We have established the last of the redemption criteria discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants,Public Warrants, each warrantholder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the Class ANew AMCI common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 warrant exercise price after the redemption notice is issued.
In order to finance transaction costs in connection with an intended initial business combination, our sponsorSponsor or anits affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into warrants (referred to in this registration statement as Working Capital Warrants) at a price of $1.00 per warrant at the option of the lender. Such warrantsWorking Capital Warrants would be identical to the private placement warrants,Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by our sponsorSponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completionClosing of an initial business combination.the Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to completion of an initial business combination.the Closing. The payment of any cash dividends subsequent to an initial business combinationthe Closing will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
On April 6, 2020, Advent entered into a letter agreement with Longspur Capital Limited (“Longspur” and such agreement, the “Longspur Engagement”), the company through which Advent’s current interim chief financial officer is providing services to Advent (as further discussed below). The Longspur Engagement was entered into in connection with Advent’s contemplated listing on the AIM Market of the London Stock Exchange and provides for Longspur to prepare an IPO preparation program, including but not limited to preparing an investment story, identifying potential private investors, and preparing research and a revised company valuation. Pursuant to such agreement an annual fee of £30,000 (plus VAT at the prevailing rate if applicable) would be charged. An additional fee of at least 15% of any monetary fees charged by any broker or NOMAD engaged by the company during the engagement period would also be charged. The initial term of the Longspur Engagement is a period of one year from April 1, 2020. On July 29, 2020, Advent and Longspur entered into a section letter agreement regarding the provision of interim chief financial officer services to Advent (the “Longspur Interim CFO Agreement”). The Longspur Interim CFO Agreement provided for Nick Stamp to act as Interim Chief Financial Officer, while remaining an employee of Longspur for an initial term of six months. The Longspur Interim CFO Agreement contemplated a £10,000 monthly fee, a £60,000 fee upon successful completion of the IPO, an additional fee of 0.25% of the total market capitalization of Advent upon IPO (payable in cash and shares), and an additional fee of 0.25% of the implied market valuation of Advent at the point of any interim fundraise payable on completion of the IPO. In connection with Advent’s decision to pursue the Transactions with AMCI rather than an IPO on the London Stock Exchange, Advent and Longspur subsequently entered into a verbal agreement pursuant to which all fees and compensation owed under the Longspur Engagement and the Longspur Interim CFO Agreement were cancelled and Advent will instead pay Longspur $1.3 million total at the closingClosing of the Transactions contemplated by the Merger Agreement.Business Combination.
AMCI’s stockholders do not have appraisal rights in connection with the Business Combination under Delaware law.
The audited financial statements of AMCI Acquisition Corp. for the period from June 18, 2018 (inception) to December 31, 2018 and for the year ended December 31, 2019 included in this proxy statement/prospectusprospectus/consent solicitation have been so included in reliance on a report of Marcum LLP, an independent registered public accounting firm, appearing elsewhere herein and are included in reliance on such report given upon such firm as experts in auditing and accounting.
AMCI’s board of directors is aware of no other matter that may be brought before the AMCI Special Meeting. Under Delaware law, only business that is specified in the notice of Special Meeting to stockholders may be transacted at the AMCI Special Meeting.
AMCI Acquisition Corp.
You may also obtain these documents by requesting them in writing or by telephone from AMCI’s proxy solicitation, Advantage Proxy agent at the following address and telephone number:
If you are a stockholder of AMCI and would like to request documents, please do so by [ ], in order to receive them before the AMCI Special Meeting. If you request any documents from AMCI, AMCI will mail them to you by first class mail, or another equally prompt means.
This document is a proxy statement of AMCI for the AMCI Special Meeting. AMCI has not authorized anyone to give any information or make any representation about the Business Combination, AMCI or Advent that is different from, or in addition to, that contained in this proxy statement. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this proxy statement/prospectusprospectus/consent solicitation speaks only as of the date of this proxy statement/prospectus,prospectus/consent solicitation, unless the information specifically indicates that another date applies.
AMCI Acquisition Corp.
We have audited the accompanying balance sheets of AMCI Acquisition Corp. (the “Company”) as of December 31, 2019 and 2018, the related statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2019 and for the period from June 18, 2018 (inception) through December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the year ended December 31, 2019 and for the period from June 18, 2018 (inception) through December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.
The initial stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders acquire Public Shares in or after the Initial Public Offering, such Public Sharesholder will be entitled to liquidating distributions from the Trust Account if the Company failsone (1) vote for each share held of record on all matters to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting fee (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amountsbe voted on by stockholders.
No fractional shares will be included with the other funds held in the Trust Account that will be available to fund the redemptionissued upon exercise of the Public Shares. In the event of such distribution, it is possible that the per share valueWarrants. If, upon exercise of the assets remaining available for distributionwarrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number of shares of New AMCI common stock to be issued to the warrantholder.
Placement Warrants
Except as described below, the Placement Warrants have terms and provisions that are identical to those of the Public Warrants, including as to exercise price, exercisability and exercise period. The Placement Warrants (including the New AMCI common stock issuable upon exercise of the Placement Warrants) are not transferable, assignable or salable until 30 days after the Closing (except, among certain other limited exceptions to our officers and directors and other persons or entities affiliated with Sponsor) and they will not be redeemable by us so long as they are held by Sponsor or its permitted transferees. Sponsor, or its permitted transferees, has the option to exercise the Placement Warrants on a cashless basis. If the Placement Warrants are held by holders other than Sponsor or its permitted transferees, the Placement Warrants will be less than $10.00 per share.subject to the same terms and conditions as the Public Warrants, and among other matters, be redeemable by us and exercisable by the holders on the same basis as the Public Warrants.
If holders of the Placement Warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of shares of New AMCI common stock equal to the quotient obtained by dividing (x) the product of the number of shares of New AMCI common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the New AMCI common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
In order to protect the amounts heldfinance transaction costs in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective targetconnection with an intended initial business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per share or (ii) 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 share due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, 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, 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.
Liquidity and Capital Resources
As indicated in the accompanying financial statements, at December 31, 2019, the Company had $520,422 in cash, working capital of $527,035, and $4,912,579 of interest available to pay its tax obligations.
The Company’s liquidity needs have been satisfied to date through the contribution of $25,000 from the sale of the founder shares, the loan from the Sponsor in an aggregate amount of $218,610 pursuant to a promissory note, and the net proceeds from the sale of the Units and Placement Warrants held outside the Trust Account.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses and may require additional funds to meet its obligations and sustain its operations.
The Company may need to raise additional capital through loans or additional investments from its Sponsor, an affiliate of thecombination, Sponsor or the Company’s officers and directors. The Company’s Sponsor, anits affiliate or certain of the Sponsor or the Company’sour officers and directors may, but are not obligated to, loan the Companyus funds as may be required. Accordingly,Up to $1,500,000 of such loans may be convertible into warrants (referred to in this registration statement as Working Capital Warrants) at a price of $1.00 per warrant at the option of the lender. Such Working Capital Warrants would be identical to the Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by Sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. On November 20, 2020, the Sponsor agreed to loan AMCI up to $1,000,000 as a working capital loan. This loan is non-interest bearing and is due at the earlier of the date on which AMCI consummates its Business Combination or February 22, 2021. On November 20, 2020, AMCI borrowed $400,000 on the working capital loan.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the Closing of the Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to the Closing. The payment of any cash dividends subsequent to the Closing will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent and Warrant Agent
The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
Our Amended and Restated Certificate of Incorporation
The AMCI Charter contains certain requirements and restrictions relating to the AMCI IPO that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of 65% of our common stock. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of the IPO (assuming they do not purchase any units in the IPO), will participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
| ● | If we are unable to complete our initial business combination prior to February 22, 2021 (subject to further extension by amendment to the AMCI Charter), we 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 subject to lawfully available funds therefor, 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 on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; |
| ● | Prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination; |
| ● | Although we do not intend to enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or our officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that such an initial business combination is fair to our company from a financial point of view; |
| ● | If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; whether or not we maintain our registration under the our Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above; |
| ● | So long as we obtain and maintain a listing for our securities on Nasdaq, Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination; |
| ● | If our stockholders approve an amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of the IPO or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares; and |
| ● | We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
In addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriters’ fees and commissions.
Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws
We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of the IPO. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:
| ● | a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”); |
| ● | an affiliate of an interested stockholder; or |
| ● | an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. |
A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
| ● | our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction; |
| ● | after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or |
| ● | on or subsequent to the date of the transaction, the initial business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
The AMCI Charter provides that our board of directors are classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.
Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval (including a specified future issuance) and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive forum for certain lawsuits
The AMCI Charter requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.
Special meeting of stockholders
Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our Chief Executive Officer or by our Chairman.
Advance notice requirements for stockholder proposals and director nominations
Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the company secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Action by written consent
Subsequent to the consummation of the IPO, any action required or permitted to be taken by our common stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders other than with respect to our Class B common stock.
Classified Board of Directors
Our board of directors are divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. The AMCI Charter provides that the authorized number of directors may be changed only by resolution of the board of directors. Subject to the terms of any preferred stock, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.
Class B Common Stock Consent Right
For so long as any shares of Class B common stock remain outstanding, we may not, without the prior vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of our certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock. Any action required or permitted to be taken at any meeting of the holders of Class B common stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class B common stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class B common stock were present and voted.
Securities Eligible for Future Sale
As of November 24, 2020, there are 9,061,136 shares of Class A common stock issued and outstanding 5,513,019 shares of Class B common stock issued and outstanding.
Registration Rights
The holders of the Founder Shares, Placement Warrants and Working Capital Warrants (and any shares of Class A common stock issuable upon the exercise of the Placement Warrants and Working Capital Warrants) are entitled to registration rights pursuant to the registration rights agreement that was signed at the time of the AMCI IPO, requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration statements.
Listing of Securities
Our Units, Class A common stock and Public Warrants are currently listed on Nasdaq under the symbols “AMCIU,” “AMCI” and “AMCIW,” respectively. It is currently expected that after the Closing, our New AMCI common stock and Public Warrants will be listed on Nasdaq under the symbols “______” and “______W”, respectively.
SECURITIES ACT RESTRICTIONS ON RESALE OF COMMON STOCK
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
| ● | 1% of the total number of shares of Class A common stock (or after the Closing, New AMCI common stock) then outstanding; or |
| ● | the average weekly reported trading volume of the Class A common stock (or after the Closing, New AMCI common stock) then during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
| ● | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
| ● | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
| ● | the issuer of the securities has filed all Exchange Act reports and materials required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and |
| ● | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
As a result, our initial stockholders will be able to sell their Founder Shares and private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
COMPARISON OF STOCKHOLDER RIGHTS
Both AMCI and Advent are incorporated under the laws of the State of Delaware and, accordingly, the rights of the stockholders of each are currently, and will continue to be, governed by the Delaware General Corporation Law, or the DGCL. If the Merger is completed, Advent stockholders will become stockholders of AMCI, and their rights will be governed by the DGCL, and, assuming the Charter Amendment Proposals are approved by the AMCI stockholders at the AMCI Special Meeting, the Amended Charter attached to this proxy statement/prospectus/consent solicitation as Annex B, and the bylaws of AMCI.
The table below summarizes the material differences between the current rights of Advent stockholders under the Advent certificate of incorporation and bylaws and the rights of AMCI stockholders, post-Closing, under the Amended Charter and bylaws, each as amended, as applicable, and as in effect immediately following the Business Combination.
While AMCI and Advent believe that the summary tables cover the material differences between the rights of their respective stockholders prior to the Business Combination and the rights of AMCI stockholders following the Business Combination, these summary tables may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus/consent solicitation and the other documents referred to in this proxy statement/prospectus/consent solicitation for a more complete understanding of the differences between being a stockholder of AMCI or Advent before the Business Combination and being a stockholder of AMCI after the Business Combination. AMCI has attached as Annex B to this proxy statement/prospectus/consent solicitation a copy of the proposed Amended Charter, and has publicly filed its bylaws with the SEC, which you can find in the list of exhibits to this registration statement, and will send copies of the documents referred to in this proxy statement/prospectus/consent solicitation to you upon your request. Advent will also send copies of its organizational documents referred to in this proxy statement/prospectus/consent solicitation to you upon your request. See the section titled “Where You Can Find More Information” in this proxy statement.
Current Advent Rights Versus New AMCI Rights Post-Merger
Provision | | | Advent Technologies Inc. (Pre-Merger) | | | New AMCI (Post-Closing) |
Authorized Capital Stock | | | Advent is currently authorized to issue 10,000,000 shares of capital stock, consisting of (a) 6,591,595 shares of common stock and (b) 3,408,405 shares of preferred stock. | | | New AMCI will be authorized to issue 111,000,000 shares of capital stock, consisting of (a) 110,000,000 shares of common stock and (b) 1,000,000 shares of preferred stock. Upon consummation of the Merger and assuming no additional AMCI Class A common stock are redeemed, we expect there will be approximately 46,167,083 shares of New AMCI common stock. |
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Number and Qualification of Directors | | | The number of directors of Advent will be fixed from time to time by Advent’s board of directors pursuant to a resolution adopted by a majority of Advent’s board of directors or by the stockholders of Advent at the annual meeting or any special meeting of the stockholders of Advent. | | | The number of directors of New AMCI shall not be fewer than 7 and not more than 9. The number of directors initially shall be 7. The precise number of directors shall be fixed by the New AMCI board of directors pursuant to a resolution adopted by the board of directors. |
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Classification of the Board of Directors | | | Delaware law permits a corporation to classify its board of directors into as many as three classes with staggered terms of office. However, the current charter of Advent does not provide for a classified board of directors. | | | Following the Merger, New AMCI will have a classified board of directors, with three classes of directors. Class I will initially serve a 1 year term, Class II will initially serve a 2 year term, and Class III will initially serve a 3 year term. All classes will serve 3 year terms following their initial term. |
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Appointment of Directors | | | At Advent’s annual meeting, the stockholders elect directors each of whom shall hold office until his or her successor is elected and qualified, unless sooner displaced. At stockholder meetings for the election of directors, the vote required for election of a director shall be the affirmative vote of a majority of the votes cast in favor or against the election of a nominee. | | | At New AMCI’s annual meeting, the stockholders elect directors each of whom shall hold office until his or her successor is elected and qualified, unless sooner displaced. At stockholder meetings for the election of directors, the vote required for election of a director shall be by a plurality of the votes cast by stockholders entitled to vote in the election in favor or against the election of a nominee. |
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Removal of Directors | | | Any director or the entire board may be removed from office with or without cause at any time, by the affirmative vote of the holders of a majority of the voting power of all then outstanding shares of Advent entitled to vote for the election of directors. | | | Any director or the entire board may be removed from office with or without cause at any time, by the affirmative vote of the holders of a majority of the voting power of all then outstanding shares of New AMCI entitled to vote for the election of directors. |
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Vacancies on the Board of Directors | | | Any newly created directorship on the Advent board that results from an increase in the number of directors and any vacancies on the board resulting from death, resignation, removal or failure of the stockholders to elect as many directors as the number of directorships fixed by them, or otherwise, are filled exclusively by a majority vote of the remaining directors then in office, even if less than a quorum. | | | Any newly created directorship on the New AMCI board that results from an increase in the number of directors and any vacancies on the board are filled exclusively pursuant to a resolution adopted by the New AMCI board of directors. |
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| | | Any director so chosen will hold office until his or her successor has been elected. | | | Any director so chosen will hold office until his or her successor has been elected and qualified. |
Special Meeting of the Board of Directors | | | Special meetings of the Advent board may be called by the President or upon the written request of any director. | | | Special meetings of the New AMCI board may be called by the chairman of the board or President and shall be called by the chairman of the board, President or Secretary on the written request of at least a majority of directors then in office, or the sole director |
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Special Meeting of the Stockholders | | | Special meetings of the stockholders of Advent may be called by the board of directors, the chairman of the board of directors, the President or, in the absence or disability of the President, by a Vice President. Upon the written request of more than one-tenth (1/10) of the voting power of all then outstanding shares of Advent entitled to vote at the meeting, the President shall call a special meeting of the stockholders. If the President does not call such special meeting of the stockholders within fifteen (15) days after receipt of such written request, such stockholders may call the special meeting of the stockholders. | | | Special meetings of the stockholders of New AMCI may be called by the board of directors, the chairman of the board of directors, or holders of a majority of the total votes entitled to be cast by the holders of all the outstanding capital stock entitled to vote generally in the election of directors. |
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Notice of Stockholder Meetings | | | Except as otherwise required by law or in the current charter, notice of each meeting of Advent stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the Advent stockholders entitled to notice of the meeting. | | | Except as otherwise required by law or in the current charter, notice of each meeting of New AMCI stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting unless otherwise required by the DGCL |
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Voting | | | Except as otherwise required by law or the current charter of Advent, holders of common stock are entitled to one vote for each share of common stock held at all meetings; provided, that, except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the current charter of Advent that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the current charter of Advent. Except as otherwise required by law or the current charter of Advent, holders of preferred stock are entitled to case the number of votes equal to the number of whole shares of common stock into which the shares of preferred stock held by such holder are convertible as of the record date on any matter presented to the stockholders of Advent for their action or consideration at any meeting of the stockholders of Advent. Except as otherwise required by law or the current charter of Advent, holders of preferred stock shall vote together with the holders of common stock as a single class and on an as-converted to common stock basis. | | | Except as otherwise required by law or the charter of New AMCI, holders of common stock are entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders are generally entitled to vote; provided, that, except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the charter of New AMCI that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the charter of New AMCI or the DGCL. |
Cumulative Voting | | | Delaware law allows for cumulative voting only if provided for in the current charter of Advent; however, the current charter of Advent does not authorize cumulative voting. | | | Delaware law allows for cumulative voting only if provided for in the charter of AMCI. The charter of AMCI does not authorize cumulative voting. |
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Drag Along | | | If the stockholders of Advent representing a majority of the then-outstanding voting power of Advent propose to consummate a Approved Transaction (as defined in the stockholders’ agreement of Advent), whether in one transaction or a series of related transactions, the stockholders representing a majority of the then-outstanding voting power of Advent have the right to require that such other stockholders support and participate in the Approved Transaction on substantially the same terms and conditions as the stockholders representing a majority of the then-outstanding voting power. | | | Any action required or permitted to be taken by the stockholders of New AMCI at any annual or special meeting of the stockholders may be effected only at a duly called annual or special meeting of stockholders of New AMCI and may not be effected by any consent in writing by such stockholders. |
Declaration and Payment of Dividends | | | Unless further restricted in the certificate of incorporation, the DGCL permits a corporation to declare and pay dividends out of either (i) surplus, or (ii) if no surplus exists, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (provided that the amount of capital of the corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets). The DGCL defines surplus as the excess, at any time, of the net assets of a corporation over its stated capital. In addition, the DGCL provides that a corporation may redeem or repurchase its shares only when the capital of the corporation is not impaired and only if such redemption or repurchase would not cause any impairment of the capital of a corporation. The current charter of Advent provides that, Advent shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the preferred stock then outstanding first receive, or simultaneously receive, a dividend on each outstanding share of preferred stock in an amount equal to (i) in the case of a dividend on common stock or any class or series that is convertible into common stock, that dividend per share of preferred stock as would equal the product of (A) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into common stock and (B) the number of shares of common stock issuable upon conversion of a share of preferred stock, in each case calculated on the record date for determination of holders entitled to receive such dividend or (ii) in the case of a dividend on any class or series that is not convertible into common stock, at a rate per share of preferred stock determined by (A) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issue price of such class or series of capital stock (subject to appropriate adjustment) and (B) multiplying such fraction by an amount equal to the applicable original issue price; provided that, if Advent declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock, the dividend payable to the holders of the preferred stock shall be calculate based upon the dividend on the class or series of capital stock that would result in the highest preferred stock dividend. | | | The board of directors of New AMCI may from time to time declare, and New AMCI may pay, dividends (payable in cash, property or shares of New AMCI’s capital stock) on New AMCI’s outstanding shares of capital stock, subject to applicable law and New AMCI’s charter. |
Limitation of Liability of Directors and Officers | | | The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. The current charter of Advent provides that, to the fullest extent provided by law, no director will be personally liable to Advent or its stockholders for monetary damages for beach of fiduciary duty as a director. | | | The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. The charter of New AMCI will provide that, to the fullest extent provided by law, no director will be personally liable to New AMCI or its stockholders for monetary damages for beach of fiduciary duty as a director. |
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Indemnification of Directors, Officers | | | The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity. The current charter of Advent provides that Advent will indemnify each director and officer to the fullest extent permitted by applicable law. | | | The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity. The charter of New AMCI will provide that New AMCI will indemnify each director and officer to the fullest extent permitted by applicable law. |
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Interested Directors | | | To the fullest extent permitted by law, Advent renounces any expectancy that any of the Advent directors will offer any corporate opportunity in which he or she may become aware to Advent, except with respect to any of the directors of Advent with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a director of Advent while such person is performing services in such capacity. | | | To the fullest extent permitted by law, New AMCI renounces any expectancy that any of the New AMCI directors will offer any corporate opportunity in which he or she may become aware to New AMCI, except with respect to any of the directors of New AMCI with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a director of New AMCI while such person is performing services in such capacity. |
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Fiduciary Duties of Directors | | | Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the board of directors or any committee designated by the board of directors are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the board of directors or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information protects directors from liability related to decisions made based on such records and other information. The Advent board of directors may exercise all such powers of Advent and do all such lawful acts and things as are not by statute or Advent’s charter or Advent’s bylaws of the stockholders’ agreement of Advent stockholders directed or required to be exercised or done solely by stockholders. | | | Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the board of directors or any committee designated by the board of directors are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the board of directors or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information protects directors from liability related to decisions made based on such records and other information. The New AMCI board of directors may exercise all such powers of New AMCI and do all such lawful acts and things as are not by statute or New AMCI’s charter or New AMCI’s bylaws of the stockholders’ agreement of New AMCI stockholders directed or required to be exercised or done solely by stockholders. |
Inspection of Books and Records | | | Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. The current charter of Advent permits Advent’s books and records to be kept within or outside Delaware. | | | Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. The charter of New AMCI will permit New AMCI’s books and records to be kept within or outside Delaware. |
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Choice of Forum | | | The current charter of Advent generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to: (i) any derivative action or proceeding brought on behalf of Advent, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of Advent to Advent or Advent’s stockholders, (iii) any action asserting a claim against Advent, its directors, officers, or employees arising pursuant to any provision of the DGCL or the current charter of Advent or Advent’s bylaws, (iv) any action asserting a claim against Advent, its directors, officers, or employees governed by the internal affairs doctrine, subject to certain exceptions. | | | The charter of New AMCI generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to: (i) any derivative action or proceeding brought on behalf of New AMCI, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of New AMCI to New AMCI or New AMCI’s stockholders, (iii) any action asserting a claim against New AMCI, its directors, officers, or employees arising pursuant to any provision of the DGCL or the current charter of New AMCI or New AMCI’s bylaws, (iv) any action asserting a claim against New AMCI, its directors, officers, or employees governed by the internal affairs doctrine, subject to certain exceptions. |
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Quorum | | | Board of directors. A majority of the Advent board of directors constitutes a quorum at any meeting of the Advent board of directors. Stockholders. The presence, in person or proxy, at a stockholders meetings of the holders of shares of outstanding capital stock representing a majority of the voting power of all outstanding shares of capital stock entitled to vote at such meeting constitutes a quorum; except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series will constitute a quorum. | | | Board of directors. A majority of the New AMCI board of directors constitutes a quorum at any meeting of the New AMCI board of directors. Stockholders. The presence, in person or proxy, at a stockholders meetings of the holders of shares of outstanding capital stock representing a majority of the voting power of all outstanding shares of capital stock entitled to vote at such meeting constitutes a quorum; except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series will constitute a quorum. |
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Amendment to Certificate of Incorporation | | | Under Delaware law, an amendment to a charter generally requires the approval of the Advent board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. Except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the current charter of Advent that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the current charter of Advent. | | | Under Delaware law, an amendment to a charter generally requires the approval of the New AMCI board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. Except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the charter of New AMCI that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the charter of New AMCI. |
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Amendment to Bylaws | | | The Advent board of directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the bylaws of Advent. The bylaws may also be amended, repealed or added to by the Advent stockholders representing a majority of the voting power of all of the then-outstanding shares of capital stock of Advent. | | | The New AMCI board of directors will be expressly authorized to make, repeal, alter, amend and rescind any or all of the bylaws of New AMCI. The bylaws may also be amended, repealed or added to by the New AMCI stockholders representing at lease sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the then-outstanding shares of capital stock of New AMCI. |
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information regarding the beneficial ownership of shares of AMCI common stock as of the date hereof (pre-Business Combination) and the currently expected ownership of shares of New AMCI common stock upon the Closing of the Business Combination by:
| ● | each person known by AMCI to be the beneficial owner of more than 5% of AMCI common stock as of the date hereof (pre-Business Combination) or of shares of New AMCI common stock upon the Closing of the Business Combination; |
| ● | each of AMCI’s officers and directors; |
| ● | each person who will become an executive officer or director of the Combined Entity upon the Closing of the Business Combination; and |
| ● | all executive officers and directors of the Combined Entity as a group upon the Closing of the Business Combination. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.
The beneficial ownership of shares of AMCI common stock pre-Business Combination is based on 14,574,155 issued and outstanding shares of AMCI common stock as of the date hereof, consisting of 9,061,136 shares of Class A common stock and 5,513,019 shares of Class B common stock. The beneficial ownership of shares of New AMCI common stock upon the closing of the Business Combination is based on 46,167,083 shares to be outstanding. It excludes any outstanding Warrants and assumes that (i) there are no redemptions of any shares by AMCI’s public stockholders in connection with the Business Combination or an Extension Redemption, (ii) the negative Closing Net Indebtedness is ($929,283), based on Advent’s unaudited interim condensed consolidated financial statements as of September 30, 2020, (iii) no awards are issued under the Equity Incentive Plan, (iv) no Working Capital Warrants are issued, and (v) AMCI does not engage in any kind of equity financing prior to the Closing. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by AMCI’s existing stockholders in AMCI will be different.
Unless otherwise indicated, AMCI believes that all persons named in the table have sole voting and investment power with respect to all AMCI common stock beneficially owned by them.
Pre-Business Combination Beneficial Ownership Table
| | Class A Common Stock | | | Class B Common Stock | | | Approximate | |
Name and Address of Beneficial Owner (1) | | Number of Shares Beneficially Owned | | | Approximate Percentage of Class | | | Number of Shares Beneficially Owned | | | Approximate Percentage of Class | | | Percentage of Outstanding Common Stock | |
AMCI Sponsor LLC(3) | | | — | | | | — | | | | 5,028,019 | | | | 91.20 | % | | | 34.5 | % |
Hans J. Mende(3) | | | — | | | | — | | | | 5,028,019 | | | | 91.20 | % | | | 34.5 | % |
Fritz R. Kundrun(3) | | | — | | | | — | | | | 5,028,019 | | | | 91.20 | % | | | 34.5 | % |
William Hunter | | | — | | | | — | | | | 100,000 | | | | 1.81 | % | | | * | |
Brian Beem | | | — | | | | — | | | | 100,000 | | | | 1.81 | % | | | * | |
Nimesh Patel | | | — | | | | — | | | | 100,000 | | | | 1.81 | % | | | * | |
Patrick Murphy | | | — | | | | — | | | | 80,000 | | | | 1.45 | % | | | * | |
Gary Uren | | | — | | | | — | | | | 35,000 | | | | 0.63 | % | | | * | |
Lawrence M. Clark, Jr. | | | — | | | | — | | | | 35,000 | | | | 0.63 | % | | | * | |
Jason Grant | | | — | | | | — | | | | 35,000 | | | | 0.63 | % | | | * | |
Shaolin Capital Management LLC(4)** | | | 1,100,000 | | | | 12.1 | % | | | — | | | | — | | | | 7.6 | % |
Hudson Bay Capital Management LP(5)** | | | 2,601,100 | | | | 28.7 | % | | | — | | | | — | | | | 17.8 | % |
Davidson Kempner Capital Management LP (6)** | | | 1,300,000 | | | | 14.3 | % | | | — | | | | — | | | | 8.9 | % |
Glazer Capital (7) ** | | | 3,092,538 | | | | 34.1 | % | | | — | | | | — | | | | 21.2 | % |
All directors and executive officers as a group (8 individuals)(2) | | | — | | | | — | | | | 5,513,019 | | | | 100 | % | | | 37.8 | % |
* less than 1%
** | The stockholder may have redeemed some or all of AMCI’s common stock held by such holder in connection with AMCI’s stockholders meeting in October 2020. Information relating to such redemption is not available to AMCI as of the date hereof. |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o AMCI Acquisition Corp., 1501 Ligonier Street, Suite 370, Latrobe, PA 15650. |
(2) | Interests shown consist solely of founder shares, classified as shares of Class B common stock. Such shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment. |
(3) | AMCI Sponsor LLC is the record holder of such shares. 2005 Kirmar Trust (US) and Fritz R. Kundrun Revocable Trust (US) each hold 50% of the Sponsor. Hans J. Mende, our Executive Chairman, is the trustee of 2005 Kirmar Trust (US) and Fritz R. Kundrun is the trustee of Fritz R. Kundrun Revocable Trust (US), and as a result each has voting and investment discretion with respect to the common stock held by the Sponsor. Each may thus be deemed to have beneficial ownership of the Class B common stock held directly by the Sponsor. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Excludes shares underlying the contingent forward purchase contract, as such shares may not be voted or disposed of by the Sponsor within 60 days of the date hereof. |
(4) | According to a Schedule 13G filed with the SEC on February 11, 2019, Shaolin Capital Management LLC holds 1,100,000 shares of the Class A common stock reported therein. The address of the principal business office of the reporting person is 1460 Broadway New York, New York 10036. |
(5) | According to a Schedule 13G Amendment filed with the SEC on April 3, 2020, Hudson Bay Capital Management LP, a Delaware limited partnership (“Hudson Bay”), serves as the investment manager to Hudson Bay Master Fund Ltd., in whose name the shares of Class A common stock reported therein are held. As such, Hudson Bay may be deemed to be the beneficial owner of all shares of Class A common stock held by Hudson Bay Master Fund Ltd. Sander Gerber serves as the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay. Mr. Gerber disclaims beneficial ownership of these securities. The address of the principal business office of each of the reporting persons is 777 Third Avenue, 30th Floor, New York, NY 10017. |
(6) | According to a Schedule 13G/A filed with the SEC on February 13, 2020, Davidson Kempner Capital Management LP holds 1,300,000 shares of the Company’s Class A common stock. Anthony A. Yoseloff is the Executive Managing Member and controls the reporting person. The address of the principal business office of the reporting person is 520 Madison Avenue, 30th Floor, New York, New York 10022. |
(7) | According to a Schedule 13G/A filed with the SEC on May 8, 2020, the shares reported are held by certain funds and managed accounts to which Glazer Capital LLC serves as investment manager. Paul J. Glazer serves as the Managing Member of Glazer Capital LLC. The address of the business office of each of the reporting persons is 250 West 55th Street, Suite 30A, New York, New York 10019 |
The table above does not include the shares of common stock underlying the private placement warrants held or to be held by AMCI’s officers, directors or the Sponsor.
Post-Business Combination Beneficial Ownership Table
| | | | | | | | Combined Entity Post-Business Combination | |
| | AMCI Pre-Business Combination | | | (assuming no redemptions by AMCI stockholders)(1) | | | (assuming maximum redemptions by AMCI stockholders)(2) | |
Name and Address of Beneficial Owner | | Number of Shares | | | Percentage of Outstanding Shares | | | Number of Shares | | | Percentage of Outstanding Shares | | | Number of Shares | | | Percentage of Outstanding Shares | |
Directors and Executive Officers Post-Business Combination | | | | | | | | | | | | | | | | | | |
Vassilios Gregoriou | | | — | | | | — | | | | 5,478,494 | | | | 13.81 | % | | | 5,478,494 | | | | 14.33 | % |
William Hunter | | | 100,000 | | | | * | | | | 100,000 | | | | * | | | | 100,000 | | | | * | |
Christos Kaskavelis(3) | | | — | | | | — | | | | 3,713,753 | | | | 9.36 | % | | | 3,713,753 | | | | 9.72 | % |
Emory De Castro | | | — | | | | — | | | | 2,130,049 | | | | 5.37 | % | | | 2,130,049 | | | | 5.57 | % |
James F. Coffey | | | — | | | | — | | | | 592,110 | | | | 1.49 | % | | | 592,110 | | | | 1.55 | % |
Katherine E. Fleming | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Anggelos Skutaris | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Katrina Fritz | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Lawrence M. Clark, Jr. | | | 35,000 | | | | * | | | | 35,000 | | | | * | | | | 35,000 | | | | * | |
| | | | | | | | | | | | | | | | | | | | | | | | |
All directors and executive officers of Combined Entity post-Business Combination as a group (nine individuals)(4) | | | — | | | | — | | | | 12,049,406 | | | | 30.4 | % | | | 12,049,406 | | | | 31.51 | % |
Five Percent Holders: | | | | | | | | | | | | | | | | | | | | | | | | |
AMCI Sponsor LLC (5)(7) | | | 5,108,019 | | | | 18.5 | % | | | 4,524,148 | | | | 11.4 | % | | | 4,524,148 | | | | 11.8 | % |
Orion Resource Partners (USA) LP (6))(7) | | | — | | | | — | | | | 4,524,149 | | | | 11.4 | % | | | 4,524,149 | | | | 11.8 | % |
(1) | Assumes that no shares of AMCI Class A common stock are redeemed and 100% participation by Advent stockholders. Percentages are based on 46,167,083 shares of New AMCI common stock outstanding following the consummation of the Business Combination. |
(2) | Assumes additional redemption of 7,237,281 AMCI Class A common stock, for aggregate payment of approximately $74.6 million from the Trust Account (based on an assumed redemption price of approximately $10.30 per share based on the redemption price per share of October 16, 2020) that would satisfy the Minimum Cash Condition of $60 million (after giving effect to payments of all unpaid expenses, AMCI’s liabilities and redemptions by AMCI’s public stockholders and excluding Advent’s closing cash), set forth in the Merger Agreement. Percentages are based on 46,167,083 shares of New AMCI common stock outstanding following the consummation of the Business Combination. |
(3) | Christos Kaskavelis’ ownership includes 1,806,689 shares owned by Nemaland Ltd, an entity in which Mr. Kaskavelis and his wife each hold a 50% stake and for which Mr. Kaskavelis holds shared voting and dispositive power with his wife with regard to such 1,806,689 shares of AMCI common stock. The business address of Mr. Kaskavelis is One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138. The business address of Nemaland Ltd is 77 Strovolou, Office 204, 2018 Strovolos, 2018, Cyprus. |
(4) | Unless otherwise indicated, the business address of each of the individuals is One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138. |
(5) | The number of shares includes 2,554,009 shares of New AMCI common stock to be issued to the Sponsor upon conversion of its founder shares and 1,970,139 shares of New AMCI common stock to be issued upon exercise of warrants owned by the Sponsor. Pursuant to the Merger Agreement, the Sponsor entered into a letter agreement with AMCI and Advent prior to or at the closing of the Business Combination, which provides that the Sponsor will forfeit one-third (1/3rd) of the Placement Warrants that it owns as of the Closing. The business address of the Sponsor is c/o AMCI Acquisition Corp., 1501 Ligonier Street, Suite 370, Latrobe, PA 15650. |
(6) | The number of shares includes 2,554,010 shares of New AMCI common stock to be issued to Orion Resource Partners (USA) LP (“Orion”) upon conversion of founder shares to be held by Orion upon the closing of the Business Combination and 1,970,139 shares of New AMCI common stock to be issued upon exercise of warrants to be held by Orion upon the closing of the Business Combination. The business address of Orion is 1045 Avenue of the America, New York, NY 100018. |
(7) | In connection with a loan previously made by Orion to AMCI, the Sponsor has agreed to transfer one-half of its Founder Shares and one-half of its remaining Placement Warrants after the forfeiture described above to Orion as a permitted transferee of Sponsor at the closing of the Business Combination. |
MANAGEMENT AFTER THE BUSINESS COMBINATION
Management and Board of Directors
The following persons are expected to be elected or appointed by the AMCI board to serve as executive officers and directors following the Business Combination.
Name | | | Age | | | Position(s) |
Vassilios Gregoriou(1) | | | 55 | | | Chairman, Chief Executive Officer and Director |
William Hunter(2) | | | 52 | | | President, Chief Financial Officer and Director |
Christos Kaskavelis | | | 52 | | | Chief Marketing Officer |
Emory De Castro(1) | | | 63 | | | Chief Technology Officer and Director |
James F. Coffey | | | 58 | | | Chief Operating Officer and General Counsel |
Katherine E. Fleming(1) | | | 55 | | | Director |
Anggelos Skutaris(1) | | | 56 | | | Director |
Katrina Fritz(1) | | | 48 | | | Director |
Lawrence M. Clark, Jr.(2) | | | 48 | | | Director |
Information regarding the executive officers and directors following the Business Combination is set forth below:
Vassilios Gregoriou has been Chairman and CEO of Advent since inception. Dr. Gregoriou cofounded Advent Technologies Inc. in 2012. In addition, Dr. Gregoriou is an internationally known scientist with research and/or managerial positions in both the U.S. (Northeastern, MIT, Polaroid, Princeton) and Greece (NHRF, FORTH) over his 30 year career so far in the technology sector. His research activity extends over a wide area of subjects in the renewable energy space that include the areas of flexible photovoltaics based on organic semiconductors, optically active materials based on conjugated oligomers and polymer nanocomposites. His published work as co-author includes three books and more than 100 scientific papers. He is also co-inventor of 15 patents. Dr. Gregoriou has more than 25 years of experience in the U.S. market. He has extensive experience in the technical development of new products and in the management of such activities. He holds a Ph.D. in Physical Chemistry from Duke University and he has attended the MBA program at Northeastern University. He was also a NRSA award recipient at Princeton University. He also served as President of Society for Applied Spectroscopy(SAS) in 2001. Dr. Gregoriou is well-qualified to serve on the board of directors following the Business Combination due to his extensive scientific, managerial and industry experience.
Christos Kaskavelis joined Advent as Chief Marketing Officer in 2019. From 2015 to 2016 he served as Managing Director of Mamaya IKE, a Greek publishing and media consulting company. From 2016 to 2018, he was a research scholar at the MIT Media Lab in Boston, Massachusetts. He has been a seed investor in the company, an angel investor, and has served on its board of directors since the first day. He is a serial entrepreneur in the tech industry and primarily digital marketing, with successful exits in both NASDAQ and London Stock Exchanges. He has designed and been responsible for enterprise software systems designed for Pratt & Whitney, Analog Devices, General Electric and Lucent Technologies in the areas of Just-In-Time (JIT) manufacturing, Supply Chain Management and Production Scheduling. He holds a Ph.D. in Supply Chain Management as well as an M.Sc. in Manufacturing Engineering from Boston University, a B.Sc. in Electrical Engineering and a B.A. in Business Economics from Brown University.
Emory De Castro has been Advent’s Chief Technology Officer since 2013. Dr. De Castro is responsible for the overall technical, manufacturing and business development operations for Advent Technologies. Prior to joining Advent, Dr. De Castro was a Vice President, Business Management and the site manager for BASF Fuel Cell Inc. in Somerset NJ. At BASF Dr. De Castro led marketing and sales, business development, quality control, and R&D direction all cumulating in nearly a four-fold increase in revenues. As the Executive Vice President at the E-TEK Division, De Nora North America he managed operations, created a global brand, and expanded the organization’s fuel cell component business in Asia and Europe. Dr. De Castro has over 20 patent applications spanning fuel cell materials and catalysts, electrochemical technology, sensors, and a beer bottle cap that extends shelf life. He is the recipient of the 2013 Department of Energy Award for Manufacturing R&D in lowering the cost of gas diffusion electrodes and the 2005 ECS New Technology Award to E-TEK Division, for introducing and commercializing a new electrolysis technology. Emory De Castro received his Ph.D. from the Department of Chemistry at the University of Cincinnati and a B.S. in Chemistry from Duke University. Dr. De Castro is well-qualified to serve on our board of directors due to his extensive scientific and technological experience.
James F. Coffey hasserved as General Counsel and Corporate Secretary of Advent since March 2020. Beginning in 2018, he served as Advent’s outside legal counsel. Mr. Coffey has over thirty years of experience in corporate and securities law, mergers and acquisitions, venture capital and corporate finance, and intellectual property law. He has extensive international experience having closed transactions in both North and South America, Europe, and China. Throughout the course of his career, Jim has developed strong relationships and strategic contacts within the clean energy and technology sectors and specific experience within the fuel cell industry. From 2013 to 2017, he served as general counsel to another HT PEM fuel cell company that was a customer of Advent. Mr. Coffey was a Gerald L. Wallace Scholar at New York University School of Law where he received an LL.M. in Corporate Law. He received his J.D. from the New England School of Law, and his B.A., cum laude, from Providence College. Mr. Coffey is listed in The Best Lawyers in America® for Mergers and Acquisitions. He is recognized for his work in intellectual property law by the IAM Patent 1000. Mr. Coffey was named a Massachusetts Super Lawyer by Law and Politics magazine. He is AV® rated by Martindale-Hubbell. Mr. Coffey is a fellow of the Boston Bar Foundation and the American Bar Foundation.
Katherine E. Fleming has over fifteen years’ experience in Higher Education leadership and has been the Provost of New York University since 2016, with responsibility for allocating financial resources and setting strategic priorities, and with oversight of all Deans and Directors. From 2007-2011 she directed the Institut Remarque at the Ecole Normale Superieure in Paris, and from 2012-2016 she served as the President of the Board of the University of Piraeus. A historian by training, she earned a BA from Barnard College of Columbia University, an MA from the University of Chicago and a Ph.D. from the University of California, Berkeley. She was granted honorary Greek citizenship by the Hellenic Republic in 2015and in 2019 was named by France to the Legion d’Honneur. Dr. Fleming is well-qualified to serve on the board of directors following the Business Combination due to her extensive financial and scholastic experience.
Anggelos Skutaris has a BSc in Economics from Arizona State University and an MBA from the Thunderbird School of Global Management. He has more than 28 years of International experience in banking, finance, management, treasury and investments. He is currently a member of the Incorporation Committee and Chief Investment Officer for Power Bank, a Qatar-based financial institution with a mission to provide Islamic financing to the global energy sector. Key positions he held in the past include: Chief Investment Officer (Janus Continental Group, JCG), Head of Treasury Operations & Transformation (Qatar Airways), Managing Partner (New Symbol Global Advisors), Chief Executive Officer (Piraeus Capital Management), Founder & CEO (OliveTree Management Associates), Group Treasurer (Titan Cement), Head of Equity Financing (Calyon Securities) and Director of Equity Financing (Credit Suisse). Whilst at Titan cement, Mr. Skutaris was instrumental in issuing the largest corporate syndicated facility in Greece, a 5-year, €800 million transaction. Mr. Skutaris is well-qualified to serve on the board of directors following the Business Combination due to his extensive business development and financial experience.
Katrina Fritz is the Executive Director of the Stationary Fuel Cell Collaborative, leading education and outreach activities with the guidance of state agencies, local air districts and industry. She also works with the National Fuel Cell Research Center on state level clean energy policy and market development. Katrina currently serves as an expert to the European Commission on Horizon 2020 programs for research and innovation. As Principal of KM Fritz LLC, Katrina has provided advisory and consulting services to global industrial firms related to business and communications strategy in distributed energy generation markets. She has held leadership positions in numerous trade associations and on advisory boards including: The California Hydrogen Business Council, the International Energy Agency’s Fuel Cell Working Group; the U.S. Fuel Cell and Hydrogen Energy Association; the Alliance for Clean Energy New York; the Pacific Clean Energy Application Center at University of California, Berkeley; and the Connecticut Fuel Cell and Hydrogen Coalition. Katrina has held leadership positions at ClearEdge Power (formerly UTC Power), Plug Power and Case Western Reserve University, leading strategic planning, government relations, business development, and corporate communications. She also worked in the software industry in Santa Cruz, California and Watford, United Kingdom. Katrina has a BA degree from the University of Michigan and an MBA from the Weatherhead School of Management at Case Western Reserve University. Ms. Fritz is well-qualified to serve on the board of directors following the Business Combination due to her extensive leadership and clean fuel technology experience.
William Hunter has been President, Chief Executive Officer and Chief Financial Officer, as well as a Director of AMCI, since AMCI’s inception. He has been Managing Director and Chief Financial Officer of AMCI Group since 2017, and since 2015 he has been Managing Partner at Hunter Natural Resources LLC, a consulting firm in the industrial, consumer and natural resources sectors. Mr. Hunter has been involved in over $20 billion of transactions in the natural resources, transportation and industrial industries during his 25 years in the industry. He is currently a member of the board of American Battery Metals Corp. (OTC: ABML), which is a clean energy materials business focused on recycling of critical minerals from lithium ion batteries, and a member of the board of directors of Ridley Terminals Inc. From 1999 to 2015, Mr. Hunter worked as a Director or Managing Director at Nomura Securities, Teneo Capital, Dahlman Rose & Co., Jefferies & Company and TD Securities. He holds a B.S.C. in Finance and an M.B.A. in Finance from DePaul University. Mr. Hunter is well-qualified to serve on the board of directors following the Business Combination due to his extensive corporate finance and capital markets experience.
Lawrence M. Clark, Jr., who has served as an independent director of AMCI since November 15, 2018, is the founder and Managing Member of BalanTrove Management, LLC (“BalanTrove”), a corporate advisory firm to middle market companies, investors and lenders. BalanTrove provides strategic advisory, interim executive management, and operational, financial and project evaluation and due diligence assistance to businesses in transition and capital providers. Mr. Clark serves as a director of Blackhawk Mining LLC, a diversified coal mining company headquartered in Lexington, Kentucky. From 2015 to 2018, he served as Chief Executive Officer of Accordant Energy, LLC, a licensor of a patented portfolio of intellectual property for processing municipal solid waste into a low-carbon engineered fuel for use in utility and industrial boilers. Prior to that, he served for two years as President and Chief Executive Officer of JW Resources, Inc., a private operator of thermal coal assets in Central Appalachia. Before founding BalanTrove in 2011, Mr. Clark spent eight years at Harbinger Capital Partners LLC, most recently as Managing Director and Director of Investments, where he was responsible for investments in metals, mining, industrial and retail companies, among other sectors. From 2001 to 2002, Mr. Clark was a Distressed Debt and Special Situations Research Analyst at Satellite Asset Management, L.P. He was Vice President in the Distressed Debt and High Yield Research Department at Lazard Freres & Co., LLC from 2000 to 2001, and an Associate in Credit Suisse First Boston’s High Yield Research Group from 1998 to 2000. Mr. Clark started his investing career in 1997 in the Corporate Bond Research Department of Salomon Brothers. Mr. Clark received an M.B.A. from New York University’s Stern School of Business in 1998, and a B.S.B.A. in Finance from Villanova University in 1993. He is well qualified to serve on the board of directors following the Business Combination due to his extensive operational, management, analysis and investing experience.
Board of Directors
The Combined Entity’s board of directors upon the closing of the Business Combination will consist of seven members. In accordance with the Amended Charter to be filed, immediately after the consummation of the Business Combination, the board of directors of New AMCI will be divided into three classes, Classes I, II and III, each to serve a three year term, except for the initial term after the Closing, for which the Class I directors will be up for reelection at the first annual meeting of stockholders occurring after the Closing, and for which the Class II directors will be up for reelection at the second annual meeting of stockholders occurring after the Closing. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following the election. Directors will not be able to obtainbe removed during their term except for cause. The directors will be divided among the three classes as follows:
| ● | the Class I directors will be Anggelos Skutaris, and Katrina Fritz, and their terms will expire at the annual meeting of stockholders to be held in 2021; |
| ● | the Class II directors will be Katherine E. Fleming and Lawrence M. Clark, Jr., and their terms will expire at the annual meeting of stockholders to be held in 2022; and |
| ● | the Class III directors will be Vassilios Gregoriou, Emory De Castro, and William Hunter, and their terms will expire at the annual meeting of stockholders to be held in 2023. |
The Combined Entity expects that any additional financing. Ifdirectorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of the board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Director Independence
Under the listing requirements and rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors and of certain board committees. Following the Business Combination, the Combined Entity’s board of directors will review the composition of the board and committees of the Combined Entity and the independence of each director.
Committees of the Board of Directors
The Combined Entity’s board of directors will have the authority to appoint committees to perform certain management and administration functions. AMCI’s current board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the board of directors. Following the Closing of the Business Combination, the charters for each of these committees will be available on the Combined Entity’s website.
Audit Committee
The Combined Entity’s audit committee is expected to consist of Messrs. ____ and ____. AMCI’s board of directors has determined each proposed member is independent under the listing standards and Rule 10A-3(b)(1) under the Exchange Act. The chairperson of our audit committee is Mr. ____. Following the Business Combination, the Combined Entity’s board of directors will determine which member of the audit committee qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under the rules of Nasdaq Stock Market.
The primary purpose of the audit committee is to discharge the responsibilities of the board of directors with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:
| ● | selecting a qualified firm to serve as the independent registered public accounting firm to audit the Combined Entity’s financial statements; |
| ● | helping to ensure the independence and performance of the independent registered public accounting firm; |
| ● | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; |
| ● | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
| ● | reviewing policies on risk assessment and risk management; |
| ● | reviewing related party transactions; |
| ● | obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the Combined Entity’s internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and |
| ● | approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm. |
Compensation Committee
The compensation committee is expected to consist of Messrs._______. AMCI’s board of directors has determined each proposed member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson of the compensation committee is expected to be Mr. _____. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directors to oversee its compensation policies, plans and programs and to review and determine the compensation to be paid to its executive officers, directors and other senior management, as appropriate.
Specific responsibilities of the compensation committee will include:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
| ● | reviewing and approving the compensation of our other executive officers; |
| ● | reviewing and recommending to our board of directors the compensation of our directors; |
| ● | reviewing our executive compensation policies and plans; |
| ● | reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management, as appropriate; |
| ● | administering our incentive compensation equity-based incentive plans; |
| ● | selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors; |
| ● | assisting management in complying with AMCI’s proxy statement and Annual Report disclosure requirements; |
| ● | if required, producing a report on executive compensation to be included in AMCI’s annual proxy statement; |
| ● | reviewing and establishing general policies relating to compensation and benefits of our employees; and |
| ● | reviewing our overall compensation philosophy. |
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee is expected to consist of Messrs._______. AMCI’s board of directors has determined each proposed member is independent under Nasdaq listing standards. The chairperson of our nominating and corporate governance committee is expected to be Mr. _______.
Specific responsibilities of our nominating and corporate governance committee include:
| ● | identifying, evaluating and selecting, or recommending that our board of directors approve, nominees for election to our board of directors; |
| ● | evaluating the performance of our board of directors and of individual directors; |
| ● | reviewing developments in corporate governance practices; |
| ● | evaluating the adequacy of our corporate governance practices and reporting; |
| ● | reviewing management succession plans; and |
| ● | developing and making recommendations to our board of directors regarding corporate governance guidelines and matters. |
Code of Business Conduct and Ethics
The Combined Entity will adopt a Code of Business Conduct and Ethics that applies to all of its employees, officers and directors, including those officers responsible for financial reporting. Following the Closing of the Business Combination, the Code of Business Conduct and Ethics will be available on its website at www.convergeone.com. Information contained on or accessible through such website is not a part of this prospectus/proxy statement, and the inclusion of the website address in this prospectus/proxy statement is an inactive textual reference only. The Combined Entity intends to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements.
Compensation Committee Interlocks and Insider Participation
No member of Combined Entity’s compensation committee has ever been an officer or employee of either company. None of Combined Entity’s expected executive officers serve, or have served during the last year, as a member of the board of directors, compensation committee, or other board committee performing equivalent functions of any other entity that has one or more executive officers serving as one of our directors or on either company’s compensation committee.
EXECUTIVE COMPENSATION OF ADVENT
Throughout this section, unless otherwise noted, “we,” “us,” “our” and similar terms refer to Advent Technologies Inc. and its subsidiaries prior to the consummation of the Business Combination, and to Advent Technologies Holdings, Inc. and its subsidiaries after the Business Combination.
Following the Business Combination, AMCI, which will be renamed Advent Technologies Holdings, Inc., will remain an “emerging growth company,” as defined in the JOBS Act and the following disclosure is intended to comply with the scaled disclosure requirements applicable to emerging growth companies.
This section provides an overview discussion of the compensation of Advent’s principal executive officer and next two most highly-compensated executive officers for its fiscal year ended December 31, 2019. These individuals, who Advent refers to as the “named executive officers” in this proxy statement/prospectus/consent solicitation, are:
| ● | Vassilios Gregoriou, Advent’s Chief Executive Officer and Chairman of its Board of Directors; |
| ● | Emory De Castro, Advent’s Chief Technology Officer; and |
| ● | Christos Kaskavelis, Advent’s Chief Marketing Officer. |
This section also provides an overview of certain compensation arrangements that Advent currently anticipates adopting in connection with the Business Combination. This discussion may contain forward-looking statements that are based on Advent’s current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that Advent adopts following the completion of the Business Combination may differ materially from the existing and currently planned programs summarized or referred to in this discussion.
Summary Compensation Table
The following table sets forth the compensation awarded to, earned by, or paid to the named executive officers in respect of their service to Advent during its fiscal years ended December 31, 2019 and December 31, 2018.
Name and Principal Position(1) | | Year | | Salary ($)(1)(2) | | Bonus ($) | | Stock Awards ($) | | Total ($) |
| | | | | | | | | | |
Vassilios Gregoriou, Chairman of the Board of Directors and Chief Executive Officer | | 2019 2018 | | $170,000 $170,000 | | — — | | — — | | $170,000 $170,000 |
| | | | | | | | | | |
Emory De Castro, Chief Technology Officer | | 2019 2018 | | $150,000 $150,000 | | — — | | — — | | $150,000 $150,000 |
Christos Kaskavelis, Chief Marketing Officer | | 2019 | | $68,909 | | — | | — | | $68,909 |
| | 2018 | | — | | — | | — | | — |
(1) | As described in further detail below in the “Employment Agreements and Other Arrangements with Executive Officers and Directors – Payment of Accrued but Unpaid Base Compensation” of this section and in Note 3 of the Company’s audited financial statements for fiscal year 2019 included as part of this joint proxy statement/prospectus/consent solicitation , although Messrs. Gregoriou, De Castro, and Kaskavelis have earned the base compensation identified above, all or a portion of these amounts have not yet been paid to them. As of November 18, 2020, an aggregate of $648,394, $526,122, and $65,000 is due in unpaid compensation for prior service to, respectively, Messrs. Gregoriou, De Castro, and Kaskavelis. It is expected that these amounts will be repaid to Messrs. Gregoriou, De Castro, and Kaskavelis upon or promptly following from the proceeds from the Business Combination. |
(2) | Mr. Kaskavelis compensation was paid to Mamaya IKE, a Greek company owned by Mr. Kaskavelis and his wife. |
Narrative Disclosure to Summary Compensation Table
Base Salaries
Each of Advent’s named executive officers receives a salary in respect of his or her services. The current annual base salary for each of Advent’s named executive officers is:
Named Executive Officer | | | Current Annual Base Salary |
Vassilios Gregoriou | | | $170,000 |
Emory De Castro | | | $150,000 |
Christos Kaskavelis | | | $120,000 |
In connection with the Business Combination, and as described in further detail in the “Executive Compensation of Advent — Employment Agreements and Other Arrangements with Executive Officers and Directors —Employment and Consulting Arrangements with Executive Officers and Directors” section of this proxy statement/prospectus/consent solicitation, Mr. Gregoriou’s annual base salary will be increased from $170,000 to $800,000; Mr. De Castro’s annual base salary will be increased from $150,000 to $350,000; and Mr. Kaskavelis’s annual base salary will be increased from $120,000 to $350,000 in each case, effective as of the date of the consummation of the Business Combination.
Annual Bonuses
None of Advent’s named executive officers received an annual bonus during fiscal years 2019 or 2018.
Equity Compensation
None of Advent’s named executive officers was granted any options or other equity-based awards during 2019 or 2018 or held any options or other equity-based awards as of December 31, 2019.
Employment Agreements
Advent is a party to certain offer letters with each of the named executive officers that set forth the initial terms and conditions of the officer’s employment with Advent. The material terms of these offer letters are summarized below.
Mr. Gregoriou. On December 3, 2012, Advent entered into an offer letter with Mr. Gregoriou, which provided for an annual base salary of $170,000, eligibility to receive an annual performance bonus of cash and performance stock awards and an initial grant of restricted stock awards in an amount equal to 4% of outstanding common stock on Mr. Gregoriou’s date of hire. Pursuant to the offer letter, if Mr. Gregoriou’s employment is terminated without “cause” or if he resigns for “good reason” (as each such term was defined in the offer letter), he is entitled to (i) 6 months’ base salary continuation and (ii) 12 months’ subsidized benefits continuation, in each case subject to Mr. Gregoriou’s execution and non-revocation of a release of claims. As described in further detail in the “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Employment and Consulting Arrangements with Executive Officers and Directors” section of this proxy statement/prospectus/consent solicitation, effective as of the consummation of the Business Combination, this offer letter is being superseded in its entirety by a new employment agreement between Mr. Gregoriou and Advent.
On October 19, 2019, Mr. Gregoriou separately entered into an agreement with the Company that contained (i) a perpetual confidentiality covenant, (ii) an assignment of intellectual property covenant, (iii) a non-competition covenant for two year post-termination of employment, (iv) a covenant not to solicit any of Advent’s customers or patrons during the two-year period following termination and (v) a covenant not to solicit any of Advent’s employees or consultants during the two-year period following termination.
Messrs. De Castro and Kaskavelis. Neither Messrs. De Castro nor Kaskavelis were previously party to employment agreements with Advent, though each entered into offer letters with Advent in May 2020. These offer letters set forth such executive’s base salary ($150,000 for Mr. De Castro and $120,000 for Mr. Kaskavelis), a bonus target of 100% of base salary, and a right to an award pursuant to the 2020-2023 Stock Grant Plan. As described in further detail in the “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Employment and Consulting Arrangements with Executive Officers and Directors” section of this proxy statement/prospectus/consent solicitation, in connection with the announcement of the Business Combination, Mr. De Castro entered into an employment agreement with Advent and Mr. Kaskavelis entered into a term sheet with Advent, each of which will become effective as of the consummation of the Business Combination.
Employee Benefits
Advent did not provide, in 2018 and 2019, any health and welfare benefits or 401(k) retirement plan to its U.S. full-time employees. As described in further detail in Note 2.22 of the Company’s audited financial statements for fiscal year 2019 included as part of this proxy statement/prospectus/consent solicitation, pursuant to Greek Labor Law 2112/1920, employees in Greece are entitled to an indemnity in the event of dismissal or retirement, though as a director, Mr. Gregoriou is unablenot eligible for such indemnity.
Outstanding Equity Awards at Fiscal Year End
As of December 31, 2019, none of Messrs. Gregoriou, De Castro or Kaskavelis had any outstanding equity awards. However, in 2020, each of Messrs. Gregoriou, Castro and Kaskavelis and certain other executive officers were issued stock awards pursuant to raisethe terms of certain stock grant plans, the terms of which are described in further detail in the “Executive Compensation of Advent-Employment Agreements and Other Arrangements with Executive Officers and Directors-Lapse of Repurchase Rights with respect to Shares granted pursuant to Advent Stock Grant Programs” section of this proxy statement/prospectus/consent solicitation.
Director Compensation
None of Advent’s non-employee directors received compensation in respect of their services as directors of Advent during the 2019 fiscal year. While each of Messrs. Gregoriou, De Castro and Kaskavelis served as members of the board of directors of Advent in 2019, none received additional capital, itcompensation for director services and all compensation earned by them with respect to their employment with Advent is set forth in the “Summary Compensation Table” above.
The AMCI board of directors will elect or appoint the persons who will serve as the executive officers and directors of the Combined Entity following the Business Combination. For biographical information concerning the executive officers and directors following the Business Combination, see “Management after the Business Combination – Management and Board of Directors”. As of the time of this filing, we are evaluating the specific terms of our director compensation program; however, we anticipate that each of our non-employee directors will receive an annual director fee as well as equity awards in connection with their services.
Employment Agreements and Other Arrangements with Executive Officers and Directors
Employment and Consulting Arrangements with Executive Officers and Directors
Employment Arrangements
On October 12, 2020, in connection with the execution of the Merger Agreement and the announcement of the Business Combination, Advent entered into (i) employment agreements, with each of Messrs. Gregoriou, De Castro, and Coffey and (ii) a term sheet with each of Messrs. Kaskavelis and Antoniou. We expect that Mr. Kaskavelis will enter into an employment agreement and Mr. Antoniou will enter into a consulting agreement, in each case, reflecting the terms and conditions of their respective term sheets prior to the consummation of the Business Combination. The material terms of these new employment and consulting arrangements are set forth below:
| ● | Mr. Gregoriou will serve as our Chief Executive Officer and Chairman of our board of directors, with an initial annual base salary of $800,000, a one-time signing bonus of $500,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 150% of his annual base salary. |
| ● | Mr. Coffey will serve as our Chief Operating Officer and General Counsel, with an annual base salary of $475,000, a one-time signing bonus of $250,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary. |
| ● | Mr. De Castro will serve as our Chief Technology Officer, with an annual base salary of $350,000, a one-time signing bonus of $250,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary. |
| ● | Mr. Kaskavelis will serve as our Chief Marketing Officer, with an annual base salary of $350,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary. |
The sign-on bonuses are payable in two installments: (i) 50% on the first payroll date following the consummation of the Business Combination and (ii) 50% to be paid on the first payroll date following the one year anniversary of the consummation of the Business Combination, subject to the applicable executive’s employment through the relevant payment date.
The employment agreements (and term sheet, for Mr. Kaskavelis) provide that if an executive’s employment terminates without “cause” or by him for “good reason,” (as such terms are defined in the employment agreement or term sheet, as applicable), the executive will be entitled to (i) up to 12 months’ subsidized medical, dental and vision benefits continuation (18 months for Mr. Gregoriou) and (ii) payment of one times (two times for Mr. Gregoriou) the sum of such executive’s annual base salary and target bonus, payable over 12 months. If such termination of employment without “cause” or resignation for “good reason” occurs within 60 days prior to, or 12 months following, a “change in control” (as such term is defined in the Equity Incentive Plan described in further details in “The Incentive Plan Proposal” section in this proxy statement/prospectus/consent solicitation), severance is enhanced and provides for (i) up to 18 months’ subsidized medical, dental and vision benefits continuation for all executives, (ii) two times (three times for Mr. Gregoriou) the sum of such executive’s annual base salary and target bonus, payable over 12 months, and (iii) the initial grant of stock options and restricted stock units issued pursuant to the Equity Incentive Plan, shall become fully vested, and such options will remain exercisable for a period of one year following such termination of employment. Moreover, if the acquirer in such “change in control” does not agree to assume or substitute for equivalent stock options, any unvested portion of the initial grant of stock options shall become fully vested and exercisable at the time of such transaction.
The employment agreements for Messrs. Gregoriou, Kaskavelis, and Coffey each contain (i) a perpetual confidentiality covenant, (ii) an assignment of intellectual property covenant, (iii) a non-competition covenant for one year post-termination of employment (subject to, for Messrs. Gregoriou and Coffey, the Executive’s receipt of at least 50% of the Executive’s highest annualized base salary within the two (2) year period preceding termination) for the entire year, (iv) a covenant not to solicit any of our customers, vendors, suppliers or other business partners during the eighteen (18)-month period following termination and (v) a covenant not to solicit any of our employees or independent contractors during the eighteen (18)-month period following termination.
In addition, Advent expects to, prior to the consummation of the Business Combination, enter into an employment agreement with William Hunter (current President and Chief Executive Officer of AMCI). Mr. Hunter is expected to serve as Advent’s President and Chief Financial Officer, with an annual base salary of $475,000, eligibility to earn an annual performance bonus with a target equal to 125% of his annual base salary, and severance entitlements upon a termination of employment without “cause” or resignation by him for “good reason’ (as customarily defined) comparable to those provided to Mr. Gregoriou and described above. In addition, Mr. Hunter will be eligible to receive a one-time signing bonus of $400,000, payable in two equal installments on the same schedule as applicable to other executives. The employment agreement with Mr. Hunter is expected to contain restrictive covenants substantially comparable to those applicable to other executive officers as described above. Although the foregoing reflects Advent’s expectations based on preliminary discussions with Mr. Hunter, definitive documentation has yet to be entered into reflecting Mr. Hunter’s employment following the Business Combination, such that the terms and conditions may materially vary from those described herein.
Consulting Arrangement
In addition, the term sheet for Mr. Antoniou provides that he will serve as our Business Development Representative, withannual consulting fees of $240,000 per year and eligibility to earn a discretionary annual performance bonus, each beginning infiscal year 2021.
Transaction Bonus Letter Agreements with Executive Officers
Advent entered into transaction bonus letter agreements with each of Messrs. Gregoriou, De Castro, Coffey and Kaskavelis, which entitle each executive to receive a transaction bonus that is payable promptly following the Business Combination, contingent upon such executive’s continued employment through the consummation of the Business Combination and execution of a general release of claims. The transaction bonus entitlement for each executive is as follows: (i) for Mr. Gregoriou, $2,500,000, (ii) for each of Messrs. De Castro and Kaskavelis, $860,000 and (iii) for Mr. Coffey, $520,000. The amounts set forth herein are inclusive of the increases to the transaction bonuses that were awarded in recognition of the oversubscription of the Pipe Investment and the effort of management in consummating this investment, as described in further detail under “Proposal 1 – The Business Combination Proposal – General Description of the Merger Agreement – Transaction Bonus Letter Agreements.”
Lapse of Repurchase Right with respect to Shares granted pursuant to Advent Stock Grant Programs
In recognition of past service, in 2020, each of our executive officers was granted shares of common stock of Advent Technologies Inc. at a discounted purchase price of $0.01 per share. These shares were issued pursuant to the terms of either (i) the Advent Technologies Inc. 2018-2020 Stock Grant Plan or (ii) the Advent Technologies Inc. 2020-2023 Stock Grant Plan (collectively, the “Stock Grant Programs”). In general, under the Stock Grant Programs, if the employee ceases to be requiredemployed with Advent for any reason prior to takeDecember 31, 2020, if a participant in the Stock Grant Programs terminates his or her employment with Advent prior to December 31, 2020, Advent has a limited repurchase period to repurchase the granted shares at a price of $0.01 per share. If Advent does not exercise such repurchase option and unless Advent declines in writing to exercise its repurchase option prior to such time, the repurchase option is automatically deemed exercised at the end of the repurchase window. This limited repurchase right will lapse upon the occurrence of the Business Combination. Therefore, even if an executive officer were to no longer be employed with Advent as of December 31, 2020, such shares will no longer be subject to the repurchase right contemplated above.
Name | | Date of Share Grant | | Shares granted under 2018-2020 Stock Grant Plan (#) | | Date of Share Grant | | Shares granted under 2020-2023 Stock Grant Plan (#) | |
Vassilios Gregoriou | | March 26, 2020 | | | 512,080 | | September 9, 2020 | | | 297,834 | |
Emory De Castro | | March 26, 2020 | | | 256,040 | | September 9, 2020 | | | 178,701 | |
Christos Kaskavelis | | March 26, 2020 | | | 256,040 | | September 9, 2020 | | | 178,701 | |
James F. Coffey | | March 26, 2020 | | | 51,208 | | September 9, 2020 | | | 89,350 | |
Total | | | | | 1,075,368 | | | | | 744,856 | |
Payment of Accrued but Unpaid Base Compensation
As described in further detail in Note 3 of Advent’s audited financial statements for fiscal year 2019 included as part of this proxy statement/prospectus/consent solicitation, although Messrs. Gregoriou, De Castro and Kaskavelis had earned base compensation for prior years of service, these amounts have not yet been paid to them. As of November 18, 2020, an aggregate of $648,394, $526,122 and $65,000 is due in unpaid compensation for prior service to, respectively, Messrs. Gregoriou, De Castro and Kaskavelis. It is expected that these amounts will be repaid to Messrs. Gregoriou, De Castro and Kaskavelis upon or promptly following the Business Combination.
Executive Compensation following the Business Combination
Our executive officers will continue to be compensated in accordance with their employment agreements, described above, following the Business Combination. We expect that our executive compensation program, as overseen by the independent compensation committee, will evolve to reflect its status as a newly publicly-traded company, while still supporting our overall business and compensation objectives. In connection with the Business Combination, Advent retained Clearbridge Compensation Consultants, LLC, an independent executive compensation consultant, to help advise on its executive compensation program.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
AMCI
Certain Relationships and Related Transactions
In June 2018, we issued an aggregate of 5,750,000 Founder Shares to Sponsor for an aggregate purchase price of $25,000 in cash, or approximately $0.004 per share. In October 2018, Sponsor transferred 35,000 Founder Shares to each of Messrs. Uren, Clark and Grant, our independent directors, and 100,000 shares to each of Messrs. Hunter, Beem and Patel, our officers. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of the AMCI IPO. On November 27, 2018, the underwriters in the AMCI IPO elected to exercise a portion of the over-allotment option for 2,052,077 additional measuresUnits. As a result of such partial exercise, Sponsor forfeited 236,981 shares of Class B common stock. The Founder Shares (including the Class A common stock issuable upon exercise thereof) may not, subject to conserve liquidity, which could include, butcertain limited exceptions, be transferred, assigned or sold by the holder.
In November 2018, Sponsor purchased an aggregate of 5,500,000 Placement Warrants for a purchase price of $1.00 per warrant, for an aggregate purchase price of $5,500,000, in a private placement that occurred simultaneously with the closing of the AMCI IPO. Each Placement Warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share. The Placement Warrants (including the Class A common stock issuable upon exercise thereof) may not, necessarilysubject to certain limited exceptions, be limitedtransferred, assigned or sold by the holder. As a result of the partial exercise of the underwriter’s over-allotment option, Sponsor purchased an additional 410,416 Placement Warrants for aggregate gross process of $410,416.
Commencing November 2018, we paid AMCI Holdings, Inc., an affiliate of our sponsor, a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Other than the foregoing, no compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to suspendingour sponsor, officers and directors, or any affiliate of our sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the pursuitconsummation of an initial business combination. The Company cannot provide any assurancecombination (regardless of the type of transaction that new financingit is). However, these individuals will be availablereimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. We do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. Our audit committee will review on a quarterly basis all payments that were made to itour sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s abilityreimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to continuethe consummation of our initial public offering, our sponsor loaned us $218,610 under an unsecured promissory note, which were used for a portion of the expenses of our initial public offering. The loan was non-interest bearing and unsecured and was repaid in full on November 23, 2018 out of the offering proceeds that were allocated to the payment of offering expenses (other than underwriting commissions).
In addition, in order to finance transaction costs in connection with an intended initial business combination, Sponsor or its affiliate or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. On November 20, 2020, the Sponsor agreed to loan AMCI up to $1,000,000 as a going concern. Theseworking capital loan. This loan is non-interest bearing and is due at the earlier of the date on which AMCI consummates its Business Combination or February 22, 2021. On November 20, 2020, AMCI borrowed $400,000 on the working capital loan. Up to $1,500,000 of such loans may be convertible into warrants (which we refer to in this registration statement as Working Capital Warrants) at a price of $1.00 per warrant at the option of the lender. The Working Capital Warrants would be identical to the Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by Sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.
In connection with a loan previously made by Orion to AMCI, the outstanding balance of which as of November 24, 2020 is $2,365,649, the Sponsor has agreed to transfer one-half of its remaining Founder Shares and one-half of its remaining Placement Warrants to Orion as a permitted transferee of Sponsor at the Closing of the Business Combination. The loan by Orion is due and payable by AMCI upon the earlier of the Closing of the Business Combination or February 22, 2021.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the Combined Entity with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We have entered into a registration rights agreement with respect to the Founder Shares, the Placement Warrants, the Working Capital Warrants (if any) and the shares of Class A common stock issuable upon exercise of the foregoing and upon conversion of the Founder Shares.
Advent
Employment and Consulting Arrangements and Transaction Bonus
In contemplation of the Business Combination, Advent has entered into employment arrangements (including transaction bonuses) with each of its executive officers and a consulting arrangement with one of its current directors. For more information regarding these agreements with Advent’s executive officers and directors, please see “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Employment and Consulting Arrangements with Executive Officers and Directors” and “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Transaction Bonus Letter Agreements with Executive Officers” of this proxy statement/prospectus/consent solicitation.
Voting Agreement
In connection with the Business Combination, Advent and AMCI have entered into voting agreements with certain significant Advent stockholders, including certain key employees.
Longspur Agreement
On April 6, 2020, Advent entered into a letter agreement with Longspur Capital Limited (“Longspur” and such agreement, the “Longspur Engagement”), the company through which Advent’s current interim chief financial statementsofficer is providing services to Advent (as further discussed below). The Longspur Engagement was entered into in connection with Advent’s contemplated listing on the AIM Market of the London Stock Exchange and provides for Longspur to prepare an IPO preparation program, including but not limited to preparing an investment story, identifying potential private investors, and preparing research and a revised company valuation. Pursuant to such agreement an annual fee of £30,000 (plus VAT at the prevailing rate if applicable) would be charged. An additional fee of at least 15% of any monetary fees charged by any broker or NOMAD engaged by the company during the engagement period would also be charged. The initial term of the Longspur Engagement is a period of one year from April 1, 2020. On July 29, 2020, Advent and Longspur entered into a section letter agreement regarding the provision of interim chief financial officer services to Advent (the “Longspur Interim CFO Agreement”). The Longspur Interim CFO Agreement provided for Nick Stamp to act as Interim Chief Financial Officer, while remaining an employee of Longspur for an initial term of six months. The Longspur Interim CFO Agreement contemplated a £10,000 monthly fee, a £60,000 fee upon successful completion of the IPO, an additional fee of 0.25% of the total market capitalization of Advent upon IPO (payable in cash and shares), and an additional fee of 0.25% of the implied market valuation of Advent at the point of any interim fundraise payable on completion of the IPO. In connection with Advent’s decision to pursue the Transactions with AMCI rather than an IPO on the London Stock Exchange, Advent and Longspur subsequently entered into a verbal agreement pursuant to which all fees and compensation owed under the Longspur Engagement and the Longspur Interim CFO Agreement were cancelled and Advent will instead pay Longspur $1.3 million total at the Closing of the Business Combination.
AMCI’s stockholders do not includehave appraisal rights in connection with the Business Combination under Delaware law.
Advent’s stockholders will have appraisal rights in connection with the Business Combination under Delaware law. No Advent stockholder who has validly exercised its appraisal rights pursuant to Section 262 of the DGCL (a “Dissenting Stockholder”) with respect to its Advent stock (such shares, “Dissenting Shares”) will be entitled to receive any adjustmentsportion of the Merger Consideration with respect to the Dissenting Shares owned by such Dissenting Stockholder unless and until such Dissenting Stockholder has effectively withdrawn or lost its appraisal rights under the DGCL. Each Dissenting Stockholder will be entitled to receive only the payment resulting from the procedure set forth in Section 262 of the DGCL with respect to the Dissenting Shares owned by such Dissenting Stockholder. A copy of Section 262 of the DGCL is attached as Annex D to this proxy statement/prospectus/consent solicitation. Advent will give AMCI and the Purchaser Representative (i) prompt notice of any written demands for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to applicable laws that are received by Advent relating to any Dissenting Stockholder’s rights of appraisal and (ii) the opportunity to direct all negotiations and proceedings with respect to demand for appraisal under the DGCL. Advent will not, except with the prior written consent of AMCI and the Purchaser Representative, voluntarily make any payment with respect to any demands for appraisal, offer to settle or settle any such demands or approve any withdrawal of any such demands.
LEGAL MATTERS
Certain legal matters relating to the recoveryvalidity of the recorded assetscommon stock to be issued hereunder will be passed upon for AMCI by Ellenoff Grossman & Schole LLP, New York, New York.
EXPERTS
The audited financial statements of AMCI Acquisition Corp. for the period from June 18, 2018 (inception) to December 31, 2018 and for the year ended December 31, 2019 included in this proxy statement/prospectus/consent solicitation have been so included in reliance on a report of Marcum LLP, an independent registered public accounting firm, appearing elsewhere herein and are included in reliance on such report given upon such firm as experts in auditing and accounting.
The consolidated financial statements of Advent Technologies Inc. as at December 31, 2019 and 2018, and for each of the two years in the period ended December 31, 2019 included in this proxy statement/prospectus/consent solicitation of AMCI which is referred to and made a part of this prospectus and registration statement have been audited by Ernst & Young (Hellas) Certified Auditors Accountants S.A., independent registered public accounting firm, as set forth in their report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing. Ernst & Young (Hellas) Certified Auditors Accountants S.A. is located at Chimarras 8B, 15125, Maroussi, Athens, Greece and is registered as a corporate body with the public register for company auditors-accountants kept with the Body of Certified Auditors-Accountants, or SOEL, Greece with registration number 107.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for AMCI’s securities is Continental Stock Transfer & Trust Company.
DELIVERY OF DOCUMENTS TO STOCKHOLDERS AND WARRANTHOLDERS
Pursuant to the rules of the SEC, AMCI and servicers that it employs to deliver communications to AMCI’s stockholders are permitted to deliver to two or more stockholders sharing the same address a single copy of this proxy statement/prospectus/consent solicitation. Upon written or oral request, AMCI will deliver a separate copy of this proxy statement/prospectus/consent solicitation to any stockholder at a shared address to which a single copy of this proxy statement/prospectus/consent solicitation was delivered and who wishes to receive separate copies in the future. Stockholders receiving multiple copies of this proxy statement/prospectus/consent solicitation may likewise request that AMCI deliver single copies of AMCI’s proxy statement in the future. Stockholders may notify AMCI of their requests by calling or writing AMCI at its principal executive offices at 1501 Ligonier Street, Suite 370, Latrobe, PA 15650, (724) 672-4319. Following the Business Combination, communications should be sent to Advent Technologies Holdings, Inc., One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138.
SUBMISSION OF STOCKHOLDER PROPOSALS
AMCI’s board of directors is aware of no other matter that may be brought before the AMCI Special Meeting. Under Delaware law, only business that is specified in the notice of Special Meeting to stockholders may be transacted at the AMCI Special Meeting.
FUTURE STOCKHOLDER PROPOSALS
If the Business Combination is completed, you will be entitled to attend and participate in the Combined Entity’s annual meetings of stockholders. If we hold a 2021 annual meeting of stockholders, we will provide notice of or otherwise publicly disclose the date on which the 2021 annual meeting will be held. If the 2021 annual meeting of stockholders is held, stockholder proposals will be eligible for consideration by the directors for inclusion in the proxy statement for the Company’s 2021 annual meeting of stockholders in accordance with Rule 14a-8 under the Exchange Act.
STOCKHOLDER COMMUNICATIONS
Stockholders and interested parties may communicate with AMCI’s board of directors, any committee chairperson or the classificationnon-management directors as a group by writing to the board or committee chairperson in care of William Hunter, Chief Executive Officer, AMCI Acquisition Corp., 1501 Ligonier Street, Suite 370, Latrobe, PA 15650. Following the Business Combination, such communications should be sent to Advent Technologies Holdings, Inc., One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138. Each communication will be forwarded, depending on the subject matter, to the board of directors, the appropriate committee chairperson or all non-management directors.
WHERE YOU CAN FIND MORE INFORMATION
AMCI has filed a registration statement on Form S-4 to register the issuance of securities described elsewhere in this proxy statement/prospectus/consent solicitation. This proxy statement/prospectus/consent solicitations is a part of that registration statement.
AMCI files reports, proxy statements and other information with the SEC as required by the Exchange Act. You may access AMCI’s filings, including this proxy statement/prospectus/consent solicitation, over the Internet at the SEC’s website at: http://www.sec.gov. Those filings are also available free of charge to the public on, or accessible through, OAC’s corporate website at https://www.oaktreeacquisitioncorp.com/. OAC’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus.
Information and statements contained in this proxy statement/prospectus or any annex to this proxy statement/prospectus are qualified in all respects by reference to the copy of the liabilitiesrelevant contract or other annex filed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part, which includes exhibits incorporated by reference from other filings made with the SEC.
If you would like additional copies of this proxy statement/prospectus/consent solicitation or if you have questions about the Business Combination or the proposals to be presented at the AMCI Special Meeting, you should contact AMCI by telephone or in writing:
William Hunter
Chief Executive Officer
AMCI Acquisition Corp.
1501 Ligonier Street, Suite 370
Latrobe, PA 15650
(724) 672-4319
You may also obtain these documents by requesting them in writing or by telephone from AMCI’s proxy solicitation, Advantage Proxy agent at the following address and telephone number:
Karen Smith
President and Chief Executive Officer
Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: (877) 870-8565
Collect: (206) 870-8565
(banks and brokers can call collect at (206) 870-8565)
Email: ksmith@advantageproxy.com
If you are a stockholder of AMCI and would like to request documents, please do so by [], in order to receive them before the AMCI Special Meeting. If you request any documents from AMCI, AMCI will mail them to you by first class mail, or another equally prompt means.
All information contained or incorporated by reference in this proxy statement/prospectus/consent solicitation relating to AMCI has been supplied by AMCI, and all such information relating to Advent has been supplied by Advent. Information provided by either AMCI or Advent does not constitute any representation, estimate or projection of any other party. AMCI’s website is http://amciacquisition.com/ and Advent’s website is https://www.advent.energy/ The information on these websites is neither incorporated by reference into this proxy statement, prospectus/consent solicitation, or into any other filings with, or into any other information furnished or submitted to, the SEC.
This document is a proxy statement of AMCI for the AMCI Special Meeting. AMCI has not authorized anyone to give any information or make any representation about the Business Combination, AMCI or Advent that might be necessaryis different from, or in addition to, that contained in this proxy statement. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this proxy statement/prospectus/consent solicitation speaks only as of the Company be unabledate of this proxy statement/prospectus/consent solicitation, unless the information specifically indicates that another date applies.
This document is a prospectus/consent solicitation of Advent for the Advent Written Consent. Advent has not authorized anyone to continuegive any information or make any representation about the Business Combination, AMCI or Advent that is different from, or in addition to, that contained in this proxy statement/prospectus/consent solicitation. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this proxy statement/prospectus/consent solicitation speaks only as a going concern.of the date of this proxy statement/prospectus/consent solicitation, unless the information specifically indicates that another date applies.
NOTESINDEX TO FINANCIAL STATEMENTS
DECEMBER
AMCI Acquisition Corp. Audited Financial Statements | Page |
| F-2 |
| F-3 |
| F-4 |
| F-5 |
| F-6 |
| F-7 |
| |
AMCI Acquisition Corp. Condensed Unaudited Financial Statements | |
| F-18 |
| F-19 |
| F-20 |
| F-21 |
| F-22 |
| |
Advent Technologies Inc. Consolidated Balance Sheets | |
| F-34 |
| F-35 |
| F-36 |
| F-37 |
| F-38 |
| F-39 |
| F-40 |
| |
Advent Technologies Inc. Unaudited Interim Condensed Consolidated Financial Statements | |
| F-58 |
| F-59 |
| F-60 |
| F-61 |
| F-62 |
| F-63 |
Note 2 - Summary of Significant Accounting PoliciesREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BasisTo the Stockholders and the Board of PresentationDirectors of
AMCI Acquisition Corp.
TheOpinion on the Financial Statements
We have audited the accompanying balance sheets of AMCI Acquisition Corp. (the “Company”) as of December 31, 2019 and 2018, the related statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2019 and for the period from June 18, 2018 (inception) through December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements are presentedpresent fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the year ended December 31, 2019 and for the period from June 18, 2018 (inception) through December 31, 2018 in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.America.
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 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder 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 Securities Act registration statement 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 statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of balance sheet in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet, which 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.
Cash and cash equivalents held in Trust Account
At December 31, 2019, the assets held in the Trust Account were invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents totaling $225,433,349 and $221,060,045 held in the Trust Account as of December 31, 2019 and December 31, 2018, respectively. During the year ended December 31, 2019, the Company withdrew $265,057 from interest accrued in the Trust Account for the payment of franchise taxes and income taxes.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Common stock subject to possible redemption
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets.
Net loss per common share
Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. An aggregate of 20,846,454 and 20,869,316 shares of common stock subject to possible redemption at December 31, 2019 and December 31, 2018, respectively, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 27,962,493 shares of common stock, since the exercise of the warrants are contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.
Reconciliation of net loss per common share
The Company’s net income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the income of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:
| | For the Year Ended December 31, 2019 | | | For the period from June 18, 2018 (inception) through December 31, 2018 | |
Net income | | $ | 2,872,889 | | | $ | 307,638 | |
Less: Income attributable to common stock subject to possible redemption | | | (3,185,186 | ) | | | (353,013 | ) |
Adjusted net loss | | $ | (312,297 | ) | | $ | (45,375 | ) |
Weighted average shares outstanding, basic and diluted | | | 6,695,864 | | | | 5,338,303 | |
Basic and diluted net loss per common share | | $ | (0.05 | ) | | $ | (0.01 | ) |
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties as of December 31, 2019 and December 31, 2018. 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 subject to income tax examinations by major taxing authorities since inception.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by Advent as of the specified effective date. Unless otherwise discussed, Advent believes that the impact of recently issued standards that are not yet effective will not have a material impact on Advent’s financial position or results of operations under adoption.
See Recent Accounting Pronouncements issued, not yet adopted under Note 2 — Summary of Significant Accounting Policies in the notes to the 2019 financial statements included elsewhere in this proxy statement for more information about recent accounting pronouncements, the timing of their adoption and Advent’s assessment, to the extent Advent has made one, of their potential impact on Advent’s financial condition and results of operations.
Quantitative and Qualitative Disclosures About Market Risk
Advent is exposed to a variety of market and other risks, including the effects of changes in interest rates and inflation, as well as risks to the availability of funding sources, hazard events and specific asset risks.
Interest Rate Risk
Advent holds cash and cash equivalents for working capital purposes. As of September 30, 2020, Advent had a cash balance of approximately $0.9 million, consisting of operating and savings accounts which are not affected by changes in the general level of U.S. interest rates. Advent is not expected to be materially exposed to interest rate risk in future as it intends to take on limited debt finance.
Inflation Risk
Advent does not believe that inflation currently has a material effect on its business.
Foreign Exchange Risk
Advent has costs predominantly denominated in euros and revenues denominated in both euros and dollars, and therefore is exposed to fluctuations in the euro/dollar exchange rate. To date, Advent has not entered into any hedging transactions to mitigate the effect of foreign exchange due to the relatively low sums involved. As the Company increases in scale, it expects to continue to incur a substantial proportion of its costs in euros, and therefore expects to put in place appropriate foreign exchange risk mitigation features in due course.
DESCRIPTION OF SECURITIES OF AMCI
The following summary of the material terms of the AMCI’s securities following the Business Combination is not intended to be a complete summary of the rights and preferences of such securities. We urge you to read the proposed Amended Charter in its entirety for a complete description of the rights and preferences of AMCI’s securities following the Business Combination. The proposed Amended Charter is described in “The Charter Amendment Proposals,” and the full text of the proposed Amended and Restated Charter is attached asAnnex B to this proxy statement/prospectus/consent solicitation.
Pursuant to the AMCI Charter, our authorized capital stock consists of 100,000,000 shares of Class A common stock, $0.0001 par value, 10,000,000 shares of Class B common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. Following the Business Combination, pursuant to the Amended Charter, the authorized capital stock of New AMCI will consist of 110,000,000 shares of common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material terms of the capital stock of New AMCI after the Business Combination. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit had an offering price of $10.00 and consists of one whole share of Class A common stock and one redeemable warrant. Each warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. On November 20, 2018, AMCI closed the IPO for the sale of 20,000,000 units at a price of $10.00 per unit, and on November 27, 2018, AMCI’s underwriter partially exercised the over-allotment option and purchased an additional 2,052,077 units.
Common Stock
Upon the Closing, the outstanding shares of Class A common stock, including any shares of Class B common stock that are converted into AMCI Class A common stock in accordance with the AMCI Charter, will be redesignated as common stock, par value $0.0001 per share, of Advent Technologies Holdings, Inc. (the new name of AMCI after the Closing), which shares are referred to herein as New AMCI common stock.
It is anticipated that, immediately after the Closing of the Business Combination, New AMCI will have a total of 46,167,083 shares of New AMCI common stock issued and outstanding. The foregoing excludes any outstanding Warrants and assumes that (i) there are no redemptions of any shares by AMCI’s public stockholders in connection with the Business Combination or an Extension Redemption, (ii) the negative Closing Net Indebtedness is ($929,283), based on Advent’s unaudited interim condensed consolidated financial statements as of September 30, 2020, (iii) no awards are issued under the Equity Incentive Plan, (iv) no Working Capital Warrants are issued, and (v) AMCI does not engage in any kind of equity financing prior to the Closing. If the actual facts are different than these assumptions (which they are likely to be), the total number of shares of New AMCI common stock issued and outstanding immediately after the Closing of the Business Combination will be different.
Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in the Amended Charter or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our shares of New AMCI common stock that are voted is required to approve any such matter voted on by our stockholders. Our board of directors will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
All of the outstanding Founder Shares, as shares of Class B common stock, will convert into shares of New AMCI common stock at the Closing of the Business Combination. With certain limited exceptions, the Founder Shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with the Sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the Closing or (B) subsequent to the Closing, (x) if the last sale price of the New AMCI common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing, or (y) the date on which New AMCI completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Preferred Stock
The Amended Charter provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in the Business Combination.
Warrants
Public Warrants
Each Public Warrant entitles the registered holder to purchase one share of New AMCI common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the Closing. The Public Warrants will expire five years after the Closing of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any shares of New AMCI common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of New AMCI common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable and we will not be obligated to issue shares of New AMCI common stock upon exercise of a warrant unless the New AMCI common stock issuable upon such warrant 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 warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Public Warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant.
We are not registering the shares of New AMCI common stock issuable upon exercise of the Public Warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 15 business days after the Closing of the Business Combination, we will use our best efforts to file with the SEC a registration statement covering the shares of New AMCI common stock issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of New AMCI common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of New AMCI common stock issuable upon exercise of the warrants is not effective by the 60th business day after the Closing of the Business Combination, warrantholders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the New AMCI common stock issuable upon exercise of the warrants is not effective within a specified period following the Closing of the Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
Once the Public Warrants become exercisable, we may call the warrants for redemption:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon not less than 30 days’ prior written notice of redemption to each warrantholder; and |
| ● | if, and only if, the reported last sale price of the New AMCI common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrantholders. |
If and when the Public Warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.
We have established the last of the redemption criteria discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the Public Warrants, each warrantholder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the New AMCI common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 warrant exercise price after the redemption notice is issued.
If we call the Public Warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise its warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of New AMCI common stock issuable upon the exercise of our warrants. If our management takes advantage of this option, all holders of Public Warrants would pay the exercise price by surrendering their warrants for that number of shares of New AMCI common stock equal to the quotient obtained by dividing (x) the product of the number of shares of New AMCI common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the New AMCI common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of New AMCI common stock to be received upon exercise of the Public Warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the warrants after the Closing. If we call our Public Warrants for redemption and our management does not take advantage of this option, Sponsor and its permitted transferees would still be entitled to exercise their Placement Warrants for cash or on a cashless basis using the same formula described above that other warrantholders would have been required to use had all warrantholders been required to exercise their warrants on a cashless basis, as described in more detail below.
A holder of a Public Warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the shares of New AMCI common stock outstanding immediately after giving effect to such exercise.
If the number of outstanding shares of New AMCI common stock is increased by a stock dividend payable in shares of New AMCI common stock, or by a split-up of shares of New AMCI common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of New AMCI common stock issuable on exercise of each Public Warrant will be increased in proportion to such increase in the outstanding shares of New AMCI common stock. A rights offering to holders of New AMCI common stock entitling holders to purchase shares of New AMCI common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of New AMCI common stock equal to the product of (i) the number of shares of New AMCI common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for New AMCI common stock) and (ii) one (1) minus the quotient of (x) the price per share of New AMCI common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for New AMCI common stock, in determining the price payable for New AMCI common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of New AMCI common stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of New AMCI common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the Public Warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of New AMCI common stock on account of such shares of New AMCI common stock (or other shares of our capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of New AMCI common stock in connection with the Closing of the Business Combination, (d) to satisfy the redemption rights of the holders of New AMCI common stock in connection with an Extension Rea stockholder vote to amend the AMCI Charter (i) for an Extension or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of New AMCI common stock in respect of such event.
If the number of outstanding shares of our New AMCI common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of New AMCI common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of New AMCI common stock issuable on exercise of each Public Warrant will be decreased in proportion to such decrease in outstanding shares of New AMCI common stock.
Whenever the number of shares of New AMCI common stock purchasable upon the exercise of the Public Warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of New AMCI common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of New AMCI common stock so purchasable immediately thereafter.
In case of any reclassification or reorganization of the outstanding shares of New AMCI common stock (other than those described above or that solely affects the par value of such shares of New AMCI common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of New AMCI common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the Public Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of our New AMCI common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. If less than 70% of the consideration receivable by the holders of New AMCI common stock in such a transaction is payable in the form of New AMCI common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants in order to determine and realize the option value component of the warrant. This formula is to compensate the warrant holder for the loss of the option value portion of the warrant due to the requirement that the warrant holder exercise the warrant within 30 days of the event. The Black-Scholes model is an accepted pricing model for estimating fair market value where no quoted market price for an instrument is available.
The Public Warrants and the Placement Warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and AMCI. You should review a copy of the warrant agreement, which has been publicly filed with the SEC and which you can find in the list of exhibits to this registration statement, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
The Public Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrantholders do not have the rights or privileges of holders of New AMCI common stock and any voting rights until they exercise their warrants and receive shares of New AMCI common stock. After the issuance of shares of New AMCI common stock upon exercise of the warrants, each holder will be entitled to one (1) vote for each share held of record on all matters to be voted on by stockholders.
No fractional shares will be issued upon exercise of the Public Warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number of shares of New AMCI common stock to be issued to the warrantholder.
Placement Warrants
Except as described below, the Placement Warrants have terms and provisions that are identical to those of the Public Warrants, including as to exercise price, exercisability and exercise period. The Placement Warrants (including the New AMCI common stock issuable upon exercise of the Placement Warrants) are not transferable, assignable or salable until 30 days after the Closing (except, among certain other limited exceptions to our officers and directors and other persons or entities affiliated with Sponsor) and they will not be redeemable by us so long as they are held by Sponsor or its permitted transferees. Sponsor, or its permitted transferees, has the option to exercise the Placement Warrants on a cashless basis. If the Placement Warrants are held by holders other than Sponsor or its permitted transferees, the Placement Warrants will be subject to the same terms and conditions as the Public Warrants, and among other matters, be redeemable by us and exercisable by the holders on the same basis as the Public Warrants.
If holders of the Placement Warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of shares of New AMCI common stock equal to the quotient obtained by dividing (x) the product of the number of shares of New AMCI common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the New AMCI common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
In order to finance transaction costs in connection with an intended initial business combination, Sponsor or its affiliate or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into warrants (referred to in this registration statement as Working Capital Warrants) at a price of $1.00 per warrant at the option of the lender. Such Working Capital Warrants would be identical to the Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by Sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. On November 20, 2020, the Sponsor agreed to loan AMCI up to $1,000,000 as a working capital loan. This loan is non-interest bearing and is due at the earlier of the date on which AMCI consummates its Business Combination or February 22, 2021. On November 20, 2020, AMCI borrowed $400,000 on the working capital loan.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the Closing of the Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to the Closing. The payment of any cash dividends subsequent to the Closing will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent and Warrant Agent
The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
Our Amended and Restated Certificate of Incorporation
The AMCI Charter contains certain requirements and restrictions relating to the AMCI IPO that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of 65% of our common stock. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of the IPO (assuming they do not purchase any units in the IPO), will participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
| ● | If we are unable to complete our initial business combination prior to February 22, 2021 (subject to further extension by amendment to the AMCI Charter), we 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 subject to lawfully available funds therefor, 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 on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; |
| ● | Prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination; |
| ● | Although we do not intend to enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or our officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that such an initial business combination is fair to our company from a financial point of view; |
| ● | If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; whether or not we maintain our registration under the our Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above; |
| ● | So long as we obtain and maintain a listing for our securities on Nasdaq, Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination; |
| ● | If our stockholders approve an amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of the IPO or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares; and |
| ● | We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
In addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriters’ fees and commissions.
Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws
We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of the IPO. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:
| ● | a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”); |
| ● | an affiliate of an interested stockholder; or |
| ● | an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. |
A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
| ● | our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction; |
| ● | after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or |
| ● | on or subsequent to the date of the transaction, the initial business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
The AMCI Charter provides that our board of directors are classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.
Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval (including a specified future issuance) and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive forum for certain lawsuits
The AMCI Charter requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.
Special meeting of stockholders
Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our Chief Executive Officer or by our Chairman.
Advance notice requirements for stockholder proposals and director nominations
Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the company secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Action by written consent
Subsequent to the consummation of the IPO, any action required or permitted to be taken by our common stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders other than with respect to our Class B common stock.
Classified Board of Directors
Our board of directors are divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. The AMCI Charter provides that the authorized number of directors may be changed only by resolution of the board of directors. Subject to the terms of any preferred stock, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.
Class B Common Stock Consent Right
For so long as any shares of Class B common stock remain outstanding, we may not, without the prior vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of our certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock. Any action required or permitted to be taken at any meeting of the holders of Class B common stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class B common stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class B common stock were present and voted.
Securities Eligible for Future Sale
As of November 24, 2020, there are 9,061,136 shares of Class A common stock issued and outstanding 5,513,019 shares of Class B common stock issued and outstanding.
Registration Rights
The holders of the Founder Shares, Placement Warrants and Working Capital Warrants (and any shares of Class A common stock issuable upon the exercise of the Placement Warrants and Working Capital Warrants) are entitled to registration rights pursuant to the registration rights agreement that was signed at the time of the AMCI IPO, requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration statements.
Listing of Securities
Our Units, Class A common stock and Public Warrants are currently listed on Nasdaq under the symbols “AMCIU,” “AMCI” and “AMCIW,” respectively. It is currently expected that after the Closing, our New AMCI common stock and Public Warrants will be listed on Nasdaq under the symbols “______” and “______W”, respectively.
SECURITIES ACT RESTRICTIONS ON RESALE OF COMMON STOCK
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
| ● | 1% of the total number of shares of Class A common stock (or after the Closing, New AMCI common stock) then outstanding; or |
| ● | the average weekly reported trading volume of the Class A common stock (or after the Closing, New AMCI common stock) then during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
| ● | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
| ● | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
| ● | the issuer of the securities has filed all Exchange Act reports and materials required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and |
| ● | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
As a result, our initial stockholders will be able to sell their Founder Shares and private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
COMPARISON OF STOCKHOLDER RIGHTS
Both AMCI and Advent are incorporated under the laws of the State of Delaware and, accordingly, the rights of the stockholders of each are currently, and will continue to be, governed by the Delaware General Corporation Law, or the DGCL. If the Merger is completed, Advent stockholders will become stockholders of AMCI, and their rights will be governed by the DGCL, and, assuming the Charter Amendment Proposals are approved by the AMCI stockholders at the AMCI Special Meeting, the Amended Charter attached to this proxy statement/prospectus/consent solicitation as Annex B, and the bylaws of AMCI.
The table below summarizes the material differences between the current rights of Advent stockholders under the Advent certificate of incorporation and bylaws and the rights of AMCI stockholders, post-Closing, under the Amended Charter and bylaws, each as amended, as applicable, and as in effect immediately following the Business Combination.
While AMCI and Advent believe that the summary tables cover the material differences between the rights of their respective stockholders prior to the Business Combination and the rights of AMCI stockholders following the Business Combination, these summary tables may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus/consent solicitation and the other documents referred to in this proxy statement/prospectus/consent solicitation for a more complete understanding of the differences between being a stockholder of AMCI or Advent before the Business Combination and being a stockholder of AMCI after the Business Combination. AMCI has attached as Annex B to this proxy statement/prospectus/consent solicitation a copy of the proposed Amended Charter, and has publicly filed its bylaws with the SEC, which you can find in the list of exhibits to this registration statement, and will send copies of the documents referred to in this proxy statement/prospectus/consent solicitation to you upon your request. Advent will also send copies of its organizational documents referred to in this proxy statement/prospectus/consent solicitation to you upon your request. See the section titled “Where You Can Find More Information” in this proxy statement.
Current Advent Rights Versus New AMCI Rights Post-Merger
Provision | | | Advent Technologies Inc. (Pre-Merger) | | | New AMCI (Post-Closing) |
Authorized Capital Stock | | | Advent is currently authorized to issue 10,000,000 shares of capital stock, consisting of (a) 6,591,595 shares of common stock and (b) 3,408,405 shares of preferred stock. | | | New AMCI will be authorized to issue 111,000,000 shares of capital stock, consisting of (a) 110,000,000 shares of common stock and (b) 1,000,000 shares of preferred stock. Upon consummation of the Merger and assuming no additional AMCI Class A common stock are redeemed, we expect there will be approximately 46,167,083 shares of New AMCI common stock. |
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Number and Qualification of Directors | | | The number of directors of Advent will be fixed from time to time by Advent’s board of directors pursuant to a resolution adopted by a majority of Advent’s board of directors or by the stockholders of Advent at the annual meeting or any special meeting of the stockholders of Advent. | | | The number of directors of New AMCI shall not be fewer than 7 and not more than 9. The number of directors initially shall be 7. The precise number of directors shall be fixed by the New AMCI board of directors pursuant to a resolution adopted by the board of directors. |
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Classification of the Board of Directors | | | Delaware law permits a corporation to classify its board of directors into as many as three classes with staggered terms of office. However, the current charter of Advent does not provide for a classified board of directors. | | | Following the Merger, New AMCI will have a classified board of directors, with three classes of directors. Class I will initially serve a 1 year term, Class II will initially serve a 2 year term, and Class III will initially serve a 3 year term. All classes will serve 3 year terms following their initial term. |
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Appointment of Directors | | | At Advent’s annual meeting, the stockholders elect directors each of whom shall hold office until his or her successor is elected and qualified, unless sooner displaced. At stockholder meetings for the election of directors, the vote required for election of a director shall be the affirmative vote of a majority of the votes cast in favor or against the election of a nominee. | | | At New AMCI’s annual meeting, the stockholders elect directors each of whom shall hold office until his or her successor is elected and qualified, unless sooner displaced. At stockholder meetings for the election of directors, the vote required for election of a director shall be by a plurality of the votes cast by stockholders entitled to vote in the election in favor or against the election of a nominee. |
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Removal of Directors | | | Any director or the entire board may be removed from office with or without cause at any time, by the affirmative vote of the holders of a majority of the voting power of all then outstanding shares of Advent entitled to vote for the election of directors. | | | Any director or the entire board may be removed from office with or without cause at any time, by the affirmative vote of the holders of a majority of the voting power of all then outstanding shares of New AMCI entitled to vote for the election of directors. |
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Vacancies on the Board of Directors | | | Any newly created directorship on the Advent board that results from an increase in the number of directors and any vacancies on the board resulting from death, resignation, removal or failure of the stockholders to elect as many directors as the number of directorships fixed by them, or otherwise, are filled exclusively by a majority vote of the remaining directors then in office, even if less than a quorum. | | | Any newly created directorship on the New AMCI board that results from an increase in the number of directors and any vacancies on the board are filled exclusively pursuant to a resolution adopted by the New AMCI board of directors. |
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| | | Any director so chosen will hold office until his or her successor has been elected. | | | Any director so chosen will hold office until his or her successor has been elected and qualified. |
Special Meeting of the Board of Directors | | | Special meetings of the Advent board may be called by the President or upon the written request of any director. | | | Special meetings of the New AMCI board may be called by the chairman of the board or President and shall be called by the chairman of the board, President or Secretary on the written request of at least a majority of directors then in office, or the sole director |
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Special Meeting of the Stockholders | | | Special meetings of the stockholders of Advent may be called by the board of directors, the chairman of the board of directors, the President or, in the absence or disability of the President, by a Vice President. Upon the written request of more than one-tenth (1/10) of the voting power of all then outstanding shares of Advent entitled to vote at the meeting, the President shall call a special meeting of the stockholders. If the President does not call such special meeting of the stockholders within fifteen (15) days after receipt of such written request, such stockholders may call the special meeting of the stockholders. | | | Special meetings of the stockholders of New AMCI may be called by the board of directors, the chairman of the board of directors, or holders of a majority of the total votes entitled to be cast by the holders of all the outstanding capital stock entitled to vote generally in the election of directors. |
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Notice of Stockholder Meetings | | | Except as otherwise required by law or in the current charter, notice of each meeting of Advent stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the Advent stockholders entitled to notice of the meeting. | | | Except as otherwise required by law or in the current charter, notice of each meeting of New AMCI stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting unless otherwise required by the DGCL |
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Voting | | | Except as otherwise required by law or the current charter of Advent, holders of common stock are entitled to one vote for each share of common stock held at all meetings; provided, that, except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the current charter of Advent that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the current charter of Advent. Except as otherwise required by law or the current charter of Advent, holders of preferred stock are entitled to case the number of votes equal to the number of whole shares of common stock into which the shares of preferred stock held by such holder are convertible as of the record date on any matter presented to the stockholders of Advent for their action or consideration at any meeting of the stockholders of Advent. Except as otherwise required by law or the current charter of Advent, holders of preferred stock shall vote together with the holders of common stock as a single class and on an as-converted to common stock basis. | | | Except as otherwise required by law or the charter of New AMCI, holders of common stock are entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders are generally entitled to vote; provided, that, except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the charter of New AMCI that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the charter of New AMCI or the DGCL. |
Cumulative Voting | | | Delaware law allows for cumulative voting only if provided for in the current charter of Advent; however, the current charter of Advent does not authorize cumulative voting. | | | Delaware law allows for cumulative voting only if provided for in the charter of AMCI. The charter of AMCI does not authorize cumulative voting. |
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Drag Along | | | If the stockholders of Advent representing a majority of the then-outstanding voting power of Advent propose to consummate a Approved Transaction (as defined in the stockholders’ agreement of Advent), whether in one transaction or a series of related transactions, the stockholders representing a majority of the then-outstanding voting power of Advent have the right to require that such other stockholders support and participate in the Approved Transaction on substantially the same terms and conditions as the stockholders representing a majority of the then-outstanding voting power. | | | Any action required or permitted to be taken by the stockholders of New AMCI at any annual or special meeting of the stockholders may be effected only at a duly called annual or special meeting of stockholders of New AMCI and may not be effected by any consent in writing by such stockholders. |
Declaration and Payment of Dividends | | | Unless further restricted in the certificate of incorporation, the DGCL permits a corporation to declare and pay dividends out of either (i) surplus, or (ii) if no surplus exists, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (provided that the amount of capital of the corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets). The DGCL defines surplus as the excess, at any time, of the net assets of a corporation over its stated capital. In addition, the DGCL provides that a corporation may redeem or repurchase its shares only when the capital of the corporation is not impaired and only if such redemption or repurchase would not cause any impairment of the capital of a corporation. The current charter of Advent provides that, Advent shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the preferred stock then outstanding first receive, or simultaneously receive, a dividend on each outstanding share of preferred stock in an amount equal to (i) in the case of a dividend on common stock or any class or series that is convertible into common stock, that dividend per share of preferred stock as would equal the product of (A) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into common stock and (B) the number of shares of common stock issuable upon conversion of a share of preferred stock, in each case calculated on the record date for determination of holders entitled to receive such dividend or (ii) in the case of a dividend on any class or series that is not convertible into common stock, at a rate per share of preferred stock determined by (A) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issue price of such class or series of capital stock (subject to appropriate adjustment) and (B) multiplying such fraction by an amount equal to the applicable original issue price; provided that, if Advent declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock, the dividend payable to the holders of the preferred stock shall be calculate based upon the dividend on the class or series of capital stock that would result in the highest preferred stock dividend. | | | The board of directors of New AMCI may from time to time declare, and New AMCI may pay, dividends (payable in cash, property or shares of New AMCI’s capital stock) on New AMCI’s outstanding shares of capital stock, subject to applicable law and New AMCI’s charter. |
Limitation of Liability of Directors and Officers | | | The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. The current charter of Advent provides that, to the fullest extent provided by law, no director will be personally liable to Advent or its stockholders for monetary damages for beach of fiduciary duty as a director. | | | The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. The charter of New AMCI will provide that, to the fullest extent provided by law, no director will be personally liable to New AMCI or its stockholders for monetary damages for beach of fiduciary duty as a director. |
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Indemnification of Directors, Officers | | | The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity. The current charter of Advent provides that Advent will indemnify each director and officer to the fullest extent permitted by applicable law. | | | The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity. The charter of New AMCI will provide that New AMCI will indemnify each director and officer to the fullest extent permitted by applicable law. |
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Interested Directors | | | To the fullest extent permitted by law, Advent renounces any expectancy that any of the Advent directors will offer any corporate opportunity in which he or she may become aware to Advent, except with respect to any of the directors of Advent with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a director of Advent while such person is performing services in such capacity. | | | To the fullest extent permitted by law, New AMCI renounces any expectancy that any of the New AMCI directors will offer any corporate opportunity in which he or she may become aware to New AMCI, except with respect to any of the directors of New AMCI with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a director of New AMCI while such person is performing services in such capacity. |
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Fiduciary Duties of Directors | | | Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the board of directors or any committee designated by the board of directors are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the board of directors or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information protects directors from liability related to decisions made based on such records and other information. The Advent board of directors may exercise all such powers of Advent and do all such lawful acts and things as are not by statute or Advent’s charter or Advent’s bylaws of the stockholders’ agreement of Advent stockholders directed or required to be exercised or done solely by stockholders. | | | Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the board of directors or any committee designated by the board of directors are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the board of directors or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information protects directors from liability related to decisions made based on such records and other information. The New AMCI board of directors may exercise all such powers of New AMCI and do all such lawful acts and things as are not by statute or New AMCI’s charter or New AMCI’s bylaws of the stockholders’ agreement of New AMCI stockholders directed or required to be exercised or done solely by stockholders. |
Inspection of Books and Records | | | Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. The current charter of Advent permits Advent’s books and records to be kept within or outside Delaware. | | | Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. The charter of New AMCI will permit New AMCI’s books and records to be kept within or outside Delaware. |
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Choice of Forum | | | The current charter of Advent generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to: (i) any derivative action or proceeding brought on behalf of Advent, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of Advent to Advent or Advent’s stockholders, (iii) any action asserting a claim against Advent, its directors, officers, or employees arising pursuant to any provision of the DGCL or the current charter of Advent or Advent’s bylaws, (iv) any action asserting a claim against Advent, its directors, officers, or employees governed by the internal affairs doctrine, subject to certain exceptions. | | | The charter of New AMCI generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to: (i) any derivative action or proceeding brought on behalf of New AMCI, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of New AMCI to New AMCI or New AMCI’s stockholders, (iii) any action asserting a claim against New AMCI, its directors, officers, or employees arising pursuant to any provision of the DGCL or the current charter of New AMCI or New AMCI’s bylaws, (iv) any action asserting a claim against New AMCI, its directors, officers, or employees governed by the internal affairs doctrine, subject to certain exceptions. |
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Quorum | | | Board of directors. A majority of the Advent board of directors constitutes a quorum at any meeting of the Advent board of directors. Stockholders. The presence, in person or proxy, at a stockholders meetings of the holders of shares of outstanding capital stock representing a majority of the voting power of all outstanding shares of capital stock entitled to vote at such meeting constitutes a quorum; except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series will constitute a quorum. | | | Board of directors. A majority of the New AMCI board of directors constitutes a quorum at any meeting of the New AMCI board of directors. Stockholders. The presence, in person or proxy, at a stockholders meetings of the holders of shares of outstanding capital stock representing a majority of the voting power of all outstanding shares of capital stock entitled to vote at such meeting constitutes a quorum; except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series will constitute a quorum. |
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Amendment to Certificate of Incorporation | | | Under Delaware law, an amendment to a charter generally requires the approval of the Advent board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. Except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the current charter of Advent that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the current charter of Advent. | | | Under Delaware law, an amendment to a charter generally requires the approval of the New AMCI board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. Except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the charter of New AMCI that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitle, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the charter of New AMCI. |
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Amendment to Bylaws | | | The Advent board of directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the bylaws of Advent. The bylaws may also be amended, repealed or added to by the Advent stockholders representing a majority of the voting power of all of the then-outstanding shares of capital stock of Advent. | | | The New AMCI board of directors will be expressly authorized to make, repeal, alter, amend and rescind any or all of the bylaws of New AMCI. The bylaws may also be amended, repealed or added to by the New AMCI stockholders representing at lease sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the then-outstanding shares of capital stock of New AMCI. |
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information regarding the beneficial ownership of shares of AMCI common stock as of the date hereof (pre-Business Combination) and the currently expected ownership of shares of New AMCI common stock upon the Closing of the Business Combination by:
| ● | each person known by AMCI to be the beneficial owner of more than 5% of AMCI common stock as of the date hereof (pre-Business Combination) or of shares of New AMCI common stock upon the Closing of the Business Combination; |
| ● | each of AMCI’s officers and directors; |
| ● | each person who will become an executive officer or director of the Combined Entity upon the Closing of the Business Combination; and |
| ● | all executive officers and directors of the Combined Entity as a group upon the Closing of the Business Combination. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.
The beneficial ownership of shares of AMCI common stock pre-Business Combination is based on 14,574,155 issued and outstanding shares of AMCI common stock as of the date hereof, consisting of 9,061,136 shares of Class A common stock and 5,513,019 shares of Class B common stock. The beneficial ownership of shares of New AMCI common stock upon the closing of the Business Combination is based on 46,167,083 shares to be outstanding. It excludes any outstanding Warrants and assumes that (i) there are no redemptions of any shares by AMCI’s public stockholders in connection with the Business Combination or an Extension Redemption, (ii) the negative Closing Net Indebtedness is ($929,283), based on Advent’s unaudited interim condensed consolidated financial statements as of September 30, 2020, (iii) no awards are issued under the Equity Incentive Plan, (iv) no Working Capital Warrants are issued, and (v) AMCI does not engage in any kind of equity financing prior to the Closing. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by AMCI’s existing stockholders in AMCI will be different.
Unless otherwise indicated, AMCI believes that all persons named in the table have sole voting and investment power with respect to all AMCI common stock beneficially owned by them.
Pre-Business Combination Beneficial Ownership Table
| | Class A Common Stock | | | Class B Common Stock | | | Approximate | |
Name and Address of Beneficial Owner (1) | | Number of Shares Beneficially Owned | | | Approximate Percentage of Class | | | Number of Shares Beneficially Owned | | | Approximate Percentage of Class | | | Percentage of Outstanding Common Stock | |
AMCI Sponsor LLC(3) | | | — | | | | — | | | | 5,028,019 | | | | 91.20 | % | | | 34.5 | % |
Hans J. Mende(3) | | | — | | | | — | | | | 5,028,019 | | | | 91.20 | % | | | 34.5 | % |
Fritz R. Kundrun(3) | | | — | | | | — | | | | 5,028,019 | | | | 91.20 | % | | | 34.5 | % |
William Hunter | | | — | | | | — | | | | 100,000 | | | | 1.81 | % | | | * | |
Brian Beem | | | — | | | | — | | | | 100,000 | | | | 1.81 | % | | | * | |
Nimesh Patel | | | — | | | | — | | | | 100,000 | | | | 1.81 | % | | | * | |
Patrick Murphy | | | — | | | | — | | | | 80,000 | | | | 1.45 | % | | | * | |
Gary Uren | | | — | | | | — | | | | 35,000 | | | | 0.63 | % | | | * | |
Lawrence M. Clark, Jr. | | | — | | | | — | | | | 35,000 | | | | 0.63 | % | | | * | |
Jason Grant | | | — | | | | — | | | | 35,000 | | | | 0.63 | % | | | * | |
Shaolin Capital Management LLC(4)** | | | 1,100,000 | | | | 12.1 | % | | | — | | | | — | | | | 7.6 | % |
Hudson Bay Capital Management LP(5)** | | | 2,601,100 | | | | 28.7 | % | | | — | | | | — | | | | 17.8 | % |
Davidson Kempner Capital Management LP (6)** | | | 1,300,000 | | | | 14.3 | % | | | — | | | | — | | | | 8.9 | % |
Glazer Capital (7) ** | | | 3,092,538 | | | | 34.1 | % | | | — | | | | — | | | | 21.2 | % |
All directors and executive officers as a group (8 individuals)(2) | | | — | | | | — | | | | 5,513,019 | | | | 100 | % | | | 37.8 | % |
* less than 1%
** | The stockholder may have redeemed some or all of AMCI’s common stock held by such holder in connection with AMCI’s stockholders meeting in October 2020. Information relating to such redemption is not available to AMCI as of the date hereof. |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o AMCI Acquisition Corp., 1501 Ligonier Street, Suite 370, Latrobe, PA 15650. |
(2) | Interests shown consist solely of founder shares, classified as shares of Class B common stock. Such shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment. |
(3) | AMCI Sponsor LLC is the record holder of such shares. 2005 Kirmar Trust (US) and Fritz R. Kundrun Revocable Trust (US) each hold 50% of the Sponsor. Hans J. Mende, our Executive Chairman, is the trustee of 2005 Kirmar Trust (US) and Fritz R. Kundrun is the trustee of Fritz R. Kundrun Revocable Trust (US), and as a result each has voting and investment discretion with respect to the common stock held by the Sponsor. Each may thus be deemed to have beneficial ownership of the Class B common stock held directly by the Sponsor. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Excludes shares underlying the contingent forward purchase contract, as such shares may not be voted or disposed of by the Sponsor within 60 days of the date hereof. |
(4) | According to a Schedule 13G filed with the SEC on February 11, 2019, Shaolin Capital Management LLC holds 1,100,000 shares of the Class A common stock reported therein. The address of the principal business office of the reporting person is 1460 Broadway New York, New York 10036. |
(5) | According to a Schedule 13G Amendment filed with the SEC on April 3, 2020, Hudson Bay Capital Management LP, a Delaware limited partnership (“Hudson Bay”), serves as the investment manager to Hudson Bay Master Fund Ltd., in whose name the shares of Class A common stock reported therein are held. As such, Hudson Bay may be deemed to be the beneficial owner of all shares of Class A common stock held by Hudson Bay Master Fund Ltd. Sander Gerber serves as the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay. Mr. Gerber disclaims beneficial ownership of these securities. The address of the principal business office of each of the reporting persons is 777 Third Avenue, 30th Floor, New York, NY 10017. |
(6) | According to a Schedule 13G/A filed with the SEC on February 13, 2020, Davidson Kempner Capital Management LP holds 1,300,000 shares of the Company’s Class A common stock. Anthony A. Yoseloff is the Executive Managing Member and controls the reporting person. The address of the principal business office of the reporting person is 520 Madison Avenue, 30th Floor, New York, New York 10022. |
(7) | According to a Schedule 13G/A filed with the SEC on May 8, 2020, the shares reported are held by certain funds and managed accounts to which Glazer Capital LLC serves as investment manager. Paul J. Glazer serves as the Managing Member of Glazer Capital LLC. The address of the business office of each of the reporting persons is 250 West 55th Street, Suite 30A, New York, New York 10019 |
The table above does not include the shares of common stock underlying the private placement warrants held or to be held by AMCI’s officers, directors or the Sponsor.
Post-Business Combination Beneficial Ownership Table
| | | | | | | | Combined Entity Post-Business Combination | |
| | AMCI Pre-Business Combination | | | (assuming no redemptions by AMCI stockholders)(1) | | | (assuming maximum redemptions by AMCI stockholders)(2) | |
Name and Address of Beneficial Owner | | Number of Shares | | | Percentage of Outstanding Shares | | | Number of Shares | | | Percentage of Outstanding Shares | | | Number of Shares | | | Percentage of Outstanding Shares | |
Directors and Executive Officers Post-Business Combination | | | | | | | | | | | | | | | | | | |
Vassilios Gregoriou | | | — | | | | — | | | | 5,478,494 | | | | 13.81 | % | | | 5,478,494 | | | | 14.33 | % |
William Hunter | | | 100,000 | | | | * | | | | 100,000 | | | | * | | | | 100,000 | | | | * | |
Christos Kaskavelis(3) | | | — | | | | — | | | | 3,713,753 | | | | 9.36 | % | | | 3,713,753 | | | | 9.72 | % |
Emory De Castro | | | — | | | | — | | | | 2,130,049 | | | | 5.37 | % | | | 2,130,049 | | | | 5.57 | % |
James F. Coffey | | | — | | | | — | | | | 592,110 | | | | 1.49 | % | | | 592,110 | | | | 1.55 | % |
Katherine E. Fleming | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Anggelos Skutaris | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Katrina Fritz | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Lawrence M. Clark, Jr. | | | 35,000 | | | | * | | | | 35,000 | | | | * | | | | 35,000 | | | | * | |
| | | | | | | | | | | | | | | | | | | | | | | | |
All directors and executive officers of Combined Entity post-Business Combination as a group (nine individuals)(4) | | | — | | | | — | | | | 12,049,406 | | | | 30.4 | % | | | 12,049,406 | | | | 31.51 | % |
Five Percent Holders: | | | | | | | | | | | | | | | | | | | | | | | | |
AMCI Sponsor LLC (5)(7) | | | 5,108,019 | | | | 18.5 | % | | | 4,524,148 | | | | 11.4 | % | | | 4,524,148 | | | | 11.8 | % |
Orion Resource Partners (USA) LP (6))(7) | | | — | | | | — | | | | 4,524,149 | | | | 11.4 | % | | | 4,524,149 | | | | 11.8 | % |
(1) | Assumes that no shares of AMCI Class A common stock are redeemed and 100% participation by Advent stockholders. Percentages are based on 46,167,083 shares of New AMCI common stock outstanding following the consummation of the Business Combination. |
(2) | Assumes additional redemption of 7,237,281 AMCI Class A common stock, for aggregate payment of approximately $74.6 million from the Trust Account (based on an assumed redemption price of approximately $10.30 per share based on the redemption price per share of October 16, 2020) that would satisfy the Minimum Cash Condition of $60 million (after giving effect to payments of all unpaid expenses, AMCI’s liabilities and redemptions by AMCI’s public stockholders and excluding Advent’s closing cash), set forth in the Merger Agreement. Percentages are based on 46,167,083 shares of New AMCI common stock outstanding following the consummation of the Business Combination. |
(3) | Christos Kaskavelis’ ownership includes 1,806,689 shares owned by Nemaland Ltd, an entity in which Mr. Kaskavelis and his wife each hold a 50% stake and for which Mr. Kaskavelis holds shared voting and dispositive power with his wife with regard to such 1,806,689 shares of AMCI common stock. The business address of Mr. Kaskavelis is One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138. The business address of Nemaland Ltd is 77 Strovolou, Office 204, 2018 Strovolos, 2018, Cyprus. |
(4) | Unless otherwise indicated, the business address of each of the individuals is One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138. |
(5) | The number of shares includes 2,554,009 shares of New AMCI common stock to be issued to the Sponsor upon conversion of its founder shares and 1,970,139 shares of New AMCI common stock to be issued upon exercise of warrants owned by the Sponsor. Pursuant to the Merger Agreement, the Sponsor entered into a letter agreement with AMCI and Advent prior to or at the closing of the Business Combination, which provides that the Sponsor will forfeit one-third (1/3rd) of the Placement Warrants that it owns as of the Closing. The business address of the Sponsor is c/o AMCI Acquisition Corp., 1501 Ligonier Street, Suite 370, Latrobe, PA 15650. |
(6) | The number of shares includes 2,554,010 shares of New AMCI common stock to be issued to Orion Resource Partners (USA) LP (“Orion”) upon conversion of founder shares to be held by Orion upon the closing of the Business Combination and 1,970,139 shares of New AMCI common stock to be issued upon exercise of warrants to be held by Orion upon the closing of the Business Combination. The business address of Orion is 1045 Avenue of the America, New York, NY 100018. |
(7) | In connection with a loan previously made by Orion to AMCI, the Sponsor has agreed to transfer one-half of its Founder Shares and one-half of its remaining Placement Warrants after the forfeiture described above to Orion as a permitted transferee of Sponsor at the closing of the Business Combination. |
MANAGEMENT AFTER THE BUSINESS COMBINATION
Management and Board of Directors
The following persons are expected to be elected or appointed by the AMCI board to serve as executive officers and directors following the Business Combination.
Name | | | Age | | | Position(s) |
Vassilios Gregoriou(1) | | | 55 | | | Chairman, Chief Executive Officer and Director |
William Hunter(2) | | | 52 | | | President, Chief Financial Officer and Director |
Christos Kaskavelis | | | 52 | | | Chief Marketing Officer |
Emory De Castro(1) | | | 63 | | | Chief Technology Officer and Director |
James F. Coffey | | | 58 | | | Chief Operating Officer and General Counsel |
Katherine E. Fleming(1) | | | 55 | | | Director |
Anggelos Skutaris(1) | | | 56 | | | Director |
Katrina Fritz(1) | | | 48 | | | Director |
Lawrence M. Clark, Jr.(2) | | | 48 | | | Director |
Information regarding the executive officers and directors following the Business Combination is set forth below:
Vassilios Gregoriou has been Chairman and CEO of Advent since inception. Dr. Gregoriou cofounded Advent Technologies Inc. in 2012. In addition, Dr. Gregoriou is an internationally known scientist with research and/or managerial positions in both the U.S. (Northeastern, MIT, Polaroid, Princeton) and Greece (NHRF, FORTH) over his 30 year career so far in the technology sector. His research activity extends over a wide area of subjects in the renewable energy space that include the areas of flexible photovoltaics based on organic semiconductors, optically active materials based on conjugated oligomers and polymer nanocomposites. His published work as co-author includes three books and more than 100 scientific papers. He is also co-inventor of 15 patents. Dr. Gregoriou has more than 25 years of experience in the U.S. market. He has extensive experience in the technical development of new products and in the management of such activities. He holds a Ph.D. in Physical Chemistry from Duke University and he has attended the MBA program at Northeastern University. He was also a NRSA award recipient at Princeton University. He also served as President of Society for Applied Spectroscopy(SAS) in 2001. Dr. Gregoriou is well-qualified to serve on the board of directors following the Business Combination due to his extensive scientific, managerial and industry experience.
Christos Kaskavelis joined Advent as Chief Marketing Officer in 2019. From 2015 to 2016 he served as Managing Director of Mamaya IKE, a Greek publishing and media consulting company. From 2016 to 2018, he was a research scholar at the MIT Media Lab in Boston, Massachusetts. He has been a seed investor in the company, an angel investor, and has served on its board of directors since the first day. He is a serial entrepreneur in the tech industry and primarily digital marketing, with successful exits in both NASDAQ and London Stock Exchanges. He has designed and been responsible for enterprise software systems designed for Pratt & Whitney, Analog Devices, General Electric and Lucent Technologies in the areas of Just-In-Time (JIT) manufacturing, Supply Chain Management and Production Scheduling. He holds a Ph.D. in Supply Chain Management as well as an M.Sc. in Manufacturing Engineering from Boston University, a B.Sc. in Electrical Engineering and a B.A. in Business Economics from Brown University.
Emory De Castro has been Advent’s Chief Technology Officer since 2013. Dr. De Castro is responsible for the overall technical, manufacturing and business development operations for Advent Technologies. Prior to joining Advent, Dr. De Castro was a Vice President, Business Management and the site manager for BASF Fuel Cell Inc. in Somerset NJ. At BASF Dr. De Castro led marketing and sales, business development, quality control, and R&D direction all cumulating in nearly a four-fold increase in revenues. As the Executive Vice President at the E-TEK Division, De Nora North America he managed operations, created a global brand, and expanded the organization’s fuel cell component business in Asia and Europe. Dr. De Castro has over 20 patent applications spanning fuel cell materials and catalysts, electrochemical technology, sensors, and a beer bottle cap that extends shelf life. He is the recipient of the 2013 Department of Energy Award for Manufacturing R&D in lowering the cost of gas diffusion electrodes and the 2005 ECS New Technology Award to E-TEK Division, for introducing and commercializing a new electrolysis technology. Emory De Castro received his Ph.D. from the Department of Chemistry at the University of Cincinnati and a B.S. in Chemistry from Duke University. Dr. De Castro is well-qualified to serve on our board of directors due to his extensive scientific and technological experience.
James F. Coffey hasserved as General Counsel and Corporate Secretary of Advent since March 2020. Beginning in 2018, he served as Advent’s outside legal counsel. Mr. Coffey has over thirty years of experience in corporate and securities law, mergers and acquisitions, venture capital and corporate finance, and intellectual property law. He has extensive international experience having closed transactions in both North and South America, Europe, and China. Throughout the course of his career, Jim has developed strong relationships and strategic contacts within the clean energy and technology sectors and specific experience within the fuel cell industry. From 2013 to 2017, he served as general counsel to another HT PEM fuel cell company that was a customer of Advent. Mr. Coffey was a Gerald L. Wallace Scholar at New York University School of Law where he received an LL.M. in Corporate Law. He received his J.D. from the New England School of Law, and his B.A., cum laude, from Providence College. Mr. Coffey is listed in The Best Lawyers in America® for Mergers and Acquisitions. He is recognized for his work in intellectual property law by the IAM Patent 1000. Mr. Coffey was named a Massachusetts Super Lawyer by Law and Politics magazine. He is AV® rated by Martindale-Hubbell. Mr. Coffey is a fellow of the Boston Bar Foundation and the American Bar Foundation.
Katherine E. Fleming has over fifteen years’ experience in Higher Education leadership and has been the Provost of New York University since 2016, with responsibility for allocating financial resources and setting strategic priorities, and with oversight of all Deans and Directors. From 2007-2011 she directed the Institut Remarque at the Ecole Normale Superieure in Paris, and from 2012-2016 she served as the President of the Board of the University of Piraeus. A historian by training, she earned a BA from Barnard College of Columbia University, an MA from the University of Chicago and a Ph.D. from the University of California, Berkeley. She was granted honorary Greek citizenship by the Hellenic Republic in 2015and in 2019 was named by France to the Legion d’Honneur. Dr. Fleming is well-qualified to serve on the board of directors following the Business Combination due to her extensive financial and scholastic experience.
Anggelos Skutaris has a BSc in Economics from Arizona State University and an MBA from the Thunderbird School of Global Management. He has more than 28 years of International experience in banking, finance, management, treasury and investments. He is currently a member of the Incorporation Committee and Chief Investment Officer for Power Bank, a Qatar-based financial institution with a mission to provide Islamic financing to the global energy sector. Key positions he held in the past include: Chief Investment Officer (Janus Continental Group, JCG), Head of Treasury Operations & Transformation (Qatar Airways), Managing Partner (New Symbol Global Advisors), Chief Executive Officer (Piraeus Capital Management), Founder & CEO (OliveTree Management Associates), Group Treasurer (Titan Cement), Head of Equity Financing (Calyon Securities) and Director of Equity Financing (Credit Suisse). Whilst at Titan cement, Mr. Skutaris was instrumental in issuing the largest corporate syndicated facility in Greece, a 5-year, €800 million transaction. Mr. Skutaris is well-qualified to serve on the board of directors following the Business Combination due to his extensive business development and financial experience.
Katrina Fritz is the Executive Director of the Stationary Fuel Cell Collaborative, leading education and outreach activities with the guidance of state agencies, local air districts and industry. She also works with the National Fuel Cell Research Center on state level clean energy policy and market development. Katrina currently serves as an expert to the European Commission on Horizon 2020 programs for research and innovation. As Principal of KM Fritz LLC, Katrina has provided advisory and consulting services to global industrial firms related to business and communications strategy in distributed energy generation markets. She has held leadership positions in numerous trade associations and on advisory boards including: The California Hydrogen Business Council, the International Energy Agency’s Fuel Cell Working Group; the U.S. Fuel Cell and Hydrogen Energy Association; the Alliance for Clean Energy New York; the Pacific Clean Energy Application Center at University of California, Berkeley; and the Connecticut Fuel Cell and Hydrogen Coalition. Katrina has held leadership positions at ClearEdge Power (formerly UTC Power), Plug Power and Case Western Reserve University, leading strategic planning, government relations, business development, and corporate communications. She also worked in the software industry in Santa Cruz, California and Watford, United Kingdom. Katrina has a BA degree from the University of Michigan and an MBA from the Weatherhead School of Management at Case Western Reserve University. Ms. Fritz is well-qualified to serve on the board of directors following the Business Combination due to her extensive leadership and clean fuel technology experience.
William Hunter has been President, Chief Executive Officer and Chief Financial Officer, as well as a Director of AMCI, since AMCI’s inception. He has been Managing Director and Chief Financial Officer of AMCI Group since 2017, and since 2015 he has been Managing Partner at Hunter Natural Resources LLC, a consulting firm in the industrial, consumer and natural resources sectors. Mr. Hunter has been involved in over $20 billion of transactions in the natural resources, transportation and industrial industries during his 25 years in the industry. He is currently a member of the board of American Battery Metals Corp. (OTC: ABML), which is a clean energy materials business focused on recycling of critical minerals from lithium ion batteries, and a member of the board of directors of Ridley Terminals Inc. From 1999 to 2015, Mr. Hunter worked as a Director or Managing Director at Nomura Securities, Teneo Capital, Dahlman Rose & Co., Jefferies & Company and TD Securities. He holds a B.S.C. in Finance and an M.B.A. in Finance from DePaul University. Mr. Hunter is well-qualified to serve on the board of directors following the Business Combination due to his extensive corporate finance and capital markets experience.
Lawrence M. Clark, Jr., who has served as an independent director of AMCI since November 15, 2018, is the founder and Managing Member of BalanTrove Management, LLC (“BalanTrove”), a corporate advisory firm to middle market companies, investors and lenders. BalanTrove provides strategic advisory, interim executive management, and operational, financial and project evaluation and due diligence assistance to businesses in transition and capital providers. Mr. Clark serves as a director of Blackhawk Mining LLC, a diversified coal mining company headquartered in Lexington, Kentucky. From 2015 to 2018, he served as Chief Executive Officer of Accordant Energy, LLC, a licensor of a patented portfolio of intellectual property for processing municipal solid waste into a low-carbon engineered fuel for use in utility and industrial boilers. Prior to that, he served for two years as President and Chief Executive Officer of JW Resources, Inc., a private operator of thermal coal assets in Central Appalachia. Before founding BalanTrove in 2011, Mr. Clark spent eight years at Harbinger Capital Partners LLC, most recently as Managing Director and Director of Investments, where he was responsible for investments in metals, mining, industrial and retail companies, among other sectors. From 2001 to 2002, Mr. Clark was a Distressed Debt and Special Situations Research Analyst at Satellite Asset Management, L.P. He was Vice President in the Distressed Debt and High Yield Research Department at Lazard Freres & Co., LLC from 2000 to 2001, and an Associate in Credit Suisse First Boston’s High Yield Research Group from 1998 to 2000. Mr. Clark started his investing career in 1997 in the Corporate Bond Research Department of Salomon Brothers. Mr. Clark received an M.B.A. from New York University’s Stern School of Business in 1998, and a B.S.B.A. in Finance from Villanova University in 1993. He is well qualified to serve on the board of directors following the Business Combination due to his extensive operational, management, analysis and investing experience.
Board of Directors
The Combined Entity’s board of directors upon the closing of the Business Combination will consist of seven members. In accordance with the Amended Charter to be filed, immediately after the consummation of the Business Combination, the board of directors of New AMCI will be divided into three classes, Classes I, II and III, each to serve a three year term, except for the initial term after the Closing, for which the Class I directors will be up for reelection at the first annual meeting of stockholders occurring after the Closing, and for which the Class II directors will be up for reelection at the second annual meeting of stockholders occurring after the Closing. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following the election. Directors will not be able to be removed during their term except for cause. The directors will be divided among the three classes as follows:
| ● | the Class I directors will be Anggelos Skutaris, and Katrina Fritz, and their terms will expire at the annual meeting of stockholders to be held in 2021; |
| ● | the Class II directors will be Katherine E. Fleming and Lawrence M. Clark, Jr., and their terms will expire at the annual meeting of stockholders to be held in 2022; and |
| ● | the Class III directors will be Vassilios Gregoriou, Emory De Castro, and William Hunter, and their terms will expire at the annual meeting of stockholders to be held in 2023. |
The Combined Entity expects that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of the board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Director Independence
Under the listing requirements and rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors and of certain board committees. Following the Business Combination, the Combined Entity’s board of directors will review the composition of the board and committees of the Combined Entity and the independence of each director.
Committees of the Board of Directors
The Combined Entity’s board of directors will have the authority to appoint committees to perform certain management and administration functions. AMCI’s current board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the board of directors. Following the Closing of the Business Combination, the charters for each of these committees will be available on the Combined Entity’s website.
Audit Committee
The Combined Entity’s audit committee is expected to consist of Messrs. ____ and ____. AMCI’s board of directors has determined each proposed member is independent under the listing standards and Rule 10A-3(b)(1) under the Exchange Act. The chairperson of our audit committee is Mr. ____. Following the Business Combination, the Combined Entity’s board of directors will determine which member of the audit committee qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under the rules of Nasdaq Stock Market.
The primary purpose of the audit committee is to discharge the responsibilities of the board of directors with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:
| ● | selecting a qualified firm to serve as the independent registered public accounting firm to audit the Combined Entity’s financial statements; |
| ● | helping to ensure the independence and performance of the independent registered public accounting firm; |
| ● | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; |
| ● | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
| ● | reviewing policies on risk assessment and risk management; |
| ● | reviewing related party transactions; |
| ● | obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the Combined Entity’s internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and |
| ● | approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm. |
Compensation Committee
The compensation committee is expected to consist of Messrs._______. AMCI’s board of directors has determined each proposed member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson of the compensation committee is expected to be Mr. _____. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directors to oversee its compensation policies, plans and programs and to review and determine the compensation to be paid to its executive officers, directors and other senior management, as appropriate.
Specific responsibilities of the compensation committee will include:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
| ● | reviewing and approving the compensation of our other executive officers; |
| ● | reviewing and recommending to our board of directors the compensation of our directors; |
| ● | reviewing our executive compensation policies and plans; |
| ● | reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management, as appropriate; |
| ● | administering our incentive compensation equity-based incentive plans; |
| ● | selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors; |
| ● | assisting management in complying with AMCI’s proxy statement and Annual Report disclosure requirements; |
| ● | if required, producing a report on executive compensation to be included in AMCI’s annual proxy statement; |
| ● | reviewing and establishing general policies relating to compensation and benefits of our employees; and |
| ● | reviewing our overall compensation philosophy. |
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee is expected to consist of Messrs._______. AMCI’s board of directors has determined each proposed member is independent under Nasdaq listing standards. The chairperson of our nominating and corporate governance committee is expected to be Mr. _______.
Specific responsibilities of our nominating and corporate governance committee include:
| ● | identifying, evaluating and selecting, or recommending that our board of directors approve, nominees for election to our board of directors; |
| ● | evaluating the performance of our board of directors and of individual directors; |
| ● | reviewing developments in corporate governance practices; |
| ● | evaluating the adequacy of our corporate governance practices and reporting; |
| ● | reviewing management succession plans; and |
| ● | developing and making recommendations to our board of directors regarding corporate governance guidelines and matters. |
Code of Business Conduct and Ethics
The Combined Entity will adopt a Code of Business Conduct and Ethics that applies to all of its employees, officers and directors, including those officers responsible for financial reporting. Following the Closing of the Business Combination, the Code of Business Conduct and Ethics will be available on its website at www.convergeone.com. Information contained on or accessible through such website is not a part of this prospectus/proxy statement, and the inclusion of the website address in this prospectus/proxy statement is an inactive textual reference only. The Combined Entity intends to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements.
Compensation Committee Interlocks and Insider Participation
No member of Combined Entity’s compensation committee has ever been an officer or employee of either company. None of Combined Entity’s expected executive officers serve, or have served during the last year, as a member of the board of directors, compensation committee, or other board committee performing equivalent functions of any other entity that has one or more executive officers serving as one of our directors or on either company’s compensation committee.
EXECUTIVE COMPENSATION OF ADVENT
Throughout this section, unless otherwise noted, “we,” “us,” “our” and similar terms refer to Advent Technologies Inc. and its subsidiaries prior to the consummation of the Business Combination, and to Advent Technologies Holdings, Inc. and its subsidiaries after the Business Combination.
Following the Business Combination, AMCI, which will be renamed Advent Technologies Holdings, Inc., will remain an “emerging growth company,” as defined in the JOBS Act and the following disclosure is intended to comply with the scaled disclosure requirements applicable to emerging growth companies.
This section provides an overview discussion of the compensation of Advent’s principal executive officer and next two most highly-compensated executive officers for its fiscal year ended December 31, 2019. These individuals, who Advent refers to as the “named executive officers” in this proxy statement/prospectus/consent solicitation, are:
| ● | Vassilios Gregoriou, Advent’s Chief Executive Officer and Chairman of its Board of Directors; |
| ● | Emory De Castro, Advent’s Chief Technology Officer; and |
| ● | Christos Kaskavelis, Advent’s Chief Marketing Officer. |
This section also provides an overview of certain compensation arrangements that Advent currently anticipates adopting in connection with the Business Combination. This discussion may contain forward-looking statements that are based on Advent’s current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that Advent adopts following the completion of the Business Combination may differ materially from the existing and currently planned programs summarized or referred to in this discussion.
Summary Compensation Table
The following table sets forth the compensation awarded to, earned by, or paid to the named executive officers in respect of their service to Advent during its fiscal years ended December 31, 2019 and December 31, 2018.
Name and Principal Position(1) | | Year | | Salary ($)(1)(2) | | Bonus ($) | | Stock Awards ($) | | Total ($) |
| | | | | | | | | | |
Vassilios Gregoriou, Chairman of the Board of Directors and Chief Executive Officer | | 2019 2018 | | $170,000 $170,000 | | — — | | — — | | $170,000 $170,000 |
| | | | | | | | | | |
Emory De Castro, Chief Technology Officer | | 2019 2018 | | $150,000 $150,000 | | — — | | — — | | $150,000 $150,000 |
Christos Kaskavelis, Chief Marketing Officer | | 2019 | | $68,909 | | — | | — | | $68,909 |
| | 2018 | | — | | — | | — | | — |
(1) | As described in further detail below in the “Employment Agreements and Other Arrangements with Executive Officers and Directors – Payment of Accrued but Unpaid Base Compensation” of this section and in Note 3 of the Company’s audited financial statements for fiscal year 2019 included as part of this joint proxy statement/prospectus/consent solicitation , although Messrs. Gregoriou, De Castro, and Kaskavelis have earned the base compensation identified above, all or a portion of these amounts have not yet been paid to them. As of November 18, 2020, an aggregate of $648,394, $526,122, and $65,000 is due in unpaid compensation for prior service to, respectively, Messrs. Gregoriou, De Castro, and Kaskavelis. It is expected that these amounts will be repaid to Messrs. Gregoriou, De Castro, and Kaskavelis upon or promptly following from the proceeds from the Business Combination. |
(2) | Mr. Kaskavelis compensation was paid to Mamaya IKE, a Greek company owned by Mr. Kaskavelis and his wife. |
Narrative Disclosure to Summary Compensation Table
Base Salaries
Each of Advent’s named executive officers receives a salary in respect of his or her services. The current annual base salary for each of Advent’s named executive officers is:
Named Executive Officer | | | Current Annual Base Salary |
Vassilios Gregoriou | | | $170,000 |
Emory De Castro | | | $150,000 |
Christos Kaskavelis | | | $120,000 |
In connection with the Business Combination, and as described in further detail in the “Executive Compensation of Advent — Employment Agreements and Other Arrangements with Executive Officers and Directors —Employment and Consulting Arrangements with Executive Officers and Directors” section of this proxy statement/prospectus/consent solicitation, Mr. Gregoriou’s annual base salary will be increased from $170,000 to $800,000; Mr. De Castro’s annual base salary will be increased from $150,000 to $350,000; and Mr. Kaskavelis’s annual base salary will be increased from $120,000 to $350,000 in each case, effective as of the date of the consummation of the Business Combination.
Annual Bonuses
None of Advent’s named executive officers received an annual bonus during fiscal years 2019 or 2018.
Equity Compensation
None of Advent’s named executive officers was granted any options or other equity-based awards during 2019 or 2018 or held any options or other equity-based awards as of December 31, 2019.
Employment Agreements
Advent is a party to certain offer letters with each of the named executive officers that set forth the initial terms and conditions of the officer’s employment with Advent. The material terms of these offer letters are summarized below.
Mr. Gregoriou. On December 3, 2012, Advent entered into an offer letter with Mr. Gregoriou, which provided for an annual base salary of $170,000, eligibility to receive an annual performance bonus of cash and performance stock awards and an initial grant of restricted stock awards in an amount equal to 4% of outstanding common stock on Mr. Gregoriou’s date of hire. Pursuant to the offer letter, if Mr. Gregoriou’s employment is terminated without “cause” or if he resigns for “good reason” (as each such term was defined in the offer letter), he is entitled to (i) 6 months’ base salary continuation and (ii) 12 months’ subsidized benefits continuation, in each case subject to Mr. Gregoriou’s execution and non-revocation of a release of claims. As described in further detail in the “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Employment and Consulting Arrangements with Executive Officers and Directors” section of this proxy statement/prospectus/consent solicitation, effective as of the consummation of the Business Combination, this offer letter is being superseded in its entirety by a new employment agreement between Mr. Gregoriou and Advent.
On October 19, 2019, Mr. Gregoriou separately entered into an agreement with the Company that contained (i) a perpetual confidentiality covenant, (ii) an assignment of intellectual property covenant, (iii) a non-competition covenant for two year post-termination of employment, (iv) a covenant not to solicit any of Advent’s customers or patrons during the two-year period following termination and (v) a covenant not to solicit any of Advent’s employees or consultants during the two-year period following termination.
Messrs. De Castro and Kaskavelis. Neither Messrs. De Castro nor Kaskavelis were previously party to employment agreements with Advent, though each entered into offer letters with Advent in May 2020. These offer letters set forth such executive’s base salary ($150,000 for Mr. De Castro and $120,000 for Mr. Kaskavelis), a bonus target of 100% of base salary, and a right to an award pursuant to the 2020-2023 Stock Grant Plan. As described in further detail in the “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Employment and Consulting Arrangements with Executive Officers and Directors” section of this proxy statement/prospectus/consent solicitation, in connection with the announcement of the Business Combination, Mr. De Castro entered into an employment agreement with Advent and Mr. Kaskavelis entered into a term sheet with Advent, each of which will become effective as of the consummation of the Business Combination.
Employee Benefits
Advent did not provide, in 2018 and 2019, any health and welfare benefits or 401(k) retirement plan to its U.S. full-time employees. As described in further detail in Note 2.22 of the Company’s audited financial statements for fiscal year 2019 included as part of this proxy statement/prospectus/consent solicitation, pursuant to Greek Labor Law 2112/1920, employees in Greece are entitled to an indemnity in the event of dismissal or retirement, though as a director, Mr. Gregoriou is not eligible for such indemnity.
Outstanding Equity Awards at Fiscal Year End
As of December 31, 2019, none of Messrs. Gregoriou, De Castro or Kaskavelis had any outstanding equity awards. However, in 2020, each of Messrs. Gregoriou, Castro and Kaskavelis and certain other executive officers were issued stock awards pursuant to the terms of certain stock grant plans, the terms of which are described in further detail in the “Executive Compensation of Advent-Employment Agreements and Other Arrangements with Executive Officers and Directors-Lapse of Repurchase Rights with respect to Shares granted pursuant to Advent Stock Grant Programs” section of this proxy statement/prospectus/consent solicitation.
Director Compensation
None of Advent’s non-employee directors received compensation in respect of their services as directors of Advent during the 2019 fiscal year. While each of Messrs. Gregoriou, De Castro and Kaskavelis served as members of the board of directors of Advent in 2019, none received additional compensation for director services and all compensation earned by them with respect to their employment with Advent is set forth in the “Summary Compensation Table” above.
The AMCI board of directors will elect or appoint the persons who will serve as the executive officers and directors of the Combined Entity following the Business Combination. For biographical information concerning the executive officers and directors following the Business Combination, see “Management after the Business Combination – Management and Board of Directors”. As of the time of this filing, we are evaluating the specific terms of our director compensation program; however, we anticipate that each of our non-employee directors will receive an annual director fee as well as equity awards in connection with their services.
Employment Agreements and Other Arrangements with Executive Officers and Directors
Employment and Consulting Arrangements with Executive Officers and Directors
Employment Arrangements
On October 12, 2020, in connection with the execution of the Merger Agreement and the announcement of the Business Combination, Advent entered into (i) employment agreements, with each of Messrs. Gregoriou, De Castro, and Coffey and (ii) a term sheet with each of Messrs. Kaskavelis and Antoniou. We expect that Mr. Kaskavelis will enter into an employment agreement and Mr. Antoniou will enter into a consulting agreement, in each case, reflecting the terms and conditions of their respective term sheets prior to the consummation of the Business Combination. The material terms of these new employment and consulting arrangements are set forth below:
| ● | Mr. Gregoriou will serve as our Chief Executive Officer and Chairman of our board of directors, with an initial annual base salary of $800,000, a one-time signing bonus of $500,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 150% of his annual base salary. |
| ● | Mr. Coffey will serve as our Chief Operating Officer and General Counsel, with an annual base salary of $475,000, a one-time signing bonus of $250,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary. |
| ● | Mr. De Castro will serve as our Chief Technology Officer, with an annual base salary of $350,000, a one-time signing bonus of $250,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary. |
| ● | Mr. Kaskavelis will serve as our Chief Marketing Officer, with an annual base salary of $350,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary. |
The sign-on bonuses are payable in two installments: (i) 50% on the first payroll date following the consummation of the Business Combination and (ii) 50% to be paid on the first payroll date following the one year anniversary of the consummation of the Business Combination, subject to the applicable executive’s employment through the relevant payment date.
The employment agreements (and term sheet, for Mr. Kaskavelis) provide that if an executive’s employment terminates without “cause” or by him for “good reason,” (as such terms are defined in the employment agreement or term sheet, as applicable), the executive will be entitled to (i) up to 12 months’ subsidized medical, dental and vision benefits continuation (18 months for Mr. Gregoriou) and (ii) payment of one times (two times for Mr. Gregoriou) the sum of such executive’s annual base salary and target bonus, payable over 12 months. If such termination of employment without “cause” or resignation for “good reason” occurs within 60 days prior to, or 12 months following, a “change in control” (as such term is defined in the Equity Incentive Plan described in further details in “The Incentive Plan Proposal” section in this proxy statement/prospectus/consent solicitation), severance is enhanced and provides for (i) up to 18 months’ subsidized medical, dental and vision benefits continuation for all executives, (ii) two times (three times for Mr. Gregoriou) the sum of such executive’s annual base salary and target bonus, payable over 12 months, and (iii) the initial grant of stock options and restricted stock units issued pursuant to the Equity Incentive Plan, shall become fully vested, and such options will remain exercisable for a period of one year following such termination of employment. Moreover, if the acquirer in such “change in control” does not agree to assume or substitute for equivalent stock options, any unvested portion of the initial grant of stock options shall become fully vested and exercisable at the time of such transaction.
The employment agreements for Messrs. Gregoriou, Kaskavelis, and Coffey each contain (i) a perpetual confidentiality covenant, (ii) an assignment of intellectual property covenant, (iii) a non-competition covenant for one year post-termination of employment (subject to, for Messrs. Gregoriou and Coffey, the Executive’s receipt of at least 50% of the Executive’s highest annualized base salary within the two (2) year period preceding termination) for the entire year, (iv) a covenant not to solicit any of our customers, vendors, suppliers or other business partners during the eighteen (18)-month period following termination and (v) a covenant not to solicit any of our employees or independent contractors during the eighteen (18)-month period following termination.
In addition, Advent expects to, prior to the consummation of the Business Combination, enter into an employment agreement with William Hunter (current President and Chief Executive Officer of AMCI). Mr. Hunter is expected to serve as Advent’s President and Chief Financial Officer, with an annual base salary of $475,000, eligibility to earn an annual performance bonus with a target equal to 125% of his annual base salary, and severance entitlements upon a termination of employment without “cause” or resignation by him for “good reason’ (as customarily defined) comparable to those provided to Mr. Gregoriou and described above. In addition, Mr. Hunter will be eligible to receive a one-time signing bonus of $400,000, payable in two equal installments on the same schedule as applicable to other executives. The employment agreement with Mr. Hunter is expected to contain restrictive covenants substantially comparable to those applicable to other executive officers as described above. Although the foregoing reflects Advent’s expectations based on preliminary discussions with Mr. Hunter, definitive documentation has yet to be entered into reflecting Mr. Hunter’s employment following the Business Combination, such that the terms and conditions may materially vary from those described herein.
Consulting Arrangement
In addition, the term sheet for Mr. Antoniou provides that he will serve as our Business Development Representative, withannual consulting fees of $240,000 per year and eligibility to earn a discretionary annual performance bonus, each beginning infiscal year 2021.
Transaction Bonus Letter Agreements with Executive Officers
Advent entered into transaction bonus letter agreements with each of Messrs. Gregoriou, De Castro, Coffey and Kaskavelis, which entitle each executive to receive a transaction bonus that is payable promptly following the Business Combination, contingent upon such executive’s continued employment through the consummation of the Business Combination and execution of a general release of claims. The transaction bonus entitlement for each executive is as follows: (i) for Mr. Gregoriou, $2,500,000, (ii) for each of Messrs. De Castro and Kaskavelis, $860,000 and (iii) for Mr. Coffey, $520,000. The amounts set forth herein are inclusive of the increases to the transaction bonuses that were awarded in recognition of the oversubscription of the Pipe Investment and the effort of management in consummating this investment, as described in further detail under “Proposal 1 – The Business Combination Proposal – General Description of the Merger Agreement – Transaction Bonus Letter Agreements.”
Lapse of Repurchase Right with respect to Shares granted pursuant to Advent Stock Grant Programs
In recognition of past service, in 2020, each of our executive officers was granted shares of common stock of Advent Technologies Inc. at a discounted purchase price of $0.01 per share. These shares were issued pursuant to the terms of either (i) the Advent Technologies Inc. 2018-2020 Stock Grant Plan or (ii) the Advent Technologies Inc. 2020-2023 Stock Grant Plan (collectively, the “Stock Grant Programs”). In general, under the Stock Grant Programs, if the employee ceases to be employed with Advent for any reason prior to December 31, 2020, if a participant in the Stock Grant Programs terminates his or her employment with Advent prior to December 31, 2020, Advent has a limited repurchase period to repurchase the granted shares at a price of $0.01 per share. If Advent does not exercise such repurchase option and unless Advent declines in writing to exercise its repurchase option prior to such time, the repurchase option is automatically deemed exercised at the end of the repurchase window. This limited repurchase right will lapse upon the occurrence of the Business Combination. Therefore, even if an executive officer were to no longer be employed with Advent as of December 31, 2020, such shares will no longer be subject to the repurchase right contemplated above.
Name | | Date of Share Grant | | Shares granted under 2018-2020 Stock Grant Plan (#) | | Date of Share Grant | | Shares granted under 2020-2023 Stock Grant Plan (#) | |
Vassilios Gregoriou | | March 26, 2020 | | | 512,080 | | September 9, 2020 | | | 297,834 | |
Emory De Castro | | March 26, 2020 | | | 256,040 | | September 9, 2020 | | | 178,701 | |
Christos Kaskavelis | | March 26, 2020 | | | 256,040 | | September 9, 2020 | | | 178,701 | |
James F. Coffey | | March 26, 2020 | | | 51,208 | | September 9, 2020 | | | 89,350 | |
Total | | | | | 1,075,368 | | | | | 744,856 | |
Payment of Accrued but Unpaid Base Compensation
As described in further detail in Note 3 of Advent’s audited financial statements for fiscal year 2019 included as part of this proxy statement/prospectus/consent solicitation, although Messrs. Gregoriou, De Castro and Kaskavelis had earned base compensation for prior years of service, these amounts have not yet been paid to them. As of November 18, 2020, an aggregate of $648,394, $526,122 and $65,000 is due in unpaid compensation for prior service to, respectively, Messrs. Gregoriou, De Castro and Kaskavelis. It is expected that these amounts will be repaid to Messrs. Gregoriou, De Castro and Kaskavelis upon or promptly following the Business Combination.
Executive Compensation following the Business Combination
Our executive officers will continue to be compensated in accordance with their employment agreements, described above, following the Business Combination. We expect that our executive compensation program, as overseen by the independent compensation committee, will evolve to reflect its status as a newly publicly-traded company, while still supporting our overall business and compensation objectives. In connection with the Business Combination, Advent retained Clearbridge Compensation Consultants, LLC, an independent executive compensation consultant, to help advise on its executive compensation program.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
AMCI
Certain Relationships and Related Transactions
In June 2018, we issued an aggregate of 5,750,000 Founder Shares to Sponsor for an aggregate purchase price of $25,000 in cash, or approximately $0.004 per share. In October 2018, Sponsor transferred 35,000 Founder Shares to each of Messrs. Uren, Clark and Grant, our independent directors, and 100,000 shares to each of Messrs. Hunter, Beem and Patel, our officers. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of the AMCI IPO. On November 27, 2018, the underwriters in the AMCI IPO elected to exercise a portion of the over-allotment option for 2,052,077 additional Units. As a result of such partial exercise, Sponsor forfeited 236,981 shares of Class B common stock. The Founder Shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
In November 2018, Sponsor purchased an aggregate of 5,500,000 Placement Warrants for a purchase price of $1.00 per warrant, for an aggregate purchase price of $5,500,000, in a private placement that occurred simultaneously with the closing of the AMCI IPO. Each Placement Warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share. The Placement Warrants (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder. As a result of the partial exercise of the underwriter’s over-allotment option, Sponsor purchased an additional 410,416 Placement Warrants for aggregate gross process of $410,416.
Commencing November 2018, we paid AMCI Holdings, Inc., an affiliate of our sponsor, a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Other than the foregoing, no compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our sponsor, officers and directors, or any affiliate of our sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is). However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. We do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the consummation of our initial public offering, our sponsor loaned us $218,610 under an unsecured promissory note, which were used for a portion of the expenses of our initial public offering. The loan was non-interest bearing and unsecured and was repaid in full on November 23, 2018 out of the offering proceeds that were allocated to the payment of offering expenses (other than underwriting commissions).
In addition, in order to finance transaction costs in connection with an intended initial business combination, Sponsor or its affiliate or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. On November 20, 2020, the Sponsor agreed to loan AMCI up to $1,000,000 as a working capital loan. This loan is non-interest bearing and is due at the earlier of the date on which AMCI consummates its Business Combination or February 22, 2021. On November 20, 2020, AMCI borrowed $400,000 on the working capital loan. Up to $1,500,000 of such loans may be convertible into warrants (which we refer to in this registration statement as Working Capital Warrants) at a price of $1.00 per warrant at the option of the lender. The Working Capital Warrants would be identical to the Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by Sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.
In connection with a loan previously made by Orion to AMCI, the outstanding balance of which as of November 24, 2020 is $2,365,649, the Sponsor has agreed to transfer one-half of its remaining Founder Shares and one-half of its remaining Placement Warrants to Orion as a permitted transferee of Sponsor at the Closing of the Business Combination. The loan by Orion is due and payable by AMCI upon the earlier of the Closing of the Business Combination or February 22, 2021.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the Combined Entity with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We have entered into a registration rights agreement with respect to the Founder Shares, the Placement Warrants, the Working Capital Warrants (if any) and the shares of Class A common stock issuable upon exercise of the foregoing and upon conversion of the Founder Shares.
Advent
Employment and Consulting Arrangements and Transaction Bonus
In contemplation of the Business Combination, Advent has entered into employment arrangements (including transaction bonuses) with each of its executive officers and a consulting arrangement with one of its current directors. For more information regarding these agreements with Advent’s executive officers and directors, please see “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Employment and Consulting Arrangements with Executive Officers and Directors” and “Executive Compensation of Advent—Employment Agreements and Other Arrangements with Executive Officers and Directors—Transaction Bonus Letter Agreements with Executive Officers” of this proxy statement/prospectus/consent solicitation.
Voting Agreement
In connection with the Business Combination, Advent and AMCI have entered into voting agreements with certain significant Advent stockholders, including certain key employees.
Longspur Agreement
On April 6, 2020, Advent entered into a letter agreement with Longspur Capital Limited (“Longspur” and such agreement, the “Longspur Engagement”), the company through which Advent’s current interim chief financial officer is providing services to Advent (as further discussed below). The Longspur Engagement was entered into in connection with Advent’s contemplated listing on the AIM Market of the London Stock Exchange and provides for Longspur to prepare an IPO preparation program, including but not limited to preparing an investment story, identifying potential private investors, and preparing research and a revised company valuation. Pursuant to such agreement an annual fee of £30,000 (plus VAT at the prevailing rate if applicable) would be charged. An additional fee of at least 15% of any monetary fees charged by any broker or NOMAD engaged by the company during the engagement period would also be charged. The initial term of the Longspur Engagement is a period of one year from April 1, 2020. On July 29, 2020, Advent and Longspur entered into a section letter agreement regarding the provision of interim chief financial officer services to Advent (the “Longspur Interim CFO Agreement”). The Longspur Interim CFO Agreement provided for Nick Stamp to act as Interim Chief Financial Officer, while remaining an employee of Longspur for an initial term of six months. The Longspur Interim CFO Agreement contemplated a £10,000 monthly fee, a £60,000 fee upon successful completion of the IPO, an additional fee of 0.25% of the total market capitalization of Advent upon IPO (payable in cash and shares), and an additional fee of 0.25% of the implied market valuation of Advent at the point of any interim fundraise payable on completion of the IPO. In connection with Advent’s decision to pursue the Transactions with AMCI rather than an IPO on the London Stock Exchange, Advent and Longspur subsequently entered into a verbal agreement pursuant to which all fees and compensation owed under the Longspur Engagement and the Longspur Interim CFO Agreement were cancelled and Advent will instead pay Longspur $1.3 million total at the Closing of the Business Combination.
AMCI’s stockholders do not have appraisal rights in connection with the Business Combination under Delaware law.
Advent’s stockholders will have appraisal rights in connection with the Business Combination under Delaware law. No Advent stockholder who has validly exercised its appraisal rights pursuant to Section 262 of the DGCL (a “Dissenting Stockholder”) with respect to its Advent stock (such shares, “Dissenting Shares”) will be entitled to receive any portion of the Merger Consideration with respect to the Dissenting Shares owned by such Dissenting Stockholder unless and until such Dissenting Stockholder has effectively withdrawn or lost its appraisal rights under the DGCL. Each Dissenting Stockholder will be entitled to receive only the payment resulting from the procedure set forth in Section 262 of the DGCL with respect to the Dissenting Shares owned by such Dissenting Stockholder. A copy of Section 262 of the DGCL is attached as Annex D to this proxy statement/prospectus/consent solicitation. Advent will give AMCI and the Purchaser Representative (i) prompt notice of any written demands for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to applicable laws that are received by Advent relating to any Dissenting Stockholder’s rights of appraisal and (ii) the opportunity to direct all negotiations and proceedings with respect to demand for appraisal under the DGCL. Advent will not, except with the prior written consent of AMCI and the Purchaser Representative, voluntarily make any payment with respect to any demands for appraisal, offer to settle or settle any such demands or approve any withdrawal of any such demands.
LEGAL MATTERS
Certain legal matters relating to the validity of the common stock to be issued hereunder will be passed upon for AMCI by Ellenoff Grossman & Schole LLP, New York, New York.
EXPERTS
The audited financial statements of AMCI Acquisition Corp. for the period from June 18, 2018 (inception) to December 31, 2018 and for the year ended December 31, 2019 included in this proxy statement/prospectus/consent solicitation have been so included in reliance on a report of Marcum LLP, an independent registered public accounting firm, appearing elsewhere herein and are included in reliance on such report given upon such firm as experts in auditing and accounting.
The consolidated financial statements of Advent Technologies Inc. as at December 31, 2019 and 2018, and for each of the two years in the period ended December 31, 2019 included in this proxy statement/prospectus/consent solicitation of AMCI which is referred to and made a part of this prospectus and registration statement have been audited by Ernst & Young (Hellas) Certified Auditors Accountants S.A., independent registered public accounting firm, as set forth in their report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing. Ernst & Young (Hellas) Certified Auditors Accountants S.A. is located at Chimarras 8B, 15125, Maroussi, Athens, Greece and is registered as a corporate body with the public register for company auditors-accountants kept with the Body of Certified Auditors-Accountants, or SOEL, Greece with registration number 107.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for AMCI’s securities is Continental Stock Transfer & Trust Company.
DELIVERY OF DOCUMENTS TO STOCKHOLDERS AND WARRANTHOLDERS
Pursuant to the rules of the SEC, AMCI and servicers that it employs to deliver communications to AMCI’s stockholders are permitted to deliver to two or more stockholders sharing the same address a single copy of this proxy statement/prospectus/consent solicitation. Upon written or oral request, AMCI will deliver a separate copy of this proxy statement/prospectus/consent solicitation to any stockholder at a shared address to which a single copy of this proxy statement/prospectus/consent solicitation was delivered and who wishes to receive separate copies in the future. Stockholders receiving multiple copies of this proxy statement/prospectus/consent solicitation may likewise request that AMCI deliver single copies of AMCI’s proxy statement in the future. Stockholders may notify AMCI of their requests by calling or writing AMCI at its principal executive offices at 1501 Ligonier Street, Suite 370, Latrobe, PA 15650, (724) 672-4319. Following the Business Combination, communications should be sent to Advent Technologies Holdings, Inc., One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138.
SUBMISSION OF STOCKHOLDER PROPOSALS
AMCI’s board of directors is aware of no other matter that may be brought before the AMCI Special Meeting. Under Delaware law, only business that is specified in the notice of Special Meeting to stockholders may be transacted at the AMCI Special Meeting.
FUTURE STOCKHOLDER PROPOSALS
If the Business Combination is completed, you will be entitled to attend and participate in the Combined Entity’s annual meetings of stockholders. If we hold a 2021 annual meeting of stockholders, we will provide notice of or otherwise publicly disclose the date on which the 2021 annual meeting will be held. If the 2021 annual meeting of stockholders is held, stockholder proposals will be eligible for consideration by the directors for inclusion in the proxy statement for the Company’s 2021 annual meeting of stockholders in accordance with Rule 14a-8 under the Exchange Act.
STOCKHOLDER COMMUNICATIONS
Stockholders and interested parties may communicate with AMCI’s board of directors, any committee chairperson or the non-management directors as a group by writing to the board or committee chairperson in care of William Hunter, Chief Executive Officer, AMCI Acquisition Corp., 1501 Ligonier Street, Suite 370, Latrobe, PA 15650. Following the Business Combination, such communications should be sent to Advent Technologies Holdings, Inc., One Mifflin Place, 119 Mt Auburn Street, Suite 400, Cambridge, MA 02138. Each communication will be forwarded, depending on the subject matter, to the board of directors, the appropriate committee chairperson or all non-management directors.
WHERE YOU CAN FIND MORE INFORMATION
AMCI has filed a registration statement on Form S-4 to register the issuance of securities described elsewhere in this proxy statement/prospectus/consent solicitation. This proxy statement/prospectus/consent solicitations is a part of that registration statement.
AMCI files reports, proxy statements and other information with the SEC as required by the Exchange Act. You may access AMCI’s filings, including this proxy statement/prospectus/consent solicitation, over the Internet at the SEC’s website at: http://www.sec.gov. Those filings are also available free of charge to the public on, or accessible through, OAC’s corporate website at https://www.oaktreeacquisitioncorp.com/. OAC’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus.
Information and statements contained in this proxy statement/prospectus or any annex to this proxy statement/prospectus are qualified in all respects by reference to the copy of the relevant contract or other annex filed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part, which includes exhibits incorporated by reference from other filings made with the SEC.
If you would like additional copies of this proxy statement/prospectus/consent solicitation or if you have questions about the Business Combination or the proposals to be presented at the AMCI Special Meeting, you should contact AMCI by telephone or in writing:
William Hunter
Chief Executive Officer
AMCI Acquisition Corp.
1501 Ligonier Street, Suite 370
Latrobe, PA 15650
(724) 672-4319
You may also obtain these documents by requesting them in writing or by telephone from AMCI’s proxy solicitation, Advantage Proxy agent at the following address and telephone number:
Karen Smith
President and Chief Executive Officer
Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: (877) 870-8565
Collect: (206) 870-8565
(banks and brokers can call collect at (206) 870-8565)
Email: ksmith@advantageproxy.com
If you are a stockholder of AMCI and would like to request documents, please do so by [], in order to receive them before the AMCI Special Meeting. If you request any documents from AMCI, AMCI will mail them to you by first class mail, or another equally prompt means.
All information contained or incorporated by reference in this proxy statement/prospectus/consent solicitation relating to AMCI has been supplied by AMCI, and all such information relating to Advent has been supplied by Advent. Information provided by either AMCI or Advent does not constitute any representation, estimate or projection of any other party. AMCI’s website is http://amciacquisition.com/ and Advent’s website is https://www.advent.energy/ The information on these websites is neither incorporated by reference into this proxy statement, prospectus/consent solicitation, or into any other filings with, or into any other information furnished or submitted to, the SEC.
This document is a proxy statement of AMCI for the AMCI Special Meeting. AMCI has not authorized anyone to give any information or make any representation about the Business Combination, AMCI or Advent that is different from, or in addition to, that contained in this proxy statement. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this proxy statement/prospectus/consent solicitation speaks only as of the date of this proxy statement/prospectus/consent solicitation, unless the information specifically indicates that another date applies.
This document is a prospectus/consent solicitation of Advent for the Advent Written Consent. Advent has not authorized anyone to give any information or make any representation about the Business Combination, AMCI or Advent that is different from, or in addition to, that contained in this proxy statement/prospectus/consent solicitation. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this proxy statement/prospectus/consent solicitation speaks only as of the date of this proxy statement/prospectus/consent solicitation, unless the information specifically indicates that another date applies.
INDEX TO FINANCIAL STATEMENTS
AMCI Acquisition Corp. Audited Financial Statements | Page |
| F-2 |
| F-3 |
| F-4 |
| F-5 |
| F-6 |
| F-7 |
| |
AMCI Acquisition Corp. Condensed Unaudited Financial Statements | |
| F-18 |
| F-19 |
| F-20 |
| F-21 |
| F-22 |
| |
Advent Technologies Inc. Consolidated Balance Sheets | |
| F-34 |
| F-35 |
| F-36 |
| F-37 |
| F-38 |
| F-39 |
| F-40 |
| |
Advent Technologies Inc. Unaudited Interim Condensed Consolidated Financial Statements | |
| F-58 |
| F-59 |
| F-60 |
| F-61 |
| F-62 |
| F-63 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of
AMCI Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of AMCI Acquisition Corp. (the “Company”) as of December 31, 2019 and 2018, the related statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2019 and for the period from June 18, 2018 (inception) through December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the year ended December 31, 2019 and for the period from June 18, 2018 (inception) through December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph - Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s business plan is dependent on the completion of a business combination and the Company’s cash and working capital as of December 31, 2019 are not sufficient to complete its planned activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2018.
New York, NY
March 27, 2020
AMCI ACQUISITION CORP.
| | December 31, 2019 | | | December 31, 2018 | |
| | | | | | |
ASSETS | | | | | | |
Current Assets | | | | | | |
Cash | | $ | 520,422 | | | $ | 886,279 | |
Prepaid expenses and other current assets | | | 57,109 | | | | 129,825 | |
Total Current Assets | | | 577,531 | | | | 1,016,104 | |
| | | | | | | | |
Cash and cash equivalents held in Trust Account | | | 225,433,349 | | | | 221,060,045 | |
Total Assets | | $ | 226,010,880 | | | $ | 222,076,149 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable | | $ | 25,496 | | | $ | 55,364 | |
Accrued expenses | | | 25,000 | | | | 0 | |
Accrued offering costs | | | 0 | | | | 25,000 | |
Franchise tax payable | | | 200,050 | | | | 54,000 | |
Income tax payable | | | 1,033,660 | | | | 113,000 | |
Total Current Liabilities | | | 1,284,206 | | | | 247,364 | |
| | | | | | | | |
Deferred underwriting fees | | | 7,718,227 | | | | 7,718,227 | |
Total Liabilities | | | 9,002,433 | | | | 7,965,591 | |
| | | | | | | | |
Commitments | | | 0 | | | | 0 | |
| | | | | | | | |
Common stock subject to possible redemption, 20,846,454 and 20,869,316 shares at redemption value at December 31, 2019 and December 31, 2018, respectively | | | 212,008,440 | | | | 209,110,550 | |
| | | | | | | | |
Stockholders’ Equity | | | | | | | | |
Preferred stock, $0.0001 par value; 1,000,000 authorized; NaN issued and outstanding | | | 0 | | | | 0 | |
Class A Common stock, $0.0001 par value; 100,000,000 shares authorized; 1,205,623 and 1,182,761 shares issued and outstanding (excluding 20,846,454 and 20,869,316 shares subject to possible redemption at December 31, 2019 and December 31, 2018, respectively) | | | 121 | | | | 118 | |
Class B Common stock, $0.0001 par value; 10,000,000 shares authorized; 5,513,019 shares issued and outstanding at December 31, 2019 and December 31, 2018 | | | 551 | | | | 551 | |
Additional paid-in capital | | | 1,818,808 | | | | 4,691,701 | |
Retained earnings | | | 3,180,527 | | | | 307,638 | |
Total Stockholders’ Equity | | | 5,000,007 | | | | 5,000,008 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 226,010,880 | | | $ | 222,076,149 | |
The accompanying notes are an integral part of these financial statements.
AMCI ACQUISITION CORP.
| | For the Year Ended December 31, 2019 | | | For the period from June 18, 2018 (inception) through December 31, 2018 | |
Operating expenses | | | | | | |
Operating and formation costs | | $ | 439,017 | | | $ | 64,637 | |
Franchise tax expense | | | 257,540 | | | | 54,000 | |
Loss from operations | | | (696,557 | ) | | | (118,637 | ) |
| | | | | | | | |
Other Income – dividends and interest | | | 4,638,361 | | | | 539,275 | |
Income before provision for income tax | | | 3,941,804 | | | | 420,638 | |
Provision for income tax | | | (1,068,915 | ) | | | (113,000 | ) |
Net income | | $ | 2,872,889 | | | $ | 307,638 | |
| | | | | | | | |
Weighted average number of common shares outstanding, basic and diluted (1) | | | 6,695,864 | | | | 5,338,303 | |
Basic and diluted net loss per share (2) | | $ | (0.05 | ) | | $ | (0.01 | ) |
_______________________
(1) | Excludes an aggregate of 20,846,454 and 20,869,316 shares subject to possible redemption as of December 31, 2019 and December 31, 2018, respectively. |
(2) | Excludes income of $3,185,186 and $353,013 attributable to common stock subject to possible redemption for the Year Ended December 31, 2019 and the Period from June 18, 2018 (inception) through December 31, 2018, respectively (see Note 2). |
The accompanying notes are an integral part of these financial statements.
AMCI ACQUISITION CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019 AND FOR THE PERIOD FROM JUNE 18, 2018 (INCEPTION) THROUGH DECEMBER 31, 2018
| | Shares of Class A Common Stock | | | Shares of Class B Common stock | | | Additional paid-in | | | Retained | | | Total Stockholders’ | |
| | Shares | | | Amount | | | Shares | | | Amount | | | capital | | | Earnings | | | Equity | |
Balance at January 1, 2019 | | | 1,182,761 | | | $ | 118 | | | | 5,513,019 | | | $ | 551 | | | $ | 4,691,701 | | | $ | 307,638 | | | $ | 5,000,008 | |
Reversal of offering costs | | | - | | | | 0 | | | | - | | | | 0 | | | | 25,000 | | | | 0 | | | | 25,000 | |
Change in common stock subject to possible redemption | | | 22,862 | | | | 3 | | | | 0 | | | | 0 | | | | (2,897,893 | ) | | | 0 | | | | (2,897,890 | ) |
Net income | | | - | | | | 0 | | | | - | | | | 0 | | | | 0 | | | | 2,872,889 | | | | 2,872,889 | |
Balance at December 31, 2019 | | | 1,205,623 | | | $ | 121 | | | | 5,513,019 | | | $ | 551 | | | $ | 1,818,808 | | | $ | 3,180,527 | | | $ | 5,000,007 | |
| | Shares of Class A Common Stock | | | Shares of Class B Common stock | | | Additional paid-in | | | Accumulated | | | Total Stockholders’ | |
| | Shares | | | Amount | | | Shares | | | Amount | | | capital | | | Deficit | | | Equity | |
Balance at June 18, 2018 (inception) | | | 0 | | | $ | 0 | | | | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Issuance of common stock to Sponsor (1) | | | - | | | | - | | | | 5,750,000 | | | | 575 | | | | 24,425 | | | | 0 | | | | 25,000 | |
Sale of 22,052,077 units at $10 per unit | | | 22,052,077 | | | | 2,205 | | | | - | | | | - | | | | 220,518,565 | | | | 0 | | | | 220,520,770 | |
Underwriters’ discount and offering expenses | | | - | | | | 0 | | | | - | | | | 0 | | | | (12,653,266 | ) | | | 0 | | | | (12,653,266 | ) |
Proceeds from sale of warrants to Sponsors | | | - | | | | 0 | | | | - | | | | 0 | | | | 5,910,416 | | | | 0 | | | | 5,910,416 | |
Sponsors’ shares cancelled (over-allotment) | | | 0 | | | | 0 | | | | (236,981 | ) | | | (24 | ) | | | 24 | | | | 0 | | | | 0 | |
Change in shares subject to redemption | | | (20,869,316 | ) | | | (2,087 | ) | | | 0 | | | | 0 | | | | (209,108,463 | ) | | | 0 | | | | (209,110,550 | ) |
Net income | | | - | | | | 0 | | | | - | | | | 0 | | | | 0 | | | | 307,638 | | | | 307,638 | |
Balance at December 31, 2018 | | | 1,182,761 | | | $ | 118 | | | | 5,513,019 | | | $ | 551 | | | $ | 4,691,701 | | | $ | 307,638 | | | $ | 5,000,008 | |
_______________________
(1) | Included 750,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. |
The accompanying notes are an integral part of these financial statements.
AMCI ACQUISITION CORP.
| | For the Year Ended December 31, 2019 | | | For the Period from June 18, 2018 (inception) through December 31, 2018 | |
| | | | | | |
Cash Flows from Operating Activities: | | | | | | |
Net income | | $ | 2,872,889 | | | $ | 307,638 | |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | | | | |
Other income – dividends and interest | | | (4,638,361 | ) | | | (539,275 | ) |
Changes in operating assets and liabilities: | | | | | | | | |
Prepaid expenses and other current assets | | | 72,716 | | | | (129,825 | ) |
Accounts payable | | | (29,868 | ) | | | 55,364 | |
Accrued expenses | | | 25,000 | | | | 0 | |
Accrued offering costs | | | 0 | | | | 25,000 | |
Franchise tax payable | | | 146,050 | | | | 54,000 | |
Income tax payable | | | 920,660 | | | | 113,000 | |
Net cash used in operating activities | | | (630,914 | ) | | | (114,098 | ) |
| | | | | | | | |
Cash Flows from Investing Activities: | | | | | | | | |
Trust Account deposit | | | 0 | | | | (220,520,770 | ) |
Trust Account withdrawals for the payment of franchise taxes and income taxes | | | 265,057 | | | | 0 | |
Net cash provided by and used in investing activities | | | 265,057 | | | | (220,520,770 | ) |
| | | | | | | | |
Cash Flows from Financing Activities: | | | | | | | | |
Payment of offering costs | | | 0 | | | | (4,935,039 | ) |
Proceeds from issuance of common stock to Sponsor | | | 0 | | | | 25,000 | |
Proceeds from sale of warrants | | | 0 | | | | 5,910,416 | |
Proceeds from sale of Units | | | 0 | | | | 220,520,770 | |
Proceeds from Promissory Note – related party | | | 0 | | | | 218,610 | |
Repayment of Promissory Note – related party | | | 0 | | | | (218,610 | ) |
Net cash provided by financing activities | | | 0 | | | | 221,521,147 | |
| | | | | | | | |
Net Change in Cash | | | (365,857 | ) | | | 886,279 | |
Cash – Beginning | | | 886,279 | | | | 0 | |
Cash – Ending | | $ | 520,422 | | | $ | 886,279 | |
| | | | | | | | |
Supplemental Disclosure for Cash Flow activities: | | | | | | | | |
Cash paid for income taxes | | $ | 153,617 | | | $ | 0 | |
| | | | | | | | |
Non-Cash investing and financing activities: | | | | | | | | |
Initial classification of common stock subject to redemption | | $ | 0 | | | $ | 209,511,210 | |
Initial classification of deferred underwriting fee payable | | $ | 0 | | | $ | 7,718,227 | |
Change in value of common stock subject to possible redemption | | $ | 2,897,890 | | | $ | 400,660 | |
Reversal of deferred offering costs over accrual | | $ | 25,000 | | | | 0 | |
The accompanying notes are an integral part of these financial statements.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Note 1 - Description of Organization and Business Operations
AMCI Acquisition Corp. (the “Company”) was incorporated in Delaware on June 18, 2018. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company’s sponsor is AMCI Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on companies in the global natural resource infrastructure, value chain and logistics-related sectors. These sectors include equipment, services and technology that is used in, or related to, the resource value chain, and we refer to Natural Resources and Mining Equipment, Technology and Services (“Natural Resources and METS”) sectors.
As of December 31, 2019, the Company had not commenced any operations. All activity through December 31, 2019 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and its search for a suitable Business Combination.
The registration statement for the Company’s Initial Public Offering was declared effective on November 15, 2018. On November 20, 2018, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), generating total gross proceeds of $200,000,000, which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 5,500,000 warrants (the “Placement Warrants”) at a price of $1.00 per warrant in a private placement to the Sponsor, generating total gross proceeds of $5,500,000, which is described in Note 4.
Following the closing of the Initial Public Offering on November 20, 2018, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Placement Warrants was placed in a trust account (“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 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.
On November 27, 2018, the Company closed on the sale of 2,052,077 additional units at a price of $10.00 per unit upon receiving notice of the underwriters’ election to partially exercise their over-allotment option, generating additional gross proceeds of $20,520,770, which were placed in the Trust Account and incurring additional offering costs of $410,416 in underwriting fees, which were paid via purchase by the Sponsor of an additional 410,416 Placement Warrants at a price of $1.00 per warrant. As a result of the partial exercise of the over-allotment option by the underwriters and the expiration of the remaining portion of the over-allotment option, the Sponsor forfeited 236,981 Founder Shares (as defined in Note 5).
Transaction costs amounted to $12,628,266, consisting of $4,410,416 of underwriting fees, $7,718,227 of deferred underwriting fees and $499,623 of other costs. In addition, $520,422 of cash remained outside of the Trust Account and was available for working capital purposes as of December 31, 2019.
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 Placement Warrants, although substantially all of the remaining net proceeds are intended to be applied generally toward consummating a Business Combination. The Company must complete an initial Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting fees and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target 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 successfully effect a Business Combination.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion unless otherwise required by law or regulation. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor, officers and directors (the “initial stockholders”) have agreed to vote their Founder Shares (as defined below in Note 5), and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder 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 shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Company has entered a contingent forward purchase agreement with the Sponsor. This contingent forward purchase agreement allows the Sponsor to purchase up to 5,000,000 units (the “Forward Purchase Units”) for $10.00 each, in a private placement to occur concurrently with the closing of an initial Business Combination, for an aggregate purchase price of up to $50,000,000. The Forward Purchase Units and their component securities would be identical to the units being sold in this offering, except that the Forward Purchase Units and their component securities would be subject to transfer restrictions and certain registration rights, as described therein. The proceeds from the sale of Forward Purchase Units may be used as part of the consideration to the sellers in the initial Business Combination.
The Company’s initial stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company has until May 20, 2020 to consummate a Business Combination (the “Combination Period”). If the Company is unable to complete 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 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 on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
The initial stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders acquire Public Shares in or after the Initial Public Offering, 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 fee (see Note 6) held in the Trust Account in the event the Company does not 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 $10.00 per share.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party 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 (i) $10.00 per share or (ii) 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 share due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, 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, 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.
Liquidity and Capital Resources
As indicated in the accompanying financial statements, at December 31, 2019, the Company had $520,422 in cash, working capital of $527,035, and $4,912,579 of interest available to pay its tax obligations.
The Company’s liquidity needs have been satisfied to date through the contribution of $25,000 from the sale of the Founder Shares, the loan from the Sponsor in an aggregate amount of $218,610 pursuant to a promissory note, and the net proceeds from the sale of the Units and Placement Warrants held outside the Trust Account.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses and may require additional funds to meet its obligations and sustain its operations.
The Company may need to raise additional capital through loans or additional investments from its Sponsor, an affiliate of the Sponsor or the Company’s officers and directors. The Company’s Sponsor, an affiliate of the Sponsor or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of an initial business combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
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 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder 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 Securities Act registration statement 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 statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of balance sheet in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet, which 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.
Cash and cash equivalents held in Trust Account
At December 31, 2019, the assets held in the Trust Account were invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents totaling $225,433,349 and $221,060,045 held in the Trust Account as of December 31, 2019 and December 31, 2018, respectively. During the year ended December 31, 2019, the Company withdrew $265,057 from interest accrued in the Trust Account for the payment of franchise taxes and income taxes.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Common stock subject to possible redemption
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets.
Net loss per common share
Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. An aggregate of 20,846,454 and 20,869,316 shares of common stock subject to possible redemption at December 31, 2019 and December 31, 2018, respectively, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 27,962,493 shares of common stock, since the exercise of the warrants are contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.
Reconciliation of net loss per common share
The Company’s net income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the income of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:
| | For the Year Ended December 31, 2019 | | | For the period from June 18, 2018 (inception) through December 31, 2018 | |
Net income | | $ | 2,872,889 | | | $ | 307,638 | |
Less: Income attributable to common stock subject to possible redemption | | | (3,185,186 | ) | | | (353,013 | ) |
Adjusted net loss | | $ | (312,297 | ) | | $ | (45,375 | ) |
Weighted average shares outstanding, basic and diluted | | | 6,695,864 | | | | 5,338,303 | |
Basic and diluted net loss per common share | | $ | (0.05 | ) | | $ | (0.01 | ) |
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties as of December 31, 2019 and December 31, 2018. 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 subject to income tax examinations by major taxing authorities since inception.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 – Initial Public Offering
Pursuant to the Initial Public Offering, the Company sold 22,052,077 units at a price of $10.00 per Unit. Each Unit consists of 1 share of Class A common stock and 1 redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase 1 share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7).
Note 4 - Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 5,500,000 Placement Warrants at a purchase price of $1.00 per Placement Warrant for an aggregate purchase price of $5,500,000. Simultaneously with the exercise of the over-allotment, the Sponsor purchased an aggregate of 410,416 Placement Warrants at a price of $1.00 per Placement Warrant for an aggregate purchase price of $410,416. Each Placement Warrant is exercisable for 1 share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Placement Warrants were added to the proceeds from the sale of the Units in the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Placement Warrants will expire worthless. The Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. The warrants will expire five years after the completion of the Company’s Business Combination or earlier upon liquidation.
The Sponsor, and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Placement Warrants until 30 days after the completion of the initial Business Combination.
Note 5 - Related Party Transactions
Founder Shares
On June 25, 2018, the Sponsor purchased 5,750,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. The Founder Shares will automatically convert into Class A common stock upon the consummation of a Business Combination on a 1-for-one basis, subject to adjustments as described in Note 7. In October 2018, the Sponsor transferred 35,000 founder sharesFounder Shares to each of Messrs. Uren, Clark and Grant, the Company’s independent director nominees, and 100,000 each to Messrs. Hunter, Beem and Patel, the Company’s officers.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
As a result of the partial exercise of the over-allotment option by the Underwriters and the expiration of the remaining portion of the over-allotment option, the Sponsor forfeited 236,981 Founder Shares.
The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, 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, capital stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Administrative Services Agreement
The Company entered into an agreement with an affiliate of the Sponsor whereby, commencing on November 16, 2018 through the earlier of the Company’s consummation of a Business Combination and its liquidation, the Company agreed to pay the affiliate $10,000 per month for office space, utilities and secretarial and administrative support. For the year ended December 31, 2019, the Company recorded $120,000 in fees in connection with such services in general and administrative expenses in the accompanying statements of operations. There were 0 fees payable and outstanding as of December 31, 2019 and December 31, 2018.
Related Party Loans
On June 25, 2018, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Promissory Note”). The Promissory Note was non-interest bearing and payable on the earlier of December 31, 2018 or the completion of the Initial Public Offering. $218,610 was outstanding under the Promissory Note as of November 20, 2018. The Company repaid the outstanding balance of the Promissory Note in the amount of $218,610 to the Sponsor on November 23, 2018.
In addition, 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 officers and directors may, but are not obligated to, loan the Company funds as may be required (“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 such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such 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 $1,500,000 of such 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 Placement Warrants.
Note 6 – Commitments
Registration Rights
Pursuant to a registration rights agreement entered into on November 15, 2018, the holders of the Founder Shares (and any shares of Class A common stock issuable upon conversion of the Founder Shares), Placement Warrants (and any shares of Class A common stock issuable upon the exercise of the Placement Warrants), Forward Purchase Units (and any shares of Class A Common Stockcommon stock issuable upon the exercise of the Forward Purchase Units and the Shares of Class A Common Stockcommon stock underlying the warrants underlying the Forward Purchase Units) and securities that may be issued upon conversion of Working Capital Loans are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Other Agreements
In May 2018, the Company entered into an agreement with a legal firm to assist the Company with a potential business combination and related securities and corporate work. The Company has agreed to pay a portion of the invoices and the payment of the remaining amount will be deferred until the consummation of the Business Combination.
In November 2018, the Company entered into an agreement with a transfer agent and trust company. The Company has paid a portion of the initial fees and the payment of the remaining amount will be deferred until the consummation of the Business Combination.
As of December 31, 2019, the aggregate amount deferred for such legal firm and transfer agent and trust company was $26,706. The deferred amount is an unrecognized contingent liability, as closing of the Business Combination was not considered probable as of December 31, 2019.
Note 7 - Stockholders’ Equity
Preferred Stock - The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2019 and December 31, 2018, there were 0 shares of preferred stock issued or outstanding.
Common Stock
Class A Common Stockcommon stock - The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to 1 vote for each share. At December 31, 2019 and December 31, 2018, there were 1,205,623 and 1,182,761 shares of Class A common stock issued and outstanding, excluding 20,846,454 and 20,869,316 shares of common stock subject to possible redemption, respectively.
Class B Common Stock - The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to 1 vote for each share. At December 31, 2019 and December 31, 2018, there were 5,513,019 shares of Class B common stock issued and outstanding.
Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a 1-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement-equivalent securities issued, or to be issued, to any seller in a Business Combination, any private placement equivalent securities issued to the Sponsor or its affiliates upon conversion of loans made to the Company). Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Warrants - Each warrant is exercisable to purchase 1 share of Class A common stock at an exercise price of $11.50 per share.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrantholders 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 warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies 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 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, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once the warrants become exercisable, the Company may redeem the Public Warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon not less than 30 days’ prior written notice of redemption; |
| ● | if, and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrantholders; and |
| ● | if, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. |
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
The Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Offering, except that the Placement Warrants and the Class A common stock issuable upon the exercise of the 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 Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Note 8 - Income Taxes
The income tax provision consists of the following:
| | Year ended December 31, 2019 | | | Period from June 18, 2018 (inception) through December 31, 2018 | | | Year ended December 31, 2019 | | | Period from June 18, 2018 (inception) through December 31, 2018 | |
Federal | | | | | | | | | | | | |
Current | | $ | 853,534 | | | $ | 113,000 | | | $ | 853,534 | | | $ | 113,000 | |
Deferred | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | |
State | | | | | | | | | | | | | | | | |
Current | | | 215,381 | | | | 0 | | | | 215,381 | | | | 0 | |
Deferred | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Income tax provision | | $ | 1,068,915 | | | $ | 113,000 | | | $ | 1,068,915 | | | $ | 113,000 | |
As of December 31, 2019 and 2018, the Company did 0t have any U.S. federal and state net operating loss carryovers (“NOLs”).
| | December 31, 2019 | | | December 31, 2018 | | | December 31, 2019 | | | December 31, 2018 | |
Deferred tax assets: | | | | | | | | | | | | |
Startup Costs | | $ | 131,532 | | | $ | 0 | | | $ | 131,532 | | | $ | 0 | |
Total deferred income tax assets | | $ | 131,532 | | | $ | 0 | | | $ | 131,532 | | | $ | 0 | |
| | | | | | | | | | | | | | | | |
Net deferred income tax assets | | | 131,532 | | | $ | 0 | | | | 131,532 | | | $ | 0 | |
Valuation allowance | | | (131,532 | ) | | | 0 | | | | (131,532 | ) | | | 0 | |
Deferred tax asset, net of allowance | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.
AMCI ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2019 and December 31, 2018 is as follows:
| | December 31, 2019 | | | December 31, 2018 | |
Statutory federal income tax rate | | | 21.00 | % | | | 21.00 | % |
State taxes, net of federal tax benefit | | | 3.10 | % | | | - | % |
Return to provision | | | (0.30 | )% | | | - | % |
Other | | | - | % | | | 3.00 | % |
Change in valuation allowance | | | 3.30 | % | | | - | % |
Income tax provision | | | 27.10 | % | | | 24.00 | % |
The Company files income tax returns in the U.S. federal jurisdiction and Pennsylvania and is subject to examination for the years ended December 31, 2018 and December 31, 2019.
Note 9 - Fair Value Measurements
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1 : Observable inputs such as quoted prices in active markets; |
| ● | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
| ● | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions |
The following table presents information about the Company’s assets that are measured on a recurring basis at December 31, 2019 and December 31, 2018, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
December 31, 2019
Description | | Quoted Prices in Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Cash and cash equivalents held in Trust Account | | $ | 225,433,349 | | | | | | | | | |
December 31, 2018
Description | | Quoted Prices in Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Cash and cash equivalents held in Trust Account | | $ | 221,060,045 | | | | | | | | | |
Note 10 - Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the 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 financial statements.
| | June 30, 2020 | | | December 31, 2019 | | | September 30, 2020 | | | December 31, 2019 | |
| | (Unaudited) | | | | | | (Unaudited) | | | | |
ASSETS | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | |
Cash | | $ | 118,170 | | | $ | 520,422 | | | $ | 109,940 | | | $ | 520,422 | |
Prepaid income tax | | | 17,119 | | | | 0 | | |
Prepaid expenses and other current assets | | | 54,097 | | | | 57,109 | | | | 25,722 | | | | 57,109 | |
Total Currents Assets | | | 189,386 | | | | 577,531 | | | | 135,662 | | | | 577,531 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents held in Trust Account | | | 152,790,533 | | | | 225,433,349 | | | | 153,781,268 | | | | 225,433,349 | |
Total Assets | | $ | 152,979,919 | | | $ | 226,010,880 | | | $ | 153,916,930 | | | $ | 226,010,880 | |
| | | | | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | |
Accounts payable | | $ | 79,025 | | | $ | 25,496 | | | $ | 57,810 | | | $ | 25,496 | |
Accrued expenses | | | 17,770 | | | | 25,000 | | | | 10,903 | | | | 25,000 | |
Franchise tax payable | | | 20,050 | | | | 200,050 | | | | 30,050 | | | | 200,050 | |
Income tax payable | | | 29,272 | | | | 1,033,660 | | | | 18,225 | | | | 1,033,660 | |
Promissory note | | | 746,259 | | | | 0 | | | | 2,330,304 | | | | 0 | |
Total Current Liabilities | | | 892,376 | | | | 1,284,206 | | | | 2,447,292 | | | | 1,284,206 | |
| | | | | | | | | | | | | | | | |
Deferred underwriting fees | | | 7,718,227 | | | | 7,718,227 | | | | 7,718,227 | | | | 7,718,227 | |
Total Liabilities | | | 8,610,603 | | | | 9,002,433 | | | | 10,165,519 | | | | 9,002,433 | |
| | | | | | | | | | | | | | | | |
Commitments | | | | | | | | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | |
Common stock subject to possible redemption, 13,623,588 and 20,846,454 shares at redemption value at June 30, 2020 and December 31, 2019, respectively | | | 139,369,310 | | | | 212,008,440 | | |
Common stock subject to possible redemption, 13,471,011 and 20,846,454 shares at redemption value at September 30, 2020 and December 31, 2019, respectively | | | | 138,751,410 | | | | 212,008,440 | |
| | | | | | | | | | | | | | | | |
Stockholders’ Equity | | | | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value; 1,000,000 authorized; NaN issued and outstanding | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Class A Common stock, $0.0001 par value; 100,000,000 shares authorized; 1,301,601 and 1,205,623 issued and outstanding (excluding 13,623,588 and 20,846,454 shares subject to possible redemption at June 30, 2020 and December 31, 2019, respectively) | | | 131 | | | | 121 | | |
Class B Common stock, $0.0001 par value; 10,000,000 shares authorized; 5,513,019 shares issued and outstanding at June 30, 2020 and December 31, 2019 | | | 551 | | | | 551 | | |
Class A Common stock, $0.0001 par value; 100,000,000 shares authorized; 1,454,178 and 1,205,623 issued and outstanding (excluding 13,471,011 and 20,846,454 shares subject to possible redemption at September 30, 2020 and December 31, 2019, respectively) | | | | 146 | | | | 121 | |
Class B Common stock, $0.0001 par value; 10,000,000 shares authorized; 5,513,019 shares issued and outstanding at September 30, 2020 and December 31, 2019 | | | | 551 | | | | 551 | |
Additional paid-in capital | | | 1,872,487 | | | | 1,818,808 | | | | 2,490,372 | | | | 1,818,808 | |
Retained earnings | | | 3,126,837 | | | | 3,180,527 | | | | 2,508,932 | | | | 3,180,527 | |
Total Stockholders’ Equity | | | 5,000,006 | | | | 5,000,007 | | | | 5,000,001 | | | | 5,000,007 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 152,979,919 | | | $ | 226,010,880 | | | $ | 153,916,930 | | | $ | 226,010,880 | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| | For the Three Months Ended June 30, 2020 | | | For the Six Months Ended June 30, 2020 | | | For the Three Months Ended June 30, 2019 | | | For the Six Months Ended June 30, 2019 | | | For the Three Months Ended September 30, 2020 | | | For the Nine Months Ended September 30, 2020 | | | For the Three Months Ended September 30, 2019 | | | For the Nine Months Ended September 30, 2019 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Operating costs | | $ | 393,205 | | | $ | 510,130 | | | $ | 103,370 | | | $ | 237,217 | | | $ | 414,612 | | | $ | 924,742 | | | $ | 114,179 | | | $ | 351,396 | |
Franchise tax expense | | | 50,000 | | | | 108,794 | | | | 50,250 | | | | 157,540 | | | | 50,000 | | | | 158,794 | | | | 50,000 | | | | 207,540 | |
Loss from operations | | | (443,205 | ) | | | (618,924 | ) | | | (153,620 | ) | | | (394,757 | ) | | | (464,612 | ) | | | (1,083,536 | ) | | | (164,179 | ) | | | (558,936 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Income – dividends and interest | | | 97,645 | | | | 793,375 | | | | 1,270,690 | | | | 2,531,081 | | | | 39,434 | | | | 832,809 | | | | 1,179,253 | | | | 3,710,334 | |
(Loss) income before provision for income tax | | | (345,560 | ) | | | 174,451 | | | | 1,117,070 | | | | 2,136,324 | | | | (425,178 | ) | | | (250,727 | ) | | | 1,015,074 | | | | 3,151,398 | |
Provision for income tax | | | 73,365 | | | | 228,141 | | | | 274,139 | | | | 503,139 | | | | 192,727 | | | | 420,868 | | | | 199,916 | | | | 703,055 | |
Net (loss) income | | $ | (418,925 | ) | | $ | (53,690 | ) | | $ | 842,931 | | | $ | 1,633,185 | | | $ | (617,905 | ) | | $ | (671,595 | ) | | $ | 815,158 | | | $ | 2,448,343 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average number of common shares outstanding, basic and diluted (1) | | | 6,724,713 | | | | 6,719,169 | | | | 6,700,195 | | | | 6,695,800 | | | | 6,816,278 | | | | 6,753,460 | | | | 6,699,373 | | | | 6,695,791 | |
Basic and diluted net loss per share (2) | | $ | (0.06 | ) | | $ | (0.07 | ) | | $ | (0.02 | ) | | $ | (0.03 | ) | | $ | (0.09 | ) | | $ | (0.13 | ) | | $ | (0.01 | ) | | $ | (0.04 | ) |
| (1) | Excludes an aggregate of 13,623,58813,471,011 and 20,865,71720,866,262 shares subject to possible redemption as of JuneSeptember 30, 2020 and 2019, respectively. |
| (2) | Excludes income of $0, $416,635, $949,978,$228,483, $879,363, and $1,824,175$2,703,586 attributable to common stock subject to possible redemption for the Three and SixNine Months Ended JuneSeptember 30, 2020 and 2019, respectively (see Note 2). |
The accompanying notes are an integral part of these unaudited condensed financial statements.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIXNINE MONTHS ENDED JUNESEPTEMBER 30, 2020 AND 2019
(Unaudited)
| | Shares of Class A Common Stock | | | Shares of Class B Common stock | | | Additional paid-in | | | Retained | | | Total Stockholders’ | |
| | Shares | | | Amount | | | Shares | | | Amount | | | capital | | | Earnings | | | Equity | |
Balance at January 1, 2020 | | | 1,205,623 | | | $ | 121 | | | | 5,513,019 | | | $ | 551 | | | $ | 1,818,808 | | | $ | 3,180,527 | | | $ | 5,000,007 | |
Change in common stock subject to possible redemption | | | 5,072 | | | | 0 | | | | 0 | | | | 0 | | | | (365,240 | ) | | | 0 | | | | (365,240 | ) |
Net income | | | | | | | 0 | | | | | | | | 0 | | | | 0 | | | | 365,235 | | | | 365,235 | |
Balance at March 31, 2020 | | | 1,210,695 | | | $ | 121 | | | | 5,513,019 | | | $ | 551 | | | $ | 1,453,568 | | | $ | 3,545,762 | | | $ | 5,000,002 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in common stock subject to possible redemption | | | 90,906 | | | | 10 | | | | 0 | | | | 0 | | | | 418,919 | | | | 0 | | | | 418,929 | |
Net loss | | | | | | | 0 | | | | | | | | 0 | | | | 0 | | | | (418,925 | ) | | | (418,925 | ) |
Balance at September 30, 2020 | | | 1,301,601 | | | $ | 131 | | | | 5,513,019 | | | $ | 551 | | | $ | 1,872,487 | | | $ | 3,126,837 | | | $ | 5,000,006 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in common stock subject to possible redemption | | | 152,577 | | | | 15 | | | | 0 | | | | 0 | | | | 617,885 | | | | 0 | | | | 617,900 | |
Net loss | | | | | | | 0 | | | | | | | | 0 | | | | 0 | | | | (617,905 | ) | | | (617,905 | ) |
Balance at September 30, 2020 | | | 1,454,178 | | | $ | 146 | | | | 5,513,019 | | | $ | 551 | | | $ | 2,490,372 | | | $ | 2,508,932 | | | $ | 5,000,001 | |
| | Shares of Class A Common Stock | | | Shares of Class B Common stock | | | Additional paid-in | | | Retained | | | Total Stockholders’ | |
| | Shares | | | Amount | | | Shares | | | Amount | | | capital | | | Earnings | | | Equity | |
Balance at January 1, 2020 | | | 1,205,623 | | | $ | 121 | | | | 5,513,019 | | | $ | 551 | | | $ | 1,818,808 | | | $ | 3,180,527 | | | $ | 5,000,007 | |
Change in common stock subject to possible redemption | | | 5,072 | | | | 0 | | | | 0 | | | | 0 | | | | (365,240 | ) | | | 0 | | | | (365,240 | ) |
Net income | | | - | | | | 0 | | | | - | | | | 0 | | | | 0 | | | | 365,235 | | | | 365,235 | |
Balance at March 31, 2020 | | | 1,210,695 | | | $ | 121 | | | | 5,513,019 | | | $ | 551 | | | $ | 1,453,568 | | | $ | 3,545,762 | | | $ | 5,000,002 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in common stock subject to possible redemption | | | 90,906 | | | | 10 | | | | 0 | | | | 0 | | | | 418,919 | | | | 0 | | | | 418,929 | |
Net loss | | | - | | | | 0 | | | | - | | | | 0 | | | | 0 | | | | (418,925 | ) | | | (418,925 | ) |
Balance at June 30, 2020 | | | 1,301,601 | | | $ | 131 | | | | 5,513,019 | | | $ | 551 | | | $ | 1,872,487 | | | $ | 3,126,837 | | | $ | 5,000,006 | |
| | Shares of Class A Common Stock | | | Shares of Class B Common stock | | | Additional paid-in | | | Retained | | | Total Stockholders’ | |
| | Shares | | | Amount | | | Shares | | | Amount | | | capital | | | Earnings | | | Equity | |
Balance at January 1, 2019 | | | 1,182,761 | | | $ | 118 | | | | 5,513,019 | | | $ | 551 | | | $ | 4,691,701 | | | $ | 307,638 | | | $ | 5,000,008 | |
Change in common stock subject to possible redemption | | | 4,424 | | | | 1 | | | | 0 | | | | 0 | | | | (790,261 | ) | | | 0 | | | | (790,260 | ) |
Net income | | | | | | | 0 | | | | | | | | 0 | | | | 0 | | | | 790,254 | | | | 790,254 | |
Balance at March 31, 2019 | | | 1,187,185 | | | $ | 119 | | | | 5,513,019 | | | $ | 551 | | | $ | 3,901,440 | | | $ | 1,097,892 | | | $ | 5,000,002 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in common stock subject to possible redemption | | | (825 | ) | | | 0 | | | | 0 | | | | 0 | | | | (842,930 | ) | | | 0 | | | | (842,930 | ) |
Net income | | | | | | | 0 | | | | | | | | 0 | | | | 0 | | | | 842,931 | | | | 842,931 | |
Balance at September 30, 2019 | | | 1,186,360 | | | $ | 119 | | | | 5,513,019 | | | $ | 551 | | | $ | 3,058,510 | | | $ | 1,940,823 | | | $ | 5,000,003 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reversal of offering costs | | | | | | | 0 | | | | 0 | | | | 0 | | | | 25,000 | | | | 0 | | | | 25,000 | |
Change in common stock subject to possible redemption | | | (545 | ) | | | 0 | | | | 0 | | | | 0 | | | | (840,160 | ) | | | 0 | | | | (840,160 | ) |
Net income | | | | | | | 0 | | | | | | | | 0 | | | | 0 | | | | 815,158 | | | | 815,158 | |
Balance at September 30, 2019 | | | 1,185,815 | | | $ | 119 | | | | 5,513,019 | | | $ | 551 | | | $ | 2,243,350 | | | $ | 2,755,981 | | | $ | 5,000,001 | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
| | Shares of Class A Common Stock | | | Shares of Class B Common stock | | | Additional paid-in | | | Retained | | | Total Stockholders’ | |
| | Shares | | | Amount | | | Shares | | | Amount | | | capital | | | Earnings | | | Equity | |
Balance at January 1, 2019 | | | 1,182,761 | | | $ | 118 | | | | 5,513,019 | | | $ | 551 | | | $ | 4,691,701 | | | $ | 307,638 | | | $ | 5,000,008 | |
Change in common stock subject to possible redemption | | | 4,424 | | | | 1 | | | | 0 | | | | 0 | | | | (790,261 | ) | | | 0 | | | | (790,260 | ) |
Net income | | | - | | | | 0 | | | | - | | | | 0 | | | | 0 | | | | 790,254 | | | | 790,254 | |
Balance at March 31, 2019 | | | 1,187,185 | | | $ | 119 | | | | 5,513,019 | | | $ | 551 | | | $ | 3,901,440 | | | $ | 1,097,892 | | | $ | 5,000,002 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in common stock subject to possible redemption | | | (825 | ) | | | 0 | | | | 0 | | | | 0 | | | | (842,930 | ) | | | 0 | | | | (842,930 | ) |
Net income | | | - | | | | 0 | | | | - | | | | 0 | | | | 0 | | | | 842,931 | | | | 842,931 | |
Balance at June 30, 2019 | | | 1,186,360 | | | $ | 119 | | | | 5,513,019 | | | $ | 551 | | | $ | 3,058,510 | | | $ | 1,940,823 | | | $ | 5,000,003 | |
AMCI ACQUISITION CORP.CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
| | Nine Months Ended September 30, | |
| | 2020 | | | 2019 | |
| | | | | | |
Cash Flows from Operating Activities: | | | | | | |
Net (loss) income | | $ | (671,595 | ) | | $ | 2,448,343 | |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | | | | |
Dividends and interest on Trust Account | | | (832,809 | ) | | | (3,710,334 | ) |
Changes in operating assets and liabilities: | | | | | | | | |
Prepaid expenses and other current assets | | | 31,387 | | | | 88,342 | |
Accounts payable | | | 32,314 | | | | (39,696 | ) |
Accrued expenses | | | (14,097 | ) | | | 0 | |
Franchise tax payable | | | (170,000 | ) | | | 96,050 | |
Income tax payable | | | (1,015,435 | ) | | | 565,278 | |
Net cash used in operating activities | | | (2,640,235 | ) | | | (552,017 | ) |
| | | | | | | | |
| | | | | | | | |
Cash Flows from Investing Activities: | | | | | | | | |
Investment of cash in Trust Account | | | (1,865,649 | ) | | | 0 | |
Trust Account withdrawal for redemption of common stock | | | 72,585,441 | | | | 0 | |
Trust Account withdrawals for the payment of franchise and income taxes | | | 1,765,098 | | | | 254,579 | |
Net cash provided by investing activities | | | 72,484,890 | | | | 254,579 | |
| | | | | | | | |
Cash Flows from Financing Activities: | | | | | | | | |
Payment for redemption of common stock | | | (72,585,441 | ) | | | 0 | |
Proceeds from promissory note | | | 2,330,304 | | | | 0 | |
Net cash used by financing activities | | | (70,255,137 | ) | | | 0 | |
| | | | | | | | |
Net Change in Cash | | | (410,482 | ) | | | (297,438 | ) |
Cash – Beginning | | | 520,422 | | | | 886,279 | |
Cash – Ending | | $ | 109,940 | | | $ | 588,841 | |
| | | | | | | | |
Supplemental Disclosure for Cash Flow activities: | | | | | | | | |
Cash paid for income taxes | | $ | 1,436,303 | | | $ | 143,139 | |
| | | | | | | | |
Non-Cash investing and financing activities: | | | | | | | | |
Change in value of common stock subject to possible redemption | | $ | (671,589 | ) | | $ | 2,473,350 | |
Reversal of deferred offering costs | | $ | 0 | | | $ | 25,000 | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| | Six Months Ended June 30, | |
| | 2020 | | | 2019 | |
| | | | | | |
Cash Flows from Operating Activities: | | | | | | |
Net (loss) income | | $ | (53,690 | ) | | $ | 1,633,185 | |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | | | | |
Dividends and interest on Trust Account | | | (793,375 | ) | | | (2,531,081 | ) |
Changes in operating assets and liabilities: | | | | | | | | |
Prepaid income tax | | | (17,119 | ) | | | 0 | |
Prepaid expenses and other current assets | | | 3,012 | | | | 39,742 | |
Accounts payable | | | 53,529 | | | | (49,467 | ) |
Accrued expenses | | | (7,230 | ) | | | 0 | |
Franchise tax payable | | | (180,000 | ) | | | 46,050 | |
Income tax payable | | | (1,004,388 | ) | | | 360,000 | |
Net cash used in operating activities | | | (1,999,261 | ) | | | (501,571 | ) |
| | | | | | | | |
| | | | | | | | |
Cash Flows from Investing Activities: | | | | | | | | |
Investment of cash in Trust Account | | | (746,259 | ) | | | 0 | |
Trust Account withdrawal for redemption of common stock | | | 72,585,441 | | | | 0 | |
Trust Account withdrawals for the payment of franchise taxes | | | 1,597,009 | | | | 254,579 | |
Net cash provided by investing activities | | | 73,436,191 | | | | 254,579 | |
| | | | | | | | |
Cash Flows from Financing Activities: | | | | | | | | |
Payment for redemption of common stock | | | (72,585,441 | ) | | | 0 | |
Proceeds from promissory note | | | 746,259 | | | | 0 | |
Net cash used by financing activities | | | (71,839,182 | ) | | | 0 | |
| | | | | | | | |
Net Change in Cash | | | (402,252 | ) | | | (246,992 | ) |
Cash – Beginning | | | 520,422 | | | | 886,279 | |
Cash – Ending | | $ | 118,170 | | | $ | 639,287 | |
| | | | | | | | |
Supplemental Disclosure for Cash Flow activities: | | | | | | | | |
Cash paid for income taxes | | $ | 1,249,648 | | | $ | 143,149 | |
| | | | | | | | |
Non-Cash investing and financing activities: | | | | | | | | |
Change in value of common stock subject to possible redemption | | $ | (53,689 | ) | | $ | 1,633,190 | |
The accompanying notes are an integral partTable of these unaudited condensed financial statements.
Contents
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
Note 1 - Description of Organization and Business Operations
AMCI Acquisition Corp. (the “Company”) was incorporated in Delaware on June 18, 2018. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company’s sponsor is AMCI Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on companies in the global natural resource infrastructure, value chain and logistics-related sectors. These sectors include equipment, services and technology that is used in, or related to, the resource value chain, and we refer to Natural Resources and Mining Equipment, Technology and Services (“Natural Resources and METS”) sectors.
As of JuneSeptember 30, 2020, the Company had not commenced any operations. All activity through JuneSeptember 30, 2020 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and its search for a suitable Business Combination.
The registration statement for the Company’s Initial Public Offering was declared effective on November 15, 2018. On November 20, 2018, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), generating total gross proceeds of $200,000,000, which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 5,500,000 warrants (the “Placement“Private Placement Warrants”) at a price of $1.00 per warrant in a private placement to the Sponsor, generating total gross proceeds of $5,500,000, which is described in Note 4.
Following the closing of the Initial Public Offering on November 20, 2018, an amount of $200,000,000 ($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 (“Trust Account”) and was subsequently 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 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.
On November 27, 2018, the Company closed on the sale of 2,052,077 additional units at a price of $10.00 per unit upon receiving notice of the underwriters’ election to partially exercise their over-allotment option, generating additional gross proceeds of $20,520,770, which were placed in the Trust Account and incurring additional offering costs of $410,416 in underwriting fees, which were paid via purchase by the Sponsor of an additional 410,416 Private Placement Warrants at a price of $1.00 per warrant. As a result of the partial exercise of the over-allotment option by the Underwriters and the expiration of the remaining portion of the over-allotment option, the Sponsor forfeited 236,981 Founder Shares (as defined below in Note 5).
Transaction costs amounted to $12,628,266, consisting of $4,410,416 of underwriting fees, $7,718,227 of deferred underwriting fees and $499,623 of other costs. In addition, $118,170$109,940 of cash remained outside of the Trust Account and was available for working capital purposes as of JuneSeptember 30, 2020.
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 remaining net proceeds are intended to be applied generally toward consummating a Business Combination. The Company must complete an initial Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting fees and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target 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 successfully effect a Business Combination.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion unless otherwise required by law or regulation. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, as amended (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor, officers and directors (the “initial stockholders”) have agreed to vote their Founder Shares, and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder 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 shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Company has entered a contingent forward purchase agreement with the Sponsor. This contingent forward purchase agreement allows the Sponsor to purchase up to 5,000,000 units (the “Forward Purchase Units”) for $10.00 each, in a private placement to occur concurrently with the closing of an initial Business Combination, for an aggregate purchase price of up to $50,000,000. The Forward Purchase Units and their component securities would be identical to the units being sold in this offering, except that the Forward Purchase Units and their component securities would be subject to transfer restrictions and certain registration rights, as described therein. The proceeds from the sale of Forward Purchase Units may be used as part of the consideration to the sellers in the initial Business Combination.
The Company’s initial stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
The Company has until October 20, 2020February 22, 2021 to consummate a Business Combination (the “Combination Period”). If the Company is unable to complete 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 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 on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
On May 15, 2020, the Company held a special meeting of stockholders to seek stockholder approval to extend the Combination Period from May 20, 2020 to October 20, 2020. The stockholders voted in favor to extend the deadline to complete a Business Combination to October 20, 2020. In addition, stockholders holding 7,126,888 shares of the Company’s Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, approximately $72.6 million (approximately $10.18 per share) was removed from the Trust Account to pay such holders. Approximately $373,000 (equal to $0.025 for each share of Class A common stock that was not redeemed at the special meeting) will be deposited into the Trust Account for each calendar month, or portion thereof, that is needed by the Company to complete an initial business combination. As of JuneSeptember 30, 2020, $746,259an additional $1,865,649 was deposited into the Trust Account.
On October 16, 2020, the Company held a special meeting of stockholders to seek stockholder approval to extend the Combination Period from October 20, 2020 to February 22, 2021. The stockholders voted in favor of the extension of the deadline to complete a Business Combination to February 22, 2021. In addition, stockholders holding 5,864,053 shares of the Company’s Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, approximately $60.4 million (approximately $10.30 per share) was removed from the Trust Account to pay such holders.
The initial stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders acquire Public Shares in or after the Initial Public Offering, 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 fee (see Note 6) held in the Trust Account in the event the Company does not 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 $10.00 per share.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party 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 (i) $10.00 per share or (ii) 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 share due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, 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, 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. Marcum LLP, our independent registered public accounting firm, and the underwriters of the Initial Public Offering will not execute agreements with us waiving such claims to the monies held in the Trust Account.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
The Company has principally financed its operations from inception using proceeds from the sale of its equity securities to its stockholders prior to the Initial Public Offering and such amount of proceeds from the sale of the Private Placement Warrants and the Initial Public Offering that were placed in an account outside of the Trust Account for working capital purposes. As of JuneSeptember 30, 2020, the Company had $118,170$109,940 in its operating bank account, $152,790,533$153,781,268 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital of approximately $75,000,$(2,263,355), which excludes approximately $17,000 of prepaid income taxes and $50,000$48,000 of franchise taxes and income tax payable that may be paid from interest earned on the Trust Account. Based on the foregoing, the Company believes it will have sufficient cash to meet its needs through the earlier of consummation of a Business Combination or October 20, 2020,February 22, 2021, the date that the Company will be required to cease all operations except for the purpose of winding up, if a Business Combination is not consummated.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. Operating results for the three and nine months ended June September 30,2020 is not necessarily indicative of the results that may be expected for the year ended December 31,2020. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed by the Company with the SEC on March 27, 2020.
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 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder 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 Securities Act registration statement 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 statements 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.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statments,statements, which 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.
Cash and cash equivalents held in Trust Account
At June September 30,2020, the assets held in the Trust Account were invested in money market funds meeting certain conditions under Rule 2a-72a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash equivalents totaling $152,790,533$153,781,268 and $225,433,349$225,433,349 held in Trust Account as of June September 30,2020 and December 31,2019, respectively. During the sixnine months ended June September 30,2020, the Company withdrew $1,597,009$1,765,098 from interest accrued on the Trust Account for the payment of franchise taxes and income taxes. On May 21,2020, the Company withdrew $72,585,441$72,585,441 for payment to the shareholdersstockholders who redeemed their shares. On July 13, October 20,2020, the Company withdrew an additional $126,432$40,000 from interest accrued on the Trust Account for the payment of incomefranchise taxes. On October 20,2020, the Company withdrew an additional $60,404,995 for payment to the stockholders who redeemed their shares.
Common stock subject to possible redemption
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets.
Net loss per common share
Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. An aggregate of 13,623,58813,471,011 and 20,865,71720,866,262 shares of common stock subject to possible redemption at JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 27,962,493 shares of common stock, since the exercise of the warrants are contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
Reconciliation of net loss per common share
The Company’s net loss/income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the income of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:
| | For the Three Months Ended June 30, 2020 | | | For the Six Months Ended June 30, 2020 | | | For the Three Months Ended June 30, 2019 | | | For the Six Months Ended June 30, 2019 | | | For the Three Months Ended September 30, 2020 | | | For the Nine Months Ended September 30, 2020 | | | For the Three Months Ended September 30, 2019 | | | For the Nine Months Ended September 30, 2019 | |
Net (loss) income | | $ | (418,925 | ) | | $ | (53,690 | ) | | $ | 842,931 | | | $ | 1,633,185 | | | $ | (617,905 | ) | | $ | (671,595 | ) | | $ | 815,158 | | | $ | 2,448,343 | |
Less: Income attributable to common stock subject to possible redemption | | | 0 | | | | (416,635 | ) | | | (949,978 | ) | | | (1,824,175 | ) | | | 0 | | | | (228,483 | ) | | | (879,363 | ) | | | (2,703,586 | ) |
Adjusted net loss | | $ | (418,925 | ) | | $ | (470,325 | ) | | $ | (107,047 | ) | | $ | (190,990 | ) | | $ | (617,905 | ) | | $ | (900,078 | ) | | $ | (64,205 | ) | | $ | (255,243 | ) |
Weighted average shares outstanding, basic and diluted | | | 6,724,713 | | | | 6,719,169 | | | | 6,700,195 | | | | 6,695,800 | | | | 6,816,278 | | | | 6,753,460 | | | | 6,699,373 | | | | 6,695,791 | |
Basic and diluted net loss per common share | | $ | (0.06 | ) | | $ | (0.07 | ) | | $ | (0.02 | ) | | $ | (0.03 | ) | | $ | (0.09 | ) | | $ | (0.13 | ) | | $ | (0.01 | ) | | $ | (0.04 | ) |
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties as of JuneSeptember 30, 2020 and December 31, 2019. 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 subject to income tax examinations by major taxing authorities since inception.
On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOL”) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend the excess business loss rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts and Jobs Act tax provisions. The Company does not believe that the CARES Act will have a significant impact on Company’s financial position or statement of operations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coveragecoverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.
Note 3 – Initial Public Offering
Pursuant to the Initial Public Offering, the Company sold 22,052,077 units at a price of $10.00$10.00 per Unit. Each Unit consists of 1 share of Class A common stock and 1 redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase 1 share of Class A common stock at a price of $11.50$11.50 per share, subject to adjustment (see Note 7). On May 20, 2020, 7,126,888 units shares were redeemed. On October 20,2020,5,864,053 shares were redeemed.
Note 4 - Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 5,500,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant for an aggregate purchase price of $5,500,000. Simultaneously with the exercise of the over-allotment, the Sponsor purchased an aggregate of 410,416 Private Placement Warrants at a price of $1.00 per Private Placement Warrant for an aggregate purchase price of $410,416. Each Private Placement Warrant is exercisable for 1 share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the proceeds from the sale of the Units in the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. The warrants will expire five years after the completion of the Company’s Business Combination or earlier upon liquidation.
The Sponsor, and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Note 5 - Related Party Transactions
Founder Shares
On June 25, 2018, the Sponsor purchased 5,750,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. The Founder Shares will automatically convert into Class A common stock upon the consummation of a Business Combination on a 1-for-one basis, subject to adjustments as described in Note 7. In October 2018, the Sponsor transferred 35,000 founder sharesFounder Shares to each of Messrs. Uren, Clark and Grant, the Company’s independent director nominees, and 100,000 each to Messrs. Hunter, Beem and Patel, the Company’s officers.
As a result of the partial exercise of the over-allotment option by the Underwriters and the expiration of the remaining portion of the over-allotment option, the Sponsor forfeited 236,981 Founder Shares.
The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, 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, capital stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
Administrative Services Agreement
The Company entered into an agreement with an affiliate of the Sponsor whereby, commencing on November 16, 2018 through the earlier of the Company’s consummation of a Business Combination and its liquidation, the Company agreed to pay the affiliate $10,000 per month for office space, utilities and secretarial and administrative support. For the sixnine months ended JuneSeptember 30, 2020 and 2019, the Company recorded $60,000$90,000 in fees in connection with such services in general and administrative expenses in the accompanying statements of operations. There were 0 fees payable and outstanding as of JuneSeptember 30, 2020 and 2019 and December 31, 2019.
Related Party Loans
In addition, 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 officers and directors may, but are not obligated to, loan the Company funds as may be required (“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 such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such 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 $1,500,000 of such 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.
Note 6 – Commitments
Registration Rights
Pursuant to a registration rights agreement entered into on November 15, 2018, the holders of the Founder Shares (and any shares of Class A common stock issuable upon conversion of the Founder Shares), Private Placement Warrants (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants), Forward Purchase Units (and any shares of Class A Common Stockcommon stock issuable upon the exercise of the Forward Purchase Units and the Shares of Class A Common Stockcommon stock underlying the warrants underlying the Forward Purchase Units) and securities that may be issued upon conversion of Working Capital Loans are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Other Agreements
In May 2018, the Company entered into an agreement with a legal firm to assist the Company with a potential business combination and related securities and corporate work. The Company has agreed to pay a portion of the invoices and the payment of the remaining amount will be deferred until the consummation of the Business Combination.
In November 2018, the Company entered into an agreement with a transfer agent and trust company. The Company has paid a portion of the initial fees and the payment of the remaining amount will be deferred until the consummation of the Business Combination.
As of JuneSeptember 30, 2020, the aggregate amount deferred for such legal firm and transfer agent and trust company was $145,575.$234,948. The deferred amount is an unrecognized contingent liability, as closing of a potential Business Combination was not considered probable as of JuneSeptember 30, 2020.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
On May 7, 2020, the Company entered into a non-binding letter of intent (the “Letter of Intent”) with an established mining company for an initial business combination. The Company does not currently expect that it will enter into a definitive agreement with the target for the transactions contemplated by the Letter of Intent. However, the Company is in discussions with multiple other targets in the alternative energy generation/storage, infrastructure and electrification industries with respect to an initial business combination. There can be no assurance that a definitive agreement for a business combination will be entered into or that a business combination will be consummated.
On May 20, 2020, the Company issued a promissory note (the “Note”) in the principal amount of up to $2,365,649$2,365,649 to an affiliate of a business combination target (the “Lender”), pursuant to which Lender agreed, among other things, to loan the Company the necessary funds to deposit in the Company’s Trust Account for each share of the Company’s Class A common stock (“Public Share”) that was not redeemed in connection with the extension of the Company’s termination date from May 20, 2020 until October 20, 2020. The Note provides that, commencing May 20, 2020, Lender shall advance to the Company monthly payments of approximately $373,000,$373,000, up to a maximum amount of approximately $1.9$1.9 million. The Company will deposit these advances into the Company’s Trust Account and such amounts will be distributed either to: (i) all of the holders of Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the Company’s initial business combination. Lender will also advance the Company up to $500,000$500,000 to pay fees and expenses incurred by the Company in completing its initial business combination. The Note bears no interest unless the Company enters into a definitive agreement for an initial business combination with a party that is not affiliated with Lender (“Third Party Business Combination”), in which case the Note will bear interest at 1% per annum. The Note is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial business combination or (ii) February 22, 2021, pursuant to the Amendment to Promissory Note dated October 20, 12,2020. The Company’s obligations under the Note are subject to a limited recourse guarantee by the Sponsor and are secured by a portion of the founder sharesFounder Shares and private placement warrants (the “Pledged Securities”) of the Company owned by Sponsor. Following the occurrence of a Third Party Business Combination, no amounts will be due under the Note if Lender elects to realize under the Pledged Securities. As of June September 30,2020, the outstanding amount is $746,259. The$2,330,304. On November 5, 2020, the Company borrowed an additional $373,130 on July 6, 2020 and $313,595 on July 15, 2020.$35,344.
Note 7 - Stockholders’ Equity
Preferred Stock - The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At JuneSeptember 30, 2020 and December 31, 2019, there were 0 shares of preferred stock issued or outstanding.
Common Stock
Class A Common Stockcommon stock - The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to 1 vote for each share. At JuneSeptember 30, 2020 and December 31, 2019, there were 1,301,6011,454,178 and 1,205,623 shares of Class A common stock issued and outstanding, excluding 13,623,58813,471,011 and 20,846,454 shares of common stock subject to possible redemption, respectively.
Class B Common Stock - The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to 1 vote for each share. At JuneSeptember 30, 2020 and December 31, 2019, there were 5,513,019 shares of Class B common stock issued and outstanding.
Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a 1-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement-equivalent securities issued, or to be issued, to any seller in a Business Combination, any private placement equivalent securities issued to the Sponsor or its affiliates upon conversion of loans made to the Company). Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
Warrants - Each warrant is exercisable to purchase 1 share of Class A common stock at an exercise price of $11.50 per share.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders 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 warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies 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 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, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once the warrants become exercisable, the Company may redeem the Public Warrants:
– | in whole and not in part; |
– | at a price of $0.01 per warrant; |
– | upon not less than 30 days’ prior written notice of redemption; and |
– | if, and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders. |
– | if, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. |
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNESeptember 30, 2020
(Unaudited)
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Offering, except that the Private Placement Warrants and the Class A common stock 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 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 8 - Fair Value Measurements
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
● | Level 1 : Observable inputs such as quoted prices in active markets; |
● | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
● | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions |
The following table presents information about the Company’s assets that are measured on a recurring basis at JuneSeptember 30, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
JuneSeptember 30, 2020
Description | | Quoted Prices in Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | | | Quoted Prices in Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Cash and cash equivalents held in Trust Account | | $ | 152,790,533 | | | | 0 | | | | 0 | | | $ | 153,781,268 | | | | 0 | | | | 0 | |
December 31, 2019
Description | | Quoted Prices in Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Cash and cash equivalents held in Trust Account | | $ | 225,433,349 | | | | 0 | | | | 0 | |
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 2020
(Unaudited)
Note 9 - Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Other than described in these condensed financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.
On October 12, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with AMCI Merger Sub Corp., a Delaware corporation and newly formed wholly-owned subsidiary of the Company (“Merger Sub”), AMCI Sponsor LLC, a Delaware limited liability company (the “Sponsor”), solely in the capacity as the representative from and after the effective time of the Merger (as defined below) (the “Effective Time”) for the stockholders of the Company (other than the Advent stockholders) (the “Purchaser Representative”), Advent Technologies Inc., a Delaware corporation (“Advent”), and Vassilios Gregoriou, solely in his capacity as the representative from and after the Effective Time for the Advent stockholders (the “Seller Representative”).
Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into Advent (the “Merger” and, together with the Warrant Amendment and the other transactions contemplated by the Merger Agreement, the “Transactions”), with Advent continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company. In the Merger, (i) all shares of Advent common stock and Advent preferred stock (together, “Advent Stock”) issued and outstanding immediately prior to the Effective Time (other than those properly exercising any applicable dissenters rights under Delaware law) will be converted into the right to receive the Merger Consideration (as defined below) (with Advent preferred stock treated on an as-converted to Advent common stock basis); and (ii) all outstanding options, warrants or rights to subscribe for or purchase any capital stock of Advent or securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any capital stock of Advent that have not been exercised or converted prior to the Effective Time will be cancelled, retired and terminated without any liability to Advent with respect thereto. At the Closing, the Company will amend its charter to, among other matters, change its name to “Advent Technologies Holdings Inc.”.
The aggregate merger consideration to be paid pursuant to the Merger Agreement to holders of Advent Stock as of immediately prior to the Effective Time (“Advent Stockholders”) will be an amount equal to (the “Merger Consideration”) (i) $250 million, minus (ii) the estimated consolidated indebtedness of Advent and its subsidiaries as of the Closing, net of their estimated consolidated cash and cash equivalents (“Closing Net Indebtedness”). The Merger Consideration to be paid to Advent Stockholders will be paid solely by the delivery of new shares of the Company’s Class A common stock, each valued at $10.00 per share. The Closing Net Indebtedness (and the resulting Merger Consideration) is based solely on estimates determined shortly prior to the Closing and is not subject to any post-Closing true-up or adjustment. The Merger Consideration will be allocated among holders of Advent Stock (including holders based on their pro rata ownership in Advent as of immediately prior to the Effective Time (treating Advent preferred stock on an as-converted to common stock basis for such purposes and including Advent Convertible Securities that have exercised or converted prior to the Effective Time).
For further information on Advent, the Merger Agreement, and the Transactions, please see the Form 8-K filed by the Company with the SEC on October 16, 2020 and Form S-4 filed by the Company on November 24, 2020.
On November 20, 2020, the Sponsor agreed to loan the Company up to $1,000,000 as a Working Capital Loan. This loan is non-interest bearing and is due at the earlier of the date on which the Company consummates its Business Combination or February 22, 2021. On November 20, 2020, the Company borrowed $400,000 on the Working Capital Loan.
On December 17, 2020, a purported shareholder class action complaint was filed against the Company, alleging that the proposed Business Combination with Avent is both procedurally and substantively unfair. The complaint does not provide detail as to how the proposed Business Combination is unfair, either procedurally or substantively, and the Company believes it has no merit.
On December 22, 2020, the Company entered into subscription agreements with the investors named in the agreements, pursuant to which the investors agreed to purchase, and the Company agreed to sell to the investors, an aggregate of 6,500,000 shares of the Company’s Class A common stock for gross proceeds to the Company of $65,000,000 in a private placement. The closing of the private placement is contingent upon, among other customary closing conditions, the substantially concurrent closing of the Business Combination pursuant to the Merger Agreement.
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Advent Technologies Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Advent Technologies Inc. (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive loss, changes of stockholders'stockholders’ deficit and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting.Accordingly,reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
We have served as the Company’s auditor since 2020.
Athens, Greece
November 9, 2020
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
Advent Technologies Inc.
ARTICLE I CONSOLIDATED BALANCE SHEETS
ARTICLE II DECEMBER 31, 2019 AND 2018
(All amounts are in USD)
| | | | | December 31, | | | | | December 31, | |
| | Notes | | | 2019 | | | 2018 | | | Notes | | 2019 | | | 2018 | |
ASSETS | | | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | | | | $ | 1,199,015 | | | $ | 147,398 | | | | | $ | 1,199,015 | | | $ | 147,398 | |
Accounts receivable, net | | | 2.8 | | | | 316,438 | | | | 99,255 | | | 2.8 | | | 316,438 | | | | 99,255 | |
Contract assets | | | 2.15 | | | | 51,936 | | | | - | | | 2.15 | | | 51,936 | | | | - | |
Inventories | | | 4 | | | | 32,440 | | | | 28,352 | | | 4 | | | 32,440 | | | | 28,352 | |
Prepaid expenses | | | | | | | 2,642 | | | | 31,879 | | | | | | 2,642 | | | | 31,879 | |
Other current assets | | | 5 | | | | 219,003 | | | | 271,631 | | | 5 | | | 219,003 | | | | 271,631 | |
Total current assets | | | | | | | 1,821,474 | | | | 578,515 | | | | | $ | 1,821,474 | | | $ | 578,515 | |
Non-current assets | | | | | | | | | | | | | | | | | | | | | | |
Property and equipment, net | | | 6 | | | | 84,977 | | | | 67,510 | | | 6 | | | 84,977 | | | | 67,510 | |
Other non-current assets | | | | | | | 125 | | | | 127 | | | | | | 125 | | | | 127 | |
Total non-current assets | | | | | | | 85,102 | | | | 67,637 | | | | | $ | 85,102 | | | $ | 67,637 | |
Total Assets | | | | | | $ | 1,906,576 | | | $ | 646,152 | | | | | $ | 1,906,576 | | | $ | 646,152 | |
| | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | | | | | | | | |
Convertible Promissory Notes | | | 10 | | | $ | - | | | $ | 791,003 | | | 10 | | $ | - | | | $ | 791,003 | |
Convertible Promissory Notes-Related parties | | | 3, 10 | | | | 500,000 | | | | 2,638,135 | | | 3, 10 | | | 500,000 | | | | 2,638,135 | |
Trade and other payables | | | 7 | | | | 307,822 | | | | 302,739 | | | 7 | | | 307,822 | | | | 302,739 | |
Due to related parties | | | 3 | | | | 1,243,424 | | | | 1,003,201 | | | 3 | | | 1,243,424 | | | | 1,003,201 | |
Deferred income from grants, current | | | 2.20 | | | | 79,591 | | | | 108,375 | | | 2.20 | | | 79,591 | | | | 108,375 | |
Deferred revenue | | | | | | | - | | | | 128,400 | | | | | | - | | | | 128,400 | |
Contract liabilities | | | 2.15,13 | | | | 38,728 | | | | - | | | 2.15,13 | | | 38,728 | | | | - | |
Other current liabilities | | | 8 | | | | 167,480 | | | | 239,862 | | | 8 | | | 167,480 | | | | 239,862 | |
Income tax payable | | | 12 | | | | 194,000 | | | | 106,982 | | | 12 | | | 194,000 | | | | 106,982 | |
Total current liabilities | | | | | | | 2,531,045 | | | | 5,318,697 | | | | | $ | 2,531,045 | | | $ | 5,318,697 | |
Non-current liabilities | | | | | | | | | | | | | | | | | | | | | | |
Liability for Staff Leaving Indemnity | | | 9 | | | | 28,853 | | | | 25,996 | | | 9 | | $ | 28,853 | | | $ | 25,996 | |
Deferred income from grants, non-current | | | 2.20 | | | | 180,480 | | | | 61,311 | | | 2.20 | | | 180,480 | | | | 61,311 | |
Total non-current liabilities | | | | | | | 209,333 | | | | 87,307 | | | | | $ | 209,333 | | | $ | 87,307 | |
Total liabilities | | | | | | | 2,740,378 | | | | 5,406,004 | | | | | $ | 2,740,378 | | | $ | 5,406,004 | |
Commitments and contingent liabilities | | | 16 | | | | - | | | | - | | | 16 | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | | | | | | | | | | |
Common stock ($0.001 par value per share; Shares authorized: 6,591,595 at December 31, 2019; Issued and outstanding: 888,184 at December 31, 2019) | | | 11 | | | | 888 | | | | - | | | 11 | | $ | 888 | | | $ | - | |
Common Stock A ($0.001 par value per share; Shares authorized: 1,600,000 at December 31, 2018; Issued and outstanding: 67,982 at December 31, 2018) | | | 11 | | | | - | | | | 68 | | | 11 | | | - | | | | 68 | |
Common Stock B ($0.001 par value per share; Shares authorized: 1,000,000 at December 31, 2018; Issued and outstanding: 668,354 at December 31, 2018) | | | 11 | | | | - | | | | 668 | | | 11 | | | - | | | | 668 | |
Preferred stock Series A ($0.001 par value per share; Shares authorized: 1,300,000 at December 31, 2019; Issued and outstanding: 314,505 at December 31, 2019) | | | 11 | | | | 315 | | | | - | | | 11 | | | 315 | | | | - | |
Preferred stock Series seed ($0.001 par value per share; Shares authorized: 2,108,405 at December 31, 2019; Issued and outstanding: 2,108,405 at December 31, 2019) | | | 11 | | | | 2,108 | | | | - | | | 11 | | | 2,108 | | | | - | |
Additional Paid in Capital | | | 11 | | | | 8,811,647 | | | | 4,520,138 | | | 11 | | | 8,811,647 | | | | 4,520,138 | |
Accumulated other comprehensive income | | | | | | | 118,859 | | | | 128,639 | | | | | | 118,859 | | | | 128,639 | |
Accumulated Deficit | | | | | | | (9,767,619 | ) | | | (9,409,365 | ) | | | | $ | (9,767,619 | ) | | $ | (9,409,365 | ) |
Total stockholders’ deficit | | | | | | | (833,802 | ) | | | (4,759,852 | ) | | | | $ | (833,802 | ) | | $ | (4,759,852 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | $ | 1,906,576 | | | $ | 646,152 | | | | | $ | 1,906,576 | | | $ | 646,152 | |
The accompanying notes are an integral part of these consolidated financial statements.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
Advent Technologies Inc.
ARTICLE III CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
ARTICLE IV DECEMBER 31, 2019 AND 2018
(All amounts are in USD)
| | | | | Years ended December 31, | | | | | Years ended December 31, | |
| | Note | | | 2019 | | | 2018 | | | Note | | 2019 | | | 2018 | |
Revenue, net | | | 13 | | | $ | 620,168 | | | $ | 373,741 | | | | 13 | | $ | 620,168 | | | $ | 373,741 | |
Cost of revenues | | | | | | | (397,393 | ) | | | (200,495 | ) | | | | | | (397,393 | ) | | | (200,495 | ) |
Gross profit | | | | | | | 222,775 | | | | 173,246 | | | | | | $ | 222,775 | | | $ | 173,246 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Income from grants | | | 2.20 | | | | 601,945 | | | | 471,509 | | | | 2.20 | | | 601,945 | | | | 471,509 | |
Research and development expenses | | | | | | | (124,728 | ) | | | (99,974 | ) | | | | | | (124,728 | ) | | | (99,974 | ) |
Administrative and selling expenses | | | | | | | (863,573 | ) | | | (859,819 | ) | | | | | | (863,573 | ) | | | (859,819 | ) |
Other operating expenses | | | | | | | (10,156 | ) | | | (35,968 | ) | | | | | | (10,156 | ) | | | (35,968 | ) |
Operating Loss | | | | | | $ | (173,737 | ) | | $ | (351,006 | ) | | | | | $ | (173,737 | ) | | $ | (351,006 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Finance costs | | | 14 | | | | (72,117 | ) | | | (25,405 | ) | | | 14 | | $ | (72,117 | ) | | $ | (25,405 | ) |
Finance costs-Relates parties | | | | | | | (34,541 | ) | | | (85,291 | ) | | | | | | (34,541 | ) | | | (85,291 | ) |
Foreign exchange differences, net | | | | | | | 11,883 | | | | 1,623 | | | | | | | 11,883 | | | | 1,623 | |
Other income | | | | | | | 568 | | | | 1,780 | | | | | | | 568 | | | | 1,780 | |
Other expenses | | | | | | | (2,483 | ) | | | (6,507 | ) | | | | | | (2,483 | ) | | | (6,507 | ) |
Loss before tax | | | | | | $ | (270,427 | ) | | $ | (464,806 | ) | | | | | $ | (270,427 | ) | | $ | (464,806 | ) |
Income tax expense | | | 12 | | | | (87,827 | ) | | | (100,577 | ) | | | 12 | | | (87,827 | ) | | | (100,577 | ) |
Net loss | | | | | | $ | (358,254 | ) | | $ | (565,383 | ) | | | | | $ | (358,254 | ) | | $ | (565,383 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
Advent Technologies Inc.
ARTICLE V CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(All amounts are in USD)
| | | | | Years ended December 31, | | | | Years ended December 31, |
| | Note | | | 2019 | | | 2018 | | Note | | 2019 | | 2018 |
Net loss | | | | | $ | (358,254 | ) | | $ | (565,383 | ) | | | $ | (358,254) | | $ | (565,383) |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | |
Net foreign currency translation adjustments | | | 2.4 | | | | (9,780 | ) | | | 42,805 | | 2.4 | | | (9,780) | | | 42,805 |
Other comprehensive income (loss) | | | | | | | (9,780 | ) | | | 42,805 | | | | | (9,780) | | | 42,805 |
Comprehensive loss | | | | | | $ | (368,033 | ) | | $ | (522,578 | ) | | | $ | (368,033) | | $ | (522,578) |
The accompanying notes are an integral part of these consolidated financial statements.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
Advent Technologies Inc.
ARTICLE VI CONSOLIDATED STATEMENT OF CHANGES OF STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(All amounts are in USD)
| | No. of shares | | | Common Stock | | | No. of shares | | | Common Stock Class A | | | No. of shares | | | Common Stock Class B | | | No. of shares | | | Preferred stock series A | | | No. of shares | | | Preferred stock series seed | | | Additional Paid in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income (Loss) | | | Total Stockholders’ Deficit | |
As at January 1, 2018 | | | — | | | $ | — | | | | 67,982 | | | $ | 68 | | | | 668,354 | | | $ | 668 | | | | — | | | $ | — | | | | — | | | $ | — | | | $ | 4,520,138 | | | $ | (8,843,982 | ) | | $ | 85,835 | | | $ | (4,237,273 | ) |
Net loss | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | $ | — | | | $ | (565,383 | ) | | $ | — | | | $ | (565,383 | ) |
Other comprehensive income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 42,804 | | | | 42,804 | |
At December 31, 2018 | | | — | | | $ | — | | | | 67,982 | | | $ | 68 | | | | 668,354 | | | $ | 668 | | | | — | | | $ | — | | | | — | | | $ | — | | | $ | 4,520,138 | | | $ | (9,409,365 | ) | | $ | 128,639 | | | $ | (4,759,852 | ) |
Net loss for the year | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | $ | — | | | $ | (358,254 | ) | | $ | — | | | $ | (358,254 | ) |
Other comprehensive loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (9,780 | ) | | | (9,780 | ) |
Conversion of Convertible Promissory Notes (Note 10) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,681,453 | | | | 1,681 | | | | 2,767,888 | | | | — | | | | — | | | | 2,769,569 | |
Exchange of common stock A & B to common stock | | | 736,336 | | | | 736 | | | | (67,982 | ) | | | (68 | ) | | | (668,354 | ) | | | (668 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Exercise of stock options (Note 11) | | | 151,848 | | | | 152 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,366 | | | | — | | | | — | | | | 1,518 | |
Issuance of preferred stock (Note 11) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 314,505 | | | | 315 | | | | 426,952 | | | | 427 | | | | 1,348,361 | | | | — | | | | — | | | | 1,349,103 | |
Extinguishment of Convertible Promissory Notes–Related parties | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 173,894 | | | | — | | | | — | | | | 173,894 | |
At December 31, 2019 | | | 888,184 | | | $ | 888 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 314,505 | | | $ | 315 | | | | 2,108,405 | | | $ | 2,108 | | | $ | 8,811,647 | | | $ | (9,767,619 | ) | | $ | 118,859 | | | $ | (833,802 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
AMCI ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
Advent Technologies Inc.
ARTICLE VII CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
ARTICLE VIII DECEMBER 31, 2019 AND 2018
(All amounts are in USD)
| | | | | Years ended December 31, | |
| | Notes | | | 2019 | | | 2018 | |
Net loss | | | | | $ | (358,254 | ) | | $ | (565,383 | ) |
| | | | | | | | | | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | |
Depreciation of property and equipment | | | | | | 16,804 | | | | 22,112 | |
Non cash interest and service cost | | | 9 | | | | 3,337 | | | | 2,777 | |
Income tax expense | | | | | | | 87,827 | | | | 100,577 | |
Accrued Interest – Convertible Promissory Notes | | | | | | | — | | | | (61,781 | ) |
| | | | | | | | | | | | |
Decrease (Increase) in: | | | | | | | | | | | | |
Accounts receivable, net | | | | | | | (217,183 | ) | | | 17,867 | |
Contract assets | | | | | | | (51,936 | ) | | | — | |
Inventories | | | | | | | (4,088 | ) | | | (28,352 | ) |
Prepaid expenses | | | | | | | 29,237 | | | | (31,880 | ) |
Other current assets | | | | | | | 52,628 | | | | (79,984 | ) |
Trade and other payables | | | | | | | 39,658 | | | | (47,342 | ) |
Due to related parties | | | | | | | 240,223 | | | | 227,250 | |
Deferred income from grants, current and deferred revenue | | | | | | | (38,012 | ) | | | 162,954 | |
Contract liabilities | | | | | | | 38,728 | | | | — | |
Other current liabilities | | | | | | | (72,382 | ) | | | 240,147 | |
Income tax payable | | | | | | | 951 | | | | — | |
Net Cash used in Operating Activities | | | | | | $ | (232,462 | ) | | $ | (41,038 | ) |
| | | | | | | | | | | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | |
Purchases of property and equipment | | | 6 | | | | (34,935 | ) | | | — | |
Net Cash used in Investing Activities | | | | | | $ | (34,935 | ) | | $ | | |
| | | | | | | | | | | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | |
Proceeds of issuance of preferred stock | | | 11 | | | | 1,349,102 | | | | — | |
Proceeds from exercise of stock options | | | 11 | | | | 1,518 | | | | — | |
Net Cash provided by Financing Activities | | | | | | $ | 1,350,620 | | | $ | | |
| | | | | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | | | | | | 1,083,223 | | | | (41,038 | ) |
Effect of exchange rate changes on cash and cash equivalents | | | | | | | (31,606 | ) | | | 9,676 | |
Cash and cash equivalents at the beginning of the year | | | | | | | 147,398 | | | | 178,760 | |
Cash and cash equivalents at the end of the year | | | | | | $ | 1,199,015 | | | $ | 147,398 | |
| | | | | | | | | | | | |
Supplemental Cash Flow Information | | | | | | | | | | | | |
Cash paid during the period for: | | | | | | | | | | | | |
Interest paid | | | | | | | — | | | | — | |
Tax paid | | | | | | | — | | | | — | |
| | | | | | | | | | | | |
Non cash Financing Activities: | | | | | | | | | | | | |
Extinguishment of Convertible Promissory Notes–Related parties | | | 10 | | | | 173,894 | | | | — | |
Conversion of Convertible Promissory Notes & issuance of preferred shares | | | 10 & 11 | | | | 2,769,569 | | | | — | |
The accompanying notes are an integral part of these consolidated financial statements.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Advent Technologies Inc. (the “Parent”) was incorporated under the laws of the State of Delaware on October 12, 2012. Following that date, the shareholdersstockholders of Advanced Energy Technologies S.A., under a share exchange agreement, effected a share exchange with the Advent Technologies Inc. resulting in identical common ownership between the two companies which was accounted for similar to a business combination between entities under common control.
The Parent is headquartered in Cambridge, Massachusetts and its wholly owned subsidiary, Advanced Energy Technologies S.A. (the “Subsidiary”) is headquartered in Patras, Greece. The Parent and the Subsidiary (collectively, “the Company”) is principally engaged in the manufacturing of membranes and fuel cells that convert methanol, natural gas, and hydrogen to electricity.
As an early stage growth company, the Company is incurring operational losses and its ability to access capital is critical. As of December 31, 2019, the Company reported a working capital deficit of $0.7 million. In addition, the Company incurred losses in 2019 and 2018 of $0.4 million and $0.6 million, respectively, and has historically incurred losses resulting in stockholders’ deficit as of December 31, 2019 of $0.9 million. The Company historically, has funded its operations primarily through the issuance of debt and equity securities. Subsequent to December 31, 2019, the Company repaid $0.5 million outstanding debt of its interest bearing Convertible Promissory Notes (Note 10) and raised additional funding from the issuance of preferred stock of $1.43 million (Notes(Note 17), resulting in no outstanding debt, and positive working capital as of June 30, 2020.
The Company currently is exploring opportunities for raising additional funds to implement its growth plan. On October 12, 2020, the Company entered into a merger agreement with AMCI Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of AMCI Acquisition Corp. (“AMCI”), a Special Purpose Acquisition Company, listed on the NASDAQ Stock Market. Completion of the transaction is subject to a number of conditions set forth in the merger agreement including, among others, stockholders'stockholders’ approval. (Note 17).
The Company believes that it will be in a position to cover its liquidity needs for the next twelve months after the date of these consolidated financial statements, through cash on hand, cash from operations, raising additional equity, capital, or a combination thereof.
The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Accordingly, they do not include any adjustments that might result in the event the Company is unable to continue as a going concern.
2. | Summary of Significant Accounting Policies: |
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
| 2.2 | Principles of consolidation |
The consolidated financial statements include the accounts of the Parent and its Subsidiary. All intercompany balances and transactions have been eliminated upon consolidation.
The preparation of consolidated financial statements in conformity U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates (Notes 2.8 and 12).
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies - continued: |
| 2.4 | Foreign Currency Translation |
The Company’s reporting currency is U.S. dollar. The functional currency of the Subsidiary is the Euro, and the assets and liabilities of this Subsidiary are translated into U.S. Dollars at the exchange rates in effect at the balance sheet dates, and revenue and expense amounts are translated at average exchange rates in effect during the period, and equity accounts are translated at historical rates. The gain or loss resulting from the translation of foreign currency financial statements into U.S. dollars is reported in the consolidated statements of comprehensive loss.
The functional currency of the Company is the U.S. dollar. Transactions denominated in foreign currencies are converted into U.S. dollars at the exchange rate in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date. Any resulting foreign exchange differences are included in the consolidated statements of operations.
Comprehensive loss is comprised of net loss and other comprehensive income (loss), net of tax. The Company’s other comprehensive income (loss), net of tax, consists of foreign currency translation adjustments that result from consolidation of its Subsidiary.
Under ASC 280, Segment Reporting, operating segments are defined as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer, who is also the CODM, makes decisions and manages the Company’s operations as a single operating segment for purposes of allocating resources and evaluating financial performance. For the above reasons, the Company has determined that it operates in one reportable segment.
| 2.7 | Cash and cash equivalents |
Cash and cash equivalents include bank deposits. Time deposits and all highly liquid investments with an original maturity of three months or less are cash equivalents. As at December 31, 2019 and 2018, the Company has no cash and cash equivalents which are restricted as to withdrawal or usage or as a compensating balance requirement.
| 2.8 | Accounts Receivable, net |
Accounts receivable are recorded at the amount billed to customers less an estimated allowance for uncollectible accounts. The allowance is estimated from historical performance, current circumstances, and projections of trends. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. As of December 31, 2019 and 2018, there was no allowance for doubtful accounts as the Company considers all of the accounts receivable fully collectible.
Inventories include raw materials used in the production process and are stated at the lower of average cost or net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Cost is determined by the first in, first out method.
| 2.10 | Property and Equipment, net |
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimate useful life of the assets. The Company uses an estimated useful life of 10 years for machinery and 5 to 7 years for furniture and other equipment.
The Company enters into leasehold improvements mainly in its office premises in Patras. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the improvement. The amounts of leasehold improvements as at December 31, 2019 and 2018 are $2,667 and $2,931 respectively.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Repair and maintenance costs which do not improve or extend asset lives are expensed as incurred. Gains or losses from disposals are included in income.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies - continued: |
The Company leases office and manufacturing space in Patras, Greece and office premises in Cambridge, Massachusetts. These leases are classified as operating leases in accordance with ASC 840, Leases. Rent expense, including any contractual rent increases, is recorded on a straight-line basis over the life of the lease. Building improvements made with the lease incentives or tenant allowances are capitalized as leasehold improvements and included in property and equipment in the balance sheet.
| 2.12 | Convertible Promissory Notes |
The Company evaluates terms in Convertible Promissory Notes and embedded features under ASC 470-20 Debt with Conversion and Other Options, ASC 480, Distinguishing liabilities from equity and ASC 815, Derivatives and embedded derivatives.
The Company follows the provisions of ASC 470-50, Modifications and Extinguishments, to account for all modifications or extinguishments of debt instruments, except debt that is extinguished through a troubled debt restructuring. Under ASC 470-50, modifications or exchanges are considered extinguishments with gains or losses recognized in current earnings if the terms of the new debt and original instrument are substantially different. If the original and new debt instruments are substantially different, the original debt is derecognized and the new debt should be initially recorded at fair value, with the difference recognized as an extinguishment gain or loss or additional paid in capital if the restructuring is in essence a capital transaction, as per ASC 470-50-40-2.
The Company collects value added taxes directly on its customers. The Company then remits such taxes on behalf of its customers to the governmental authorities. The Company excludes from net operating revenues the tax amounts imposed on revenue-producing transactions that were collected from its customers to be remitted to governmental authorities. Accordingly, such tax amounts are recorded in the line item trade accounts receivable in the consolidated balance sheets when collection of taxes from the customer has not yet occurred and are recorded in the line item trade and other payable in the Company’s consolidated balance sheets until they are remitted to the applicable governmental authorities.
The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. For the years ended December 31, 2019 or 2018, income tax provisions of $87,827 and $100,577, respectively, have been recorded in the consolidated statements of operations, including provisions for accrued interest and penalties. The Company is currently not aware of any issues under review that could result in significant accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities.
The Company may be subject to potential examination by U.S. federal, state and city, and the Subsidiary may be subject to potential examination by the Greek taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with the U.S. federal, state and city and Greek tax laws. The Company has recorded no deferred tax assets or liabilities as of December 31, 2019 and 2018. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into legislation. As part of the legislation, the U.S. corporate income tax rate was reduced from 35% to 21%, among other changes, for which the Company’s management does not believe that have a material effect on the Company’s consolidated financial statements.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies - continued: |
The Company’s revenues derive from product sales. The Company sells electrochemistry materials, i.e. high-temperature plastic membranes, electrodes, and their combination-resulting MEAs (Membrane-Electrode Assemblies), as well as MEAs consumables. The Company recognizes revenue as follows:
Revenue recognition up to December 31, 2018
Up to December 31, 2018, revenue was recognized in accordance with ASC 605, Revenue Recognition. For product sales, revenue was recognized when product was shipped from the Company’s facilities and risk of loss and title had passed to the customer, which was in accordance with customer contracts and the stated shipping terms. In general, customers do not have any rights of return, except for quality/specification disputes and the Company offers limited time warranty, up to 45 days as per its policy. With significant and recurring customers, the Company negotiates written master agreements as framework agreements (general terms and conditions of trading), following individually purchase orders. For customers with no master agreements, the approved purchase orders form the contract. Contracts with customers and sales in general are short-term.
The Company based on historical performance, current circumstances, and projections of trends estimated that no allowance for returns as per warranty policy should have been recognized.
Revenue recognition from January 1, 2019
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as amended, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The Company adopted ASU No. 2014-09 on January 1, 2019, using the modified retrospective approach to all contracts not completed at the date of initial application. The prior period comparative information has not been restated and continues to be reported under the accounting guidance in effect for that period.
In accordance with ASC 606, revenue is recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its arrangements:
| ● | identify the contract with a customer, |
● identify the contract with a customer,
| ● | identify the performance obligations in the contract, |
● identify the performance obligations in the contract,
| ● | determine the transaction price, |
● determine the transaction price,
| ● | allocate the transaction price to performance obligations in the contract, and |
● allocate the transaction price to performance obligations in the contract, and
| ● | recognize revenue as the performance obligation is satisfied. |
● recognize revenue as the performance obligation is satisfied.
With significant and recurring customers, the Company negotiates written master agreements as framework agreements (general terms and conditions of trading), following individually purchase orders. For customers with no master agreements, the approved purchase orders form the contract. Effectively, contracts under the revenue standard have been assessed to be the purchase orders agreed with customers.
The Company has assessed that each product sold is a single performance obligation because the promised goods are distinct on their own and within the context of contract. In cases where the agreement includes customization services for the contracted products, the Company is providing integrated services; therefore, the goods are not separately identifiable, but are inputs to produce and deliver a combined output and form a single performance obligation within the context of the contract. Furthermore, the Company assessed whether it acts as a principal or agent in each of its revenue arrangements and has concluded that in all sales transactions it acts as a principal. Additionally, the Company taking into consideration the guidance and indicative factors provided by ASC 606 concluded that it provides assurance type warranties (warranty period is up to 45 days) as it does not provide a service to the customer beyond fixing defects that existed at the time of sale. The Company based on historical performance, current circumstances, and projections of trends estimated that no allowance for returns as per warranty policy should be recognized at the time of sale, accounted for under ASC 460, Guarantees.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies - continued: |
Under ASC 606, the Company estimates the transaction price, including variable consideration, at the commencement of the contract and recognizes revenue over the contract term, rather than when fees become fixed or determinable. In other words, where contracts with customers include variable consideration (i.e. volume rebates), the Company estimates at contract inception the variable consideration and adjusts the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Furthermore, no material rights or significant financing components have been identified in the Company’s contracts. Payment terms generally include advance payment requirements. The time between a customer’s payment and the receipt of funds is less than one year. Payment terms are in the majority fixed and do not include variable considerations, except from volume rebates.
Revenue from satisfaction of performance obligations is recognized based on identified transaction price. The transaction price reflects the amount to which the Company has rights under the present contract. It is allocated to the distinct performance obligations based on standalone selling prices of the services promised in the contract. In cases of more than one performance obligation, the Company allocates transaction price to the distinct performance obligations in proportion to their observable stand-alone selling prices and recognizes revenue as those performance obligations are satisfied.
In the majority of cases of product sales, revenue is recognized at a point in time when customer obtains control of the respective goods that is, when the products are shipped from the Company’s facilities as control passes to the customer in accordance with agreed contracts and the stated shipping terms. In cases where the contract includes customization services, which one performance obligation is identified, revenue is recognized over time as the Company’s performance does not create an asset with alternative use and the Company has an enforceable right to payment for performance completed to date. The Company uses the input method (i.e. cost-to cost method) to measure progress towards complete satisfaction of the performance obligation.
Contract Assets and Contract Liabilities
A contract asset results when goods or services have been transferred to the customer, but payment is contingent upon a future event, other than the passage of time. As at December 31, 2019, the Company recognized contract asset of $51,936, in the consolidated balance sheets.
The Company recognizes contract liabilities when the Company receives customer payments in advance of the performance obligations being satisfied on the Company’s contracts. The Company generally invoices its customers in advance of services being provided. As at December 31, 2019, the Company recognized contract liabilities of amount $38,728, in the consolidated balance sheets.
For more information regarding the impact of adopting the revenue standard in terms of contract assets and liabilities refer to Note 13.
Contract costs
Customer contracts are less than one year and the Company has elected the practical expedient in ASC 340-40-25-4 to expense any contract costs as incurred. During the years ended December 31, 2019 and 2018, no contract costs were recognized in the consolidated statements of operations.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies - continued: |
Cost of revenues include consumables and product materials, labor and employee compensation, third party services and fees, and other direct costs such as depreciation, travel costs and rent expenses, that relate to the manufacturing of Company’s products. The Company recognizes cost of revenues in the period that revenues are recognized.
| 2.17 | Research and Development Expenses |
Research and development costs that do not meet the criteria for capitalization are expensed as incurred. Research and development expenses include employee compensation, materials, depreciation and other indirect costs related to the development of the Company’s products.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 2.18 | Administrative and Selling Expenses |
Administrative expenses include employee compensation, benefits and travel expenses, consulting and legal fees, and other general overhead costs including depreciation to support our operations. Selling expenses include allocated depreciation, personnel remuneration, advertising expenses and other allocated amounts.
The Company expenses patent renewal costs and related legal costs as they are incurred and classifies such costs as other operating expenses, in the accompanying consolidated statements of operations. The Company recorded patent expenses of $10,156 and $35,968 for the years ended December 31, 2019 and 2018.
| 2.20 | Income from grants and related deferred income |
Grants include cash subsidies received from various institutions and organizations. Grants are recognized as other income. Such amounts are recognized in the consolidated statements of operations when all conditions attached to the grants are fulfilled.
Condition to the grants would not be fulfilled unless related costs have been characterized as eligible by the grantors, are actually incurred and there is certainty that costs are allowable. These grants are recognized as deferred income when received and recorded in income when the eligible and allowable related costs and expenses are incurred. Under all grant programs, a coordinator is specified. The coordinator, among other, receives the funding from the grantor and proceeds to its distribution to the parties agreed in the process specified in the program. The Company assessed whether it acts as a principal or agent in its role as a coordinator for specific grants and has concluded that in all related transactions it acts as an agent. During the years ended December 31, 2019 and 2018, the Company recognized income for grants of $601,945 and $471,509, respectively, in connection with amounts received for fuel cell research and development. Deferred income from grants as at December 31, 2019 and December 31, 2018 in the consolidated balance sheets is $260,071 and $169,686, respectively, and is split between current and non-current portion based on the estimated time of realization of eligible costs and expenses.
The Company recognizes cost for common shares vested and non-vested, under stock options and stock awards granted to its employees and directors for their services, (i) immediately at the grant date if no vesting conditions are present, or (ii) using the accelerated method over the requisite service period based on the grant-date fair value of the awards. The Company accounts for forfeitures as they occur. For the years ended December 31, 2019 and 2018, no amortization of compensation cost was recorded, since there were no unvested shares outstanding during these years.
| 2.22 | Liability for Staff Leaving Indemnity |
Under Greek labor law, employees are entitled to staff leaving indemnity in the event of dismissal or retirement with the amount of payment varying in relation to the employee’s compensation, length of service and manner of termination (dismissed or retired). Employees who resign or are dismissed with cause are not entitled to staff leaving indemnity. Staff retirement obligations are calculated at the present value of the future retirement benefits deemed to have accrued at year-end, based on the employees earning retirement benefit rights accumulated throughout the working period in accordance with the Greek Labor Law 2112/1920.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies - continued: |
The reserve for retirement obligations is classified as defined benefit plan under ASC 715-30 and is based on an actuarial valuation. Net costs for the period are separately reflected in the accompanying consolidated statements of comprehensive loss consist of the present value of benefits earned in the year, interest cost on the benefit obligation, past service cost and gains or losses on curtailment. Past service costs are recognized in the consolidated statements of operations on the earlier of the date of plan amendment and the date that the Company recognizes restructuring or termination costs. Actuarial gains or losses are recognized immediately in the consolidated balance sheets with a corresponding debit or credit to retained earnings through other comprehensive income (loss) in the period in which they occur. Re-measurements are not reclassified to profit and loss in subsequent periods.
| 2.23 | Fair Value Measurement |
The Company follows the accounting guidance in ASC 820 for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories:
| ● | Level 1: Quoted prices in active markets for identical assets or liabilities. |
● Level 1: Quoted prices in active markets for identical assets or liabilities.
| ● | Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. |
● Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace.
| ● | Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. |
● Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value, if any, are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
| 2.24 | Concentration of Credit Risk |
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash is placed with high-credit-quality financial institutions. The Company limits its concentration of risk in accounts receivable from product sales as it transacts with different customers. The Company has not experienced any credit loss relating to its cash equivalents or accounts receivable. The Company performs periodic credit evaluations of its customers and generally does not require collateral.
Revenue, net for years ended December 31, 2019 and 2018 included revenues derived from significant customers as follows (in percentages of total revenue, net):
Customer | | 2019 | | 2018 |
A | | 19% | | |
B | | 11% | | |
C | | | | 12% |
D | | | | 11% |
E | | | | 11% |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies - continued: |
| 2.25 | Commitment and contingencies |
Liabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties, environmental and remediation obligations and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
| 2.26 | Recent Accounting Pronouncements |
In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, ASU 2018-10, Codification Improvements to Topic 842, Leases, was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Furthermore, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, ASU 2019-01, Codification Improvements to Topic 842, Leases and ASU 2020-02, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), provided additional clarifications for implementing ASU 2016.02. The new lease standard was originally effective for the private entities on January 1, 2021, with early adoption permitted. Following the issuance of ASU 2020-05, Effective Dates for Certain Entities (Topic 842), the effective date of Leases was deferred for private entities (the “all other” category) to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application continues to be permitted which means that an entity may choose to implement Leases before those deferred effective dates. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. Furthermore, amendments, ASU 2019-10 and ASU 2019-11 provided additional clarification for implementing ASU 2016-13. ASU 2016-13 is effective for the Company beginning January 1, 2023, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 is effective for the Company beginning January 1, 2022, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company’s financial statements and does not expect it to have a material impact on the consolidated financial statements. In October 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities (“ASU 2018-17”). ASU 2018-17 provides that indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. This is consistent with how indirect interests held through related parties under common control are considered for determining whether a reporting entity must consolidate a VIE. The Amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements.
In August 2018, FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, and earlier adoption is permitted. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. | Related party disclosures: |
The amounts included in the accompanying consolidated balance sheets and consolidated statements of operations are as follows:
Consolidated Balance Sheets
| | December 31, 2019 | | | December 31, 2018 | | | December 31, 2019 | | | December 31, 2018 | |
Convertible Promissory Notes – Related parties | | Total | | | Notes | | | Interest | | | Total | | | Notes | | | Interest | | | Total | | | Notes | | | Interest | | | Total | | | Notes | | | Interest | |
Convertible Promissory Notes - Vassilios Gregoriou | | $ | – | | | $ | – | | | $ | – | | | $ | 28,982 | | | $ | 20,000 | | | $ | 8,982 | | | $ | – | | | $ | – | | | $ | – | | | $ | 28,982 | | | $ | 20,000 | | | $ | 8,982 | |
Convertible Promissory Notes -Advanced Energy Innovation Inc. | | | – | | | | – | | | | – | | | | 1,449,096 | | | | 1,000,000 | | | | 449,096 | | | | – | | | | – | | | | – | | | | 1,449,096 | | | | 1,000,000 | | | | 449,096 | |
Convertible Promissory Notes - System Sunlight SA | | | – | | | | – | | | | – | | | | 369,967 | | | | 256,758 | | | | 113,209 | | | | – | | | | – | | | | – | | | | 369,967 | | | | 256,758 | | | | 113,209 | |
Convertible Promissory Notes - Christos Kaskavelis | | | – | | | | – | | | | – | | | | 130,521 | | | | 99,955 | | | | 30,566 | | | | – | | | | – | | | | – | | | | 130,521 | | | | 99,955 | | | | 30,566 | |
Convertible Promissory Notes - Piraeus-Taneo Capital Fund | | | 500,000 | | | | 500,000 | | | | – | | | | 659,569 | | | $ | 441,600 | | | $ | 217,969 | | | | 500,000 | | | | 500,000 | | | | – | | | | 659,569 | | | | 441,600 | | | | 217,969 | |
| | $ | 500,000 | | | $ | 500,000 $ | | | | – | | | $ | 2,638,135 | | | $ | 1,818,313 | | | $ | 819,822 | | |
Total | | | $ | 500,000 | | | $ | 500,000 | | | $ | – | | | $ | 2,638,135 | | | $ | 1,818,313 | | | $ | 819,822 | |
| | December 31, | |
| | 2019 | | | 2018 | |
Due to related parties | | Unpaid compensation cost | | | Unpaid compensation cost | |
Vassilios Gregoriou | | $ | 648,394 | | | $ | 554,894 | |
Christos Kaskavelis | | | 68,908 | | | | – | |
Emory Sayre De Castro | | | 526,122 | | | | 448,307 | |
Total | | $ | 1,243,424 | | | $ | 1,003,201 | |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statements of operations
| | December 31, | |
| | 2019 | | | 2018 | |
Finance costs – Related parties | | Interest | | | Interest | |
Convertible Promissory Notes – Vassilios Gregoriou | | $ | | | | $ | 710 | |
Convertible Promissory Notes – Advanced Energy Innovation Inc. | | | - | | | | 35,507 | |
Convertible Promissory Notes – System Sunlight SA | | | - | | | | 9,117 | |
Convertible Promissory Notes – Christos Kaskavelis | | | - | | | | 3,549 | |
Convertible Promissory Notes – Piraeus-Taneo Capital Fund (“PTCF”) | | | 34,541 | | | $ | 36,408 | |
Total | | $ | 34,541 | | | $ | 85,291 | |
Vassilios Gregoriou: Vassilios Gregoriou is the Company’s Chairman and CEO and one of the major shareholdersstockholders of the Company, owning 15% and 2% of the Company’s common stock as of December 31, 2019 and December 31, 2018, respectively. As further discussed in Note 10, Vassilios Gregoriou holds convertible notes converted to Company’s preferred shares in 2019. The Company has entered into a consultancy agreement with the CEO for his services, with an annual remuneration of $170,000. The table above presents unpaid compensation costs as at December 31, 2019 and 2018.
[Advanced Energy Innovation Inc.: Vassilios Gregoriou, the Company’s Chairman and CEO and major shareholderstockholder and Christos Kaskavelis, Company’s Director, owns 40% and 40% of Advanced Energy Innovation Inc., respectively. As further discussed in Note 10, Advanced Energy Innovation Inc. holds convertible notes converted to Company’s preferred shares in 2019.]
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. | Related party disclosures: |
Christos Kaskavelis: Christos Kaskavelis serves as the Company’s Director and minor shareholder.stockholder. The Company pays Christos Kaskavelis for professional services rendered, through Mamaya Inc, Delaware corporationIKE, a Greek company owed by him and his wife. The table above presents unpaid compensation costs as at December 31, 2019 and 2018.
System Sunlight SA: System Sunlight SA is one of the major shareholdersstockholders of the Company, owning 13% and 19% of the Company’s common stock as of December 31, 2019 and December 31, 2018, respectively. As further discussed in Note 10, System Sunlight SA holds convertible notes converted to Company’s preferred shares in 2019.
Piraeus-Taneo Capital Fund (“PTCF”): PTCF is a venture capital mutual fund represented by Piraeus Capital Management SA, a member of Piraeus Bank SA group, owning 3% and 43% of the Company’s common stock as of December 31, 2019 and December 31, 2018, respectively. As further discussed in Note 10, PTCF is holder of convertible notes, which have been settled in cash subsequent to December 31, 2019. According to the terms of the respective notes, PTCF was entitled with representation in the Board and in this respect one representative of the fund was appointed as Director. Subsequent to December 31, 2019 and following the settlement of the respective notes, the representative of PTCF resigned his position in Board.
Emory Sayre De Castro: Emory Sayre De Castro, is the Company’s Director, CTO and minor shareholder.stockholder. The Company has entered into a consultancy agreement with the CTO for his services, with an annual remuneration of $150,000. The table above presents unpaid compensation costs as at December 31, 2019 and 2018.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Inventories consist of the following:
| | December 31, | | | December 31, | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Raw materials and supplies | | | 32,440 | | | | 28,352 | | | $ | 32,440 | | | $ | 28,352 | |
Total | | | 32,440 | | | | 28,352 | | | $ | 32,440 | | | $ | 28,352 | |
Other current assets are analyzed as follows:
| | December 31, | | | December 31, | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
VAT receivable | | | 171,057 | | | | 135,835 | | | $ | 171,057 | | | $ | 135,835 | |
Grants receivable | | | 43,779 | | | | 130,244 | | | | 43,779 | | | | 130,244 | |
Other current receivables | | | 4,167 | | | | 5,552 | | | | 4,167 | | | | 5,552 | |
Total | | | 219,003 | | | | 271,631 | | | $ | 219,003 | | | $ | 271,631 | |
VAT receivable related to sales of the Subsidiary.
Grants receivable as of December 31, 2018 consist of grants accrued of amount $ 93,747 (not invoiced) and grants invoiced of amount $36,497. As of December 31, 2019 the amount of $ 43,779 relates wholly to grants accrued amounts.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. | Property and equipment: |
Property and equipment as of December 31, 2019 and 2018, are composed of the following:
| | Property and Equipment | | | Accumulated Depreciation | | | Exchange Differences | | | Net Book Value | | | Property and Equipment | | | Accumulated Depreciation | | | Exchange Differences | | | Net Book Value | |
Balance January 1, 2018 | | | 550,932 | | | | (459,152 | ) | | | – | | | | 91,780 | | | $ | 550,932 | | | $ | (459,152 | ) | | $ | – | | | $ | 91,780 | |
Depreciation for the year | | | – | | | | (22,112 | ) | | | – | | | | (22,112 | ) | | | – | | | | (22,112 | ) | | | – | | | | (22,112 | ) |
Reversal of fully depreciated asset | | | (343,986 | ) | | | 343,986 | | | | – | | | | – | | | | (343,986 | ) | | | 343,986 | | | | – | | | | – | |
Exchange differences | | | – | | | | – | | | | (2,158 | ) | | | (2,158 | ) | | | – | | | | – | | | | (2,158 | ) | | | (2,158 | ) |
Balance December 31, 2018 | | | 206,946 | | | | (137,278 | ) | | | (2,158 | ) | | | 67,510 | | | $ | 206,946 | | | $ | (137,278 | ) | | $ | (2,158 | ) | | $ | 67,510 | |
Additions | | | 34,935 | | | | – | | | | – | | | | 34,935 | | | | 34,935 | | | | – | | | | – | | | | 34,935 | |
Depreciation for the year | | | – | | | | (16,804 | ) | | | – | | | | (16,804 | ) | | | – | | | | (16,804 | ) | | | – | | | | (16,804 | ) |
Reversal of fully depreciated asset | | | (6,672 | ) | | | 6,672 | | | | – | | | | – | | | | (6,672 | ) | | | 6,672 | | | | – | | | | – | |
Exchange differences | | | – | | | | – | | | | (664 | ) | | | (664 | ) | | | – | | | | – | | | | (664 | ) | | | (664 | ) |
Balance December 31, 2019 | | | 235,209 | | | | (147,410 | ) | | | (2,822 | ) | | | 84,977 | | | $ | 235,209 | | | $ | (147,410 | ) | | $ | (2,822 | ) | | $ | 84,977 | |
There were $34,935 of additions to office and other equipment in the year ended December 31, 2019 and $nil in the year ended December 31, 2018. Depreciation expense for the years ended December 31, 2019 and 2018 was $22,112 and $16,804, respectively. Also, property and equipment include leasehold improvements of amount $2,667 and $2,931 as at December 31, 2019 and 2018, respectively. There are no collaterals or other commitments on the Company’s property and equipment.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. | Trade and other payables: |
| | December 31, | | | December 31, | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Trade payables | | | 267,706 | | | | 269,036 | | | $ | 267,706 | | | $ | 269,036 | |
Other payables | | | 40,116 | | | | 33,703 | | | | 40,116 | | | | 33,703 | |
Total | | | 307,822 | | | | 302,739 | | | $ | 307,822 | | | $ | 302,739 | |
8. | Other current liabilities: |
Other current liabilities of the Company are analyzed as follows:
| | December 31, | | | December 31, | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Accrued expenses for legal and consulting fees | | | 76,555 | | | | 147,718 | | | $ | 76,555 | | | $ | 147,718 | |
Other accruals and short-term payables | | | 79,767 | | | | 78,522 | | | | 79,767 | | | | 78,522 | |
Provision for unused vacation | | | 11,158 | | | | 13,622 | | | | 11,158 | | | | 13,622 | |
Total | | | 167,480 | | | | 239,862 | | | $ | 167,480 | | | $ | 239,862 | |
Amounts of $54,174 and $55,219 classified in other current liabilities as of December 31, 2019 and December 31, 2018, respectively, relate to amounts received from grantor to the Company in its role as a coordinator to this grant and the Company is obliged to transfer these amounts to one of its shareholders,stockholders, which is also part in the respective grant program.
9. | Liability for Staff Leaving Indemnity: |
The movements in the net liability in the accompanying consolidated balance sheets has as follows:
| | December 31, | | | December 31, | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Liability at the beginning of the period | | | 25,996 | | | | 24,405 | | | $ | 25,996 | | | $ | 24,405 | |
Interest cost | | | 292 | | | | 276 | | | | 292 | | | | 276 | |
Service cost | | | 3,045 | | | | 2,501 | | | | 3,045 | | | | 2,501 | |
Cost recognized in loss for the year | | | 3,337 | | | | 2,777 | | | | 3,337 | | | | 2,777 | |
Exchange differences | | | (480 | ) | | | (1,186 | ) | | | (480 | ) | | | (1,186 | ) |
Net liability at the end of the period | | | 28,853 | | | | 25,996 | | | $ | 28,853 | | | $ | 25,996 | |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. | Liability for Staff Leaving Indemnity: |
The main actuarial assumptions used were as follows:
| | December 31, | |
| | 2019 | | | 2018 | |
| | % | | | % | |
Discount rate | | | 1.15 | | | | 1.15 | |
Future salary increases | | | 1.50 | | | | 1.50 | |
Inflation | | | 1.50 | | | | 1.50 | |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. | Convertible Promissory Notes: |
Convertible Promissory Notes and Convertible Promissory Notes – Related parties are analyzed as follows:
| | Interest | | | December 31, | | | Interest | | | December 31, | |
| | rate | | | 2019 | | | 2018 | | | rate | | | 2019 | | | 2018 | |
| | % | | | | | | | | | % | | | | | | | |
Senior secured Convertible Promissory Notes – (“Advent Notes”) | | | 8 | % | | | — | | | | 1,961,690 | | | | 8 | % | | $ | — | | | $ | 1,961,690 | |
Senior secured Convertible Promissory Notes – (“PTCF Note”) | | | 8 | % | | | 500,000 | | | | 441,600 | | | | 8 | % | | | 500,000 | | | | 441,600 | |
Total Convertible Promissory Notes Face Amount | | | | | | | 500,000 | | | | 2,403,290 | | | | | | | | 500,000 | | | | 2,403,290 | |
Interest accrues to redemption or conversion – Advent Notes | | | | | | | — | | | | 807,879 | | | | | | | | — | | | | 807,879 | |
Interest accrues to redemption or conversion - PTCF Note | | | | | | | — | | | | 217,969 | | | | | | | | — | | | | 217,969 | |
Total Convertible Promissory Notes Interest accrued | | | | | | | — | | | | 1,025,848 | | | | | | | | — | | | | 1,025,848 | |
Advent Notes | | | | | | | — | | | | 2,769,569 | | | | | | | | — | | | | 2,769,569 | |
PTCF Note | | | | | | | 500,000 | | | | 659,569 | | | | | | | | 500,000 | | | | 659,569 | |
Total Notes | | | | | | | 500,000 | | | | 3,429,138 | | | | | | | | 500,000 | | | | 3,429,138 | |
Related Party Convertible Promissory Notes | | | | | | | | | | | | | | | | | | | | | | | | |
Advent Notes | | | | | | | — | | | | 1,978,566 | | | | | | | | — | | | | 1,978,566 | |
PTCF Note | | | | | | | 500,000 | | | | 659,569 | | | | | | | | 500,000 | | | | 659,569 | |
Total Related Party Convertible Promissory Notes | | | | | | | 500,000 | | | | 2,638,135 | | | | | | | | 500,000 | | | | 2,638,135 | |
Convertible Promissory Notes | | | | | | | | | | | | | | | | | | | | | | | | |
Advent Notes | | | | | | | — | | | | 791,003 | | | | | | | | — | | | | 791,003 | |
Total Convertible Promissory Notes | | | | | | | — | | | | 791,003 | | | | | | | $ | — | | | $ | 791,003 | |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Senior Secured Promissory Notes – Advent Notes
On October 12, 2012, the Parent issued $1,961,690 of Senior Secured Convertible Promissory Notes (“Advent Notes”), according to an agreement between the Parent, its Subsidiary and several investors, including related parties. Under this agreement, as amended, the investors (except for PTCF, which had entered into a separate agreement with the Subsidiary, as discussed below) entered into separate agreements with the Parent for the issuance of the Advent Notes. The Advent Notes are issued in their face value, interest of 8% is accrued on the principal until repayment or conversion, and their maturity dates were December 31, 2017. The Advent Notes are contingently convertible into a variable number of preferred shares or other equity securities. At June 11, 2018, the Required Holders, majority of Advent Notes’ holders as defined by the agreement (the “Required Holders”), exercised their option according to which all notes are convertible in preferred shares, with conversion price equal to 65% or 50% as per terms of each separate agreement with each investor, multiplied by $2.61, being the price per common share established by an independent valuator appointed by the Company and the Required Holders. The aggregate of this outstanding principal balance and the accrued and unpaid interest of $807,879 at that date was $2,769,569. It was further agreed that the Parent will authorize and issue preferred stock to effect the conversion. As at December 31, 2018 the authorization of preferred stock was not effected and Advent Notes were classified as a current liability. On May 28, 2019, the Company amended its certificate of incorporation and 2,500,000 preferred shares were authorized. On the same date, 1,681,453 Series Seed Preferred Shares, par value $0.001 per share were issued to the investors, of which 1,176,539 were issued to related parties (Note 11).
In October 2012, upon the issuance of initial Advent Notes, and in each additional issuance of Advent Notes up to December 31, 2017, warrants were issued to the investors. The warrants had an exercise price of $0.01 and matured on the fifth anniversary from their issuance or conversion if earlier, with their exercise contingent on a liquidity event. Most of the warrants have matured by December 31, 2017. No value was assigned to the remaining warrants. On June 11, 2018, any unexpired warrants held by Advent Notes holders, were terminated.
10. | Convertible Promissory Notes: |
Interest expense was $nil and $69,652 for the years ended December 31, 2019 and 2018, respectively (Note 14), of which $48,883 is included in Finance costs − Related parties and the remaining in Finance costs, in the consolidated statements of operations for the year ended December 31, 2018.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Senior secured convertible promissory notes – PTCF Note
Pursuant to the agreement with the Parent and several investors described above, Advanced Energy Technologies S.A., entered into a senior secured convertible promissory note agreement with PTCF and Piraeus Bank S.A. with a nominal value of Euro 385,743 ($499,846), with the Parent as guarantor and security provider (the “PTCF Note”). The PTCF Note was issued in its face value, bears interest of 8% per annum and its maturity date, as amended, was December 31, 2017. Under the terms of the note, the notes are contingently convertible into Subsidiary’s common stock at a conversion ratio of ten euro per share, and able to be further converted to Parent’s preferred stock at a variable price, at the option of the holders, and subject to condition imposed by Advent Notes. The Company’s assessment of the conversion features resulted to no bifurcation of embedded derivatives or beneficial conversion features, and the debt was classified as a current liability as at December 31, 2018.
On December 31, 2019, Advanced Energy Technologies S.A. and PTCF agreed the full repayment of the PTCF Note up to January 20, 2020, pursuant to which Euro 452,285 ($500,000) was agreed to be paid in full settlement of the PTCF Note with a principal balance of Euro 385,743 and accrued interest payable of Euro 221,342.50 at that date. The Company determined that the modified repayment terms met the criteria for debt extinguishment per ASC 470-50, Debt - Modifications and Extinguishments and resulted in a gain on debt extinguishment. The difference between the settlement amount of Euro 452,285 ($500,000) and the carrying amount of Euro 607,085.50 ($673,894 principal and interest), of Euro 154,801 ($173,894) was recognized in additional paid in capital as a capital transaction in accordance to ASC 470-50-40-2, since PTCF is a related party (Note 3).
On January 20, 2020, the Company repaid in full the amount of $500,000 as originally agreed with PTCF (Note 17).
Interest expense was $34,541 and $36,408 for the years ended December 31, 2019 and 2018, respectively (Note 14) and is classified in Finance costs − Related parties in consolidated statements of comprehensive operations.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. | Stockholders’ Deficit: |
The Company upon its incorporation had authorized 2,600,000 shares of common stock, with par value of $0.001 per share, consisting of 1,600,000 shares of Class A Voting Common Stock and 1,000,000 shares of Class B Non-Voting Common Stock.
On May 28, 2019, the Company amended and restated its certificate of incorporation to authorize 10,000,000 shares, consisting of 7,500,000 shares of Common Stock (one class of voting common stock), with par value of $0.001 per share, and 2,500,000 shares of Preferred Stock, with par value of $0.001 per share. The Preferred Stock was designated as Series Seed Preferred Stock.
On May 28, 2019, the Company exchanged the outstanding at that time Class A and Class B Common Stock, of 67,982 and 668,354, respectively, for shares in the newly authorized Common Stock amounting to 736,336 common shares.
On May 31, 2019, 151,848 common shares were issued in connection with the stock option plans discussed below, and as of December 31, 2019, the Company’s issued and outstanding common shares was 888,184.
As discussed in Note 10 above, upon the authorization of Series Seed Preferred Stock, the total outstanding balance of Advent Notes amounting to $2,769,569 was converted to 1,681,453 Series Seed Preferred Stock.
In December 2019, the Company entered into private placement agreements pursuant to which the Company issued 426,952 Series Seed Preferred Shares for net proceeds of $499,937.
On October 11, 2019, the Company further amended and restated its certificate of incorporation to issue up to 6,591,595 shares of common stock, par value of $0.001 per share, and up to 3,408,405 shares of Preferred stock, with par value of $0.001 per share. Such Preferred stock is comprised of 2,108,405 Series Seed Preferred Stock and 1,300,000 Series A Preferred Stock. Terms of Series Seed Preferred Stock and Series A Preferred Stock were similar to the May 28, 2019, certificate of incorporation.
11. | Stockholders’ Deficit: |
Upon authorization of the Series A Preferred Stock, the Company issued 314,505 Series A Preferred Shares for net proceeds of $849,165 in connection with private placement agreement with several investors.
As per the second amended and restated certificate of incorporation each share of Series Seed Preferred Stock and Series A Preferred Stock has voting rights equal to an equivalent number of shares of common stock into which it is convertible and votes together as one class with the common stock, participate on an as-converted basis in dividends declared and paid on the Company’s common shares and have a liquidation preference equal to the greater of $2.61 or $4.0046 for Series Seed Preferred Stock and Series A Preferred Stock, respectively, or the liquidation amount per share on an as converted basis.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Series Seed Preferred Stock and Series A Preferred Stock are convertible at any time, at the option of the holder, at a conversion rate of one common share per Series Seed Preferred Stock or Series A Preferred Stock. All of the Series Seed Preferred Stock and Series A Preferred Stock will automatically convert into common shares, upon either (a) the closing of the sale of shares of Common Stock to the public at a price of at least $6.0684 per share or (b) upon request of holders of more than 50% of the preferred stock acting as a single class in an as converted basis, at a conversion rate of one common share per Series Seed Preferred Stock or Series A Preferred Stock.
The conversion price is subject to customary anti-dilution and other adjustments such as issuance of common shares as a dividend or the subdivision, combination, or reclassification of common shares into a greater or lesser number of common shares.
If a deemed liquidation occurs (such as merger or consolidation of the Company or its Subsidiary and sale of all or substantially all of the Company’s and its subsidiary’s assets, unless holders of at least majority of the outstanding shares of preferred stock voting together as a single class and on an as-converted basis elect otherwise) and the Company does not effect the dissolution in 90 days, holders of the preferred stock can request, subject to the approval by majority holders of the preferred stock acting as a single class on an as converted basis, the redemption of the preferred stock at a price equal to the liquidation amount.
The Series Seed Preferred Stock and Series A Preferred Stock did not meet the criteria for mandatorily redeemable financial instruments.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Additionally, the Company determined that the nature of both classes of preferred stock were more akin to an equity instrument and that the economic characteristics and risks of the embedded conversion options were clearly and closely related to both classes of preferred stock. As such, the conversion options were not required to be bifurcated from the equity host under ASC 815, Derivatives and Hedging. The Company assessed that no beneficial conversion feature should be assigned. The Company also determined that the contingent redemption call option did not meet the definition of a derivative, since the Company’s shares are not readily convertible into cash, and thus net settlement criterion for an instrument to be characterized as a derivative under ASC 815, is not met. The Company assessed that equity classification was appropriate for both series of preferred stock.
The Series Seed Preferred Stock and Series A Preferred Stock rank pari passu with each other and senior to the Company’s common stock with respect to dividend distributions and distributions upon any liquidation event.
In 2017, the Company awarded options for 151,848 fully vested common shares were awarded to Company’s employees and to Company’s directors, for their services with an exercise price of $0.01 under the stock plans of 2012-2016 and 2017. In 2019, all the grantees exercised their option and 151,848 common shares par value $0.001 were issued, for $1,518.
12. | Income Tax (Current and Deferred): |
The Company’s consolidated financial statements include total net loss before taxes of $270,427 and $464,806 for the years ended December 31, 2019 and 2018. The income tax provision consists of the following:
| | December 31, | | | December 31, | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Federal: | | | | | | | | | | | | |
Current | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
Deferred | | | – | | | | – | | | | – | | | | – | |
State and Local: | | | | | | | | | | | | | | | | |
Current | | | – | | | | – | | | | – | | | | – | |
Deferred | | | – | | | | – | | | | – | | | | – | |
Non-US: | | | | | | | | | |
Non-U.S.: | | | | | | | | | |
Current | | | 87,827 | | | | 100,577 | | | | 87,827 | | | | 100,577 | |
Deferred | | | – | | | | – | | | | – | | | | – | |
Income tax provision | | $ | 87,827 | | | $ | 100,577 | | | $ | 87,827 | | | $ | 100,577 | |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. | Income Tax (Current and Deferred): |
Reconciliations of the differences between the provision for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows:
| | 2019 | | | 2019 | |
| | Amount | | | Percent of Pretax Income | | | Amount | | | Percent of Pretax Income | |
Current tax at U.S. statutory rate | | $ | (56,790 | ) | | | 21.00 | % | | $ | (56,790 | ) | | | 21.00 | % |
Effect of state tax | | | (33,856 | ) | | | 12.52 | % | | | (33,856 | ) | | | 12.52 | % |
Effect of valuation allowance | | | 32,489 | | | | (12.01 | )% | | | 32,489 | | | | (12.01 | )% |
Non-US change in tax rate | | | 38,128 | | | | (14.10 | )% | |
Effect of non-US income tax rates | | | 1,957 | | | | (0.72 | )% | |
Non-U.S. change in tax rate | | | | 38,128 | | | | (14.10 | )% |
Effect of non-U.S. income tax rates | | | | 1,957 | | | | (0.72 | )% |
Effect of non-deductible expenses | | | 34,579 | | | | (12.79 | )% | | | 34,579 | | | | (12.79 | )% |
Change in tax reserves | | | 71,320 | | | | (26.37 | )% | | | 71,320 | | | | (26.37 | )% |
Total Income Tax Provision | | $ | 87,827 | | | | (32.48 | )% | | $ | 87,827 | | | | (32.48 | )% |
| | 2018 | |
| | Amount | | | Percent of Pretax Income | |
Current tax at U.S. statutory rate | | $ | (97,609 | ) | | | 21.00 | % |
Effect of state tax | | | (19,848 | ) | | | 4.27 | % |
Effect of valuation allowance | | | 80,489 | | | | (17.32 | )% |
Effect of non-U.S. income tax rates | | | 6,522 | | | | (1.40 | )% |
Effect of non-deductible expenses | | | 37,251 | | | | (8.01 | )% |
Change in tax reserves | | | 93,772 | | | | (20.17 | )% |
Total Income Tax Provision | | $ | 100,577 | | | | (21.64 | )% |
| | 2018 | |
| | Amount | | | Percent of Pretax Income | |
Current tax at U.S. statutory rate | | $ | (97,609 | ) | | | 21.00 | % |
Effect of state tax | | | (19,848 | ) | | | 4.27 | % |
Effect of valuation allowance | | | 80,489 | | | | (17.32 | )% |
Effect of non-US income tax rates | | | 6,522 | | | | (1.40 | )% |
Effect of non-deductible expenses | | | 37,251 | | | | (8.01 | )% |
Change in tax reserves | | | 93,772 | | | | (20.17 | )% |
Total Income Tax Provision | | $ | 100,577 | | | | (21.64 | )% |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates in effect. Significant components of the Company’s deferred tax assets and liabilities are as follows:
| | December 31, | |
| | 2019 | | | 2018 | |
Deferred Tax Assets: | | | | | | |
Net Operating Loss Carryforwards | | $ | 814,849 | | | $ | 589,852 | |
Accounts receivable | | | 36,838 | | | | 33,444 | |
Capitalized costs | | | 404,325 | | | | 527,760 | |
Deferred revenue | | | 62,417 | | | | 85,006 | |
Other current assets | | | – | | | | 40,947 | |
Other current liabilities | | | 28,599 | | | | 30,111 | |
Other | | | 48,706 | | | | 15,681 | |
Gross Deferred Tax Assets | | $ | 1,395,734 | | | $ | 1,322,801 | |
Less: Valuation Allowance | | | (1,384,230 | ) | | | (1,313,741 | ) |
Total Deferred Tax Assets | | $ | 11,504 | | | $ | 9,060 | |
Deferred Tax Liabilities: | | | | | | | | |
Depreciation | | $ | (11,504 | ) | | $ | (9,060 | ) |
Total Deferred Tax Liabilities | | $ | (11,504 | ) | | $ | (9,060 | ) |
Net Deferred Tax Assets/(Liabilities) | | $ | – | | | $ | – | |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. | Income Tax (Current and Deferred): |
A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company provides a valuation allowance to offset deferred tax assets for net operating losses incurred during the year and for other deferred tax assets where, in the Company’s opinion, it is more likely than not that the financial statement benefit of these losses will not be realized. The Company’s valuation allowance increased by $70,489 in 2019 mainly due to increase in carried forward losses and by $80,489 in 2018 due to the same reason.
As of December 31, 2019, the Company had U.S. federal and state net operating loss carryforwards of $2,827,555 and $1,052,680, respectively, which may be used to offset future taxable income, if any. As of December 31, 2018, the Company had U.S. federal and state net operating loss carryforwards of $2,291,848 and $516,973, respectively, which may be used to offset future taxable income, if any. The Company’s U.S. federal and state net operating loss carryforwards begin to expire in 2033 and the U.S. federal net operating losses generated in 2018 and 2019 can be carried forward indefinitely. Ownership changes, as defined under Section 382 of the Internal Revenue Code of 1986, may limit the amount of net operating losses that can be utilized to offset future taxable income or tax liability. The Company has not yet completed an analysis of whether its net operating loss carryforwards may be limited.
As of December 31, 2019, the Company had $134,595 of gross unrecognized tax benefits, which would impact the effective tax rate, if recognized. As of December 31, 2018, the Company had $63,276 of gross unrecognized tax benefits, which would impact the effective tax rate, if recognized. A reconciliation of unrecognized tax benefits is as follows:
| | December 31, | |
| | 2019 | | | 2018 | |
Balance at beginning of period | | $ | 63,276 | | | $ | 5,280 | |
Increase in tax positions for current year | | | 71,319 | | | | 57,996 | |
Decrease in tax positions for prior year | | | – | | | | – | |
Lapse in statute of limitations | | | – | | | | – | |
Balance at end of period | | $ | 134,595 | | | $ | 63,276 | |
The Company’s policy is to classify interest and penalties, if any, as components of the income tax provision in the consolidated statement of operations. The Company has not recorded any interest or penalty in the year ended December 31, 2019, whereas it has recorded an increase of $36,230 in the year ended December 31, 2018. Both as of December 31, 2019 and 2018, the amount of accrued interest and penalties totaled $38,919. The Company expects its unrecognized tax benefits to increase within the next twelve months but the range cannot be estimated at this time.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Company files income tax returns in the U.S. federal and Massachusetts jurisdictions. The statute of limitations for assessment by the Internal Revenue Service and Massachusetts tax authorities is closed for tax years prior to 2017, although carryforward attributes that were generated prior to tax year 2017 may still be adjusted upon examination by the Internal Revenue Service or Massachusetts tax authorities if they either have been, or will be, utilized in a future period.
The Subsidiary files income tax returns in Greece and is subject to examination by the taxing authorities. The Subsidiary’s income tax returns are open for audit for tax years 2015 and forward.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Revenue, net is analyzed as follows:
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Sales of goods | | | 620,168 | | | | 374,524 | | | $ | 620,168 | | | $ | 374,524 | |
Discounts on sales | | | – | | | | (783 | ) | | | – | | | | (783 | ) |
Total revenue from contracts with customers | | | 620,168 | | | | 373,741 | | | $ | 620,168 | | | $ | 373,741 | |
The timing of revenue recognition is analyzed as follows:
Timing of revenue recognition | | 2019 | | | 2018 | | |
Timing of revenue recognitionTiming of revenue recognition | | | 2019 | | | 2018 | |
Goods and services transferred at a point in time | | | 493,087 | | | | 373,741 | | | $ | 493,087 | | | $ | 373,741 | |
Goods and services transferred over time | | | 127,081 | | | | – | | | | 127,081 | | | | – | |
Total revenue from contracts with customers | | | 620,168 | | | | 373,741 | | | $ | 620,168 | | | $ | 373,741 | |
The adoption of ASC 606 did not have an impact in revenue recognition in the Company’s consolidated financial statements for the prior annual period, except for the recognition of contract assets and contract liabilities, which under the previous standard are classified as accrued income or deferred revenue. In particular, as the Company’s revenue stream is the sale of products, the revenue recognition process has been assessed and has not changed.
No contract assets were recognized as at January 1, 2019. As at December 31, 2019 contract assets are $51,936. Also, the Company has recognized contract liabilities at an amount of $128,400 as at January 1, 2019 and $38,728 as at December 31, 2019. Within 2019, the Company fully transferred goods to the customers in respect of the open balance of $128,400.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Finance costs are analyzed as follows:
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
Interest on bank loans and bonds | | | – | | | | 20,769 | | | $ | – | | | $ | 20,769 | |
Interest cost on benefit obligation | | | 292 | | | | 276 | | | | 292 | | | | 276 | |
Bank fees | | | 4,237 | | | | 4,360 | | | | 4,237 | | | | 4,360 | |
Other financing costs | | | 67,588 | | | | – | | | | 67,588 | | | | – | |
Total finance costs | | | 72,117 | | | | 25,405 | | | | 72,117 | | | | 25,405 | |
Finance costs – related parties | | | 34,541 | | | | 85,291 | | | $ | 34,541 | | | $ | 85,291 | |
Total finance costs – related parties | | | 34,541 | | | | 85,291 | | | $ | 34,541 | | | $ | 85,291 | |
15. | Fair value measurement: |
The carrying amounts reflected in the consolidated balance sheets of cash and cash equivalents, accounts receivables, net, other current assets, trade and other payables, due to related parties, other current liabilities, income tax payable and convertible promissory notes, approximate their respective fair values due to the short maturity of these instruments.
16. | Commitments and contingencies: |
The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves significant judgment about future events. There is no material pending or threatened litigation against the Company that remains outstanding as of December 31, 2019 and 2018.
The Company leases office and manufacturing premises in Patras, Greece and office premises in Cambridge, Massachusetts. In detail, for the office and manufacturing areas leased in Patras, there is a single lease agreement in force with a lease term up to 2028, while the lease in Cambridge is negotiated yearly. The cost of each lease, including any contractual rent increases, is recognized over the life of the lease agreement using the straight-line method.
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. | Commitments and contingencies: |
Rent expense for the above leases for the year ended December 31, 2019 and 2018, was $19,097 and $12,845 respectively. The future minimum lease payments are as follows:
Time period | | Amount ($) | |
Within 1 year | | | 24,619 | |
From 2 to 5 years | | | 63,122 | |
Thereafter | | | 143,460 | |
ADVENT TECHNOLOGIES INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
a) | On January 20, 2020, the Company settled the outstanding PTCF Notes, according to the settlement agreement dated December 31, 2019 (Note 10). |
b) | During the six monthsix-month period ended June 30, 2020 the Company has repurchased 44,829 number of common shares from existing minority shareholdersstockholders for $118,199, out of which $83,363 remain payable. The respective shares have been cancelled. |
c) | During the six monthsix-month period ended June 30, 2020, the Company has issued 529,532 Series A Preferred Shares, upon various private placements with investors. Proceeds from the issuances are $1,430,005. |
d) | On October 12, 2020 and as amended on October 19, 2020 the Company entered into a merger agreement with AMCI, under which all shares of Company'sCompany’s common stock, par value $0.001 per share and all Company'sCompany’s convertible preferred shares, par value $0.001 per share, on an as converted basis, issued and outstanding immediately prior to the effective time, will be converted into the right to receive AMCI Class A common stock, par value $0.0001 per share, representing a pro rata share of $250 million in the aggregate, subject to an estimatedminus net indebtednessdebt adjustment, as of the closing, with each stockholder of the Company being entitled to receive its pro rata share of the total consideration. |
e) | In March and AugustSeptember 2020, the Company’s Board of Directors and shareholdersstockholders approved the issuance of an aggregate of 2,173,702 shares of common stock, pursuant to restricted stock award agreements to reward certain employees, directors, and consultants of the Company. |
f) | With the recent and rapid development of the Coronavirus disease (COVID-19) outbreak the world economy entered a period of unprecedented health care crisis that has already caused considerable global disruption in business activities and everyday life, Manymany countries have adopted extraordinary and economically costly containment measures while certain countries have required companies to limit or even suspend normal business operations, Governments, including Greek and USU.S. Government, have implemented restrictions on travelling as well as strict quarantine measures. |
The financial effect of the current crisis on the global economy and overall business activities cannot be estimated with reasonable certainty at this stage, due to the pace at which the outbreak expands and the high level of uncertainties arising from the inability to reliably predict the outcome, The event is considered as a non-adjusting event and is therefore not reflected in the recognition and measurement of the assets and liabilities in the consolidated financial statements as at December 31, 2019.
The financial effect of the current crisis on the global economy and overall business activities cannot be estimated with reasonable certainty at this stage, due to the pace at which the outbreak expands and the high level of uncertainties arising from the inability to reliably predict the outcome, The event is considered as a non-adjusting event and is therefore not reflected in the recognition and measurement of the assets and liabilities in the consolidated financial statements as at December 31, 2019. Management has considered the unique circumstances and the risk exposures of the Company and has concluded that the event is not expected to have an immediate material impact on the business operations, Management will continue to monitor the situation closely in case the period of disruption becomes prolonged.
Advent Technologies Inc.
Unaudited Interim Condensed Consolidated
StatementsBalance SheetsAs of Operations
For the six-month periods ended JuneSeptember 30, 2020 (unaudited) and December 31, 2019 (audited)
(All amounts are in USD)
| | Notes | | | June 30, 2020 (unaudited) | | | December 31, 2019 (audited) | |
ASSETS | | | | | | | | | |
Current assets | | | | | | | | | |
Cash and cash equivalents | | | | | $ | 1,347,070 | | | $ | 1,199,015 | |
Accounts receivable, net | | | | | | 241,044 | | | | 316,438 | |
Contract assets | | | 12 | | | | 70,437 | | | | 51,936 | |
Inventories | | | 4 | | | | 95,092 | | | | 32,440 | |
Prepaid expenses | | | | | | | 153 | | | | 2,642 | |
Other current assets | | | 5 | | | | 243,078 | | | | 219,003 | |
Total current assets | | | | | | | 1,996,874 | | | | 1,821,474 | |
| | | | | | | | | | | | |
Non-current assets | | | | | | | | | | | | |
Property and equipment, net | | | 6 | | | | 140,157 | | | | 84,977 | |
Other non-current assets | | | | | | | 124 | | | | 125 | |
Total non-current assets | | | | | | | 140,281 | | | | 85,102 | |
Total Assets | | | | | | $ | 2,137,155 | | | $ | 1,906,576 | |
| | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | |
Convertible Promissory Notes-Related parties | | | 3,9 | | | $ | — | | | $ | 500,000 | |
Trade and other payables | | | 7 | | | | 400,265 | | | | 307,822 | |
Due to related parties | | | 3 | | | | 941,829 | | | | 1,243,424 | |
Deferred income from grants, current | | | | | | | 98,271 | | | | 79,591 | |
Contract liabilities | | | 12 | | | | 52,434 | | | | 38,728 | |
Other current liabilities | | | 8 | | | | 226,894 | | | | 167,480 | |
Income tax payable | | | | | | | 211,134 | | | | 194,000 | |
Total current liabilities | | | | | | | 1,930,827 | | | | 2,531,045 | |
| | | | | | | | | | | | |
Non-current liabilities | | | | | | | | | | | | |
Provision for staff leaving indemnities | | | | | | | 30,608 | | | | 28,853 | |
Deferred income from grants, non-current | | | | | | | 179,911 | | | | 180,480 | |
Other long term liabilities | | | | | | | 8,959 | | | | — | |
Total non-current liabilities | | | | | | | 219,478 | | | | 209,333 | |
Total liabilities | | | | | | | 2,150,305 | | | | 2,740,378 | |
| | | | | | | | | | | | |
Commitments and contingent liabilities | | | | | | | — | | | | — | |
| | | | | | | | | | | | |
STOCKHOLDERS' EQUITY (DEFICIT) | | | | | | | | | | | | |
Common stock ($0.001 par value per share; Shares authorized: 6,591,595 at June 30, 2020 and December 31, 2019; Issued and outstanding: 2,123,554* at June 30, 2020 and 888,184 at December 31,2019) | | | 10 | | | | 2,123 | | | | 888 | |
Preferred stock Series A ($0.001 par value per share; Shares authorized: 1,300,000 at June 30, 2020 and December 31, 2019; Issued and outstanding: 844,037 at June 30, 2020 and 314,505 at December 31, 2019) | | | 10 | | | | 844 | | | | 315 | |
Preferred stock Series seed ($0.001 par value per share; Shares authorized: 2,108,405 at June 30, 2020 and December 31, 2019; Issued and outstanding: 2,108,405 at June 30, 2020 and December 31, 2019) | | | 10 | | | | 2,108 | | | | 2,108 | |
Additional Paid in Capital | | | 10 | | | | 10,311,257 | | | | 8,811,647 | |
Accumulated other comprehensive income | | | | | | | 107,357 | | | | 118,859 | |
Accumulated Deficit | | | | | | | (10,436,839 | ) | | | (9,767,619 | ) |
Total stockholders’ deficit | | | | | | | (13,150 | ) | | | (833,802 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | $ | 2,137,155 | | | $ | 1,906,576 | |
* | include 1,280,199 unvested shares of common stock, legally outstanding |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed Consolidated Statements of Operations
For the six-month periods ended June 30, 2020 and 2019
(All amounts are in USD
| | | | | Six-month periods ended June 30 | |
| | Notes | | | 2020 | | | 2019 | |
Revenue, net | | | 12 | | | $ | 300,620 | | | $ | 287,858 | |
Cost of revenues | | | | | | | (283,953 | ) | | | (151,849 | ) |
Gross profit | | | | | | | 16,667 | | | | 136,009 | |
| | | | | | | | | | | | |
Income from grants | | | | | | | 143,106 | | | | 353,817 | |
Research and development expenses | | | | | | | (43,633 | ) | | | (56,748 | ) |
Administrative and selling expenses | | | | | | | (749.820 | ) | | | (444,143 | ) |
Other operating expenses | | | | | | | (4,614 | ) | | | (1,607 | ) |
Operating Loss | | | | | | $ | (638.294 | ) | | $ | (12,672 | ) |
| | | | | | | | | | | | |
Finance costs | | | 13 | | | | (3,037 | ) | | | (1,643 | ) |
Finance costs - Related parties | | | 13 | | | | — | | | | (17,449 | ) |
Foreign exchange differences, net | | | | | | | (18,579 | ) | | | (7,210 | ) |
Other income | | | | | | | 96 | | | | 5 | |
Other expenses | | | | | | | (6,306 | ) | | | (2,558 | ) |
Loss before tax | | | | | | $ | (666,120 | ) | | $ | (41,527 | ) |
| | | | | | | | | | | | |
Income tax expense | | | | | | | (3,101 | ) | | | — | |
Net Loss | | | | | | $ | (669,221 | ) | | $ | (41,527 | ) |
| Notes | September 30, 2020 (unaudited) | December 31, 2019 (audited) |
ASSETS | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 929,283 | $ | 1,199,015 |
Accounts receivable, net | | | 209,845 | | 316,438 |
Contract assets | 12 | | 128,608 | | 51,936 |
Inventories | 4 | | 107,350 | | 32,440 |
Prepaid expenses | | | 2,106 | | 2,642 |
Other current assets | 5 | | 298,922 | | 219,003 |
Total current assets | | $ | 1,676,114 | $ | 1,821,474 |
| | | | | |
Non-current assets | | | | | |
Property and equipment, net | 6 | | 162,899 | | 84,977 |
Other non-current assets | | | 130 | | 125 |
Total non-current assets | | $ | 163,029 | $ | 85,102 |
Total Assets | | $ | 1,839,143 | $ | 1,906,576 |
| | | | | |
LIABILITIES | | | | | |
Current liabilities | | | | | |
Convertible Promissory Notes-Related parties | 3,9 | $ | - | $ | 500,000 |
Trade and other payables | 7 | | 363,261 | | 307,822 |
Due to related parties | 3 | | 1,038,148 | | 1,243,424 |
Deferred income from grants, current | | | 177,221 | | 79,591 |
Contract liabilities | 12 | | 11,102 | | 38,728 |
Other current liabilities | 8 | | 423,258 | | 167,480 |
Income tax payable | | | 196,122 | | 194,000 |
Total current liabilities | | $ | 2,209,112 | $ | 2,531,045 |
| | | | | |
Non-current liabilities | | | | | |
Provision for staff leaving indemnities | | | 32,967 | | 28,853 |
Deferred income from grants, non-current | | | 131,370 | | 180,480 |
Other long term liabilities | | | 18,733 | | - |
Total non-current liabilities | | $ | 183,070 | $ | 209,333 |
Total liabilities | | $ | 2,392,182 | $ | 2,740,378 |
| | | | | |
Commitments and contingent liabilities | | | - | | - |
| | | | | |
STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | |
Common stock ($0.001 par value per share; Shares authorized: 6,591,595 at September 30, 2020 and December 31, 2019; Issued and outstanding: 3,017,057 at September 30, 2020 and 888,184 at December 31,2019) | 10 | $ | 3,017 | $ | 888 |
Preferred stock Series A ($0.001 par value per share; Shares authorized: 1,300,000 at September 30, 2020 and December 31, 2019; Issued and outstanding: 844,037 at September 30, 2020 and 314,505 at December 31, 2019) | 10 | | 844 | | 315 |
Preferred stock Series seed ($0.001 par value per share; Shares authorized: 2,095,592 at September 30, 2020 and December 31, 2019; Issued and outstanding: 2,095,592 at September 30, 2020 and December 31, 2019) | 10 | | 2,096 | | 2,108 |
Additional Paid in Capital | 10 | | 10,534,202 | | 8,811,647 |
Accumulated other comprehensive income | | | 105,315 | | 118,859 |
Accumulated Deficit | | | (11,198,513) | | (9,767,619) |
Total stockholders’ deficit | | $ | (553,039) | $ | (833,802) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | | $ | 1,839,143 | $ | 1,906,576 |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed Consolidated
Statements of
Comprehensive LossOperationsFor the six-monthnine-month periods ended JuneSeptember 30, 2020 and 2019
(All amounts are in USD)
| | Six-month periods ended June 30 | |
Notes | | 2020 | | | 2019 | |
Net loss | | $ | (669,221 | ) | | $ | (41,527 | ) |
Other comprehensive income (loss): | | | | | | | | |
Net foreign currency translation adjustments | | | (11,502 | ) | | | 6,311 | |
Other comprehensive income (loss) | | | (11,502 | ) | | | 6,311 | |
Comprehensive loss | | $ | (680,723 | ) | | $ | (35,216 | ) |
| | | | | Nine-month periods ended September 30 | |
| | Notes | | | 2020 | | | 2019 | |
| | | | | | | | | |
Revenue, net | | | 12 | | | $ | 526,032 | | | $ | 392,264 | |
Cost of revenues | | | | | | | (374,430 | ) | | | (216,237 | ) |
Gross profit | | | | | | $ | 151,602 | | | $ | 176,027 | |
| | | | | | | | | | | | |
Income from grants | | | | | | | 159,182 | | | | 490,477 | |
Research and development expenses | | | | | | | (81,273 | ) | | | (125,786 | ) |
Administrative and selling expenses | | | 13 | | | | (1,636,449 | ) | | | (662,297 | ) |
Other operating expenses | | | | | | | (4,614 | ) | | | (1,986 | ) |
Operating Loss | | | | | | $ | (1,411,552 | ) | | $ | (123,565 | ) |
| | | | | | | | | | | | |
Finance costs | | | 14 | | | | (4,749 | ) | | | (2,766 | ) |
Finance costs - Related parties | | | 14 | | | | - | | | | (26,031 | ) |
Foreign exchange differences, net | | | | | | | (26,584 | ) | | | (9,891 | ) |
Other income | | | | | | | 25,545 | | | | 5 | |
Other expenses | | | | | | | (697 | ) | | | (2,554 | ) |
Loss before tax | | | | | | $ | (1,418,037 | ) | | $ | (164,802 | ) |
| | | | | | | | | | | | |
Income tax expense | | | | | | | - | | | | - | |
Net Loss | | | | | | $ | (1,418,037 | ) | | $ | (164,802 | ) |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed Consolidated
StatementStatements of
Changes of Stockholders’ DeficitComprehensive LossFor the six-monthnine-month periods ended JuneSeptember 30, 2020 and 2019
(All amounts are in USD)
| | No. of shares | | | Common Stock | | | No. of shares | | | Common Stock Class A | | | No. of shares | | | Common Stock Class B | | | No. of shares | | | Preferred stock series A | | | No. of shares | | | Preferred stock series seed | | | Additional Paid in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income (Loss) | | | Total Stockholders’ Deficit | |
As at January 1, 2019 | | | — | | | $ | — | | | | 67,982 | | | $ | 68 | | | | 668,354 | | | $ | 668 | | | | — | | | $ | — | | | | — | | | $ | — | | | $ | 4,520,138 | | | $ | (9,409,365 | ) | | $ | 128,638 | | | $ | (4,759,852 | ) |
Net loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (41,528 | ) | | | — | | | | (41,528 | ) |
Other comprehensive income (loss) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 6,311 | | | | 6,311 | |
Conversion of Convertible Promissory Notes (Note 9) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,681,453 | | | | 1,681 | | | | 2,767,888 | | | | — | | | | — | | | | 2,769,569 | |
Exchange of common stock A & B to common stock | | | 736,336 | | | | 736 | | | | (67,982 | ) | | | (68 | ) | | | (668,354 | ) | | | (668 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Exercise of stock options (Note 10) | | | 151,848 | | | | 152 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,366 | | | | — | | | | — | | | | 1,518 | |
At June 30, 2019 | | | 888,184 | | | $ | 888 | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | 1,681,453 | | | $ | 1,681 | | | $ | 7,289,392 | | | $ | (9,450,893 | ) | | $ | 134,949 | | | $ | (2,023,982 | ) |
As at January 1, 2020 | | | 888,184 | | | $ | 888 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 314,505 | | | $ | 315 | | | | 2,108,405 | | | $ | 2,108 | | | $ | 8,811,647 | | | $ | (9,767,619 | ) | | $ | 118,859 | | | $ | (833,802 | ) |
Net loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (669.221 | ) | | | — | | | | (669.221 | ) |
Other comprehensive income (loss) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (11,502 | ) | | | (11,502 | ) | | | | |
Issuance of preferred stock (Note 10) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 529,532 | | | | 530 | | | | — | | | | — | | | | 1,429,475 | | | | — | | | | — | | | | 1,430,005 | |
Issuance of non-vested stock awards(Note 11) | | | 1,280,199 | | | | 1,280 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,521 | | | | — | | | | — | | | | 12,801 | |
Repurchase of shares (Note 10) | | | (44,829 | ) | | | (45 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (118,154 | ) | | | — | | | | — | | | | (118,199 | ) |
Recognition of stock grant plan (Note 11) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 176,768 | | | | — | | | | — | | | | 176,768 | |
At June 30, 2020 | | | 2,123,554 | * | | $ | 2,123 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 844,037 | | | $ | 844 | | | | 2,108,405 | | | $ | 2,108 | | | $ | 10,311,257 | | | $ | (10,436,839 | ) | | $ | 107,357 | | | $ | (13,150 | ) |
* | include 1,280,199 unvested shares of common stock, legally outstanding |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
For the six-month periods ended June 30, 2020 and 2019
(All amounts are in USD)
| | | | | Six-month periods ended June 30 | |
| | Notes | | | 2020 | | | 2019 | |
Net Cash used in Operating Activities | | | | | $ | (690,905 | ) | | $ | (9,366 | ) |
Cash Flows from Investing Activities: | | | | | | | | | | | |
Purchases of property and equipment | | | | | | (64,786 | ) | | | (30,215 | ) |
Net Cash used in Investing Activities | | | | | $ | (64,786 | ) | | $ | (30,215 | ) |
Cash Flows from Financing Activities: | | | | | | | | | | | |
Proceeds of issuance of preferred stock | | | 10 | | | | 1,430,005 | | | | — | |
Proceeds from issuance of non-vested stock awards | | | 10, 11 | | | | 12,801 | | | | 1,518 | |
Repurchase of shares | | | 10 | | | | (34,836 | ) | | | — | |
Repayment of Convertible Promissory Notes | | | 9 | | | | (500,000 | ) | | | — | |
Net Cash provided by Financing Activities | | | | | | $ | 907,970 | | | $ | 1,518 | |
Net increase (decrease) in cash and cash equivalents | | | | | | | 152,279 | | | | (38,063 | ) |
Effect of exchange rate changes on cash and cash equivalents | | | | | | | (4,224 | ) | | | 7,383 | |
Cash and cash equivalents at the beginning of the period | | | | | | | 1,199,015 | | | | 147,398 | |
Cash and cash equivalents at the end of the period | | | | | | $ | 1,347,070 | | | $ | 116,718 | |
Supplemental Cash Flow Information | | | | | | | | | | | | |
Non-cash Operating Activities: | | | | | | | | | | | | |
Recognition of stock grant plan | | | 11 | | | $ | 176,768 | | | | — | |
| | | | | Nine-month periods ended September 30 | |
| | Notes | | | 2020 | | | 2019 | |
| | | | | | | | | |
Net loss | | | | | | $ | (1,418,037 | ) | | $ | (164,802 | ) |
| | | | | | | | | | | | |
Other comprehensive income (loss): | | | | | | | | | | | | |
Net foreign currency translation adjustments | | | | | | | (13,544 | ) | | | 48,331 | |
Other comprehensive income (loss) | | | | | | | (13,544 | ) | | | 48,331 | |
Comprehensive loss | | | | | | $ | (1,431,581 | ) | | $ | (116,471 | ) |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
Advent Technologies Inc.
Unaudited Interim Condensed Consolidated Statement of Changes of Stockholders’ Deficit For the nine-month periods ended September 30, 2020 and 2019
(All amounts are in USD)
| | No. of shares | | | Common Stock | | | No. of shares | | | Common Stock Class A | | | No. of shares | | | Common Stock Class B | | | No. of shares | | | Preferred stock series A | | | No. of shares | | | Preferred stock series seed | | | Additional Paid in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income (Loss) | | | Total Stockholders’ Deficit | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As at January 1, 2019 | | | - | | | $ | - | | | | 67,982 | | | $ | 68 | | | | 668,354 | | | $ | 668 | | | | - | | | $ | - | | | | - | | | $ | - | | | $ | 4,520,138 | | | $ | (9,409,365 | ) | | $ | 128,639 | | | $ | (4,759,852 | ) |
Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (164,801 | ) | | | - | | | | (164,801 | ) |
Other comprehensive income (loss) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 48,331 | | | | 48,331 | |
Conversion of Convertible Promissory Notes (Note 9) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,681,453 | | | | 1,681 | | | | 2,767,888 | | | | - | | | | - | | | | 2,769,569 | |
Exchange of common stock A & B to common stock (Note 10) | | | 736,336 | | | | 736 | | | | (67,982 | ) | | | (68 | ) | | | (668,354 | ) | | | (668 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
Exercise of stock options (Note 10) | | | 151,848 | | | | 152 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,366 | | | | - | | | | - | | | | 1,518 | |
At September 30, 2019 | | | 888,184 | | | $ | 888 | | | | - | | | $ | - | | | | - | | | $ | - | | | | - | | | $ | - | | | | 1,681,453 | | | $ | 1,681 | | | $ | 7,289,392 | | | $ | (9,574,166 | ) | | $ | 176,970 | | | $ | (2,105,235 | ) |
As at January 1, 2020 | | | 888,184 | | | $ | 888 | | | | - | | | $ | - | | | | - | | | $ | - | | | | 314,505 | | | $ | 315 | | | | 2,108,405 | | | $ | 2,108 | | | $ | 8,811,647 | | | $ | (9,767,619 | ) | | $ | 118,859 | | | $ | (833,802 | ) |
Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1,418,037 | ) | | | - | | | | (1,418,037 | ) |
Other comprehensive income (loss) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | - | | | | (13,544 | ) | | | (13,544 | ) |
Issuance of preferred stock (Note 10) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 529,532 | | | | 529 | | | | - | | | | - | | | | 1,429,475 | | | | - | | | | - | | | | 1,430,005 | |
Issuance of non-vested stock awards(Note 10 and 11) | | | 2,173,702 | | | | 2,174 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 19,562 | | | | - | | | | - | | | | 21,736 | |
Repurchase of shares (Note 10) | | | (44,829 | ) | | | (45 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (12,813 | ) | | | (12 | ) | | | (139,878 | ) | | | (12,857 | ) | | | - | | | | (152,792 | ) |
Recognition of stock grant plans (Note 11) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 413,396 | | | | - | | | | - | | | | 413,396 | |
At September 30, 2020 | | | 3,017,057 | | | $ | 3,017 | | | | - | | | $ | - | | | | - | | | $ | - | | | | 844,037 | | | $ | 844 | | | | 2,095,592 | | | $ | 2,096 | | | $ | 10,534,202 | | | $ | (11,198,513 | ) | | $ | 105,315 | | | $ | (553,039 | ) |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
Advent Technologies Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows For the nine-month periods ended September 30, 2020 and 2019
(All amounts are in USD)
| | | | | Nine-month periods ended September 30 | |
| | Notes | | | 2020 | | | 2019 | |
Net Cash used in Operating Activities | | | | | $ | (1,045,004 | ) | | $ | (62,610 | ) |
| | | | | | | | | | | |
Cash Flows from Investing Activities: | | | | | | | | | | | |
Purchases of property and equipment | | | | | | (89,123 | ) | | | (34,698 | ) |
Net Cash used in Investing Activities | | | | | $ | (89,123 | ) | | $ | (34,698 | ) |
| | | | | | | | | | | |
Cash Flows from Financing Activities: | | | | | | | | | | | |
Proceeds of issuance of preferred stock | | | 10 | | | | 1,430,005 | | | | - | |
Proceeds from issuance of non-vested stock awards | | | 10, 11 | | | | 21,736 | | | | 1,518 | |
Repurchase of shares | | | 10 | | | | (69,430 | ) | | | - | |
Proceeds from preferred series A shares | | | | | | | - | | | | 549,223 | |
Repayment of Convertible Promissory Notes | | | 9 | | | | (500,000 | ) | | | - | |
Net Cash provided by Financing Activities | | | | | | $ | 882,311 | | | $ | 550,741 | |
Net increase (decrease) in cash and cash equivalents | | | | | | | (251,815 | ) | | | 453,433 | |
Effect of exchange rate changes on cash and cash equivalents | | | | | | | (17,918 | ) | | | 12,603 | |
Cash and cash equivalents at the beginning of the period | | | | | | | 1,199,015 | | | | 147,398 | |
Cash and cash equivalents at the end of the period | | | | | | $ | 929,283 | | | $ | 613,434 | |
Supplemental Cash Flow Information | | | | | | | | | | | | |
Non-cash Operating Activities: | | | | | | | | | | | | |
Recognition of stock grant plans | | | 11 | | | $ | 413,396 | | | $ | - | |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(All amounts are in USD, unless otherwise stated)
Advent Technologies Inc. (the “Parent”) was incorporated under the laws of the State of Delaware on October 12, 2012. Following that date, the shareholders of Advanced Energy Technologies S.A., under a share exchange agreement, effected a share exchange with the Advent Technologies Inc. resulting in identical common ownership between the two companies which was accounted for similar to a business combination between entities under common control.
The Parent is headquartered in Cambridge, Massachusetts and its wholly owned subsidiary, Advanced Energy Technologies S.A. (the “Subsidiary”) is headquartered in Patras, Greece. The Parent and the Subsidiary (collectively, “the Company”) is principally engaged in the manufacturing of membranes and fuel cells that convert methanol, natural gas, and hydrogen to electricity.
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles ("(“U.S. GAAP"GAAP”). Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements and the accompanying notes have been prepared on the same basis and should be read in conjunction with the Company'sCompany’s annual financial statements for the fiscal year ended December 31, 2019, issued on November XX, 2020 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation of the Company'sCompany’s financial position, results of operations and cash flows for the periods presented. Operating results for the six-monthnine-month period ended JuneSeptember 30, 2020 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2020.
As of JuneSeptember 30, 2020, the Company reported a working capital surplusdeficit of $0.09$0.53 million. The Company has historically funded its operations primarily through the issuance of debt and equity securities.
The Company believes that it will be in a position to cover its liquidity needs for the next twelve months after the date of these unaudited interim condensed consolidated financial statements, through cash on hand and cash from operations.
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
2. | Summary of Significant Accounting Policies: |
A discussion of the Company'sCompany’s significant accounting policies can be found in the Company'sCompany’s audited annual consolidated financial statements for the years ended December 31, 2019 and 2018. There have been no material changes to these policies in the six-monthnine-month period ended JuneSeptember 30, 2020, except from the adoption of the standard discussed below:
When stock is retired or purchased for constructive retirement, any excess purchase price over par value may be allocated between Additional Paid In Capital (“APIC”) and retained earnings or may be charged directly to retained earnings. For the repurchased shares during the six- monthnine-month period ended JuneSeptember 30, 2020, the Company decreased its common stock and APIC respectively-in other words any excess par value over the purchase price was credited to capital surplus.
Recent Accounting Pronouncements
| a) | In February 2016, the Financial Accounting Standards Board ("FASB"(“FASB”) issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, ASU 2018-10, Codification Improvements to Topic 842, Leases, was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Furthermore, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, ASU 2019-01, Codification Improvements to Topic 842, Leases and ASU 2020-02, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), provided additional clarifications for implementing ASU 2016.02. The new lease standard was originally effective for the private entities on January 1, 2021, with early adoption permitted. Following the issuance of ASU 2020-05, Effective Dates for Certain Entities (Topic 842), the effective date of Leases was deferred for private entities (the “all other” category) to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application continues to be permitted which means that an entity may choose to implement Leases before those deferred effective dates. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements. |
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Statements
(All amounts are in USD, unless otherwise stated)
2. | Summary of Significant Accounting Policies:— continued |
b) | In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. Furthermore, amendments, ASU 2019-10 and ASU 2019-11 provided additional clarification for implementing ASU 2016-13. ASU 2016-13 is effective for the Company beginning January 1, 2023, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the consolidated financial statements. |
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
2. | Summary of Significant Accounting Policies - continued: |
| c) | In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 is effective for the Company beginning January 1, 2022, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company'sCompany’s financial statements and does not expect it to have a material impact on the consolidated financial statements. |
3. | Related party disclosures |
The amounts included in the accompanying interim condensed consolidated balance sheets as of JuneSeptember 30, 2020 (unaudited) and as of December 31, 2019 (audited) and unaudited interim condensed consolidated statements of operations for the six-monthnine-month periods ended JuneSeptember 30, 2020 and 2019 are as follows:
Consolidated Balance Sheets
| | June 30, | | | December 31, | |
| | 2020 (unaudited) | | | 2019 (audited) | |
| | Total | | | Notes | | | Interest | | | Total | | | Notes | | | Interest | |
Convertible Promissory Notes – Piraeus-Taneo Capital Fund | | | — | | | | — | | | | — | | | $ | 500,000 | | | $ | 500,000 | | | $ | — | |
| | $ | — | | | $ | — | | | $ | — | | | $ | 500,000 | | | $ | 500,000 | | | | — | |
| | | June 30, | | | December 31, | |
| | | 2020 (unaudited) | | | 2019 (audited) | |
Due to related parties | | | Unpaid compensation cost | | | Unpaid compensation cost | |
Vassilios Gregoriou | | | $ | 571,303 | | | $ | 648,394 | |
Charalampos Antoniou | | | | 5,000 | | | | — | |
Christos Kaskavelis | | | | 15,000 | | | | — | |
Emory Sayre De Castro | | | | 350,526 | | | | 526,122 | |
Total | | | $ | 941,829 | | | $ | 1,174,516 | |
| | September 30, | | | December 31, | |
| | 2020 (unaudited) | | | 2019 (audited) | |
| | Total | | | Notes | | | Interest | | | Total | | | Notes | | | Interest | |
Convertible Promissory Notes – Piraeus-Taneo Capital Fund | | $ | - | | | $ | - | | | $ | - | | | $ | 500,000 | | | $ | 500,000 | | | $ | - | |
Total | | $ | - | | | $ | - | | | $ | - | | | $ | 500,000 | | | $ | 500,000 | | | $ | - | |
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Statements
(All amounts are in USD, unless otherwise stated)
3. | Related party disclosures |
| | September 30, | | | December 31, | |
| | 2020 (unaudited) | | | 2019 (audited) | |
Due to related parties | | Unpaid compensation cost | | | Unpaid compensation cost | |
Vassilios Gregoriou | | $ | 592,638 | | | $ | 648,394 | |
Charalampos Antoniou | | | 1,666 | | | | - | |
James Coffey | | | 10,818 | | | | - | |
Christos Kaskavelis | | | 45,000 | | | | 68,908 | |
Emory Sayre De Castro | | | 388,026 | | | | 526,122 | |
Total | | $ | 1,038,148 | | | $ | 1,243,424 | |
Consolidated statements of operations
| | Six-month periods ended June 30, | | | Nine-month periods ended September 30, | |
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Finance costs – Related parties | | Interest | | | Interest | | | Interest | | | Interest | |
Convertible Promissory Notes – Piraeus-Taneo Capital Fund | | | — | | | $ | 17,449 | | | $ | - | | | $ | 26,031 | |
Total | | $ | — | | | $ | 17,449 | | | $ | - | | | $ | 26,031 | |
Vassilios Gregoriou: Vassilios Gregoriou is the Company’s CEO (“Chief Executive Officer”) and one of the major shareholders of the Company, owning 30% and 15% of the Company’s common shares as of June 30, 2020 and December 31, 2019, respectively.Company. The Company has entered into a consultancy agreement with the CEO for his services, with an annual remuneration of $170,000. The table above presents unpaid compensation costs as at JuneSeptember 30, 2020 and December 31, 2019.2019, amounted to $592,638 and $648,394, respectively. Also, during the six-monthnine-month period ended JuneSeptember 30, 2020 he was awarded 512,080809,914 common shares from the stock grant planplans (Note 11).
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
3. | Related party disclosures – continued: |
Piraeus-Taneo Capital Fund (“PTCF”): PTCF is a venture capital mutual fund represented by Piraeus Capital Management SA, a member of Piraeus Bank SA group. PTCF was the holder of convertible notes and shareholder of 3% as of December 31, 2019, until the repayment of the convertible notes in January 2020 (Note 9). Upon the repayment of the notes PTCF sold its ownership interest to other existing minority shareholders of the Company.
Emory Sayre De Castro: Emory Sayre De Castro is the Company’s Director, CTO and CTO, owning 15% and 8% of the Company’s common shares as of June 30, 2020 and December 31, 2019, respectively.shareholder. The Company has entered into a consultancy agreement with the CTO for his services, with an annual remuneration of $150,000. The table above presents unpaid compensation costs as at JuneSeptember 30, 2020 and December 31, 2019.2019, amounted to $388,026 and $526,122, respectively. Also, during the six-monthnine-month period ended JuneSeptember 30, 2020 he was awarded 256,040434,741 common shares from the stock grant planplans (Note 11).
Christos Kaskavelis: Christos Kaskavelis is the Company’s Director owning 15% and 2% of the Company’s common shares as of June 30, 2020 and December 31, 2019, respectively.shareholder. Also, during the six-monthnine-month period ended JuneSeptember 30, 2020 he was awarded 256,040434,741 common shares from the stock grant planplans (Note 11). The Company on May 16, 2020 has entered into a consultancy agreement with the CRO CMO (“Chief RevenueMarketing Officer”) for his services, with an annual remuneration of $120,000. The table above presents unpaid compensation costs as at JuneSeptember 30, 2020 and December 31, 2019.2019, amounted to $45,000 and $68,908 respectively.
Charalampos Antoniou: Charalampos Antoniou is the Company’s Director minorand shareholder, and during the six-monthnine-month period ended JuneSeptember 30, 2020 was awarded 153,625235,727 common shares from the stock grant planplans (Note 11). The Company on May 16, 2020 has entered into a board member agreement for his services, with an annual remuneration of $40,000.The$40,000. The table above presents unpaid compensation costs as at JuneSeptember 30, 2020 and December 31, 2019.2019, amounted to $1,666 and $nil respectively.
James Coffey: James Coffey is Company’s Director minorand shareholder and during the six-monthnine-month period ended JuneSeptember 30, 2020 was awarded 51,208140,558 common shares from the stock grant planplans (Note 11). The Company on March 11, 2020 has entered into a consultancy agreement for his services as a general counsel, with an annual remuneration of $100,000. The table above presents unpaid compensation costs as at September 30, 2020 and December 31, 2019, amounted to $10,818 and $nil, respectively.
Inventories are analyzed as of follows:
| | June 30, | | | December 31, | |
| | 2020 | | | 2019 | |
Raw materials and supplies | | | 95,092 | | | | 32,440 | |
Total | | | 95,092 | | | | 32,440 | |
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Statements
(All amounts are in USD, unless otherwise stated)
| | September 30, | | | December 31, | |
| | 2020 | | | 2019 | |
Raw materials and supplies | | $ | 107,350 | | | $ | 32,440 | |
Total | | $ | 107,350 | | | $ | 32,440 | |
Other current assets are analyzed as follows:
| | June 30, | | | December 31, | | | September 30, | | December 31, | |
| | 2020 | | | 2019 | | | 2020 | | 2019 | |
VAT receivable | | | 204,627 | | | | 171,057 | | | $ | 226,993 | | $ | 171,057 | |
Grants receivable | | | 34,496 | | | | 43,779 | | | | 67,784 | | | 43,779 | |
Other current receivables | | | 3,955 | | | | 4,167 | | | | 4,145 | | | 4,167 | |
Total | | | 243,078 | | | | 219,003 | | | $ | 298,922 | | $ | 219,003 | |
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
6. | Property and equipment, net: |
During the six-month monthnine-month period ended JuneSeptember 30, 2020, $64,786$89,123 additions to property and equipment concerns machinery, office and other equipment. There are no collaterals or other commitments on the Company’s property and equipment.
7. | Trade and other payables: |
Trade and other payables are analyzed as follows:
| | June 30, | | | December 31, | | | September 30, | | December 31, | |
| | 2020 | | | 2019 | | | 2020 | | 2019 | |
Trade payables | | | 351,290 | | | | 336,614 | | | $ | 318,642 | | $ | 267,706 | |
Other payables | | | 48,975 | | | | 40,116 | | | | 44,619 | | | 40,116 | |
Total | | | 400,265 | | | | 376,730 | | | $ | 363,261 | | $ | 307,822 | |
8. | Other current liabilities: |
Other current liabilities of the Company are analyzed as follows:
| | June 30, | | | December 31, | | | September 30, | | December 31, | |
| | 2020 | | | 2019 | | | 2020 | | 2019 | |
Accrued expenses for legal and consulting fees | | | 70,018 | | | | 76,555 | | | $ | 327,649 | | $ | 76,555 | |
Other accruals and short-term payables | | | 146,976 | | | | 79,767 | | | | 82,086 | | | 79,767 | |
Provision for unused vacation | | | 9,900 | | | | 11,158 | | | | 13,523 | | | 11,158 | |
Total | | | 226,894 | | | | 167,480 | | | $ | 423,258 | | $ | 167,480 | |
Amounts of $54,004$56,463 and $54,174 classified in other current liabilitiesOther accruals and short-term payables as of JuneSeptember 30, 2020 and December 31, 2019, respectively, relate to amounts received from grantor to the Company in its role as a coordinator to this grant and the Company is obliged to transfer these amounts to one of its shareholders, which is also part in the respective grant program.
9. | Convertible Promissory Notes: |
Convertible Promissory Notes and Convertible Promissory Notes – Related parties are analyzed as follows:
Senior Secured Promissory Notes – Advent Notes
On May 28, 2019, the Company issued 1,681,453 Series Seed preferred shares, of par value $0.001 per share, to settle the then outstanding balance of Advent Notes amounted to $2,769,569 (principal and interest).
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
9. | Convertible Promissory Notes – continued: |
Senior secured convertible debenture loan – PTCF Note
On December 31, 2019, Advanced Energy Technologies S.A. and PTCF agreed to fully repay the PTCF Note by January 20, 2020, pursuant to which Euro 452,285 ($500,000) was agreed to be paid in full settlement of the PTCF
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Statements
(All amounts are in USD, unless otherwise stated)
9. | Convertible Promissory Notes: |
Note with a principal balance of Euro 385,743 and accrued interest payable amounted of Euro 221,342.50 at that date. The Company determined that the modified repayment terms met the criteria for debt extinguishment per ASC 470-50, Debt - Modifications and Extinguishments and resulted in a gain on debt extinguishment. The difference between the settlement amount of Euro 452,285 ($500,000) and the carrying amount of Euro 607,085.50 ($673,894 principal and interest), of Euro 154,801 ($173,894) was recognized in additional paid in capital as a capital transaction in accordance to ASC 470-50-40-2, since PTCF was a related party (Note 3). On January 20, 2020, the Company repaid the amount of $500,000 as originally agreed.
10. | Stockholders’ Deficit: |
The Company upon its incorporation had authorized 2,600,000 shares of common stock, with par value of $0.001, consisting of 1,600,000 shares of Class A Voting Common Stock and 1,000,000 shares of Class B Non-Voting Common Stock.
On May 28, 2019, the Company amended and restated its certificate of incorporation to authorize 10,000,000 shares, consisting of 7,500,000 shares of Common Stock (one class of voting common stock), with par value of $0.001 per share, and 2,500,000 shares of Preferred Stock, with par value of $0.001 per share. The Preferred Stock was designated as Series Seed Preferred Stock.
On May 28, 2019, the Company exchanged the outstanding at that time Class A and Class B Common Stock of 67,982 and 668,345, respectively for shares in the newly authorized Common Stock amounting to 736,336 common shares.
On May 28, 2019, the total outstanding balance of Advent Notes amounting to $2,769,569 was converted to 1,681,453 Series Seed Preferred Stock.
On May 31, 2019, 151,848 common shares were issued in connection with the stock option plans discussed below, and as of December 31, 2019, the Company’s issued and outstanding common shares was 888,184.
In December 2019, the Company entered into private placement agreements pursuant to which the Company issued 426,952 Series Seed Preferred Shares for net proceeds of $499,937.
On October 11, 2019, the Company further amended and restated its certificate of incorporation to issue up to 6,591,595 common stock, with par value of $0.001 per share, and up to 3,408,405 Preferred stock, with par value of $0.001 per share. Such Preferred stock is comprised of 2,108,405 Series Seed Preferred Stock and 1,300,000 of Series A Preferred Stock. Terms of Series Seed Preferred Stock and Series A Preferred Stock were similar to the May 28, 2019 certificate of incorporation.
Upon authorization of the Series A Preferred Stock, the Company issued 314,505 shares in Series A Preferred Stock for net proceeds of $849,165 in connection with private placement agreement with several investors.
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
10. | Stockholders’ Deficit - continued: |
As per the second amended and restated certificate of incorporation each share of Series Seed Preferred Stock and Series A Preferred Stock has voting rights equal to an equivalent number of shares of common stock into which it is convertible and votes together as one class with the common stock, participate on an as-converted basis in dividends declared and paid on the Company’s common shares and have a liquidation preference equal to the greater of $2.61 or $4.0046 for Series Seed Preferred Stock and Series A Preferred Stock, respectively, or the liquidation amount per share on an as converted basis.
The Series Seed Preferred Stock and Series A Preferred Stock are convertible at any time, at the option of the holder, at a conversion rate of one common share per Series Seed Preferred Stock or Series A Preferred Stock. All of the Series Seed Preferred Stock and Series A Preferred Stock will automatically convert into common shares, upon either (a) the closing of the sale of shares of Common Stock to the public at a price of at least $6.0684 per share or (b) upon request of holders of more than 50% of the preferred shares acting as a single class in an as converted basis, at a conversion rate of one common share per Series Seed Preferred Stock or Series A Preferred Stock.
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Statements
(All amounts are in USD, unless otherwise stated)
10. | Stockholders’ Deficit: |
The conversion price is subject to customary anti-dilution and other adjustments such as issuance of common shares as a dividend or the subdivision, combination, or reclassification of common shares into a greater or lesser number of common shares.
If a deemed liquidation occurs (such as merger or consolidation of the Company or its subsidiaries and sale of all or substantially all of the Company’s and its subsidiary’s assets, unless holders of at least majority of the outstanding shares of preferred stock voting together as a single class and on an as-converted basis elect otherwise) and the Company does not effect the dissolution in 90 days, holders of the preferred stock can request, subject to the approval by majority holders of the preferred shares acting as a single class on an as converted basis, the redemption of the preferred stock at a price equal to the liquidation amount.
The Series Seed Preferred Stock and Series A Preferred Stock did not meet the criteria for mandatorily redeemable financial instruments.
Additionally, the Company determined that the nature of both classes of preferred shares were more akin to an equity instrument and that the economic characteristics and risks of the embedded conversion options were clearly and closely related to both classes of preferred shares. As such, the conversion options were not required to be bifurcated from the equity host under ASC 815, Derivatives and Hedging. The Company assessed that no beneficial conversion feature should be assigned. The Company also determined that the contingent redemption call option did not meet the definition of a derivative, since the Company’s shares are not readily convertible into cash, and thus net settlement criterion for an instrument to be characterized as a derivative under ASC 815, is not met. The Company assessed that equity classification was appropriate for both series of preferred stock.
The Series Seed Preferred Stock and Series A Preferred Stock rank pari passu with each other and senior to the Company’s common shares with respect to dividend distributions and distributions upon any liquidation event.
During the six-monthnine-month period ended JuneSeptember 30, 2020, the Company entered into private placement agreements with certain investors pursuant to which the Company issued 529,532 Series A Preferred Shares for net proceeds of $1,430,005.
During the six-monthnine-month period ended JuneSeptember 30, 2020, 1,280,1992,173,702 common shares were issued in connection with the stock grant planplans discussed below.
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
10. | Stockholders’ Deficit - continued: |
In addition, during the six-monthnine-month period ended JuneSeptember 30, 2020, 44,829 common shares and 12,813 Series Seed Preferred Stock were repurchased by the Company, from existing minority shareholders, for an amount of $118,199 out of which $83,363 remain payable as of June 30, 2020.and $34,594, respectively. The respective shares have been cancelled.
11. | Stock grant plan:plans: |
On March 26, 2020, the Company’s Board of Directors and shareholders approved the 2018-2020 Stock Grant Plan (the “2018-2020 Plan”) to reward certain employees and directors of the Company. The maximum aggregate number of shares that may be issued under the Planthis plan is 1,280,199 common shares. The Company entered into separate Restricted Stock Award Agreements with each participant according to which awards for 1,280,199 non-vested shares of common stock were granted with purchase price $0.01 per share. Under the Plan, if the employee ceases to be employed with the Company for any reason prior to December 31, 2020, the Company has a limited repurchase period to repurchase the granted shares at a price of $0.01 per share. If the Company does not exercise such repurchase option and unless the Company declines in writing to exercise itsthe repurchase option prior to such time, the repurchase option is automatically deemed exercised at the end of the repurchase window. This limited repurchase right will lapse upon the occurrence of a liquidation event. Therefore, even if an executive officer were to no longer be employed with the Company as of December 31, 2020, such shares will no longer be subject to the repurchase right contemplated above. The repurchase feature is deemed equivalent to a forfeiture (vesting) provision. The shares shall vest over a period ending December 31, 2020. The stock-based compensation is being recognized to administrative and selling expenses over the vesting period and based on the fair value of the shares on the grant date of $0.40.date.
Advent Technologies Inc.
NotesAs of September 9, 2020, the Company’s Board of Directors and shareholders approved the 2020-2023 Stock Grant Plan (the “2020-2023 Plan”) to reward certain employees and directors of the Unaudited Interim Condensed Consolidated Statements
(All amounts areCompany. The maximum aggregate number of shares that may be issued under this plan is 893,503 common shares. The Company entered into separate Restricted Stock Award Agreements with each participant according to which awards for 893,503 shares of common stock were granted with purchase price $0.01 per share. If the Company does not exercise such repurchase option and unless the Company declines in USD, unless otherwise stated)writing to exercise the repurchase option prior to such time, the repurchase option is automatically deemed exercised at the end of the repurchase window. This limited repurchase right will lapse upon the occurrence of a liquidation event. The repurchase feature is deemed equivalent to a forfeiture (vesting) provision.The shares shall vest over a period ending December 31, 2020. The stock-based compensation is being recognized to administrative and selling expenses over the vesting period and based on the fair value of the shares on the grant date.
A summary of the status of the Company’s non-vested shares as of January 1, 2020 and the movement for the six-monthnine-month periods ended JuneSeptember 30, 2020, is presented below. There were no shares forfeited during the six-monthnine-month periods ended JuneSeptember 30, 2020 and 2019.
| | Number of non- vested shares | | | Grant date fair value per non- vested shares | | | Number of non-vested shares | | Grant date fair value per non- vested shares | |
Balance January 1, 2020 | | | — | | | $ | — | | | $ | - | | $ | - | |
Granted | | | 2,180,199 | | | $ | 0.40 | | | | 2,173,702 | | | 0.40 | |
Vested | | | — | | | | — | | | | - | | | - | |
Balance June 30, 2020 | | | 2,180,199 | | | $ | 0.40 | | |
Balance September 30, 2020 | | | $ | 2,173,702 | | $ | 0.40 | |
The total of 2,173,702 granted and non-vested shares from both Plans, are legally outstanding.
As of January 1, 2019, 2020 there was $nil total unrecognized compensation cost related to non-vested share-based compensation arrangements. As of JuneSeptember 30, 2019 and 2020, there was $nil and $335,312$167,656 total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2018-2020 Plan. As of September 30, 2019 and 2020, there was $nil and $288,429 total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2020-2023 Plan. The amount of $335,312 $456,085, in aggregate from both plans,is expected to be recognized through December 31, 2020.
The amounts of $nil and $176,768,$413,396, represent the stock based compensation expense for both plans for the six-monthnine-month periods ended JuneSeptember 30, 2019 and 2020, respectively and are recorded in “Administrative and selling expenses”, in the accompanying unaudited interim condensed consolidated statements of operations.
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
Revenue, net for the six-monthnine-month periods ended JuneSeptember 30, 2020 and 2019 (unaudited), is analyzed as follows:
| | Six-month periods ended June 30, | | | Nine-month periods ended September 30, | |
Type of goods or service | | 2020 | | | 2019 | | | 2020 | | 2019 | |
Sales of goods | | | 300,620 | | | | 287,858 | | | $ | 526,032 | | $ | 392,264 | |
Total revenue from contracts with customers | | | 300,620 | | | | 287,858 | | | $ | 526,032 | | $ | 392,264 | |
The timing of revenue recognition is analyzed as follows:
| | Six-month periods ended June 30, | | | Nine-month periods ended September 30, | |
Timing of revenue recognition | | 2020 | | | 2019 | | | 2020 | | 2019 | |
Goods and services transferred at a point in time | | | 228,494 | | | | 287,858 | | | $ | 443,183 | | $ | 392,264 | |
Goods and services transferred over time | | | 72,126 | | | | — | | | | 82,849 | | | - | |
Total revenue from contracts with customers | | | 300,620 | | | | 287,858 | | | $ | 526,032 | | $ | 392,264 | |
As at JuneSeptember 30, 2020 and December 31, 2019 contract assets are $70,437$ 128,608 and $51,936.$51,936, respectively. Also, the Company has recognized contract liabilities at an amount of $52,434$ 11,102 and $38,728 as at JuneSeptember 30, 2020 and December 31, 2019, respectively.
Revenue, net for the six-monthnine-month periods ended JuneSeptember 30, 2020 and 2019 (unaudited), included revenues derived from significant customers as follows (in percentages of total revenue, net):
| | Six-month periods ended June 30, | | | Nine-month periods ended September 30, | |
Customer | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
A | | | 35 | % | | | — | | | | 34 | % | | | 16 | % |
B | | | 18 | % | | | — | | | | 34 | % | | 18 | % |
C | | | 16 | % | | | 32 | % | | | 16 | % | | 21 | % |
D | | | | - | | | 20 | % |
13. | Administrative and selling expenses: |
Administrative and selling expenses for the nine-month periods ended September 30, 2020 and 2019 (unaudited), respectively, are analyzed as follows:
| | Nine-month periods ended September 30, | |
| | 2020 | | | 2019 | |
Administrative expenses | | $ | 1,509,205 | | | $ | 552,838 | |
Selling and distribution expenses | | | 127,244 | | | | 109,459 | |
Total administrative and selling expenses | | $ | 1,636,449 | | | $ | 662,297 | |
Administrative expenses | | Nine-month periods ended September 30, | |
| | 2020 | | | 2019 | |
Staff remuneration and expenses | | $ | 743,423 | | | $ | 481,621 | |
Third party fees and expenses | | | 300,327 | | | | 1,472 | |
Compensation expenses for stock grant plans | | | 413,396 | | | | - | |
Various expenses | | | 44,319 | | | | 63,972 | |
Depreciation of PPE | | | 7,740 | | | | 5,773 | |
Total administrative expenses | | $ | 1,509,205 | | | $ | 552,838 | |
Selling and distribution expenses | | Nine-month periods ended September 30, | |
| | 2020 | | | 2019 | |
Staff remuneration and expenses | | $ | 67,814 | | | $ | 61,204 | |
Rentals | | | 20,318 | | | | 9,286 | |
Various expenses | | | 39,112 | | | | 38,969 | |
Total selling and distribution expenses | | $ | 127,244 | | | $ | 109,459 | |
Finance costs for the nine-month periods ended September 30, 2020 and 2019 (unaudited), respectively, are analyzed as follows:
| | Nine-month periods ended September 30, | |
| | 2020 | | | 2019 | |
Bank fees | | | 4,722 | | | | 2,550 | |
Other finance costs | | | 27 | | | | 216 | |
Total finance costs | | | 4,749 | | | | 2,766 | |
| | | | | | | | |
Finance costs - related parties | | $ | - | | | $ | 26,031 | |
Total finance costs – related parties | | $ | - | | | $ | 26,031 | |
Advent Technologies Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts are in USD, unless otherwise stated)
Finance costs for the six-month periods ended June 30, 2020 and 2019 (unaudited), are analyzed as follows:
| | Six-month periods ended June 30, | |
| | 2020 | | | 2019 | |
Bank fees | | | 2,911 | | | | 1,499 | |
Other finance costs | | | 126 | | | | 144 | |
Total finance costs | | | 3,037 | | | | 1,643 | |
Finance costs - related parties | | | — | | | | 17,449 | |
Total finance costs – related parties | | | — | | | | 17,449 | |
14.15. | Fair value measurement: |
The carrying amounts reflected in the condensed consolidated balance sheets of cash and cash equivalents, accounts receivables, net, other current assets, trade and other payables, due to related parties, other current liabilities, income tax payable and convertible promissory notes, approximate their respective fair values due to the short maturity of these instruments.
15.16. | Commitments and contingencies: |
Litigations
The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves significant judgment about future events. There is no material pending or threatened litigation against the Company that remains outstanding as of JuneSeptember 30, 2020 and December 31, 2019.
a) | On October 12, 2020 and as amended on October 19, 2020 the Company entered into a merger agreement with AMCI, under which all shares of Company'sCompany’s common stock, par value $0.001 per share and all Company'sCompany’s convertible preferred shares, par value $0.001 per share, on an as converted basis, issued and outstanding immediately prior to the effective time, will be converted into the right to receive AMCI Class A common stock, par value $0.0001 per share, representing a pro rata share of $250 million in the aggregate, subject to a post-closing working capital adjustment, with each stockholder of the Company being entitled to receive its pro rata share of the total consideration. |
b) | In September 2020, the Company’s Board of Directors and shareholders approved the issuance of 893,503 shares of common stock, pursuant to restricted stock award agreements to reward certain employees, directors and consultants of the Company. |
c) | With the recent and rapid development of the Coronavirus disease (COVID-19) outbreak the world economy entered a period of unprecedented health care crisis that has already caused considerable global disruption in business activities and everyday life. Many countries have adopted extraordinary and economically costly containment measures while certain countries have required companies to limit or even suspend normal business operations, governments, including Greek and US Government, have implemented restrictions on travelling as well as strict quarantine measures. The situation is rapidly evolving and, as such, it is difficult to predict the ultimate severity and long-term impact of the pandemic on the industry and the Company at this time. Management has considered the unique circumstances and the risk exposures of the Company and has concluded that the event is not expected to have an immediate material impact on the business operations. Management will continue to monitor the situation closely in case the period of disruption becomes prolonged. |
The situation is rapidly evolving and, as such, it is difficult to predict the ultimate severity and long-term impact
ANNEX A
ANNEX AAGREEMENT AND PLAN OF MERGER
by and among
AMCI ACQUISITION CORP.,
as the Purchaser,
AMCI MERGER SUB CORP.,
as Merger Sub,
AMCI SPONSOR LLC,
in the capacity as the Purchaser Representative,
VASSILIOS GREGORIOU,
in the capacity as the Seller Representative,
and
ADVENT TECHNOLOGIES INC.,
as the Company,
Dated as of October 12, 2020
TABLE OF CONTENTS
| Page |
I. MERGER | A-2 |
1.1. Merger | A-2 |
1.2. Effective Time | A-2 |
1.3. Effect of the Merger | A-2 |
1.4. Tax Treatment | A-2 |
1.5. Certificate of Incorporation and Bylaws | A-2 |
1.6. Directors and Officers of the Surviving Corporation | A-2 |
1.7. Amended Purchaser Charter | A-2 |
1.8. Merger Consideration | A-3 |
1.9. Effect of Merger on Company Securities | A-3 |
1.10. Surrender of Company Stock and Disbursement of Merger Consideration | A-3 |
1.11. Effect of Transaction on Merger Sub Stock | A-5 |
1.12. Closing Calculations | A-5 |
1.13. Taking of Necessary Action; Further Action | A-5 |
1.14. Appraisal and Dissenter’s Rights | A-5 |
| |
II. CLOSING | A-5 |
2.1. Closing | A-5 |
| |
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER | A-6 |
3.1. Organization and Standing | A-6 |
3.2. Authorization; Binding Agreement | A-6 |
3.3. Governmental Approvals | A-6 |
3.4. Non-Contravention | A-7 |
3.5. Capitalization | A-7 |
3.6. SEC Filings and Purchaser Financials | A-8 |
3.7. Absence of Certain Changes | A-8 |
3.8. Compliance with Laws | A-9 |
3.9. Actions; Orders; Permits | A-9 |
3.10. Taxes and Returns | A-9 |
3.11. Employees and Employee Benefit Plans | A-9 |
3.12. Properties | A-9 |
3.13. Material Contracts | A-9 |
3.14. Transactions with Affiliates | A-10 |
3.15. Merger Sub Activities | A-10 |
3.16. Investment Company Act | A-10 |
3.17. Finders and Brokers | A-10 |
3.18. Ownership of Merger Consideration | A-10 |
3.19. Certain Business Practices | A-10 |
3.20. Insurance | A-11 |
3.21. Independent Investigation | A-11 |
3.22. Information Supplied | A-11 |
3.23. Trust Account | A-12 |
| |
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY | A-12 |
4.1. Organization and Standing | A-12 |
4.2. Authorization; Binding Agreement | A-13 |
4.3. Capitalization | A-13 |
4.4. Subsidiaries | A-14 |
4.5. Governmental Approvals | A-14 |
| Page |
4.6. Non-Contravention | A-14 |
4.7. Financial Statements | A-15 |
4.8. Absence of Certain Changes | A-16 |
4.9. Compliance with Laws | A-16 |
4.10. Company Permits | A-16 |
4.11. Litigation | A-16 |
4.12. Material Contracts | A-16 |
4.13. Intellectual Property | A-18 |
4.14. Taxes and Returns | A-20 |
4.15. Real Property | A-21 |
4.16. Personal Property | A-21 |
4.17. Title to and Sufficiency of Assets | A-21 |
4.18. Employee Matters | A-21 |
4.19. Benefit Plans | A-22 |
4.20. Environmental Matters | A-24 |
4.21. Transactions with Related Persons | A-25 |
4.22. Insurance | A-25 |
4.23. Product Warranty and Liability | A-26 |
4.24. Books and Records | A-26 |
4.25. Top Customers and Suppliers | A-26 |
4.26. Certain Business Practices | A-26 |
4.27. Investment Company Act | A-27 |
4.28. Finders and Brokers | A-27 |
4.29. Independent Investigation | A-27 |
4.30. Information Supplied | A-27 |
| |
V. COVENANTS | A-27 |
5.1. Access and Information | A-27 |
5.2. Conduct of Business of the Company | A-28 |
5.3. Conduct of Business of the Purchaser | A-30 |
5.4. Annual and Interim Financial Statements | A-32 |
5.5. Purchaser Public Filings | A-32 |
5.6. No Solicitation | A-32 |
5.7. No Trading | A-33 |
5.8. Notification of Certain Matters | A-33 |
5.9. Efforts | A-33 |
5.10. Tax Matters | A-35 |
5.11. Transfer Taxes | A-35 |
5.12. Further Assurances | A-35 |
5.13. The Registration Statement | A-35 |
5.14. Company Stockholder Meeting | A-37 |
5.15. Public Announcements | A-37 |
5.16. Confidential Information | A-38 |
5.17. Documents and Information | A-39 |
5.18. Post-Closing Board of Directors and Executive Officers | A-39 |
5.19. Indemnification of Directors and Officers; Tail Insurance | A-39 |
5.20. Trust Account Proceeds | A-40 |
5.21. PIPE Investment | A-40 |
5.22. Required Extension | A-40 |
5.23. Section 16 Matters | A-40 |
| Page |
VI. CLOSING CONDITIONS | A-41 |
6.1. Conditions to Each Party’s Obligations | A-41 |
6.2. Conditions to Obligations of the Company | A-41 |
6.3. Conditions to Obligations of the Purchaser | A-42 |
6.4. Frustration of Conditions | A-43 |
| |
VII. TERMINATION AND EXPENSES | A-44 |
7.1. Termination | A-44 |
7.2. Effect of Termination | A-45 |
7.3. Fees and Expenses | A-45 |
| |
VIII. WAIVERS AND RELEASES | A-45 |
8.1. Waiver of Claims Against Trust | A-45 |
| |
IX. MISCELLANEOUS | A-46 |
9.1. No Survival | A-46 |
9.2. Notices | A-46 |
9.3. Binding Effect; Assignment | A-48 |
9.4. Third Parties | A-48 |
9.5. Governing Law; Jurisdiction | A-48 |
9.6. WAIVER OF JURY TRIAL | A-48 |
9.7. Specific Performance | A-48 |
9.8. Severability | A-49 |
9.9. Amendment | A-49 |
9.10. Waiver | A-49 |
9.11. Entire Agreement | A-49 |
9.12. Interpretation | A-50 |
9.13. Counterparts | A-50 |
9.14. Purchaser Representative | A-50 |
9.15. Seller Representative | A-51 |
9.16. Legal Representation | A-53 |
9.17. Non-Recourse | A-53 |
| |
X. DEFINITIONS | A-54 |
10.1. Certain Definitions | A-54 |
10.2. Section References | A-60 |
INDEX OF EXHIBITS
Exhibit | | Description |
| | |
Exhibit A | | Form of Voting Agreement |
| | |
Exhibit B | | Form of Lock-Up Agreement |
| | |
Exhibit C | | Form of Non-Competition Agreement |
| | |
Exhibit D | | Employment Agreements |
| | |
Exhibit E | | Sponsor Warrant Letter |
| | |
Exhibit F | | Form of Letter of Transmittal |
| | |
Exhibit G | | Form of Incentive Plan |
| | |
Exhibit H | | Form of Transaction Bonus Agreement |
AGREEMENT AND PLAN OF MERGER
by and among
AMCI ACQUISITION CORP.,
as the Purchaser,
AMCI MERGER SUB CORP.,
as Merger Sub,
AMCI SPONSOR LLC,
in the capacity as the Purchaser Representative,
VASSILIOS GREGORIOU,
in the capacity as the Seller Representative,
and
ADVENT TECHNOLOGIES INC.,
as the Company,
Dated as of October 12, 2020
| Page |
I. MERGER | A-2 |
1.1. Merger | A-2 |
1.2. Effective Time | A-2 |
1.3. Effect of the Merger | A-2 |
1.4. Tax Treatment | A-2 |
1.5. Certificate of Incorporation and Bylaws | A-2 |
1.6. Directors and Officers of the Surviving Corporation | A-2 |
1.7. Amended Purchaser Charter | A-2 |
1.8. Merger Consideration | A-3 |
1.9. Effect of Merger on Company Securities | A-3 |
1.10. Surrender of Company Stock and Disbursement of Merger Consideration | A-3 |
1.11. Effect of Transaction on Merger Sub Stock | A-5 |
1.12. Closing Calculations | A-5 |
1.13. Taking of Necessary Action; Further Action | A-5 |
1.14. Appraisal and Dissenter’s Rights | A-5 |
| |
II. CLOSING | A-5 |
2.1. Closing | A-5 |
| |
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER | A-6 |
3.1. Organization and Standing | A-6 |
3.2. Authorization; Binding Agreement | A-6 |
3.3. Governmental Approvals | A-6 |
3.4. Non-Contravention | A-6 |
3.5. Capitalization | A-7 |
3.6. SEC Filings and Purchaser Financials | A-8 |
3.7. Absence of Certain Changes | A-8 |
3.8. Compliance with Laws | A-9 |
3.9. Actions; Orders; Permits | A-9 |
3.10. Taxes and Returns | A-9 |
3.11. Employees and Employee Benefit Plans | A-9 |
3.12. Properties | A-9 |
3.13. Material Contracts | A-9 |
3.14. Transactions with Affiliates | A-10 |
3.15. Merger Sub Activities | A-10 |
3.16. Investment Company Act | A-10 |
3.17. Finders and Brokers | A-10 |
3.18. Ownership of Merger Consideration | A-10 |
3.19. Certain Business Practices | A-10 |
3.20. Insurance | A-11 |
3.21. Independent Investigation | A-11 |
3.22. Information Supplied | A-11 |
3.23. Trust Account | A-12 |
| |
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY | A-12 |
4.1. Organization and Standing | A-12 |
4.2. Authorization; Binding Agreement | A-12 |
4.3. Capitalization | A-13 |
4.4. Subsidiaries | A-14 |
4.5. Governmental Approvals | A-14 |
| Page |
4.6. Non-Contravention | A-14 |
4.7. Financial Statements | A-14 |
4.8. Absence of Certain Changes | A-16 |
4.9. Compliance with Laws | A-16 |
4.10. Company Permits | A-16 |
4.11. Litigation | A-16 |
4.12. Material Contracts | A-16 |
4.13. Intellectual Property | A-18 |
4.14. Taxes and Returns | A-20 |
4.15. Real Property | A-21 |
4.16. Personal Property | A-21 |
4.17. Title to and Sufficiency of Assets | A-21 |
4.18. Employee Matters | A-21 |
4.19. Benefit Plans | A-22 |
4.20. Environmental Matters | A-24 |
4.21. Transactions with Related Persons | A-25 |
4.22. Insurance | A-25 |
4.23. Product Warranty and Liability | A-26 |
4.24. Books and Records | A-26 |
4.25. Top Customers and Suppliers | A-26 |
4.26. Certain Business Practices | A-26 |
4.27. Investment Company Act | A-27 |
4.28. Finders and Brokers | A-27 |
4.29. Independent Investigation | A-27 |
4.30. Information Supplied | A-27 |
| |
V. COVENANTS | A-27 |
5.1. Access and Information | A-27 |
5.2. Conduct of Business of the Company | A-28 |
5.3. Conduct of Business of the Purchaser | A-30 |
5.4. Annual and Interim Financial Statements | A-32 |
5.5. Purchaser Public Filings | A-32 |
5.6. No Solicitation | A-32 |
5.7. No Trading | A-33 |
5.8. Notification of Certain Matters | A-33 |
5.9. Efforts | A-33 |
5.10. Tax Matters | A-35 |
5.11. Transfer Taxes | A-35 |
5.12. Further Assurances | A-35 |
5.13. The Registration Statement | A-35 |
5.14. Company Stockholder Meeting | A-37 |
5.15. Public Announcements | A-37 |
5.16. Confidential Information | A-38 |
5.17. Documents and Information | A-39 |
5.18. Post-Closing Board of Directors and Executive Officers | A-39 |
5.19. Indemnification of Directors and Officers; Tail Insurance | A-39 |
5.20. Trust Account Proceeds | A-40 |
5.21. PIPE Investment | A-40 |
5.22. Required Extension | A-40 |
5.23. Section 16 Matters | A-40 |
| Page |
VI. CLOSING CONDITIONS | A-41 |
6.1. Conditions to Each Party’s Obligations | A-41 |
6.2. Conditions to Obligations of the Company | A-41 |
6.3. Conditions to Obligations of the Purchaser | A-42 |
6.4. Frustration of Conditions | A-43 |
| |
VII. TERMINATION AND EXPENSES | A-44 |
7.1. Termination | A-44 |
7.2. Effect of Termination | A-45 |
7.3. Fees and Expenses | A-45 |
| |
VIII. WAIVERS AND RELEASES | A-45 |
8.1. Waiver of Claims Against Trust | A-45 |
| |
IX. MISCELLANEOUS | A-46 |
9.1. No Survival | A-46 |
9.2. Notices | A-46 |
9.3. Binding Effect; Assignment | A-48 |
9.4. Third Parties | A-48 |
9.5. Governing Law; Jurisdiction | A-48 |
9.6. WAIVER OF JURY TRIAL | A-48 |
9.7. Specific Performance | A-48 |
9.8. Severability | A-49 |
9.9. Amendment | A-49 |
9.10. Waiver | A-49 |
9.11. Entire Agreement | A-49 |
9.12. Interpretation | A-49 |
9.13. Counterparts | A-50 |
9.14. Purchaser Representative | A-50 |
9.15. Seller Representative | A-51 |
9.16. Legal Representation | A-52 |
9.17. Non-Recourse | A-53 |
| |
X DEFINITIONS | A-54 |
10.1. Certain Definitions | A-54 |
10.2. Section References | A-60 |
INDEX OF EXHIBITS
Exhibit | | Description |
| | |
Exhibit A | | Form of Voting Agreement |
| | |
Exhibit B | | Form of Lock-Up Agreement |
| | |
Exhibit C | | Form of Non-Competition Agreement |
| | |
Exhibit D | | Employment Agreements |
| | |
Exhibit E | | Sponsor Warrant Letter |
| | |
Exhibit F | | Form of Letter of Transmittal |
| | |
Exhibit G | | Form of Incentive Plan |
| | |
Exhibit H | | Form of Transaction Bonus Agreement |
AGREEMENT AND PLAN OF MERGERThis Agreement and Plan of Merger (this “Agreement”) is made and entered into as of October 12, 2020 by and among (i) AMCI Acquisition Corp., a company incorporated in Delaware (together with its successors, the “Purchaser”), (ii) AMCI Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), (iii) AMCI Sponsor LLC, a Delaware limited liability company, in the capacity as the representative from and after the Effective Time (as defined below) for the stockholders of the Purchaser (other than the Company Stockholders (as defined below) as of immediately prior to the Effective Time and their successors and assignees) in accordance with the terms and conditions of this Agreement (the “Purchaser Representative”), (iv) Vassilios Gregoriou, in the capacity as the representative from and after the Effective Time for the Company Stockholders (as defined below) as of immediately prior to the Effective Time in accordance with the terms and conditions of this Agreement (the “Seller Representative”), and (v) Advent Technologies Inc., a Delaware corporation (the “Company”). The Purchaser, Merger Sub, the Purchaser Representative, the Seller Representative and the Company are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties”.
RECITALS:
A. The Company, directly and indirectly through its subsidiaries, is in the business of developing, producing and selling fuel cells that cleanly convert methanol, natural gas and hydrogen into electricity;
B. The Purchaser owns all of the issued and outstanding capital stock of Merger Sub, which was formed for the sole purpose of the Merger (as defined below);
C. The Parties intend to enter into a business combination transaction pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”), as a result of which all of the issued and outstanding capital stock of the Company immediately prior to the Effective Time, shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right for each Company Stockholder to receive its Pro Rata Share (as defined herein) of the Merger Consideration (as defined herein), all upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the Delaware General Corporation Law (as amended, the “DGCL”), all in accordance with the terms of this Agreement;
D. The boards of directors of the Company, the Purchaser and Merger Sub have each (i) determined that the Merger is fair, advisable and in the best interests of their respective companies and stockholders, (ii) approved this Agreement and the transactions contemplated hereby, including the Merger, upon the terms and subject to the conditions set forth herein, and (iii) determined to recommend to their respective stockholders the approval and adoption of this Agreement and the transactions contemplated hereby, including the Merger;
E. The Purchaser has received voting and support agreements in the form attached as Exhibit A hereto (collectively, the “Voting Agreements”) signed by the Company and certain of the holders of Company Stock (as defined herein) indicating the agreement of such Company Stockholders to approve the Merger and the other transactions contemplated by this Agreement);
F. Prior to or simultaneously with the execution and delivery of this Agreement, certain Company Stockholders have each entered into (a) a Lock-Up Agreement with Purchaser and the Purchaser Representative, the form of which is attached as Exhibit B hereto (each, a “Lock-Up Agreement”) and (b) a Non-Competition and Non-Solicitation Agreement in favor of Purchaser and the Company, the form of which is attached as Exhibit C hereto (each, a “Non-Competition Agreement”), each of which agreements described in clauses (a) and (b) above will become effective as of the Closing;
G. Prior to or simultaneously with the execution and delivery of this Agreement, certain members of the Company’s management team have entered into Transaction Bonus Agreements, the form of which is attached as Exhibit H hereto (each, a “Transaction Bonus Agreement”), each of which will become effective as of the Closing, for aggregate cash bonus payments of $2,955,208 payable in connection with the Closing;
H. Prior to or simultaneously with the execution and delivery of this Agreement, each of the Key Executives have entered into new employment agreements with the Company, in each case effective as of the Closing (the “Employment Agreements”), copies of which are attached as Exhibit D hereto and which will be assumed by Purchaser in connection with the Closing;
I. Prior to or simultaneously with the execution and delivery of this Agreement, the Purchaser’s sponsor AMCI Sponsor LLC, a Delaware limited liability company (the
“Sponsor”) is entering into a letter agreement with the Purchaser and the Company (the
“Sponsor Warrant Letter”), a copy of which is attached as
Exhibit E hereto, pursuant to which the Sponsor is agreeing to forfeit one-third (1/3
rd) of the Purchaser Private Warrants that it owns as of the Closing (the
“Forfeited Warrants”);
J. The Parties intend that the Merger will qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code (as defined herein); and
L. Certain capitalized terms used herein are defined in Article X hereof.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereto agree as follows:
MERGER
1.1
Merger. At the Effective Time, and subject to and upon the terms and conditions of this Agreement, and in accordance with the applicable provisions of the DGCL, Merger Sub and the Company shall consummate the Merger, pursuant to which Merger Sub shall be merged with and into the Company, following which the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation. The Company, as the surviving corporation after the Merger, is hereinafter sometimes referred to as the
“Surviving Corporation” (provided, that references to the Company for periods after the Effective Time shall include the Surviving Corporation).
1.2
Effective Time. The Parties hereto shall cause the Merger to be consummated by filing the Certificate of Merger for the
mergerMerger of Merger Sub with and into the Company (the
“Certificate of Merger”) with the Secretary of State of the State of Delaware in such form as is required by, and executed in accordance with, the relevant provisions of the DGCL and mutually agreed by the Parties (the time of such filing, or such later time as may be specified in the Certificate of Merger, being the
“Effective Time”).
1.3
Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate of Merger and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of Merger Sub and the Company shall become the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Surviving Corporation, which shall include the assumption by the Surviving Corporation of any and all agreements, covenants, duties and obligations of Merger Sub and the Company set forth in this Agreement to be performed after the Effective Time.
1.4
Tax Treatment. For federal income tax purposes, the Merger is intended to constitute a “reorganization” within the meaning of Section 368 of the Code. The Parties adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
1.5
Certificate of Incorporation and Bylaws. At the Effective Time, the Certificate of Incorporation and Bylaws of the Company, each as in effect immediately prior to the Effective Time, shall automatically be amended and restated in their entirety to read identically to the Certificate of Incorporation and Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, and such amended and restated Certificate of Incorporation and Bylaws shall become the respective Certificate of Incorporation and Bylaws of the Surviving Corporation, except that the name of the Surviving Corporation in such Certificate of Incorporation and Bylaws shall be amended to be “Advent Technologies Inc.” or such other name as agreed to by the Company and Purchaser.
1.6
Directors and Officers of the Surviving Corporation. At the Effective Time, the board of directors and executive officers of the Surviving Corporation shall be the board of directors and executive officers of the Purchaser, after giving effect to
Section 5.18, each to hold office in accordance with the Certificate of Incorporation and Bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal.
1.7
Amended Purchaser Charter. Effective upon the Effective Time, the Purchaser shall amend and restate its Certificate of Incorporation in a form to be agreed upon by the Company and the Purchaser, acting reasonably (the
“Amended Purchaser Charter”), which shall, among other matters, amend the Purchaser’s Certificate of Incorporation to (i) provide that the name of the Purchaser shall be changed to “Advent Technologies Holdings Inc.”, or such other name as mutually agreed to by the Purchaser and the Company, (ii) provide for size and structure of the Post-Closing Purchaser Board in accordance with
Section 5.18, and (iii) remove and change certain provisions in the Certificate of Incorporation related to the Purchaser’s status as a blank check company.
1.8
Merger Consideration. As consideration for the Merger, the Company Stockholders (including, for the avoidance of doubt, the holders of any Company Convertible Securities who convert or exercise their Company Convertible Securities into shares of Company Stock prior to the Closing) collectively shall be entitled to receive from the Purchaser, in the aggregate, a number of shares of Purchaser Common Stock with an aggregate value equal to (the
“Merger Consideration”) (i) Two Hundred Fifty Million U.S. Dollars ($250,000,000), minus (ii) the amount of Closing Net Indebtedness, with each share of Purchaser Common Stock valued for such purposes at Ten U.S. Dollars ($10.00) (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing, the
“Merger Consideration Price Per Share”).
1.9
Effect of Merger on Company Securities. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holders of any Company Securities or the holders of any shares of capital stock of the Purchaser or Merger Sub:
(a) Company Stock. Subject to clause (b) below, all shares of Company Stock issued and outstanding immediately prior to the Effective Time will automatically be cancelled and cease to exist in exchange for the right to receive the Merger Consideration, with each Company Stockholder being entitled to receive its Pro Rata Share of the Merger Consideration, without interest, upon delivery of the Transmittal Documents in accordance with Section 1.10. All shares of Company Preferred Stock will be treated on an as-converted to Company Common Stock basis. As of the Effective Time, each Company Stockholder shall cease to have any other rights in and to the Company or the Surviving Corporation (other than the rights set forth in Section 1.14 below).
(b) Treasury Stock. Notwithstanding clause (a) above or any other provision of this Agreement to the contrary, at the Effective Time, if there are any Company Securities that are owned by the Company as treasury shares or any Company Securities owned by any direct or indirect Subsidiary of the Company immediately prior to the Effective Time, such Company Securities shall be canceled and shall cease to exist without any conversion thereof or payment therefor.
(c) Dissenting Shares. Each of the Dissenting Shares issued and outstanding immediately prior to the Effective Time shall be cancelled and cease to exist in accordance with Section 1.14 and shall thereafter represent only the right to receive the applicable payments set forth in Section 1.14.
(d) Company Convertible Securities. Any Company Convertible Security, if not exercised or deemed converted prior to the Effective Time, shall be cancelled, retired and terminated and cease to represent a right to acquire, be exchanged for or convert into shares of Company Stock, and the Company will have no further Liability with respect thereto.
1.10
Surrender of Company Stock and Disbursement of Merger Consideration.
(a) Prior to the Effective Time, the Purchaser shall appoint its transfer agent, Continental Stock Transfer & Trust Company, or another agent reasonably acceptable to the Company (the “Exchange Agent”), for the purpose of exchanging the certificates representing Company Stock (“Company Certificates”) for the Merger Consideration. At or prior to the Effective Time, the Purchaser shall deposit, or cause to be deposited, with the Exchange Agent the Merger Consideration. As promptly as practicable after the date hereof, the Purchaser shall use its reasonable best efforts to send, or to cause the Exchange Agent to send, to each Company Stockholder, a letter of transmittal for use in such exchange, in the form attached hereto as Exhibit F (a “Letter of Transmittal”) (which shall specify that the delivery of Company Certificates in respect of the Merger Consideration shall be effected, and risk of loss and title shall pass, only upon proper delivery of the Company Certificates (or a Lost Certificate Affidavit) to the Exchange Agent).
(b) Each Company Stockholder shall be entitled to receive its Pro Rata Share of the Merger Consideration in respect of the Company Stock represented by the Company Certificate(s) (excluding any shares of Company Stock described in Sections 1.9(b) or 1.9(c)), as soon as reasonably practicable after the Effective Time and after delivery to the Exchange Agent of the following items (collectively, the “Transmittal Documents”): (i) the Company Certificate(s) for its Company Stock (or a Lost Certificate Affidavit), together with a properly completed and duly executed Letter of Transmittal and (ii) such other related documents as may be reasonably requested by the Exchange Agent or the Purchaser. Until so surrendered, each Company Certificate shall represent after the Effective Time for all purposes only the right to receive such portion of the Merger Consideration attributable to such Company Certificate.
(c) If any portion of the Merger Consideration is to be delivered or issued to a Person other than the Person in whose name the surrendered Company Certificate is registered immediately prior to the Effective Time, it shall be a condition to such delivery that (i) the transfer of such Company Stock shall have been permitted in accordance with the terms of the Company’s Organizational Documents and any stockholders agreement with respect to the Company, each as in effect immediately prior to the Effective Time, (ii) such Company Certificate shall be properly endorsed or shall otherwise be in proper form for transfer and, (iii) the recipient of such portion of the Merger Consideration, or the Person in whose name such portion of the Merger Consideration is delivered or issued, shall have already executed and delivered, if a Key Executive or certain other Company Stockholders, counterparts to a Lock-Up Agreement and Non-Competition Agreement, and such other Transmittal Documents as are reasonably deemed necessary by the Exchange Agent or the Purchaser and (iv) the Person requesting such delivery shall pay to the Exchange Agent any transfer or other Taxes required as a result of such delivery to a Person other than the registered holder of such Company Certificate or establish to the reasonable satisfaction of the Exchange Agent that such Tax has been paid or is not payable.
(d) Notwithstanding anything to the contrary contained herein, in the event that any Company Certificate shall have been lost, stolen or destroyed, in lieu of delivery of a Company Certificate to the Exchange Agent, the Company Stockholder may instead deliver to the Exchange Agent an affidavit of lost certificate and indemnity of loss in form and substance reasonably acceptable to the Purchaser (a “Lost Certificate Affidavit”), which at the reasonable discretion of the Purchaser may include a requirement that the owner of such lost, stolen or destroyed Company Certificate deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against the Purchaser or the Surviving Corporation with respect to the shares of Company Stock represented by the Company Certificates alleged to have been lost, stolen or destroyed. Any Lost Certificate Affidavit properly delivered in accordance with this Section 1.10(d) shall be treated as a Company Certificate for all purposes of this Agreement.
(e) After the Effective Time, there shall be no further registration of transfers of Company Stock. If, after the Effective Time, Company Certificates are presented to the Surviving Corporation, the Purchaser or the Exchange Agent, they shall be canceled and exchanged for the applicable portion of the Merger Consideration provided for, and in accordance with the procedures set forth in this Section 1.10. No dividends or other distributions declared or made after the date of this Agreement with respect to Purchaser Common Stock with a record date after the Effective Time will be paid to the holders of any Company Certificates that have not yet been surrendered with respect to the Purchaser Common Stock to be issued upon surrender thereof until the holders of record of such Company Certificates shall surrender such certificates (or provide a Lost Certificate Affidavit), if applicable, and provide the other Transmittal Documents. Subject to applicable Law, following surrender of any such Company Certificates (or delivery of a Lost Certificate Affidavit), if applicable, and delivery of the other Transmittal Documents, Purchaser shall promptly deliver to the record holders thereof, without interest, the certificates representing the Purchaser Common Stock issued in exchange therefor and the amount of any such dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such Purchaser Common Stock.
(f) All securities issued upon the surrender of Company Stock in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Stock. Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 1.10(a) that remains unclaimed by Company Stockholders two (2) years after the Effective Time shall be returned to the Purchaser, upon demand, and any such Company Stockholder who has not exchanged its Company Stock for the applicable portion of the Merger Consideration in accordance with this Section 1.10 prior to that time shall thereafter look only to the Purchaser for payment of the portion of the Merger Consideration in respect of such shares of Company Stock without any interest thereon (but with any dividends paid with respect thereto). Notwithstanding the foregoing, none of the Surviving Corporation, the Purchaser or any Party hereto shall be liable to any Person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.
(g) Notwithstanding anything to the contrary contained herein, no fraction of a share of Purchaser Common Stock will be issued by virtue of the Merger or the transactions contemplated hereby, and each Person who would otherwise be entitled to a fraction of a share of Purchaser Common Stock (after aggregating all fractional shares of Purchaser Common Stock that otherwise would be received by such holder) shall instead be entitled to receive for each such fractional share an amount in cash, without interest, rounded down to the nearest cent, equal to the product of (x) the amount of the fractional share interest to which such holder would otherwise be entitled but for this Section 1.10(g), multiplied by (y) the Merger Consideration Price Per Share.
1.11
Effect of Transaction on Merger Sub Stock. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holders of any Company Securities or the holders of any shares of capital stock of the Purchaser or Merger Sub, each share of Merger Sub Common Stock outstanding immediately prior to the Effective Time shall be converted into an equal number of shares of common stock of the Surviving Corporation, with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.
1.12
Closing Calculations. At least three (3) Business Days prior to the Closing Date, the Company shall deliver to the Purchaser a statement certified by the Company’s chief executive officer (the
“Closing Statement”) setting forth a good faith calculation of the Company’s Closing Net Indebtedness and the resulting Merger Consideration based on such calculation, in reasonable detail including for each component thereof, along with the amount owed to each creditor of any of the Target Companies, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly upon delivering the Closing Statement to the Purchaser, if requested by the Purchaser, the Company will meet with the Purchaser to review and discuss the Closing Statement and the Company will consider in good faith the Purchaser’s comments to the Closing Statement and make any appropriate adjustments to the Closing Statement to reflect any reasonable comments of the Purchaser prior to the Closing, which adjusted Closing Statement, as mutually approved by the Company and the Purchaser both acting reasonably and in good faith, shall thereafter become the Closing Statement for all purposes of this Agreement. The Closing Statement and the determinations contained therein shall be prepared in accordance with the Accounting Principles and otherwise in accordance with this Agreement.
1.13
Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Merger Sub, the officers and directors of the Company and Merger Sub are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
1.14
Appraisal and Dissenter’s Rights. No Company Stockholder who has validly exercised its appraisal rights pursuant to Section 262 of the DGCL (a
“Dissenting Stockholder”) with respect to its Company Stock (such shares,
“Dissenting Shares”) shall be entitled to receive any portion of the Merger Consideration with respect to the Dissenting Shares owned by such Dissenting Stockholder unless and until such Dissenting Stockholder shall have effectively withdrawn or lost its appraisal rights under the DGCL. Each Dissenting Stockholder shall be entitled to receive only the payment resulting from the procedure set forth in Section 262 of the DGCL with respect to the Dissenting Shares owned by such Dissenting Stockholder. The Company shall give the Purchaser and the Purchaser Representative (i) prompt notice of any written demands for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to applicable Laws that are received by the Company relating to any Dissenting Stockholder’s rights of appraisal and (ii) the opportunity to direct all negotiations and proceedings with respect to demand for appraisal under the DGCL. The Company shall not, except with the prior written consent of the Purchaser and the Purchaser Representative, voluntarily make any payment with respect to any demands for appraisal, offer to settle or settle any such demands or approve any withdrawal of any such demands. Notwithstanding anything to the contrary contained in this Agreement, for all purposes of this Agreement, the Merger Consideration shall be reduced by the Pro Rata Share of any Dissenting Stockholders attributable to any Dissenting Shares and the Dissenting Stockholders shall have no rights to any portion of the Merger Consideration with respect to any Dissenting Shares.
CLOSING
2.1
Closing. Subject to the satisfaction or waiver of the conditions set forth in
Article VI, the consummation of the transactions contemplated by this Agreement (the
“Closing”) shall be deemed to take place at the offices of Ellenoff Grossman & Schole, LLP (
“EGS”), counsel to the Purchaser, 1345 Avenue of the Americas, New York, NY 10105, on a date and at a time to be agreed upon by Purchaser and the Company, which date shall be no later than the second (2
nd) Business Day after all the Closing conditions to this Agreement have been satisfied or waived, or at such other date, time or place as the Purchaser and the Company may agree (the date and time at which the Closing is actually held being the
“Closing Date”).
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Except as set forth in (i) the disclosure schedules delivered by the Purchaser to the Company on the date hereof (the “Purchaser Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, or (ii) the SEC Reports that are available on the SEC’s website through EDGAR at least one (1) Business Day prior to the date hereof (excluding any risk factors, forward-looking statements or similar predictive statements) (it being acknowledged that nothing disclosed in such a SEC Report will be deemed to modify or qualify the representations and warranties set forth in Section 3.1 (Organization and Standing), Section 3.2 (Authorization; Binding Agreement) and Section 3.5 (Capitalization)), the Purchaser represents and warrants to the Company, as of the date hereof and as of the Closing, as follows:
3.1
Organization and Standing. The Purchaser is a company duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. The Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Purchaser is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed or in good standing can be cured without material cost or expense. The Purchaser has heretofore made available to the Company accurate and complete copies of its Organizational Documents, as currently in effect. The Purchaser is not in violation of any provision of its Organizational Documents in any material respect.
3.2
Authorization; Binding Agreement. The Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform the Purchaser’s obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Purchaser
ShareholderStockholder Approval. The execution and delivery of this Agreement and each Ancillary Document to which it is a party and the consummation of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by the board of directors of the Purchaser, and (b) other than the Required Purchaser
ShareholderStockholder Approval, no other corporate proceedings, other than as set forth elsewhere in the Agreement, on the part of the Purchaser are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which the Purchaser is a party shall be when delivered, duly and validly executed and delivered by the Purchaser and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement of creditors’ rights generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and the fact that equitable remedies or relief (including the remedy of specific performance) are subject to the discretion of the court from which such relief may be sought (collectively, the
“Enforceability Exceptions”).
3.3
Governmental Approvals. Except as otherwise described in
Schedule 3.3, no Consent of or with any Governmental Authority, on the part of the Purchaser is required to be obtained or made in connection with the execution, delivery or performance by the Purchaser of this Agreement and each Ancillary Document to which it is a party or the consummation by the Purchaser of the transactions contemplated hereby and thereby, other than (a) pursuant to Antitrust Laws, (b) such filings as contemplated by this Agreement, (c) any filings required with Nasdaq or the SEC with respect to the transactions contemplated by this Agreement, (d) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, and the rules and regulations thereunder, and (e) where the failure to obtain or make such Consents or to make such filings or notifications, would not reasonably be expected to have a Material Adverse Effect on the Purchaser.
3.4
Non-Contravention. Except as otherwise described in
Schedule 3.4, the execution and delivery by the Purchaser of this Agreement and each Ancillary Document to which it is a party, the consummation by the Purchaser of the transactions contemplated hereby and thereby, and compliance by the Purchaser with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the Purchaser’s Organizational Documents, (b) subject to obtaining the Consents from Governmental Authorities referred to in
Section 3.3 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to the Purchaser or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Purchaser under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the properties or assets of the Purchaser under, (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any Purchaser Material Contract, except for any deviations from any of the foregoing clauses (a), (b) or (c) that would not reasonably be expected to have a Material Adverse Effect on the Purchaser.
(a) Purchaser is authorized to issue a total of 111,000,000 shares of capital stock, par value $0.0001 per share, consisting of 110,000,000 shares of Purchaser Common Stock and 1,000,000 shares of Purchaser Preferred Stock. The issued and outstanding Purchaser Securities as of the date of this Agreement are set forth on Schedule 3.5(a). As of the date of this Agreement, there are no issued or outstanding shares of Purchaser Preferred Stock. All outstanding shares of Purchaser Common Stock are duly authorized, validly issued, fully paid and non-assessable and are not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, Purchaser’s Organizational Documents or any Contract to which Purchaser is a party. None of the outstanding Purchaser Securities has been issued in violation of any applicable securities Laws.
(b) Prior to giving effect to the merger,Merger, Merger Sub is authorized to issue 1,000 shares of Merger Sub Common Stock, of which 1,000 shares are issued and outstanding, and all of which are owned by the Purchaser. Prior to giving effect to the transactions contemplated by this Agreement, other than Merger Sub, Purchaser does not have any Subsidiaries or own any equity interests in any other Person.
(c) Except as set forth in Schedule 3.5(a) or Schedule 3.5(c) or as contemplated by the Warrant Amendment, there are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights or (iii) subscriptions or other rights, agreements, arrangements, Contracts or commitments of any character (other than this Agreement and the Ancillary Documents), (A) relating to the issued or unissued shares of Purchaser or (B) obligating Purchaser to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options or shares or securities convertible into or exchangeable for such shares, or (C) obligating Purchaser to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment for such capital shares. Other than the Redemption (or any redemption in connection with an Extension), the Warrant Amendment or as expressly set forth in this Agreement, there are no outstanding obligations of Purchaser to repurchase, redeem or otherwise acquire any shares of Purchaser or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any Person. Except as set forth in Schedule 3.5(c), there are no shareholdersstockholders agreements, voting trusts or other agreements or understandings to which Purchaser is a party with respect to the voting of any shares of Purchaser.
(d) All Indebtedness of Purchaser as of the date of this Agreement is disclosed on Schedule 3.5(d). No Indebtedness of Purchaser contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by Purchaser or (iii) the ability of Purchaser to grant any Lien on its properties or assets.
(e) Since the date of formation of Purchaser, and except as contemplated by this Agreement, Purchaser has not declared or paid any distribution or dividend in respect of its shares and has not repurchased, redeemed or otherwise acquired any of its shares, and Purchaser’s board of directors has not authorized any of the foregoing.
3.6
SEC Filings and Purchaser Financials.
(a) The Purchaser, since the IPO, has filed all forms, reports, schedules, statements, registration statements, prospectuses and other documents required to be filed or furnished by the Purchaser with the SEC under the Securities Act and/or the Exchange Act, together with any amendments, restatements or supplements thereto, and will file all such forms, reports, schedules, statements and other documents required to be filed subsequent to the date of this Agreement. Except to the extent available on the SEC’s web site through EDGAR, the Purchaser has delivered to the Company copies in the form filed with the SEC of all of the following: (i) the Purchaser’s annual reports on Form 10-K for each fiscal year of the Purchaser beginning with the first year the Purchaser was required to file such a form, (ii) the Purchaser’s quarterly reports on Form 10-Q for each fiscal quarter that the Purchaser filed such reports to disclose its quarterly financial results in each of the fiscal years of the Purchaser referred to in clause (i) above, (iii) all other forms, reports, registration statements, prospectuses and other documents (other than preliminary materials) filed by the Purchaser with the SEC since the beginning of the first fiscal year referred to in clause (i) above (the forms, reports, registration statements, prospectuses and other documents referred to in clauses (i), (ii) and (iii) above, whether or not available through EDGAR, are, collectively, the “SEC Reports”) and (iv) all certifications and statements required by (A) Rules 13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C. §1350 (Section 906 of SOX) with respect to any report referred to in clause (i) above (collectively, the “Public Certifications”). The SEC Reports (x) were prepared in all material respects in accordance with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations thereunder and (y) did not, as of their respective effective dates (in the case of SEC Reports that are registration statements filed pursuant to the requirements of the Securities Act) and at the time they were filed with the SEC (in the case of all other SEC Reports) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Public Certifications are each true as of their respective dates of filing. As used in this Section 3.6, the term “file” shall be broadly construed to include any manner permitted by SEC rules and regulations in which a document or information is furnished, supplied or otherwise made available to the SEC. As of the date of this Agreement, (A) the Purchaser Public Units, the Purchaser Common Stock and the Purchaser Public Warrants are listed on Nasdaq, (B) the Purchaser has not received any written deficiency notice from Nasdaq relating to the continued listing requirements of such Purchaser Securities, (C) there are no Actions pending or, to the Knowledge of the Purchaser, threatened against the Purchaser by the Financial Industry Regulatory Authority with respect to any intention by such entity to suspend, prohibit or terminate the quoting of such Purchaser Securities on Nasdaq and (D) such Purchaser Securities are in compliance with all of the applicable corporate governance rules of Nasdaq.
(b) The financial statements and notes of the Purchaser contained or incorporated by reference in the SEC Reports (the “Purchaser Financials”), fairly present in all material respects the financial position and the results of operations, changes in shareholders’stockholders’ equity, and cash flows of the Purchaser at the respective dates of and for the periods referred to in such financial statements, all in accordance with (i) GAAP methodologies applied on a consistent basis throughout the periods involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may be indicated in the notes thereto and for the omission of notes and audit adjustments in the case of unaudited quarterly financial statements to the extent permitted by Regulation S-X or Regulation S-K, as applicable).
(c) Except as and to the extent reflected or reserved against in the Purchaser Financials, the Purchaser has not incurred any Liabilities or obligations of the type required to be reflected on a balance sheet in accordance with GAAP that are not adequately reflected or reserved on or provided for in the Purchaser Financials, other than Liabilities of the type required to be reflected on a balance sheet in accordance with GAAP that have been incurred since the Purchaser’s formation in the ordinary course of business.
3.7
Absence of Certain Changes. As of the date of this Agreement, except as set forth in
Schedule 3.7, the Purchaser has, (a) since its formation, conducted no business other than its formation, the public offering of its securities (and the related private offerings), public reporting and its search for an initial Business Combination as described in the IPO Prospectus (including the investigation of the Target Companies and the negotiation and execution of this Agreement) and related activities and (b) since December 31, 2019, not been subject to a Material Adverse Effect on the Purchaser.
3.8
Compliance with Laws. The Purchaser is, and has since its formation been, in compliance with all Laws applicable to it and the conduct of its business except for such noncompliance which would not reasonably be expected to have a Material Adverse Effect on the Purchaser, and the Purchaser has not received written notice alleging any violation of applicable Law in any material respect by the Purchaser.
3.9
Actions; Orders; Permits. There is no pending or, to the Knowledge of the Purchaser, threatened material Action to which the Purchaser is subject which would reasonably be expected to have a Material Adverse Effect on the Purchaser. There is no material Action that the Purchaser has pending against any other Person. The Purchaser is not subject to any material Orders of any Governmental Authority, nor are any such Orders pending. The Purchaser holds all material Permits necessary to lawfully conduct its business as presently conducted, and to own, lease and operate its assets and properties, all of which are in full force and effect, except where the failure to hold such Consent or for such Consent to be in full force and effect would not reasonably be expected to have a Material Adverse Effect on the Purchaser.
(a) The Purchaser has timely filed, or caused to be timely filed, all material Tax Returns required to be filed by it, which such Tax Returns are accurate and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Purchaser Financials have been established in accordance with GAAP. Schedule 3.10(a) sets forth each jurisdiction where the Purchaser files or is required to file a Tax Return. There are no audits, examinations, investigations or other Actions pending against the Purchaser in respect of any Tax, and the Purchaser has not been notified in writing of any proposed Tax claims or assessments against the Purchaser (other than, in each case, claims or assessments for which adequate reserves in the Purchaser Financials have been established in accordance with GAAP or are immaterial in amount). There are no Liens with respect to any Taxes upon any of the Purchaser’s assets, other than Permitted Liens. The Purchaser has no outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by the Purchaser for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.
(b) Since the date of its formation, the Purchaser has not (i) changed any Tax accounting methods, policies or procedures except as required by a change in Law, (ii) made, revoked, or amended any material Tax election, (iii) filed any amended Tax Returns or claim for refund or (iv) entered into any closing agreement affecting or otherwise settled or compromised any material Tax Liability or refund.
(c) Purchaser is not aware of any fact or circumstance that would reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
3.11
Employees and Employee Benefit Plans. The Purchaser does not (a) have any paid employees or (b) maintain, sponsor, contribute to or otherwise have any Liability under, any Benefit Plans. Neither the execution and delivery of this Agreement or the Ancillary Documents nor the consummation of the transactions contemplated by this Agreement and the Ancillary Documents will (i) result in any payment or benefit (including severance, unemployment compensation, golden parachute, bonus or otherwise) from Purchaser or its Subsidiaries becoming due to any director, officer or employee of Purchaser, or (ii) result in the acceleration of the time of payment or vesting of any such payment or benefit.
3.12
Properties. The Purchaser does not own, license or otherwise have any right, title or interest in any material Intellectual Property. The Purchaser does not own or lease any material real property or material Personal Property.
(a) Except as set forth on Schedule 3.13(a), other than this Agreement and the Ancillary Documents, there are no Contracts to which the Purchaser is a party or by which any of its properties or assets may be bound, subject or affected, which (i) creates or imposes a Liability greater than $200,000, (ii) may not be cancelled by the Purchaser on less than sixty (60) days’ prior notice without payment of a material penalty or termination fee or (iii) prohibits, prevents, restricts or impairs in any material respect any business practice of the Purchaser as its business is currently conducted, any acquisition of material property by the Purchaser, or restricts in any material respect the ability of the Purchaser to engage in business as currently conducted by it or compete with any other Person (each, a “Purchaser Material Contract”). All Purchaser Material Contracts have been made available to the Company other than those that are exhibits to the SEC Reports.
(b) With respect to each Purchaser Material Contract: (i) the Purchaser Material Contract was entered into at arms’ length and in the ordinary course of business; (ii) the Purchaser Material Contract is legal, valid, binding and enforceable in all material respects against the Purchaser and, to the Knowledge of the Purchaser, the other parties thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (iii) the Purchaser is not in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default in any material respect by the Purchaser, or permit termination or acceleration by the other party, under such Purchaser Material Contract; and (iv) to the Knowledge of the Purchaser, no other party to any Purchaser Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by the Purchaser under any Purchaser Material Contract.
3.14
Transactions with Affiliates.
Schedule 3.14 sets forth a true, correct and complete list of the Contracts and arrangements that are in existence as of the date of this Agreement under which there are any existing or future Liabilities or obligations between the Purchaser and any (a) present or former director, officer or employee or Affiliate of the Purchaser, or any immediate family member of any of the foregoing, or (b) record or beneficial owner of more than five percent (5%) of the Purchaser’s outstanding capital stock as of the date hereof.
3.15
Merger Sub Activities. Since its formation, Merger Sub has not engaged in any business activities other than as contemplated by this Agreement, does not own directly or indirectly any ownership, equity, profits or voting interest in any Person and has no assets or Liabilities except those incurred in connection with this Agreement and the Ancillary Documents to which it is a party and the Transactions, and, other than this Agreement and the Ancillary Documents to which it is a party, Merger Sub is not party to or bound by any Contract.
3.16
Investment Company Act. The Purchaser is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, or required to register as an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.
3.17
Finders and Brokers. Except as set forth on
Schedule 3.17, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from the Purchaser, the Target Companies or any of their respective Affiliates in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Purchaser.
Schedule 3.17 sets forth, as of the date of this Agreement, the amounts of any such fees or commissions that are due, or would be due, upon the Closing based on obligations existing as of the date of this Agreement.
3.18
Ownership of Merger Consideration. All shares of Purchaser Common Stock to be issued and delivered to the Company Stockholders as Merger Consideration in accordance with
Article I shall be, upon issuance and delivery of such Purchaser Common Stock, fully paid and non-assessable, free and clear of all Liens, other than restrictions arising from applicable securities Laws, any applicable Lock-Up Agreement, and any Liens incurred by any Company Stockholder, and the issuance and sale of such Purchaser Common Stock pursuant hereto will not be subject to or give rise to any preemptive rights or rights of first refusal.
3.19
Certain Business Practices.
(a) Neither the Purchaser, nor any of its Representatives acting on its behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law, (iii) made any other unlawful payment or (iv) since the formation of the Purchaser, directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the Purchaser or assist it in connection with any actual or proposed transaction.
(b) The operations of the Purchaser are and have been conducted at all times in material compliance with money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving the Purchaser with respect to any of the foregoing is pending or, to the Knowledge of the Purchaser, threatened.
(c) None of the Purchaser or any of its directors or officers, or, to the Knowledge of the Purchaser, any other Representative acting on behalf of the Purchaser is currently (i) identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), the U.S. Department of State, or other applicable Governmental Authority, (ii) organized, resident or located in, or a national of, a comprehensively sanctioned country, or (iii) in the aggregate fifty percent (50%) or greater owned, directly or indirectly, or otherwise controlled, by a Person identified in clauses (i) or (ii); and the Purchaser has not, since its formation, directly or knowingly indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC or the U.S. Department of State.
3.20
Insurance.
Schedule 3.20 lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by the Purchaser relating to the Purchaser or its business, properties, assets, directors, officers and employees, copies of which have been provided to the Company. All premiums due and payable under all such insurance policies have been timely paid and the Purchaser is otherwise in material compliance with the terms of such insurance policies. All such insurance policies are in full force and effect, and to the Knowledge of the Purchaser, there is no threatened termination of, or material premium increase with respect to, any of such insurance policies. There have been no insurance claims made by the Purchaser. The Purchaser has each reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to be material to Purchaser.
3.21
Independent Investigation. The Purchaser has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Target Companies, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Target Companies for such purpose. The Purchaser acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of the Company set forth in this Agreement (including the related portions of the Company Disclosure Schedules) and in any certificate delivered to Purchaser pursuant hereto, and the information provided by or on behalf of the Company for the Registration Statement; and (b) none of the Company nor its respective Representatives have made any representation or warranty as to the Target Companies, or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Company Disclosure Schedules) or in any certificate delivered to Purchaser pursuant hereto.
3.22
Information Supplied. None of the information supplied or to be supplied by the Purchaser expressly for inclusion or incorporation by reference: (a) in any current report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority or stock exchange with respect to the transactions contemplated by this Agreement or any Ancillary Documents; (b) in the Registration Statement; or (c) in the mailings or other distributions to the Purchaser’s stockholders and/or prospective investors with respect to the consummation of the transactions contemplated by this Agreement or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by the Purchaser expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Purchaser makes no representation, warranty or covenant with respect to any information supplied by or on behalf of the Target Companies, the Company Stockholders or any of their respective Affiliates.
3.23
Trust Account. As of the date hereof, Purchaser has an amount of assets in the Trust Account of no less than $153,781,000. The funds held in the Trust Account are invested in U.S. government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act and held in trust pursuant to the Trust Agreement. The Trust Agreement is in full force and effect and is a legal, valid and binding obligation of Purchaser and the Trustee, enforceable in accordance with its terms. The Trust Agreement has not been terminated, repudiated, rescinded, amended, supplemented or modified, in any respect, and no such termination, repudiation, rescission, amendment, supplement or modification is contemplated. There are no separate Contracts, side letters or other arrangements or understandings (whether written or unwritten, express or implied) that would cause the description of the Trust Agreement in the SEC Reports to be inaccurate in any material respect or, to the Knowledge of Purchaser, that would entitle any Person (other than (i) in respect of deferred underwriting commissions in accordance with Purchaser’s underwriting agreement with the IPO Underwriter or Taxes, (ii) the holders of Purchaser Common Stock prior to the Effective Time who shall have elected to redeem their Purchaser Common Stock pursuant to the Purchaser’s Organizational Documents or in connection with an amendment thereof to extend Purchaser’s deadline to consummate a Business Combination or (iii) if Purchaser fails to complete a Business Combination within the allotted time period and liquidates the Trust Account, subject to the terms of the Trust Agreement, Purchaser in limited amounts to permit Purchaser to pay the expenses of the Trust Account’s liquidation and dissolution, and then Purchaser’s public
shareholders)stockholders) to any portion of the funds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account have been released, except to pay Taxes from any interest income earned in the Trust Account, and to redeem Purchaser Common Stock pursuant to the Purchaser’s Organizational Documents, or in connection with an amendment thereof to extend Purchaser’s deadline to consummate a Business Combination. As of the date of this Agreement, there are no Actions pending or, to the Knowledge of Purchaser, threatened with respect to the Trust Account
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedules delivered by the Company to the Purchaser on the date hereof (the “Company Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, the Company hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing, as follows:
4.1
Organization and Standing. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each Subsidiary of the Company is a corporation or other entity duly formed, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each Target Company is duly qualified or licensed and in good standing in the jurisdiction in which it is incorporated or registered and in each other jurisdiction where it does business or operates to the extent that the character of the property owned, or leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.
Schedule 4.1 lists all jurisdictions in which any Target Company is qualified to conduct business and all names other than its legal name under which any Target Company does business as of the date hereof. The Company has provided to the Purchaser accurate and complete copies of its Organizational Documents and the Organizational Documents of each of its Subsidiaries, each as amended to date and as currently in effect. No Target Company is in violation of any provision of its Organizational Documents in any material respect.
4.2
Authorization; Binding Agreement. The Company has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is or is required to be a party, to perform the Company’s obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Company Stockholder Approval. The execution and delivery of this Agreement and each Ancillary Document to which the Company is or is required to be a party and the consummation of the transactions contemplated hereby and thereby, (a) have been duly and validly authorized by the Company’s board of directors in accordance with the Company’s Organizational Documents, the DGCL, any other applicable Law or any Contract to which the Company or any of its
shareholdersstockholders is a party or by which it or its securities are bound and (b) other than the Required Company Stockholder Approval, no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which the Company is or is required to be a party shall be when delivered, duly and validly executed and delivered by the Company and assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions. The Company’s board of directors, by resolutions duly adopted at a meeting duly called and held (i) determined that this Agreement and the Merger and the other transactions contemplated hereby are advisable, fair to, and in the best interests of, the Company and its stockholders, (ii) approved this Agreement and the Merger and the other transactions contemplated by this Agreement in accordance with the DGCL, (iii) directed that this Agreement be submitted to the Company’s stockholders for adoption and (iv) resolved to recommend that the Company stockholders adopt this Agreement. The Voting Agreements delivered by the Company include the Key Executives, and such Voting Agreements are in full force and effect.
(a) The Company is authorized to issue (i) 6,591,595 shares of Company Common Stock, 843,355 of which shares are issued and outstanding, and (ii) 3,408,405 shares of Company Preferred Stock, 2,939,630 of which shares are issued and outstanding. With respect to the Company Preferred Stock, the Company has designated 2,108,405 shares as Series Seed Preferred Stock and 1,300,000 shares as Series A Preferred Stock. Prior to giving effect to the transactions contemplated by this Agreement, all of the issued and outstanding Company Stock and other equity interests of the Company are set forth on Schedule 4.3(a), along with the beneficial and record owners thereof, all of which shares and other equity interests are owned free and clear of any Liens other than those imposed under the Company Charter. All of the outstanding shares and other equity interests of the Company have been duly authorized, are fully paid and non-assessable and not in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, any other applicable Law, the Company Charter or any Contract to which the Company is a party or by which it or its securities are bound. The Company holds no shares or other equity interests of the Company in its treasury. None of the outstanding shares or other equity interests of the Company were issued in violation of any applicable securities Laws. The rights, privileges and preferences of the Company Preferred Stock are as stated in the Company Charter and as provided by the DGCL.
(b) The Company has reserved 893,503 shares of Company Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to the Company Equity Plan, which was duly adopted by the Company’s board of directors and approved by the Company’s stockholders. All of such shares remain available for future awards permitted under the Company Equity Plan. The Company has furnished to the Purchaser complete and accurate copies of the Company Equity Plan. There are no outstanding Company Options. Other than as set forth on Schedule 4.3(b), there are no Company Convertible Securities, or preemptive rights or rights of first refusal or first offer, nor are there any Contracts, commitments, arrangements or restrictions to which the Company or, to the Knowledge of the Company, any of its stockholders is a party or bound relating to any equity securities of the Company, whether or not outstanding. There are no outstanding or authorized equity appreciation, phantom equity or similar rights with respect to the Company. Except as set forth on Schedule 4.3(b), there are no voting trusts, proxies, shareholderstockholder agreements or any other agreements or understandings with respect to the voting of the Company’s equity interests. Except as set forth in the Company Charter, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any equity interests or securities of the Company, nor has the Company granted any registration rights to any Person with respect to the Company’s equity securities. All of the Company’s securities have been granted, offered, sold and issued in compliance with all applicable securities Laws. As a result of the consummation of the transactions contemplated by this Agreement, no equity interests of the Company are issuable and no rights in connection with any interests, warrants, rights, options or other securities of the Company accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
(c) Except as disclosed in the Company Financials, since January 1, 2019, the Company has not declared or paid any distribution or dividend in respect of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the board of directors of the Company has not authorized any of the foregoing.
4.4
Subsidiaries.
Schedule 4.4 sets forth the name of each Subsidiary of the Company, and with respect to each Subsidiary (a) its jurisdiction of organization, (b) its authorized shares or other equity interests (if applicable), and (c) the number of issued and outstanding shares or other equity interests and the record holders and beneficial owners thereof. All of the outstanding equity securities of each Subsidiary of the Company are duly authorized and validly issued, fully paid and non-assessable (if applicable), and were offered, sold and delivered in compliance with all applicable securities Laws, and owned by one or more of the Company or its Subsidiaries free and clear of all Liens (other than those, if any, imposed by such Subsidiary’s Organizational Documents). There are no Contracts to which the Company or any of its Affiliates is a party or bound with respect to the voting (including voting trusts or proxies) of the equity interests of any Subsidiary of the Company other than the Organizational Documents of any such Subsidiary. There are no outstanding or authorized options, warrants, rights, agreements, subscriptions, convertible securities or commitments to which any Subsidiary of the Company is a party or which are binding upon any Subsidiary of the Company providing for the issuance or redemption of any equity interests of any Subsidiary of the Company. There are no outstanding equity appreciation, phantom equity, profit participation or similar rights granted by any Subsidiary of the Company. No Subsidiary of the Company has any limitation, whether by Contract, Order or applicable Law, on its ability to make any distributions or dividends to its equity holders or repay any debt owed to another Target Company. Except for the equity interests of the Subsidiaries listed on
Schedule 4.4, the Company does not own or have any rights to acquire, directly or indirectly, any equity interests of, or otherwise Control, any Person. None of the Company or its Subsidiaries is a participant in any joint venture, partnership or similar arrangement. There are no outstanding contractual obligations of the Company or its Subsidiaries to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.
4.5
Governmental Approvals. Except as otherwise described in
Schedule 4.5, no Consent of or with any Governmental Authority on the part of any Target Company is required to be obtained or made in connection with the execution, delivery or performance by the Company of this Agreement or any Ancillary Documents or the consummation by the Company of the transactions contemplated hereby or thereby other than (a) such filings as are expressly contemplated by this Agreement or (b) pursuant to Antitrust Laws.
4.6
Non-Contravention. Except as otherwise described in
Schedule 4.6, the execution and delivery by the Company (or any other Target Company, as applicable) of this Agreement and each Ancillary Document to which any Target Company is or is required to be a party or otherwise bound, and the consummation by any Target Company of the transactions contemplated hereby and thereby and compliance by any Target Company with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of any Target Company’s Organizational Documents, (b) subject to obtaining the Consents from Governmental Authorities referred to in
Section 4.5 hereof, the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to any Target Company or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by any Target Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the properties or assets of any Target Company under, (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of any Company Material Contract, except in the cases of clauses (b) and (c), as would not individually or in the aggregate reasonably be expected to be material to the Target Companies, taken as a whole, or the ability of the Company to perform its obligations under this Agreement or the Ancillary Documents to which it is or is required to be a party or otherwise bound.
4.7
Financial Statements.
(a) As used herein, the term “Company Financials” means the (i) audited consolidated financial statements of the Target Companies (including, in each case, any related notes thereto), consisting of the consolidated balance sheets of the Target Companies as of December 31, 2019 and December 31, 2018, and the related consolidated audited income statements, changes in stockholder equity and statements of cash flows for the fiscal years then ended, each audited by a PCAOB qualified auditor in accordance with GAAP and PCAOB standards (the “Audited Company Financials”), and (ii) the Company prepared and auditor reviewed financial statements, consisting of the consolidated balance sheet of the Target Companies as of JuneSeptember 30, 2020 (the “Interim Balance Sheet Date”) and the related consolidated income statement, changes in stockholder equity and statement of cash flows for the three (3) months then ended. True and correct copies of the Company Financials have been provided to the Purchaser. The Company Financials (i) accurately reflect the books and records of the Target Companies as of the times and for the periods referred to therein, (ii) were prepared in accordance with GAAP, consistently applied throughout and among the periods involved (except that the unaudited statements exclude the footnote disclosures and other presentation items required for GAAP and exclude year-end adjustments which will not be material in amount), (iii) comply in all material respects with all applicable accounting requirements under the Securities Act and the rules and regulations of the SEC thereunder, and (iv) fairly present in all material respects the consolidated financial position of the Target Companies as of the respective dates thereof and the consolidated results of the operations and cash flows of the Target Companies for the periods indicated. No Target Company has ever been subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.
(b) Each Target Company maintains accurate books and records reflecting its assets and Liabilities and maintains proper and adequate internal accounting controls that provide reasonable assurance that (i) such Target Company does not maintain any off-the-book accounts and that such Target Company’s assets are used only in accordance with such Target Company’s management directives, (ii) transactions are executed with management’s authorization, (iii) transactions are recorded as necessary to permit preparation of the financial statements of such Target Company and to maintain accountability for such Target Company’s assets, (iv) access to such Target Company’s assets is permitted only in accordance with management’s authorization, (v) the reporting of such Target Company’s assets is compared with existing assets at regular intervals and verified for actual amounts, and (vi) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection of accounts, notes and other receivables on a current and timely basis. All of the financial books and records of the Target Companies are complete and accurate in all material respects and have been maintained in the ordinary course consistent with past practice and in accordance with applicable Laws. No Target Company has been subject to or involved in any material fraud that involves management or other employees who have a significant role in the internal controls over financial reporting of any Target Company. In the past three (3) years, no Target Company or its Representatives has received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of any Target Company or its internal accounting controls, including any material written complaint, allegation, assertion or claim that any Target Company has engaged in questionable accounting or auditing practices.
(c) The Target Companies do not have any Indebtedness other than the Indebtedness set forth on Schedule 4.7(c), which schedule sets for the amounts (including principal and any accrued but unpaid interest or other obligations) with respect to such Indebtedness. Except as disclosed on Schedule 4.7(c), no Indebtedness of any Target Company contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by any Target Company, or (iii) the ability of the Target Companies to grant any Lien on their respective properties or assets.
(d) Except as set forth on Schedule 4.7(d), no Target Company is subject to any Liabilities or obligations (required to be reflected on a balance sheet prepared in accordance with GAAP), except for those that are either (i) adequately reflected or reserved on or provided for in the consolidated balance sheet of the Company and its Subsidiaries as of the Interim Balance Sheet Date contained in the Company Financials or (ii) not material and that were incurred after the Interim Balance Sheet Date in the ordinary course of business consistent with past practice (other than Liabilities for breach of any Contract or violation of any Law).
(e) All financial projections with respect to the Target Companies that were delivered by or on behalf of the Company to the Purchaser or its Representatives were prepared in good faith using assumptions that the Company believes to be reasonable.
(f) All accounts, notes and other receivables, whether or not accrued, and whether or not billed, of the Target Companies (the “Accounts Receivable”) arose from sales actually made or services actually performed in the ordinary course of business and represent valid obligations to a Target Company arising from its business. None of the Accounts Receivable are subject to any right of recourse, defense, deduction, return of goods, counterclaim, offset, or set off on the part of the obligor in excess of any amounts reserved therefore on the Company Financials. All of the Accounts Receivable are, to the Knowledge of the Company, fully collectible according to their terms in amounts not less than the aggregate amounts thereof carried on the books of the Target Companies (net of reserves) within ninety (90) days.
4.8
Absence of Certain Changes. Except as set forth on
Schedule 4.8, since December 31, 2019 to the date of this Agreement, each Target Company has (a) conducted its business only in the ordinary course of business consistent with past practice, (b) not been subject to a Material Adverse Effect and (c) has not taken any action or committed or agreed to take any action that would be prohibited by
Section 5.2(b) (without giving effect to
Schedule 5.2) if such action were taken on or after the date hereof without the consent of the Purchaser.
4.9
Compliance with Laws. No Target Company is or has been in material conflict or material non-compliance with, or in material default or violation of, nor has any Target Company received, since January 1, 2015, any written or, to the Knowledge of the Company, oral notice of any material conflict or non-compliance with, or material default or violation of, any applicable Laws by which it or any of its properties, assets, employees, business or operations are or were bound or affected.
4.10
Company Permits. Each Target Company (and its employees who are legally required to be licensed by a Governmental Authority in order to perform his or her duties with respect to his or her employment with any Target Company), holds all Permits necessary to lawfully conduct in all material respects its business as presently conducted and as currently contemplated to be conducted, and to own, lease and operate its assets and properties (collectively, the “Company
Permits”). The Company has made available to the Purchaser true, correct and complete copies of all material Company Permits, all of which material Company Permits are listed on
Schedule 4.10. All of the Company Permits are in full force and effect, and no suspension or cancellation of any of the Company Permits is pending or, to the Company’s Knowledge, threatened. No Target Company is in violation in any material respect of the terms of any Company Permit, and no Target Company has received any written or, to the Knowledge of the Company, oral notice of any Actions relating to the revocation or modification of any Company Permit.
4.11
Litigation. Except as described on
Schedule 4.11, there is no (a) Action of any nature currently pending or, to the Company’s Knowledge, threatened, nor is there any reasonable basis for any Action to be made (and no such Action has been brought or, to the Company’s Knowledge, in the past five (5) years; or (b) Order now pending or outstanding or that was rendered by a Governmental Authority in the past five (5) years, in either case of (a) or (b) by or against any Target Company, its current or former directors, officers or equity holders (provided, that any litigation involving the directors, officers or equity holders of a Target Company must be related to the Target Company’s business, equity securities or assets), its business, equity securities or assets. The items listed on
Schedule 4.11, if finally determined adversely to the Target Companies, will not have, either individually or in the aggregate, a Material Adverse Effect upon any Target Company. In the past five (5) years, none of the current or former officers, senior management or directors of any Target Company have been charged with, indicted for, arrested for, or convicted of any felony or any crime involving fraud.
(a) As of the date hereof, Schedule 4.12(a) sets forth a true, correct and complete list of, and the Company has made available to the Purchaser (including written summaries of oral Contracts), true, correct and complete copies of, each Contract to which any Target Company is a party or by which any Target Company, or any of its properties or assets are currently bound (each Contract described below, whether in effect as of the date hereof or entered into during the Interim Period, a “Company Material Contract”) that:
(i) contains covenants that limit the ability of any Target Company (A) to compete in any line of business or with any Person or in any geographic area or to sell, or provide any service or product or solicit any Person, including any non-competition covenants, employee and customer non-solicit covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses or (B) to purchase or acquire an interest in any other Person;
(ii) involves any joint venture, profit-sharing, partnership, limited liability company or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture;
(iii) involves any exchange traded, over the counter or other swap, cap, floor, collar, futures contract, forward contract, option or other derivative financial instrument or Contract, based on any commodity, security, instrument, asset, rate or index of any kind or nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;
(iv) evidences Indebtedness (whether incurred, assumed, guaranteed or secured by any asset) of any Target Company having an outstanding principal amount in excess of $200,000;
(v) involves the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets with an aggregate value in excess of $200,000 (other than in the ordinary course of business consistent with past practice) or shares or other equity interests of any Target Company or another Person;
(vi) relates to any merger, consolidation or other business combination with any other Person or the acquisition or disposition of any other entity or its business or material assets or the sale of any Target Company, its business or material assets;
(vii) by its terms, individually or with all related Contracts, calls for aggregate payments or receipts by the Target Companies under such Contract or Contracts of at least $200,000 per year or $500,000 in the aggregate;
(viii) is with any Top Customer or Top Supplier;
(ix) obligates the Target Companies to provide continuing indemnification or a guarantee of obligations of a third party after the date hereof in excess of $200,000, entered into outside of the ordinary course of business;
(x) is between any Target Company and any directors, officers or employees of a Target Company (other than at-will employment arrangements with employees entered into in the ordinary course of business consistent with past practice), including all non-competition, severance and indemnification agreements, or any Related Person;
(xi) obligates the Target Companies to make any capital commitment or expenditure in excess of $200,000 (including pursuant to any joint venture);
(xii) relates to a material settlement entered into within three (3) years prior to the date of this Agreement or under which any Target Company has outstanding obligations (other than customary confidentiality obligations);
(xiii) provides another Person (other than another Target Company or any manager, director or officer of any Target Company) with a power of attorney;
(xiv) relates to the development, ownership, licensing or use of any Intellectual Property by, to or from any Target Company, other than Off-the-Shelf Software;
(xv) that will be required to be filed with the Registration Statement under applicable SEC requirements or would otherwise be required to be filed by the Company as an exhibit for a Form S-1 pursuant to Items 601(b)(1), (2), (4), (9) or (10) of Regulation S-K under the Securities Act as if the Company was the registrant; or(xvi) that any Target Company otherwise reasonably considers material to the operation of its business and not described in clauses (i) through (xv) above.
(b) Except as disclosed in Schedule 4.12(b), with respect to each Company Material Contract: (i) such Company Material Contract is valid and binding and enforceable in all respects against the Target Company party thereto and, to the Knowledge of the Company, each other party thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (ii) the consummation of the transactions contemplated by this Agreement will not affect the validity or enforceability of any Company Material Contract; (iii) no Target Company is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute a material breach or default by any Target Company, or permit termination or acceleration by the other party thereto, under such Company Material Contract; (iv) to the Knowledge of the Company, no other party to such Company Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a material breach or default by such other party, or permit termination or acceleration by any Target Company, under such Company Material Contract; (v) no Target Company has received written or, to the Knowledge of the Company, oral notice of an intention by any party to any such Company Material Contract that provides for a continuing obligation by any party thereto to terminate such Company Material Contract or amend the terms thereof, other than modifications in the ordinary course of business that do not adversely affect any Target Company in any material respect; and (vi) no Target Company has waived any rights under any such Company Material Contract.
4.13
Intellectual Property.
(a) Schedule 4.13(a)(i) sets forth: (i) all U.S. and foreign registered Patents, Trademarks, Copyrights and Internet Assets and applications owned or licensed by a Target Company or otherwise used or held for use by a Target Company in which a Target Company is the owner, applicant or assignee (“Company Registered IP”), specifying as to each item, as applicable: (A) the nature of the item, including the title, (B) the owner of the item (with respect to Company Registered IP licensed by a Target Company, to the Company’s Knowledge), (C) the jurisdictions in which the item is issued or registered or in which an application for issuance or registration has been filed and (D) the issuance, registration or application numbers and dates; and (ii) all material unregistered Intellectual Property owned or purported to be owned by a Target Company. Schedule 4.13(a)(ii) sets forth all Intellectual Property licenses, sublicenses and other agreements or permissions (“Company IP Licenses”) (other than “shrink wrap,” “click wrap,” and “off the shelf” software agreements and other agreements for Software commercially available on reasonable terms to the public generally with license, maintenance, support and other fees of less than $20,000 per year (collectively, “Off-the-Shelf Software”), which are not required to be listed, although such licenses are “Company IP Licenses” as that term is used herein), under which a Target Company is a licensee or to the Company’s Knowledge is otherwise authorized to use or practice any Intellectual Property, and describes (A) the applicable Intellectual Property licensed, sublicensed or used and (B) any royalties, license fees or other compensation due from a Target Company, if any. To the Company’s Knowledge, each Target Company owns, free and clear of all Liens (other than Permitted Liens), has valid and enforceable rights in, and has the unrestricted right to use, sell, license, transfer or assign, all Intellectual Property currently used, licensed or held for use by such Target Company, and previously used or licensed by such Target Company, except for the Intellectual Property that is the subject of the Company IP Licenses. No item of Company Registered IP that consists of a pending Patent application fails to identify all pertinent inventors, and for each Patent and Patent application in the Company Registered IP, the Target Companies have obtained valid assignments of inventions from each inventor. Except as set forth on Schedule 4.13(a)(iii), all Company Registered IP is owned exclusively by the applicable Target Company without obligation to pay royalties, licensing fees or other fees, or otherwise account to any third party with respect to such Company Registered IP, and such Target Company has recorded assignments of all Company Registered IP.
(b) To the Company’s Knowledge, each Target Company has a valid and enforceable license to use all Intellectual Property that is the subject of the Company IP Licenses applicable to such Target Company. The Company IP Licenses include all of the licenses, sublicenses and other agreements or permissions necessary to operate the Target Companies as presently conducted. Each Target Company has performed all material obligations imposed on it in the Company IP Licenses, has made all payments required to date, and such Target Company is not, nor, to the Knowledge of the Company, is any other party thereto, in breach or default thereunder, nor, to the Knowledge of the Company, has any event occurred that with notice or lapse of time or both would constitute a default thereunder. The continued use by the Target Companies of the Intellectual Property that is the subject of the Company IP Licenses in the same manner that it is currently being used is not restricted by any applicable license of any Target Company. All registrations for Copyrights, Patents, Trademarks and Internet Assets that are owned by or exclusively licensed to any Target Company are valid, in force and in good standing with all required fees and maintenance fees having been paid with no Actions pending, and, to the Company’s Knowledge, all applications to register any Copyrights, Patents and Trademarks are pending and in good standing, all without challenge of any kind. No Target Company is party to any Contract that requires a Target Company to assign to any Person all of its rights in any Intellectual Property developed by a Target Company under such Contract.
(c) Schedule 4.13(c) sets forth all material licenses, sublicenses and other agreements or permissions under which a Target Company is the licensor (each, an “Outbound IP License”), and for each such Outbound IP License, describes (i) the applicable Intellectual Property licensed, (ii) the licensee under such Outbound IP License, and (iii) any royalties, license fees or other compensation due to a Target Company, if any. Each Target Company has performed all material obligations imposed on it in the Outbound IP Licenses, and such Target Company is not, nor, to the Knowledge of the Company, is any other party thereto, in breach or default thereunder, nor has any event occurred that with notice or lapse of time or both would constitute a default thereunder.
(d) No Action is pending or, to the Company’s Knowledge, threatened against a Target Company that challenges the validity, enforceability, ownership, or right to use, sell, license or sublicense, or that otherwise relates to, any Intellectual Property currently owned, licensed, used or held for use by the Target Companies, nor, to the Knowledge of the Company, is there any reasonable basis for any such Action. No Target Company has received any written or, to the Knowledge of the Company, oral notice or claim asserting or suggesting that any infringement, misappropriation, violation, dilution or unauthorized use of the Intellectual Property of any other Person is or may be occurring or has or may have occurred, as a consequence of the business activities of any Target Company, nor to the Knowledge of the Company is there a reasonable basis therefor. There are no Orders to which any Target Company is a party or is otherwise bound that (i) restrict the rights of a Target Company to use, transfer, license or enforce any Intellectual Property owned by a Target Company, (ii) materially restrict the conduct of the business of a Target Company in order to accommodate a third Person’s Intellectual Property, or (iii) other than the Outbound IP Licenses, grant any third Person any right with respect to any Intellectual Property owned by a Target Company. No Target Company is currently infringing, or has, in the past, infringed, misappropriated or violated any Intellectual Property of any other Person in any material respect in connection with the ownership, use or license of any Intellectual Property owned or purported to be owned by a Target Company or, to the Knowledge of the Company, otherwise in connection with the conduct of the respective businesses of the Target Companies. To the Company’s Knowledge, no third party is currently, or in the past three (3) years has been, infringing upon, misappropriating or otherwise violating any Intellectual Property owned, licensed by, licensed to, or otherwise used or held for use by any Target Company (“
Company IP”) in any material respect.
(e) All officers, directors, employees and independent contractors of a Target Company (and each of their respective Affiliates) have assigned to the Target Companies all Intellectual Property arising from the services performed for a Target Company by such Persons and all such assignments of Company Registered IP have been recorded. No current or former officers, employees or independent contractors of a Target Company have claimed any ownership interest in any Intellectual Property owned by a Target Company. To the Knowledge of the Company, there has been no material violation of a Target Company’s policies or practices related to protection of Company IP or any confidentiality or nondisclosure Contract relating to the Intellectual Property owned by a Target Company. The Company has made available to the Purchaser true and complete copies of all written Contracts referenced in subsections under which employees and independent contractors assigned their Intellectual Property to a Target Company. To the Company’s Knowledge, none of the employees of any Target Company is obligated under any Contract, or subject to any Order, that would materially interfere with the use of such employee’s best efforts to promote the interests of the Target Companies, or that would materially conflict with the business of any Target Company as presently conducted or contemplated to be conducted. Each Target Company has taken reasonable security measures in order to protect the secrecy, confidentiality and value of the material Company IP.
(f) To the Knowledge of the Company, no Person has obtained unauthorized access to third party information and data (including personally identifiable information) in the possession of a Target Company, nor has there been any other material compromise of the security, confidentiality or integrity of such information or data, and no written or, to the Knowledge of the Company, oral complaint relating to an improper use or disclosure of, or a breach in the security of, any such information or data has been received by a Target Company. Each Target Company has complied in all material respects with all applicable Laws and Contract requirements relating to privacy, personal data protection, and the collection, processing and use of personal information and its own privacy policies and guidelines. The operation of the business of the Target Companies has not and does not violate any right to privacy or publicity of any third person, or constitute unfair competition or trade practices under applicable Law.
(g) The consummation of any of the transactions contemplated by this Agreement will not result in the material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect to, or release of source code because of (i) any Contract providing for the license or other use of Intellectual Property owned by a Target Company, or (ii) any Company IP License. Following the Closing, the Company shall be permitted to exercise, directly or indirectly through its Subsidiaries, all of the Target Companies’ rights under such Contracts or Company IP Licenses to the same extent that the Target Companies would have been able to exercise had the transactions contemplated by this Agreement not occurred, without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Target Companies would otherwise be required to pay in the absence of such transactions.
(a) Each Target Company has timely filed, or caused to be timely filed, all income and other material Tax Returns required to be filed by it (taking into account all available extensions), which Tax Returns are true, correct and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Company Financials have been established.
(b) There is no Action currently pending or, to the Knowledge of the Company, threatened against a Target Company by a Governmental Authority in a jurisdiction where the Target Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.
(c) No Target Company is being audited by any Tax authority or has been notified in writing by any Tax authority that any such audit is contemplated or pending. There are no claims, assessments, audits, examinations, investigations or other Actions pending against a Target Company in respect of any material Tax, and no Target Company has been notified in writing of any proposed Tax claims or assessments against it in respect of any material Taxes (other than, in each case, claims or assessments for which adequate reserves in the Company Financials have been established).
(d) There are no Liens with respect to any Taxes upon any Target Company’s assets, other than Permitted Liens.
(e) Each Target Company has collected or withheld all material Taxes currently required to be collected or withheld by it, and all such material Taxes have been paid to the appropriate Governmental Authorities or set aside in appropriate accounts for future payment when due.
(f) No Target Company has any outstanding waivers or extensions of any applicable statute of limitations to assess any amount of Taxes other than such waivers or extensions entered into in the ordinary course of business. There are no outstanding requests by a Target Company for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return other than any requests made in the ordinary course of business.
(g) No Target Company has participated in, or sold, distributed or otherwise promoted, any “listed transaction,” as defined in U.S. Treasury Regulation section 1.6011-4.
(h) No Target Company has any Liability for the material Taxes of another Person (other than another Target Company) that are not adequately reflected in the Company Financials (i) under any applicable Tax Law, (ii) as a transferee or successor, or (iii) by contract or indemnity (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes). No Target Company is a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar agreement or arrangement (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes) with respect to material Taxes that will be binding on any Target Company with respect to any period following the Closing Date.
(i) No Target Company has requested, or is bound by, any private letter ruling, technical advice memorandum, closing agreement or similar ruling, memorandum or agreement with any Governmental Authority with respect to any material Taxes.
(j) No Target Company: (i) has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of securities (to any Person or entity that is not a member of the consolidated group of which the Company is the common parent corporation) qualifying for, or intended to qualify for, Tax-free treatment under Section 355 of the Code (A) within the two-year period ending on the date hereof or (B) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement; or (ii) is or has ever been (A) a U.S. real property holding corporation within the meaning of Section 897(c)(2) of the Code, or (B) a member of any consolidated, combined, unitary or affiliated group of corporations for any Tax purposes other than a group of which the Company is or was the common parent corporation.
(k) No Target Company is aware of any fact or circumstance that would reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
4.15
Real Property.
Schedule 4.15 contains a complete and accurate list of all premises currently leased or subleased or otherwise used or occupied by a Target Company for the operation of the business of a Target Company, and of all current leases, lease guarantees, agreements and documents related thereto, including all amendments, terminations and modifications thereof or waivers thereto (collectively, the “
Company Real Property Leases”), as well as the current annual rent and term under each Company Real Property Lease. The Company has provided to the Purchaser a true and complete copy of each of the Company Real Property Leases, and in the case of any oral Company Real Property Lease, a written summary of the material terms of such Company Real Property Lease. To the Company’s Knowledge, the Company Real Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of a Target Company or any other party under any of the Company Real Property Leases, and no Target Company has received notice of any such condition. No Target Company owns or has ever owned any real property or any interest in real property (other than the leasehold interests in the Company Real Property Leases).
4.16
Personal Property. Each item of Personal Property which is currently owned, used or leased by a Target Company with a book value or fair market value of greater than Fifty Thousand Dollars ($50,000) is set forth on
Schedule 4.16, along with, to the extent applicable, a list of lease agreements, lease guarantees, security agreements and other agreements related thereto, including all amendments, terminations and modifications thereof or waivers thereto (“Company Personal Property Leases”). Except as set forth in
Schedule 4.16, all such items of Personal Property are in good operating condition and repair (reasonable wear and tear excepted consistent with the age of such items), and are suitable for their intended use in the business of the Target Companies. The operation of each Target Company’s business as it is now conducted or presently proposed to be conducted is not in any material respect dependent upon the right to use the Personal Property of Persons other than a Target Company, except for such Personal Property that is owned, leased or licensed by or otherwise contracted to a Target Company. The Company has provided to the Purchaser a true and complete copy of each of the Company Personal Property Leases, and in the case of any oral Company Personal Property Lease, a written summary of the material terms of such Company Personal Property Lease. To the Knowledge of the Company, the Company Personal Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of a Target Company or any other party under any of the Company Personal Property Leases, and no Target Company has received notice of any such condition.
4.17
Title to and Sufficiency of Assets. Each Target Company has good and marketable title to, or a valid leasehold interest in or right to use, all of its assets, free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors under leasehold interests, (c) Liens specifically identified on the Interim Balance Sheet and (d) Liens set forth on
Schedule 4.17. The assets (including Intellectual Property rights and contractual rights) of the Target Companies constitute all of the assets, rights and properties that are used in the operation of the businesses of the Target Companies as it is now conducted and presently proposed to be conducted or that are used or held by the Target Companies for use in the operation of the businesses of the Target Companies, and taken together, are adequate and sufficient for the operation of the businesses of the Target Companies as currently conducted.
(a) Except as set forth in Schedule 4.18(a), no Target Company is a party to any collective bargaining agreement or other Contract covering any group of employees, labor organization or other representative of any of the employees of any Target Company, and the Company has no Knowledge of any activities or proceedings of any labor union or other party to organize or represent such employees. There has not occurred or, to the Knowledge of the Company, been threatened any strike, slow-down, picketing, work-stoppage, or other similar labor activity with respect to any such employees. Schedule 4.18(a) sets forth all unresolved labor controversies (including unresolved grievances and age or other discrimination claims), if any, that are pending or, to the Knowledge of the Company, threatened between any Target Company and Persons employed by or providing services as independent contractors to a Target Company. No current officer or employee of a Target Company has provided any Target Company written or, to the Knowledge of the Company, oral notice of his or her plan to terminate his or her employment with any Target Company.
(b) Except as set forth in Schedule 4.18(b), each Target Company (i) is and has been in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, health and safety and wages and hours, and other Laws relating to discrimination, disability, labor relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working conditions, employee scheduling, occupational safety and health, family and medical leave, and employee terminations, and has not received written or, to the Knowledge of the Company, oral notice that there is any pending Action involving unfair labor practices against a Target Company, (ii) is not liable for any material past due arrears of wages or any material penalty for failure to comply with any of the foregoing, and (iii) is not liable for any material payment to any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees, independent contractors or consultants (other than routine payments to be made in the ordinary course of business and consistent with past practice). There are no Actions pending or, to the Knowledge of the Company, threatened against a Target Company brought by or on behalf of any applicant for employment, any current or former employee, any Person alleging to be a current or former employee, or any Governmental Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship.
(c) Schedule 4.18(c) hereto sets forth a complete and accurate list as of the date hereof of all employees of the Target Companies showing for each as of such date (i) the employee’s name/staff identification number, job title or description, employer, location, salary level (including any bonus, commission, deferred compensation or other remuneration payable (other than any such arrangements under which payments are at the discretion of the Target Companies)), (ii) any bonus, commission or other remuneration other than salary paid during the fiscal year ending December 31, 2019, and (iii) any wages, salary, bonus, commission or other compensation due and owing to each employee during or for the fiscal year ending December 31, 2020. Except as set forth on Schedule 4.18(c), (A) no employee is a party to a written employment Contract with a Target Company and each is employed “at will”, and (B) the Target Companies have paid in full to all their employees all wages, salaries, commission, bonuses and other compensation due to their employees, including overtime compensation, and no Target Company has any obligation or Liability (whether or not contingent) with respect to severance payments to any such employees under the terms of any written or, to the Company’s Knowledge, oral agreement, or commitment or any applicable Law, custom, trade or practice. Except as set forth in Schedule 4.18(c), each Target Company employee has entered into the Company’s standard form of employee non-disclosure, inventions and restrictive covenants agreement with a Target Company (whether pursuant to a separate agreement or incorporated as part of such employee’s overall employment agreement), a copy of which has been made available to the Purchaser by the Company.
(d) Schedule 4.18(d) contains a list of all independent contractors (including consultants) currently engaged by any Target Company, along with the position, the entity engaging such Person, date of retention and rate of remuneration, most recent increase (or decrease) in remuneration and amount thereof, for each such Person. Except as set forth on Schedule 4.18(d), all of such independent contractors are a party to a written Contract with a Target Company. Except as set forth on Schedule 4.18(d), each such independent contractor has entered into customary covenants regarding confidentiality, non-competition and assignment of inventions and copyrights in such Person’s agreement with a Target Company, a copy of which has been provided to the Purchaser by the Company. For the purposes of applicable Law, including the Code, all independent contractors who are currently, or within the last five (5) years have been, engaged by a Target Company are bona fide independent contractors and not employees of a Target Company. Each independent contractor is terminable on fewer than thirty (30) days’ notice, without any obligation of any Target Company to pay severance or a termination fee.
(a) Set forth on Schedule 4.19(a) is a true and complete list of each Benefit Plan of a Target Company (each, a “Company Benefit Plan”). With respect to each Company Benefit Plan, there are no funded benefit obligations for which contributions have not been made or properly accrued and there are no unfunded benefit obligations that have not been accounted for by reserves, or otherwise properly footnoted in accordance with GAAP on the Company Financials. No Target Company is or has in the past been a member of a “controlled group” for purposes of Section 414(b), (c), (m) or (o) of the Code, nor does any Target Company have any Liability with respect to any collectively-bargained for plans, whether or not subject to the provisions of ERISA. No statement, either written or oral, has been made by any Target Company to any Person with regard to any Company Benefit Plan that was not in accordance with the Company Benefit Plan in any material respect.
(b) Each Company Benefit Plan is and has been operated at all times in compliance with all applicable Laws in all material respects, including ERISA and the Code. Each Company Benefit Plan which is intended to be “qualified” within the meaning of Section 401(a) of the Code (i) has been determined by the IRS to be so qualified (or is based on a prototype plan which has received a favorable opinion letter) during the period from its adoption to the date of this Agreement and (ii) its related trust has been determined to be exempt from taxation under Section 501(a) of the Code or the Target Companies have requested an initial favorable IRS determination of qualification and/or exemption within the period permitted by applicable Law. To the Knowledge of the Company, no fact exists which could materially adversely affect the qualified status of such Company Benefit Plans or the exempt status of such trusts.
(c) With respect to each Company Benefit Plan which covers any current or former officer, director, consultant or employee (or beneficiary thereof) of a Target Company, the Company has provided to Purchaser accurate and complete copies, if applicable, of: (i) all Company Benefit Plan texts and agreements and related trust agreements or annuity Contracts (including any amendments, modifications or supplements thereto); (ii) all summary plan descriptions and material modifications thereto; (iii) the three (3) most recent Forms 5500, if applicable, and annual report, including all schedules thereto; (iv) the most recent annual and periodic accounting of plan assets; (v) the three (3) most recent nondiscrimination testing reports; (vi) the most recent determination letter received from the IRS, if any; (vii) the most recent actuarial valuation; and (viii) all material communications with any Governmental Authority.
(d) With respect to each Company Benefit Plan: (i) such Company Benefit Plan has been administered and enforced in all material respects in accordance with its terms, the Code and ERISA; (ii) no material breach of fiduciary duty has occurred; (iii) no Action is pending, or to the Company’s Knowledge, threatened (other than routine claims for benefits arising in the ordinary course of administration); (iv) no prohibited transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred, excluding transactions effected pursuant to a statutory or administration exemption; and (v) all contributions and premiums due through the Closing Date have been made in all material respects as required under ERISA or have been fully accrued in all material respects on the Company Financials.
(e) No Company Benefit Plan is a “defined benefit plan” (as defined in Section 414(j) of the Code), a “multiemployer plan” (as defined in Section 3(37) of ERISA) or a “multiple employer plan” (as described in Section 413(c) of the Code) or is otherwise subject to Title IV of ERISA or Section 412 of the Code, and no Target Company has incurred any Liability or, to the Knowledge of the Company, otherwise could have any Liability, contingent or otherwise, under Title IV of ERISA and no condition presently exists that is expected to cause such Liability to be incurred. No Company Benefit Plan will become a multiple employer plan with respect to any Target Company immediately after the Closing Date. No Target Company currently maintains or has ever maintained, or is required currently or has ever been required to contribute to or otherwise participate in, a multiple employer welfare arrangement or voluntary employees’ beneficiary association as defined in Section 501(c)(9) of the Code.
(f) There is no arrangement under any Company Benefit Plan with respect to any employee that would result in the payment of any amount that by operation of Sections 280G or 162(m) of the Code would not be deductible by the Target Companies and no arrangement exists pursuant to which a Target Company will be required to “gross up” or otherwise compensate any person because of the imposition of any excise tax on a payment to such person.
(g) With respect to each Company Benefit Plan which is a “welfare plan” (as described in Section 3(1) of ERISA): (i) no such plan provides medical or death benefits with respect to current or former employees of a Target Company beyond their termination of employment (other than coverage mandated by Law, which is paid solely by such employees); and (ii) there are no reserves, assets, surplus or prepaid premiums under any such plan. Each Target Company has complied with the provisions of Section 601 et seq. of ERISA and Section 4980B of the Code.
(h) The consummation of the transactions contemplated by this Agreement and the Ancillary Documents will not: (i) entitle any individual to severance pay, unemployment compensation or other benefits or compensation; (ii) accelerate the time of payment or vesting, or increase the amount of any compensation due, or in respect of, any individual; or (iii) result in or satisfy a condition to the payment of compensation that would, in combination with any other payment, result in an “excess parachute payment” within the meaning of Section 280G of the Code. No Target Company has incurred any Liability for any Tax imposed under Chapter 43 of the Code or civil liability under Section 502(i) or (l) of ERISA.
(i) Except to the extent required by Section 4980B of the Code or similar state Law, no Target Company provides health or welfare benefits to any former or retired employee or is obligated to provide such benefits to any active employee following such employee’s retirement or other termination of employment or service.
(j) All Company Benefit Plans can be terminated at any time as of or after the Closing Date without resulting in any Liability to the Surviving Corporation or Purchaser or their respective Affiliates for any additional contributions, penalties, premiums, fees, fines, excise taxes or any other charges or liabilities.
(k) Each Company Benefit Plan that is subject to Section 409A of the Code (each, a “Section 409A Plan”) as of the Closing Date is indicated as such on Schedule 4.19(k). No Company Options or other equity-based awards have been issued or granted by the Company that are, or are subject to, a Section 409A Plan. Each Section 409A Plan has been administered in compliance, and is in documentary compliance, with the applicable provisions of Section 409A of the Code, the regulations thereunder and other official guidance issued thereunder. No Target Company has any obligation to any employee or other service provider with respect to any Section 409A Plan that may be subject to any Tax under Section 409A of the Code. No payment to be made under any Section 409A Plan is, or to the Knowledge of the Company will be, subject to the penalties of Section 409A(a)(1) of the Code. There is no Contract or plan to which any Target Company is a party or by which it is bound to compensate any employee, consultant or director for penalty taxes paid pursuant to Section 409A of the Code.
4.20
Environmental Matters. Except as set forth in
Schedule 4.20:
(a) Each Target Company is and has been in compliance in all material respects with all applicable Environmental Laws, including obtaining, maintaining in good standing, and complying in all material respects with all Permits required for its business and operations by Environmental Laws (“Environmental Permits”), no Action is pending or, to the Company’s Knowledge, threatened to revoke, modify, or terminate any such Environmental Permit, and, to the Company’s Knowledge, no facts, circumstances, or conditions currently exist that could adversely affect such continued compliance with Environmental Laws and Environmental Permits or require capital expenditures to achieve or maintain such continued compliance with Environmental Laws and Environmental Permits.
(b) No Target Company is the subject of any outstanding Order or Contract with any Governmental Authority or other Person in respect of any (i) Environmental Laws, (ii) Remedial Action, or (iii) Release or threatened Release of a Hazardous Material. No Target Company has assumed, contractually or by operation of Law, any Liabilities or obligations under any Environmental Laws.
(c) No Action has been made or is pending, or to the Company’s Knowledge, threatened against any Target Company or any assets of a Target Company alleging either or both that a Target Company may be in material violation of any Environmental Law or Environmental Permit or may have any material Liability under any Environmental Law.
(d) No Target Company has manufactured, treated, stored, disposed of, arranged for or permitted the disposal of, generated, handled or Released any Hazardous Material, or owned or operated any property or facility, in a manner that has given or would reasonably be expected to give rise to any material Liability or obligation under applicable Environmental Laws. To the Knowledge of the Company, no fact, circumstance, or condition exists in respect of any Target Company or any property currently or formerly owned, operated, or leased by any Target Company or any property to which a Target Company arranged for the disposal or treatment of Hazardous Materials that could reasonably be expected to result in a Target Company incurring any material Environmental Liabilities.
(e) To the Company’s Knowledge, there is no investigation of the business, operations, or currently owned, operated, or leased property of a Target Company or previously owned, operated, or leased property of a Target Company pending or threatened that could lead to the imposition of any Liens under any Environmental Law or material Environmental Liabilities.
(f) To the Knowledge of the Company, there is not located at any of the properties of a Target Company any (i) underground storage tanks, (ii) asbestos-containing material, or (iii) equipment containing polychlorinated biphenyls.
(g) The Company has provided to the Purchaser all environmentally related site assessments, audits, studies, reports, analysis and results of investigations that have been performed in respect of the currently or previously owned, leased, or operated properties of any Target Company, in each case that are in the Company’s possession.
4.21
Transactions with Related Persons. Except as set forth on
Schedule 4.21, no Target Company nor any of its Affiliates, nor any officer, director, manager, employee, trustee or beneficiary of a Target Company or any of its Affiliates, nor any immediate family member of any of the foregoing (whether directly or indirectly through an Affiliate of such Person) (each of the foregoing, a “
Related Person”) is presently, or in the past three (3) years, has been, a party to any transaction with a Target Company, including any Contract or other arrangement (a) providing for the furnishing of services by (other than as officers, directors or employees of the Target Company), (b) providing for the rental of real property or Personal Property from or (c) otherwise requiring payments to (other than for services or expenses as directors, officers or employees of the Target Company in the ordinary course of business consistent with past practice) any Related Person or any Person in which any Related Person has an interest as an owner, officer, manager, director, trustee or partner or in which any Related Person has any direct or indirect interest (other than the ownership of securities representing no more than two percent (2%) of the outstanding voting power or economic interest of a publicly traded company). Except as set forth on
Schedule 4.21, no Target Company has outstanding any Contract or other arrangement or commitment with any Related Person, and no Related Person owns any real property or Personal Property, or right, tangible or intangible (including Intellectual Property) which is used in the business of any Target Company. The assets of the Target Companies do not include any material receivable or other obligation from a Related Person, and the liabilities of the Target Companies do not include any material payable or other obligation or commitment to any Related Person.
(a) Schedule 4.22(a) lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by a Target Company relating to a Target Company or its business, properties, assets, directors, officers and employees, copies of which have been provided to the Purchaser. All premiums due and payable under all such insurance policies have been timely paid and the Target Companies are otherwise in material compliance with the terms of such insurance policies. To the Company’s Knowledge, each such insurance policy (i) is legal, valid, binding, enforceable and in full force and effect and (ii) will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the Closing. No Target Company has any self-insurance or co-insurance programs. In the past three (3) years, no Target Company has received any notice from, or on behalf of, any insurance carrier relating to or involving any adverse change or any change other than in the ordinary course of business, in the conditions of insurance, any refusal to issue an insurance policy or non-renewal of a policy.
(b) Schedule 4.22(b) identifies each individual insurance claim in excess of $50,000 made by a Target Company in the past three (3) years. Each Target Company has reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to be material to the Target Companies, taken as a whole. To the Knowledge of the Company, no event has occurred, and no condition or circumstance exists, that would reasonably be expected to (with or without notice or lapse of time) give rise to or serve as a basis for the denial of any such insurance claim. In the past three (3) years, no Target Company has made any claim against an insurance policy as to which the insurer is denying coverage.
4.23
Product Warranty and Liability.
(a) Each product manufactured, sold or delivered by any Target Company in conducting its business has been in all material respects in conformity with all product specifications all express and implied warranties and all applicable Laws. To the Company’s Knowledge, no Target Company has any material liability for replacement or repair of any such products or other damages in connection therewith or any other customer or product obligations not reserved against in the Financial Statements. No Target Company has sold any products or delivered any services that included a warranty for a period of longer than one year.
(b) To the Company’s Knowledge, no Target Company has any material Liability arising out of any injury to individuals or property as a result of the ownership, possession, or use of any product designed, manufactured, assembled, repaired, maintained, delivered, sold or installed, or services rendered, by or on behalf of a Target Company. No Target Company has committed any act or omission which would reasonably be expected to result in, and there has been no occurrence which would reasonably be expected to give rise to or form the basis of, any material product Liability or material Liability for breach of warranty (whether covered by insurance or not) on the part of a Target Company with respect to products designed, manufactured, assembled, repaired, maintained, delivered, sold or installed or services rendered by or on behalf of a Target Company.
4.24
Books and Records. All of the financial books and records of the Target Companies are complete and accurate in all material respects and have been maintained in the ordinary course consistent with past practice and in accordance with applicable Laws.
4.25
Top Customers and Suppliers.
Schedule 4.25 lists, by dollar volume received or paid, as applicable, for each of (a) the twelve (12) months ended on December 31, 2019 and (b) the period from January 1, 2020 through the Interim Balance Sheet Date, the ten (10) largest customers of the Target Companies (the “
Top Customers”) and the ten (10) largest suppliers of goods or services to the Target Companies (the “
Top Suppliers”), along with the amounts of such dollar volumes. The relationships of each Target Company with such suppliers and customers are good commercial working relationships and (i) no Top Supplier or Top Customer within the last twelve (12) months has cancelled or otherwise terminated, or, to the Company’s Knowledge, intends to cancel or otherwise terminate, any material relationships of such Person with a Target Company, (ii) no Top Supplier or Top Customer has during the last twelve (12) months decreased materially or, to the Company’s Knowledge, threatened to stop, decrease or limit materially, or intends to modify materially its material relationships with a Target Company or intends to stop, decrease or limit materially its products or services to any Target Company or its usage or purchase of the products or services of any Target Company, (iii) to the Company’s Knowledge, no Top Supplier or Top Customer intends to refuse to pay any amount due to any Target Company or seek to exercise any remedy against any Target Company, (iv) no Target Company has within the past two (2) years been engaged in any material dispute with any Top Supplier or Top Customer, and (v) to the Company’s Knowledge, the consummation of the transactions contemplated in this Agreement and the Ancillary Documents will not adversely affect the relationship of any Target Company with any Top Supplier or Top Customer.
4.26
Certain Business Practices.
(a) No Target Company, nor any of their respective Representatives acting on their behalf has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law or (iii) made any other unlawful payment. Since January 1, 2015, no Target Company, nor any of their respective Representatives acting on their behalf has directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder any Target Company or assist any Target Company in connection with any actual or proposed transaction.
(b) Since January 1, 2015, the operations of each Target Company are and have been conducted at all times in compliance with money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving a Target Company with respect to any of the foregoing is pending or, to the Knowledge of the Company, threatened.
(c) No Target Company or any of their respective directors or officers, or, to the Knowledge of the Company, any other Representative acting on behalf of a Target Company is currently (i) identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by OFAC, the U.S. Department of State, or other applicable Governmental Authority, (ii) organized, resident or located in, or a national of, a comprehensively sanctioned country, or (iii) in the aggregate fifty percent (50%) or greater owned, directly or indirectly, or otherwise controlled, by a Person identified in clauses (i) or (ii); and no Target Company has in the last five (5) fiscal years, directly or knowingly indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC or the U.S. Department of State.
4.27
Investment Company Act. No Target Company is an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, or required to register as an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.
4.28
Finders and Brokers . Except as set forth in
Schedule 4.28, no Target Company has incurred or will incur any Liability for any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby.
4.29
Independent Investigation. The Company has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Purchaser, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Purchaser for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of the Purchaser set forth in Agreement (including the related portions of the Purchaser Disclosure Schedules) and in any certificate delivered to the Company pursuant hereto; and (b) neither the Purchaser nor any of its Representatives have made any representation or warranty as to the Purchaser or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Purchaser Disclosure Schedules) or in any certificate delivered to the Company pursuant hereto.
4.30
Information Supplied. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference: (a) in any current report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority or stock exchange with respect to the transactions contemplated by this Agreement or any Ancillary Documents; (b) in the Registration Statement; or (c) in the mailings or other distributions to the Purchaser’s stockholders and/or prospective investors with respect to the consummation of the transactions contemplated by this Agreement or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Company makes no representation, warranty or covenant with respect to any information supplied by or on behalf of the Purchaser or its Affiliates.
COVENANTS
5.1
Access and Information.
(a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section 7.1 or the Closing (the “Interim Period”), subject to Section 5.16, the Company shall give, and shall cause its Representatives to give, the Purchaser and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns, internal working papers (other than any confidential information in respect of Taxes), client files, client Contracts and director service agreements), of or pertaining to the Target Companies, as the Purchaser or its Representatives may reasonably request regarding the Target Companies and their respective businesses, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects (including unaudited quarterly financial statements, including a consolidated quarterly balance sheet and income statement, a copy of each material report, schedule and other document filed with or received by a Governmental Authority pursuant to the requirements of applicable securities Laws, and independent public accountants’ work papers (subject to the consent or any other conditions required by such accountants, if any)) and cause each of the Company’s Representatives to reasonably cooperate with the Purchaser and its Representatives in their investigation; provided, however, that the Purchaser and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Target Companies.
(b) During the Interim Period, subject to Section 5.16, the Purchaser shall give, and shall cause its Representatives to give, the Company and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns, internal working papers (other than any confidential information in respect of Taxes), client files, client Contracts and director service agreements), of or pertaining to the Purchaser or its Subsidiaries, as the Company or its Representatives may reasonably request regarding the Purchaser, its Subsidiaries and their respective businesses, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects (including unaudited quarterly financial statements, including a consolidated quarterly balance sheet and income statement, a copy of each material report, schedule and other document filed with or received by a Governmental Authority pursuant to the requirements of applicable securities Laws, and independent public accountants’ work papers (subject to the consent or any other conditions required by such accountants, if any)) and cause each of the Purchaser’s Representatives to reasonably cooperate with the Company and its Representatives in their investigation; provided, however, that the Company and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Purchaser or any of its Subsidiaries.
5.2
Conduct of Business of the Company.
(a) Unless the Purchaser shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents or as set forth on Schedule 5.2, the Company shall, and shall cause its Subsidiaries to, (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to the Target Companies and their respective businesses, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants, and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice.
(b) Without limiting the generality of Section 5.2(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents or as set forth on Schedule 5.2, during the Interim Period, without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall cause its Subsidiaries to not:
(i) amend, waive or otherwise change, in any respect, its Organizational Documents, except as required by applicable Law;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $200,000 individually or $500,000 in the aggregate, make a loan or advance to or investment in any third party (other than advancement of expenses to employees in the ordinary course of business), or guarantee or endorse any Indebtedness, Liability or obligation of any Person in excess of $200,000 individually or $500,000 in the aggregate;
(v) increase the wages, salaries or compensation of its employees other than in the ordinary course of business, consistent with past practice, and in any event not in the aggregate by more than five percent (5%), or make or commit to make any bonus payment (whether in cash, property or securities) to any employee, or materially increase other benefits of employees generally, or enter into, establish, materially amend or terminate any Company Benefit Plan with, for or in respect of any current consultant, officer, manager director or employee, in each case other than as required by applicable Law, pursuant to the terms of any Company Benefit Plans or in the ordinary course of business consistent with past practice;
(vi) make or rescind inconsistent with past practice any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to a material amount of Taxes, file any material amended Tax Return or claim for refund, or change any Tax accounting period or method, in each case except as required by applicable Law or in compliance with GAAP;
(vii) transfer or license to any Person or otherwise extend, materially amend or modify, permit to lapse or fail to preserve any material Company Registered IP, material Company Licensed IP or other material Company IP (excluding non-exclusive licenses of Company IP to Target Company customers in the ordinary course of business consistent with past practice), or disclose to any Person who has not entered into a confidentiality agreement any Trade Secrets;
(viii) terminate, or waive or assign any material right under, any Company Material Contract or enter into any Contract that would be a Company Material Contract, in any case outside of the ordinary course of business consistent with past practice;
(ix) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(x) establish any Subsidiary or enter into any new line of business;
(xi) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;
(xii) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP and after consulting with the Company’s outside auditors;
(xiii) waive, release, assign, settle or compromise any material claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, a Target Company or its Affiliates) not in excess of $200,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Actions, Liabilities or obligations, unless such amount has been reserved in the Company Financials;
(xiv) close or materially reduce its activities, or effect any layoff or other personnel reduction or change, at any of its facilities;
(xv) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business consistent with past practice;
(xvi) make capital expenditures in excess of $200,000 individually for any project (or set of related projects) or $500,000 in the aggregate (excluding, for the avoidance of doubt, incurring any Expenses);
(xvii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xviii) voluntarily incur any Liability in excess of $200,000 individually or $500,000 in the aggregate (excluding the incurrence of any Expenses) other than pursuant to the terms of a Company Material Contract or Company Benefit Plan in existence as of the date of this Agreement or entered into in the ordinary course of business or in accordance with the terms of this Section 5.2;
(xix) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(xx) enter into any agreement, understanding or arrangement with respect to the voting of equity securities of the Company;
(xxi) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement;
(xxii) accelerate the collection of any trade receivables or delay the payment of trade payables or any other material liabilities other than in the ordinary course of business consistent with past practice;
(xxiii) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any Related Person (other than compensation and benefits and advancement of expenses, in each case, provided in the ordinary course of business consistent with past practice); or
(xxiv) authorize or agree to do any of the foregoing actions;
provided, that any actions reasonably taken in good faith by the Company or its Subsidiaries to the extent reasonably believed to be necessary to comply with Laws (including orders of Governmental Authorities) related to COVID-19 shall be deemed not to constitute a breach of the requirements set forth under this Section 5.2.
5.3
Conduct of Business of the Purchaser.
(a) Unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents or as set forth on Schedule 5.3, the Purchaser shall, and shall cause its Subsidiaries to, (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to the Purchaser and its Subsidiaries and their respective businesses, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants, and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice. Notwithstanding anything to the contrary in this Section 5.3, nothing in this Agreement shall prohibit or restrict Purchaser from extending one or more times, in accordance with Purchaser’s Organizational Documents and the IPO Prospectus, the deadline by which it must complete its Business Combination (an “Extension”), and no consent of any other Party shall be required in connection therewith, including incurring any expenses in connection therewith (such expenses, including any additional amounts paid to the Trust Account in connection with such Extension, “Extension Expenses”).
(b) Without limiting the generality of
Section 5.3(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents (including as contemplated by any PIPE Investment consented to by the Company in accordance with
Section 5.21 or the Warrant Amendment) or as set forth on
Schedule 5.3, during the Interim Period, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), the Purchaser shall not, and shall cause its Subsidiaries to not:
(i) amend, waive or otherwise change, in any respect, its Organizational Documents except as required by applicable Law;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its equity securities or other security interests of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $200,000 individually or $500,000 in the aggregate, make a loan or advance to or investment in any third party, or guarantee or endorse any Indebtedness, Liability or obligation of any Person (provided, that this Section 5.3(b)(iv) shall not prevent the Purchaser from borrowing funds necessary to finance its ordinary course administrative costs and expenses and Expenses incurred in connection with the consummation of the Merger and the other transactions contemplated by this Agreement (including any PIPE Investment and any Extension Expenses), up to aggregate additional Indebtedness during the Interim Period of $1,500,000;
(v) make or rescind any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;
(vi) amend, waive or otherwise change the Trust Agreement in any manner adverse to the Purchaser;
(vii) terminate, waive or assign any material right under any Purchaser Material Contract;
(viii) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(ix) establish any Subsidiary or enter into any new line of business;
(x) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;
(xi) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP and after consulting the Purchaser’s outside auditors;
(xii) waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, the Purchaser or its Subsidiary) not in excess of $200,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Actions, Liabilities or obligations, unless such amount has been reserved in the Purchaser Financials;
(xiii) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business;
(xiv) make capital expenditures in excess of $200,000 individually for any project (or set of related projects) or $500,000 in the aggregate (excluding for the avoidance of doubt, incurring any Expenses);
(xv) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the Merger);
(xvi) voluntarily incur any Liability in excess of $200,000 individually or $500,000 in the aggregate (excluding the incurrence of any Expenses) other than pursuant to the terms of a Contract in existence as of the date of this Agreement or entered into in the ordinary course of business or in accordance with the terms of this Section 5.3 during the Interim Period;
(xvii) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(xviii) enter into any agreement, understanding or arrangement with respect to the voting of Purchaser Securities;
(xix) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement; or
(xx) authorize or agree to do any of the foregoing actions;
provided, that any actions reasonably taken in good faith by the Purchaser or its Subsidiaries to the extent reasonably believed to be necessary to comply with Laws (including orders of Governmental Authorities) related to COVID-19 shall be deemed not to constitute a breach of the requirements set forth under this Section 5.3.
5.4
Annual and Interim Financial Statements. During the Interim Period, within thirty (30) calendar days following the end of each three-month quarterly period and each fiscal year, the Company shall deliver to the Purchaser an unaudited consolidated income statement and an unaudited consolidated balance sheet of the Target Companies for the period from the Interim Balance Sheet Date through the end of such calendar month, quarterly period or fiscal year and the applicable comparative period in the preceding fiscal year, in each case accompanied by a certificate of the Chief Financial Officer of the Company to the effect that all such financial statements fairly present the consolidated financial position and results of operations of the Target Companies as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments and excluding footnotes. From the date hereof through the Closing Date, the Company will also promptly deliver to the Purchaser copies of any audited consolidated financial statements of the Target Companies that the Target Companies’ certified public accountants may issue.
5.5
Purchaser Public Filings. During the Interim Period, the Purchaser will keep current and timely file all of its public filings with the SEC and otherwise comply in all material respects with applicable securities Laws and shall use its reasonable best efforts prior to the Closing to maintain the listing of the Purchaser Common Stock on Nasdaq.
(a) For purposes of this Agreement, (i) an “Acquisition Proposal” means any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any Person or group at any time relating to an Alternative Transaction, and (ii) an “Alternative Transaction” means (A) with respect to the Company and its Affiliates, a transaction (other than the transactions contemplated by this Agreement) concerning the sale of (x) all or any material part of the business or assets of the Target Companies (other than in the ordinary course of business consistent with past practice) or (y) any material portion of the shares or other equity interests or profits of the Target Companies, in any case, whether such transaction takes the form of a sale of shares or other equity interests, assets, merger, consolidation, issuance of debt securities, management Contract, joint venture or partnership, or otherwise and (B) with respect to the Purchaser and its Affiliates, a transaction (other than the transactions contemplated by this Agreement) concerning a Business Combination involving Purchaser.
(b) During the Interim Period, in order to induce the other Parties to continue to commit to expend management time and financial resources in furtherance of the transactions contemplated hereby, each Party shall not, and shall cause its Representatives to not, without the prior written consent of the Company and the Purchaser, directly or indirectly, (i) solicit, assist, initiate or facilitate the making, submission or announcement of, or intentionally encourage, any Acquisition Proposal, (ii) furnish any non-public information regarding such Party or its Affiliates or their respective businesses, operations, assets, Liabilities, financial condition, prospects or employees to any Person or group (other than a Party to this Agreement or their respective Representatives) in connection with or in response to an Acquisition Proposal, (iii) engage or participate in discussions or negotiations with any Person or group with respect to, or that could reasonably be expected to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any Acquisition Proposal, (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Acquisition Proposal, or (vi) release any third Person from, or waive any provision of, any confidentiality agreement to which such Party is a party.
(c) Each Party shall notify the others as promptly as practicable (and in any event within 48 hours) in writing of the receipt by such Party or any of its Representatives of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any Acquisition Proposal or any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could be expected to result in an Acquisition Proposal, and (ii) any request for non-public information relating to such Party or its Affiliates in connection with any Acquisition Proposal, specifying in each case, the material terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such inquiry, proposal, offer or request for information. Each Party shall keep the others promptly informed of the status of any such inquiries, proposals, offers or requests for information. During the Interim Period, each Party shall, and shall cause its Representatives to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any Person with respect to any Acquisition Proposal and shall, and shall direct its Representatives to, cease and terminate any such solicitations, discussions or negotiations.
5.7
No Trading. The Company acknowledges and agrees that it is aware, and that the Company’s Affiliates are aware (and each of their respective Representatives is aware or, upon receipt of any material nonpublic information of the Purchaser, will be advised) of the restrictions imposed by U.S. federal securities laws and the rules and regulations of the SEC and Nasdaq promulgated thereunder or otherwise (the “
Federal Securities Laws”) and other applicable foreign and domestic Laws on a Person possessing material nonpublic information about a publicly traded company. The Company hereby agrees that, while it is in possession of such material nonpublic information, it shall not purchase or sell any securities of the Purchaser (other than to engage in the Merger in accordance with Article I), communicate such information to any third party, take any other action with respect to the Purchaser in violation of such Laws, or cause or encourage any third party to do any of the foregoing.
5.8
Notification of Certain Matters. During the Interim Period, each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice or other communication in writing from any third party (including any Governmental Authority) alleging (i) that the Consent of such third party is or may be required in connection with the transactions contemplated by this Agreement or (ii) any material non-compliance with any Law by such Party or its Affiliates; (c) receives any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; (d) discovers any fact or circumstance that, or becomes aware of the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would reasonably be expected to cause or result in any of the conditions to the Closing set forth in
Article VI not being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the transactions contemplated by this Agreement. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.
(a) Subject to the terms and conditions of this Agreement, each Party shall use its commercially reasonable efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement (including the receipt of all applicable Consents of Governmental Authorities) and to comply as promptly as practicable with all requirements of Governmental Authorities applicable to the transactions contemplated by this Agreement.
(b) In furtherance and not in limitation of
Section 5.9(a), to the extent required under any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade (“Antitrust Laws”), each Party hereto agrees to make any required filing or application under Antitrust Laws, as applicable, at such Party’s sole cost and expense, with respect to the transactions contemplated hereby as promptly as practicable, to supply as promptly as reasonably practicable any additional information and documentary material that may be reasonably requested pursuant to Antitrust Laws and to take all other actions reasonably necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under Antitrust Laws as soon as practicable, including by requesting early termination of the waiting period provided for under the Antitrust Laws.
(c) Each Party shall, in connection with its efforts to obtain all requisite approvals and authorizations for the transactions contemplated by this Agreement under any applicable Laws, use its commercially reasonable efforts to: (i) cooperate in all respects with each other Party or its Affiliates in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private Person; (ii) keep the other Parties reasonably informed of any communication received by such Party or its Representatives from, or given by such Party or its Representatives to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private Person, in each case regarding any of the transactions contemplated by this Agreement; (iii) permit a Representative of the other Parties and their respective outside counsel to review any communication given by it to, and consult with each other in advance of any meeting or conference with, any Governmental Authority or, in connection with any proceeding by a private Person, with any other Person, and to the extent permitted by such Governmental Authority or other Person, give a Representative or Representatives of the other Parties the opportunity to attend and participate in such meetings and conferences; (iv) in the event a Party’s Representative is prohibited from participating in or attending any meetings or conferences, the other Parties shall keep such Party promptly and reasonably apprised with respect thereto; and (v) use commercially reasonable efforts to cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending the transactions contemplated hereby, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental Authority.
(d) As soon as reasonably practicable following the date of this Agreement, the Parties shall reasonably cooperate with each other and use (and shall cause their respective Affiliates to use) their respective reasonable best efforts to prepare and file with Governmental Authorities requests for approval of the transactions contemplated by this Agreement and shall use reasonable best efforts to have such Governmental Authorities approve the transactions contemplated by this Agreement. Each Party shall give prompt written notice to the other Parties if such Party or any of its Representatives receives any notice from such Governmental Authorities in connection with the transactions contemplated by this Agreement, and shall promptly furnish the other Parties with a copy of such Governmental Authority notice. If any Governmental Authority requires that a hearing or meeting be held in connection with its approval of the transactions contemplated hereby, whether prior to the Closing or after the Closing, each Party shall arrange for Representatives of such Party to be present for such hearing or meeting. If any objections are asserted with respect to the transactions contemplated by this Agreement under any applicable Law or if any Action is instituted (or threatened to be instituted) by any applicable Governmental Authority or any private Person challenging any of the transactions contemplated by this Agreement or any Ancillary Document as violative of any applicable Law or which would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby, the Parties shall use their commercially reasonable efforts to resolve any such objections or Actions so as to timely permit consummation of the transactions contemplated by this Agreement and the Ancillary Documents, including in order to resolve such objections or Actions which, in any case if not resolved, could reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby. In the event any Action is instituted (or threatened to be instituted) by a Governmental Authority or private Person challenging the transactions contemplated by this Agreement, or any Ancillary Document, the Parties shall, and shall cause their respective Representatives to, reasonably cooperate with each other and use their respective commercially reasonable efforts to contest and resist any such Action and to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement or the Ancillary Documents.
(e) Prior to the Closing, each Party shall use its reasonable best efforts to obtain any Consents of Governmental Authorities or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the transactions contemplated by this Agreement or required as a result of the execution or performance of, or consummation of the transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.
5.10
Tax Matters. Each of the Parties shall use its reasonable best efforts to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. None of the Parties shall (and each of the Parties shall cause their respective Subsidiaries not to) take any action, or fail to take any action, that could reasonably be expected to cause the Merger to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. The Parties intend to report and, except to the extent otherwise required by Law, shall report, for federal income tax purposes, the Merger as a “reorganization” within the meaning of Section 368(a) of the Code.
5.11
Transfer Taxes. The Purchaser shall pay for any sales, use, real property transfer, stamp, stock transfer or other similar transfer Taxes imposed on Purchaser, Merger Sub or any Target Company in connection with the Merger or the other transactions contemplated by this Agreement.
5.12
Further Assurances. The Parties hereto shall further cooperate with each other and use their respective commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this Agreement and applicable Laws to consummate the transactions contemplated by this Agreement as soon as reasonably practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings.
5.13
The Registration Statement.
(a) As promptly as practicable after the date hereof, the Purchaser shall prepare with the reasonable assistance of the Company, and file with the SEC a registration statement on Form S-4 (as amended or supplemented from time to time, and including the Proxy Statement contained therein, the “Registration Statement”) in connection with the registration under the Securities Act of the Purchaser Common Stock to be issued under this Agreement as the Merger Consideration, which Registration Statement will also contain a proxy statement (as amended, the “Proxy Statement”) for the purpose of soliciting proxies from Purchaser stockholders for the matters to be acted upon at the Purchaser Special Meeting and holders of Purchaser Warrants for the matters to be acted upon at the Warrantholder Meeting and providing the Public Stockholders an opportunity in accordance with the Purchaser’s Organizational Documents and the IPO Prospectus to have their shares of Purchaser Common Stock redeemed (the “Redemption”) in conjunction with the stockholder vote on the Purchaser ShareholderStockholder Approval Matters.
(b) The Proxy Statement shall include proxy materials for the purpose of soliciting proxies from:
(i) Purchaser stockholders to vote, at a special meeting of Purchaser stockholders to be called and held for such purpose (the “Purchaser Special Meeting”), in favor of resolutions approving (A) the adoption and approval of this Agreement and the transactions contemplated hereby or referred to herein, including the Merger (and, to the extent required, the issuance of any shares in connection with any PIPE Investment), by the holders of Purchaser Common Stock in accordance with the Purchaser’s Organizational Documents, the DCGL and the rules and regulations of the SEC and Nasdaq, (B) the adoption and approval of the Amended Purchaser Charter, (C) adoption and approval of a new equity incentive plan in substantially the form attached as Exhibit G hereto (the “Incentive Plan”), which will provide for awards for a number of shares of Purchaser Common Stock equal to fifteen percent (15%) of the aggregate number of shares of Purchaser Common Stock issued and outstanding immediately after the Closing (giving effect to the Redemption), (D) the appointment of the members of the Post-Closing Purchaser Board in accordance with Section 5.18 hereof, (E) such other matters as the Company and Purchaser shall hereafter mutually determine to be necessary or appropriate in order to effect the Merger and the other transactions contemplated by this Agreement (the approvals described in foregoing clauses (A) through (E), collectively, the “Purchaser ShareholderStockholder Approval Matters”), and (F) the adjournment of the Purchaser Special Meeting, if necessary or desirable in the reasonable determination of Purchaser; and
(ii) holders of Purchaser Warrants to vote, at a special meeting of the holders of Purchaser Warrants to be called and held for such purpose (the “
Warrantholder Meeting”), in favor of resolutions approving (A) the adoption and approval of an amendment to the Warrant Agreement to provide that all issued and outstanding Purchaser Warrants as of the Closing will no longer be exercisable and will be cancelled, and each holder of a Purchaser Warrant will instead receive a cash payment of One and One-Half U.S. Dollar ($1.50) per whole Purchaser Warrant, payable by Purchaser promptly following the Closing (the “
Warrant Amendment”), (B) such other matters as Purchaser shall hereafter determine to be reasonably necessary or appropriate in order to effect the Warrant Amendment (the approvals described in foregoing clauses (A) and (B), together, the “
Warrantholder Approval Matters”), and (C) the adjournment of the Warrantholder Meeting, if necessary or desirable in the reasonable determination of Purchaser.
(c) If on the date for which the Purchaser Special Meeting is scheduled, Purchaser has not received proxies representing a sufficient number of shares to obtain the Required Purchaser ShareholderStockholder Approval, whether or not a quorum is present, Purchaser may make one or more successive postponements or adjournments of the Purchaser Special Meeting. Purchaser shall use its reasonable best efforts to solicit from the Purchaser stockholders proxies in favor of the Purchaser ShareholderStockholder Approval Matters prior to such Purchaser Special Meeting, and to take all other reasonable actions necessary or advisable to secure the Required Purchaser ShareholderStockholder Approval.
(d) If on the date for which the Warrantholder Meeting is scheduled, Purchaser has not received proxies representing a sufficient number of votes of holders of Purchaser Warrants to approve the Warrantholder Approval Matters at the Warrantholder Meeting in accordance with the Warrant Agreement, applicable Law and the Proxy Statement (the “Required Warrantholder Approval”), whether or not a quorum is present, Purchaser may make one or more successive postponements or adjournments of the Purchaser Warrant Meeting. Purchaser shall use its reasonable best efforts to solicit from the holders of Purchaser Warrants proxies in favor of the Warrantholder Approval Matters prior to such Warrantholder Meeting, and to take all other reasonable actions necessary or advisable to secure the Required Warrantholder Approval (provided, that Purchaser shall not be required to make any additional payments or provide any additional consideration to holders of Purchaser Warrants in connection therewith).
(e) In connection with the Registration Statement, Purchaser will file with the SEC financial and other information about the transactions contemplated by this Agreement in accordance with applicable Law and applicable proxy solicitation and registration statement rules set forth in the Purchaser’s Organizational Documents, the DGCL and the rules and regulations of the SEC and Nasdaq. Purchaser shall cooperate and provide the Company (and its counsel) with a reasonable opportunity to review and comment on the Registration Statement and any amendment or supplement thereto prior to filing the same with the SEC, and Purchaser shall consider any such comments in good faith. The Company shall provide Purchaser with such information concerning the Target Companies and their stockholders, officers, directors, employees, assets, Liabilities, condition (financial or otherwise), business and operations that may be required or appropriate for inclusion in the Registration Statement, or in any amendments or supplements thereto, which information provided by the Company shall be true and correct and not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading.
(f) Purchaser shall exert reasonable best efforts to satisfy the requirements of the Securities Act, the Exchange Act and other applicable Laws in connection with the Registration Statement, the Purchaser Special Meeting, the Warrantholder Meeting and the Redemption. Each of Purchaser and the Company shall, and shall cause each of its Subsidiaries to, make their respective directors, officers and employees, upon reasonable advance notice, available to the Company, Purchaser and, after the Closing, the Purchaser Representative, and their respective Representatives in connection with the drafting of the public filings with respect to the transactions contemplated by this Agreement, including the Registration Statement, and responding in a timely manner to comments from the SEC. Each Party shall promptly correct any information provided by it for use in the Registration Statement (and other related materials) if and to the extent that such information is determined to have become false or misleading in any material respect or as otherwise required by applicable Laws. Purchaser shall amend or supplement the Registration Statement and cause the Registration Statement, as so amended or supplemented, to be filed with the SEC and to be disseminated to Purchaser stockholders and the holders of Purchaser Warrants, in each case as and to the extent required by applicable Laws and subject to the terms and conditions of this Agreement and the Purchaser’s Organizational Documents.
(g) Purchaser, with the assistance of the other Parties, shall promptly respond to any SEC comments on the Registration Statement and shall otherwise use its commercially reasonable efforts to cause the Registration Statement to “clear” comments from the SEC and become effective. Purchaser shall provide the Company with copies of any written comments, and shall inform the Company of any material oral comments, that Purchaser or its Representatives receive from the SEC or its staff with respect to the Registration Statement, the Purchaser Special Meeting, the Warrantholder Meeting and the Redemption promptly after the receipt of such comments and shall give the Company a reasonable opportunity under the circumstances to review and comment on any proposed written or material oral responses to such comments (and Purchaser shall consider any such comments by the Company in good faith).
(h) As soon as practicable following the Registration Statement “clearing” comments from the SEC and becoming effective, Purchaser shall distribute the Registration Statement to the Company Stockholders and the Proxy Statement to Purchaser’s stockholders and the holders of Purchaser Warrants, and, pursuant thereto, shall call the Purchaser Special Meeting and the Warrantholder Meeting in accordance with the DGCL for a date no later than thirty (30) days following the effectiveness of the Registration Statement.
(i) Purchaser shall apply for, and shall use reasonable best efforts to cause the Purchaser Common Stock to be issued in connection with the Merger to be approved for listing on Nasdaq as of the Closing Date and shall comply with all applicable Laws, any applicable rules and regulations of Nasdaq, Purchaser’s Organizational Documents and this Agreement in the preparation, filing and distribution of the Registration Statement, any solicitation of proxies thereunder, the calling and holding of the Purchaser Special Meeting and the Redemption.
5.14
Company Stockholder Meeting. As promptly as practicable after the Registration Statement has become effective, the Company will call a meeting (the “
Company Special Meeting”) of its stockholders or solicit a written consent of its stockholders in order to obtain the Required Company Stockholder Approval, and if such written consent is not obtained promptly after the Registration Statement has become effective, the Company shall use its reasonable best efforts to solicit from the Company Stockholders proxies in favor of the Required Company Stockholder Approval prior to any such Company Special Meeting, and to take all other actions necessary or advisable to secure the Required Company Stockholder Approval, including enforcing the Voting Agreements.
5.15
Public Announcements.
(a) The Parties agree that during the Interim Period no public release, filing or announcement concerning this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby shall be issued by any Party or any of their Affiliates without the prior written consent of the Purchaser and the Company (which consent shall not be unreasonably withheld, conditioned or delayed), except as such release or announcement may be required by applicable Law or the rules or regulations of any securities exchange, in which case the applicable Party shall use commercially reasonable efforts to allow the other Parties reasonable time to comment on, and arrange for any required filing with respect to, such release or announcement in advance of such issuance.
(b) The Parties shall mutually agree upon and, as promptly as practicable after the execution of this Agreement (but in any event within four (4) Business Days thereafter), issue a press release announcing the execution of this Agreement (the “Signing Press Release”). Promptly after the issuance of the Signing Press Release, the Purchaser shall file a current report on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required by Federal Securities Laws, which the Company shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing (with the Company reviewing, commenting upon and approving such Signing Filing in any event no later than the third (3rd) Business Day after the execution of this Agreement; provided, that the Purchaser provides the Company with a reasonable amount of time to complete such review, comment and approval prior to the third (3rd) Business Day after the execution of this Agreement). The Parties shall mutually agree upon and, as promptly as practicable after the Closing (but in any event within four (4) Business Days thereafter), issue a press release announcing the consummation of the transactions contemplated by this Agreement (the “Closing Press Release”). Promptly after the issuance of the Closing Press Release, the Purchaser shall file a current report on Form 8-K (the “Closing Filing”) with the Closing Press Release and a description of the Closing as required by Federal Securities Laws which the Seller Representative and the Purchaser Representative shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing. In connection with the preparation of the Signing Press Release, the Signing Filing, the Closing Filing, the Closing Press Release, or any other report, statement, filing notice or application made by or on behalf of a Party to any Governmental Authority or other third party in connection with the transactions contemplated hereby, each Party shall, upon request by any other Party, furnish the Parties with all information concerning themselves, their respective directors, officers and equity holders, and such other matters as may be reasonably necessary or advisable in connection with the transactions contemplated hereby, or any other report, statement, filing, notice or application made by or on behalf of a Party to any third party and/ or any Governmental Authority in connection with the transactions contemplated hereby.
5.16
Confidential Information.
(a) The Company and the Seller Representative hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with Article VII, for a period of two (2) years after such termination, they shall, and shall cause their respective Representatives to: (i) treat and hold in strict confidence any Purchaser Confidential Information, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing their obligations hereunder or thereunder, enforcing their rights hereunder or thereunder, or in furtherance of their authorized duties on behalf of the Purchaser or its Subsidiaries), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Purchaser Confidential Information without the Purchaser’s prior written consent; and (ii) in the event that the Company, the Seller Representative or any of their respective Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with Article VII, for a period of two (2) years after such termination, becomes legally compelled to disclose any Purchaser Confidential Information, (A) provide the Purchaser to the extent legally permitted with prompt written notice of such requirement so that the Purchaser or an Affiliate thereof may seek, at Purchaser’s cost, a protective Order or other remedy or waive compliance with this Section 5.16(a), and (B) in the event that such protective Order or other remedy is not obtained, or the Purchaser waives compliance with this Section 5.16(a), furnish only that portion of such Purchaser Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise its reasonable best efforts to obtain assurances that confidential treatment will be accorded such Purchaser Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, the Company and the Seller Representative shall, and shall cause their respective Representatives to, promptly deliver to the Purchaser or destroy (at Purchaser’s election) any and all copies (in whatever form or medium) of Purchaser Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Company and the Seller Representative and their respective Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; and provided, further, that any Purchaser Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement.
(b) The Purchaser hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with Article VII, for a period of two (2) years after such termination, it shall, and shall cause its Representatives to: (i) treat and hold in strict confidence any Company Confidential Information, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Company Confidential Information without the Company’s prior written consent; and (ii) in the event that the Purchaser or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with Article VII, for a period of two (2) years after such termination, becomes legally compelled to disclose any Company Confidential Information, (A) provide the Company to the extent legally permitted with prompt written notice of such requirement so that the Company may seek, at the Company’s sole expense, a protective Order or other remedy or waive compliance with this Section 5.16(b) and (B) in the event that such protective Order or other remedy is not obtained, or the Company waives compliance with this Section 5.16(b), furnish only that portion of such Company Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise its reasonable best efforts to obtain assurances that confidential treatment will be accorded such Company Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, the Purchaser shall, and shall cause its Representatives to, promptly deliver to the Company or destroy (at the Purchaser’s election) any and all copies (in whatever form or medium) of Company Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Purchaser and its Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; and provided, further, that any Company Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement. Notwithstanding the foregoing, the Purchaser and its Representatives shall be permitted to disclose any and all Company Confidential Information to the extent required by the Federal Securities Laws.
5.17
Documents and Information. After the Closing Date, the Purchaser and the Company shall, and shall cause their respective Subsidiaries to, until the seventh (7
th) anniversary of the Closing Date, retain all books, records and other documents pertaining to the business of the Target Companies in existence on the Closing Date and make the same available for inspection and copying by the Purchaser Representative during normal business hours of the Company and its Subsidiaries, as applicable, upon reasonable request and upon reasonable notice. No such books, records or documents shall be destroyed after the seventh (7
th) anniversary of the Closing Date by the Purchaser or its Subsidiaries (including any Target Company) without first advising the Purchaser Representative in writing and giving the Purchaser Representative a reasonable opportunity to obtain possession thereof.
5.18
Post-Closing Board of Directors and Executive Officers.
(a) The Parties shall take all necessary action, including causing the directors of the Purchaser to resign, so that effective as of the Closing, the Purchaser’s board of directors (the “Post-Closing Purchaser Board”) will consist of nine (9) individuals. Immediately after the Closing, the Parties shall take all necessary action to designate and appoint to the Post-Closing Purchaser Board (i) the three (3) persons that are designated by the Purchaser prior to the Closing (the “Purchaser Directors”), at least one (1) of whom shall be required to qualify as an independent director under Nasdaq rules, and (ii) the six (6) persons that are designated by the Company prior to the Closing (the “Company Directors”), at least four (4) of whom shall be required to qualify as an independent director under Nasdaq rules. Pursuant to the Amended Purchaser Charter as in effect as of the Closing, the Post-Closing Purchaser Board will be a classified board with three classes of directors, with (I) one class of directors, the Class I Directors, initially serving a one (1) year term, such term effective from the Closing (but any subsequent Class I Directors serving a three (3) year term), (II) a second class of directors, the Class II Directors, initially serving a two (2) year term, such term effective from the Closing (but any subsequent Class II Directors serving a three (3) year term), and (III) a third class of directors, the Class III Directors, serving a three (3) year term, such term effective from the Closing. One of the Purchaser Directors shall be a Class I Director, one shall be a Class II Director and the third shall be a Class III Director. In accordance with the Amended Purchaser Charter as in effect at the Closing, no director on the Post-Closing Purchaser Board may be removed without cause. The Parties shall also take all necessary action, including causing the directors and officers of the Company to resign effective as of the Closing, so that the board of directors of the Surviving Corporation immediately after the Closing shall be the same as the Post-Closing Purchaser Board. At or prior to the Closing, the Purchaser will provide each member of the Post-Closing Purchaser Board with a customary director indemnification agreement, in form and substance reasonable acceptable to such director, to be effective upon the Closing (or if later, such director’s appointment).
(b) The Parties shall take all action necessary, including causing the executive officers of Purchaser to resign, so that the individuals serving as the chief executive officer and chief financial officer, respectively, of Purchaser immediately after the Closing will be the same individuals (in the same office) as that of the Company immediately prior to the Closing (unless, at its sole discretion, the Company desires to appoint another qualified person to either such role, in which case, such other person identified by the Company shall serve in such role).
5.19
Indemnification of Directors and Officers; Tail Insurance.
(a) The Parties agree that all rights to exculpation, indemnification and advancement of expenses existing in favor of the current or former directors and officers of the Purchaser or Merger Sub and each Person who served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of the Purchaser or Merger Sub (the “D&O Indemnified Persons”) as provided in their respective Organizational Documents or under any indemnification, employment or other similar agreements between any D&O Indemnified Person and the Purchaser or Merger Sub, in each case as in effect on the date of this Agreement, shall survive the Closing and continue in full force and effect in accordance with their respective terms to the extent permitted by applicable Law. For a period of six (6) years after the Effective Time, the Purchaser shall cause the Organizational Documents of the Purchaser and the Surviving Corporation to contain provisions no less favorable with respect to exculpation and indemnification of and advancement of expenses to D&O Indemnified Persons than are set forth as of the date of this Agreement in the Organizational Documents of the Purchaser and Merger Sub to the extent permitted by applicable Law. The provisions of this Section 5.19 shall survive the consummation of the Merger and are intended to be for the benefit of, and shall be enforceable by, each of the D&O Indemnified Persons and their respective heirs and representatives.
(b) For the benefit of the Purchaser’s and Merger Sub’s directors and officers, the Purchaser shall be permitted prior to the Effective Time to obtain and fully pay the premium for a “tail” insurance policy that provides coverage for up to a six-year period from and after the Effective Time for events occurring prior to the Effective Time (the “
D&O Tail Insurance”) that is substantially equivalent to and in any event not less favorable in the aggregate than the Purchaser’s existing policy or, if substantially equivalent insurance coverage is unavailable, the best available coverage. If obtained, the Purchaser shall maintain the D&O Tail Insurance in full force and effect, and continue to honor the obligations thereunder, and the Purchaser shall timely pay or caused to be paid all premiums with respect to the D&O Tail Insurance.
5.20
Trust Account Proceeds. The Parties agree that after the Closing, the funds in the Trust Account, after taking into account payments for the Redemption, and any proceeds received by Purchaser from any PIPE Investment shall first be used to pay (i) if applicable, the aggregate payment to be made to the former holders of Purchaser Warrants for the Warrant Amendment, (ii) the Purchaser’s accrued Expenses, (iii) the Purchaser’s deferred Expenses (including cash amounts payable to the IPO Underwriter and any legal fees) of the IPO, (iv) any loans owed by the Purchaser to Orion Resource Partners (USA) LP, a Delaware limited partnership, (v) any loans owed by the Purchaser to the Sponsor for any Expenses (including deferred Expenses), other administrative costs and expenses incurred by or on behalf of the Purchaser or Extension Expenses and (vi) any other Liabilities of the Purchaser due and payable as of the Closing. Such Expenses, as well as any Expenses that are required to be paid by delivery of the Purchaser’s securities, will be paid at the Closing. Any remaining cash will be used for working capital and general corporate purposes of the Purchaser and the Surviving Corporation.
5.21
PIPE Investment. Without limiting anything to the contrary contained herein, during the Interim Period, Purchaser may, but shall not be required to, enter into and consummate subscription agreements with investors relating to a private equity investment in Purchaser to purchase shares of Purchaser in connection with a private placement, and/or enter into backstop arrangements with potential investors, in either case on terms mutually agreeable to the Company and Purchaser, acting reasonably (a “
PIPE Investment”), and, if Purchaser elects, with the Company’s consent (not to be unreasonably withheld, delayed or conditioned), to seek a PIPE Investment, Purchaser and the Company shall, and shall cause their respective Representatives to, cooperate with each other and their respective Representatives in connection with such PIPE Investment and use their respective commercially reasonable efforts to cause such PIPE Investment to occur (including having the Company’s senior management participate in any investor meetings and roadshows as reasonably requested by Purchaser).
5.22
Required Extension. Purchaser hereby agrees that it will seek, and use its reasonable best efforts to obtain, from its stockholders an Extension (the “
Required Extension”) of its current deadline to consummate a Business Combination of October 20, 2020, with such Required Extension to be to February 22, 2021 unless otherwise consented to by the Company (such consent not to be unreasonably withheld, delayed or conditioned), or such other period as agreed by Purchaser and the Company. Notwithstanding the foregoing or anything else to the contrary in this Agreement, Purchaser may, but shall not be required to, pay additional amounts to the Trust Account in connection with any Extension.
5.23
Section 16 Matters. Prior to the Closing, the Purchaser’s board of directors, or an appropriate committee of “non-employee directors” (as defined in Rule 16b-3 under the Exchange Act) thereof, shall adopt a resolution consistent with the interpretive guidance of the SEC so that the acquisition of Purchaser Common Stock pursuant to this Agreement and the other agreements contemplated hereby, by any person owning securities of the Company who is expected to become a director or officer (as defined under Rule 16a-1(f) under the Exchange Act) of Purchaser following the Closing shall be an exempt transaction for purposes of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder.
CLOSING CONDITIONS
6.1
Conditions to Each Party’s Obligations. The obligations of each Party to consummate the Merger and the other transactions described herein shall be subject to the satisfaction or written waiver (where permissible) by the Company and the Purchaser of the following conditions:
(a) Required Purchaser ShareholderStockholder Approval. The Purchaser ShareholderStockholder Approval Matters that are submitted to the vote of the shareholdersstockholders of the Purchaser at the Purchaser Special Meeting in accordance with the Proxy Statement shall have been approved by the requisite vote of the shareholdersstockholders of the Purchaser at the Purchaser Special Meeting in accordance with the Purchaser’s Organizational Documents, applicable Law and the Proxy Statement (the “Required Purchaser ShareholderStockholder Approval”).
(b) Required Warrantholder Approval. The Required Warrantholder Approval shall have been obtained by Purchaser.
(c) Required Company Stockholder Approval. The requisite vote or consent of the Company Stockholders (including any separate class or series vote that is required, whether pursuant to the Company’s Organizational Documents, any stockholder agreement or otherwise) in accordance with the DGCL and the Company’s Organizational Documents, to authorize, approve and consent to, the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which the Company is or is required to be a party or bound, and the consummation of the transactions contemplated hereby and thereby, including the Merger (the “Required Company Stockholder Approval”) shall have been obtained.
(d) Antitrust Laws. Any waiting period (and any extension thereof) applicable to the consummation of this Agreement under any Antitrust Laws shall have expired or been terminated.
(e) Requisite Regulatory Approvals. All Consents required to be obtained from or made with any Governmental Authority in order to consummate the transactions contemplated by this Agreement shall have been obtained or made.
(f) Requisite Consents. The Consents required to be obtained from or made with any third Person (other than a Governmental Authority) in order to consummate the transactions contemplated by this Agreement that are set forth in Schedule 7.1(f) shall have each been obtained or made.
(g) No Adverse Law or Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) or Order that is then in effect and which has the effect of making the transactions or agreements contemplated by this Agreement illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by this Agreement.
(h) Net Tangible Assets Test. Upon the Closing, after giving effect to the Redemption and any PIPE Investment, the Purchaser shall have net tangible assets of at least $5,000,001.
(i) Appointment to the Board. The members of the Post-Closing Purchaser Board shall have been elected or appointed as of the Closing consistent with the requirements of Section 5.18.
(j) Registration Statement. The Registration Statement shall have been declared effective by the SEC and shall remain effective as of the Closing, and no stop order or similar order shall be in effect with respect to the Registration Statement.
6.2
Conditions to Obligations of the Company. In addition to the conditions specified in
Section 6.1, the obligations of the Company to consummate the Merger and the other transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by the Company) of the following conditions:
(a) Representations and Warranties. All of the representations and warranties of the Purchaser set forth in this Agreement and in any certificate delivered by or on behalf of the Purchaser pursuant hereto shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, the Purchaser.
(b)
Agreements and Covenants. The Purchaser shall have performed in all material respects all of the Purchaser’s obligations and complied in all material respects with all of the Purchaser’s agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) Warrant Forfeiture and Warrant Amendment. Sponsor shall have forfeited the Forfeited Warrants in accordance with the Sponsor Warrant Letter, and the Warrant Amendment shall be in full force and effect.
(d) No Purchaser Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Purchaser since the date of this Agreement which is continuing and uncured.
(e) Minimum Cash Condition. Upon the Closing, the Purchaser shall have cash and cash equivalents, including funds remaining in the Trust Account and the proceeds of any PIPE Investment approved by the Company in accordance with Section 5.21 (but after giving effect to (i) the completion and payment of the Redemption, (ii) the payment of all unpaid Expenses incurred by or on behalf of the Purchaser, the Company or any of its Subsidiaries, and any other Liabilities of the Purchaser due at the Closing, and (iii) the repurchase any Purchaser Warrants outstanding as of the Closing in accordance with the Warrant Amendment), and excluding Company Closing Cash taken into account in the calculation of Company Net Indebtedness, of at least equal to Sixty Million U.S. Dollars ($60,000,000).
(f) Nasdaq. The Purchaser Common Stock to be issued as Merger Consideration shall have been approved for listing on Nasdaq, subject only to official notice of issuance thereof.
(g) Closing Deliveries.
(i) Officer Certificate.OFFICER CERTIFICATE. The Purchaser shall have delivered to the Company a certificate, dated the Closing Date, signed by an executive officer of the Purchaser in such capacity, certifying as to the satisfaction of the conditions specified in Sections 6.2(a), 6.2(b) and 6.2(d).
(ii) Secretary Certificate.SECRETARY CERTIFICATE. The Purchaser shall have delivered to the Company a certificate from its secretary or other executive officer certifying as to, and attaching, (A) copies of the Purchaser’s Organizational Documents as in effect as of the Closing Date (after giving effect to the adoption of the Amended Purchaser Charter), (B) the resolutions of the Purchaser’s board of directors authorizing and approving the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which it is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby, (C) evidence that the Required Purchaser ShareholderStockholder Approval has been obtained and (D) the incumbency of officers authorized to execute this Agreement or any Ancillary Document to which the Purchaser is or is required to be a party or otherwise bound.
(iii) Good Standing.GOOD STANDING. The Purchaser shall have delivered to the Company a good standing certificate (or similar documents applicable for such jurisdictions) for the Purchaser certified as of a date no earlier than thirty (30) days prior to the Closing Date from the proper Governmental Authority of the Purchaser’s jurisdiction of organization and from each other jurisdiction in which the Purchaser is qualified to do business as a foreign entity as of the Closing, in each case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.
6.3
Conditions to Obligations of the Purchaser. In addition to the conditions specified in
Section 6.1, the obligations of the Purchaser and Merger Sub to consummate the Merger and the other transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by the Purchaser) of the following conditions:
(a) Representations and Warranties. All of the representations and warranties of the Company set forth in this Agreement and in any certificate delivered by or on behalf of the Company pursuant hereto shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, the Target Companies, taken as a whole.
(b) Agreements and Covenants. The Company shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) No Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Target Companies taken as a whole since the date of this Agreement which is continuing and uncured.
(d) Certain Ancillary Documents. Each Lock-Up Agreement, Non-Competition Agreement, Transaction Bonus Agreement and Employment Agreement shall be in full force and effect in accordance with the terms thereof as of the Closing.
(e) Closing Deliveries.
(i) Officer Certificate.OFFICER CERTIFICATE. The Purchaser shall have received a certificate from the Company, dated as the Closing Date, signed by an executive officer of the Company in such capacity, certifying as to the satisfaction of the conditions specified in Sections 6.3(a), 6.3(b) and 6.3(c)
(ii) Secretary Certificate.SECRETARY CERTIFICATE. The Company shall have delivered to the Purchaser a certificate executed by the Company’s secretary certifying as to the validity and effectiveness of, and attaching, (A) copies of the Company’s Organizational Documents as in effect as of the Closing Date (immediately prior to the Effective Time), (B) the requisite resolutions of the Company’s board of directors authorizing and approving the execution, delivery and performance of this Agreement and each Ancillary Document to which the Company is or is required to be a party or bound, and the consummation of the Merger and the other transactions contemplated hereby and thereby, and the adoption of the Surviving Corporation Organizational Documents, and recommending the approval and adoption of the same by the Company Stockholders at a duly called meeting of stockholders, (C) evidence that the Required Company Stockholder Approval has been obtained and (D) the incumbency of officers of the Company authorized to execute this Agreement or any Ancillary Document to which the Company is or is required to be a party or otherwise bound.
(iii) Good Standing.GOOD STANDING. The Company shall have delivered to the Purchaser good standing certificates (or similar documents applicable for such jurisdictions) for each Target Company certified as of a date no earlier than thirty (30) days prior to the Closing Date from the proper Governmental Authority of the Target Company’s jurisdiction of organization and from each other jurisdiction in which the Target Company is qualified to do business as a foreign corporation or other entity as of the Closing, in each case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.
(iv) Certified Charter.CERTIFIED CHARTER. The Company shall have delivered to the Purchaser a copy of the Company Charter, as in effect as of immediately prior to the Effective Time, certified by the Secretary of State of the State of Delaware as of a date no more than ten (10) Business Days prior to the Closing Date.
(v) Company Convertible Securities.COMPANY CONVERTIBLE SECURITIES. The Purchaser shall have received evidence reasonably acceptable to the Purchaser that the Company shall have terminated, extinguished and cancelled in full any outstanding Company Convertible Securities or commitments therefor, without the Company having any further Liability with respect thereto.
(vi) Registered Agent Letter.REGISTERED AGENT LETTER. The Purchaser shall receive a copy of the letter, executed by all parties thereto, in the agreed form, to the Delaware registered agent of the Company from the client of record of such registered agent instructing it to take instruction from the Purchaser (or its nominees) from Closing.
6.4
Frustration of Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition set forth in this
Article VI to be satisfied if such failure was caused by the failure of such Party or its Affiliates (or with respect to the Company, any Target Company or Company Stockholder) failure to comply with or perform any of its covenants or obligations set forth in this Agreement.
TERMINATION AND EXPENSES
7.1
Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing as follows:
(a) by mutual written consent of the Purchaser and the Company;
(b) by written notice by the Purchaser or the Company if any of the conditions to the Closing set forth in Article VI have not been satisfied or waived on or prior to October 20, 2020 (the “Outside Date”); provided, that if the Required Extension is obtained, the Outside Date shall also be extended to the same date as such Required Extension requires a Business Combination be completed by; provided, further the right to terminate this Agreement under this Section 7.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation, warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;
(c) by written notice by either the Purchaser or the Company if a Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such Order or other action has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(c) shall not be available to a Party if the failure by such Party or its Affiliates to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Governmental Authority;
(d) by written notice by the Company to Purchaser, if (i) there has been a breach by the Purchaser of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of the Purchaser shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 6.2(a) or Section 6.2(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Purchaser or (B) the Outside Date; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 7.1(d) if at such time the Company is in material uncured breach of this Agreement;
(e) by written notice by the Purchaser to the Company, if (i) there has been a breach by the Company of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of such Parties shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 6.3(a) or Section 6.3(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Company or (B) the Outside Date; provided, that the Purchaser shall not have the right to terminate this Agreement pursuant to this Section 7.1(e) if at such time the Purchaser is in material uncured breach of this Agreement;
(f) by written notice by the Company to the Purchaser, if there shall have been a Material Adverse Effect on the Purchaser following the date of this Agreement which is uncured and continuing;
(g) by written notice by the Purchaser to the Company, if there shall have been a Material Adverse Effect on the Target Companies taken as a whole following the date of this Agreement which is uncured and continuing;
(h) by written notice by either the Purchaser or the Company to the other, if the Purchaser Special Meeting is held (including any adjournment or postponement thereof) and has concluded, the Purchaser’s stockholders have duly voted, and the Required Purchaser ShareholderStockholder Approval was not obtained;
(i) by written notice by either the Purchaser or the Company to the other, if the Company Special Meeting is held (including any adjournment or postponement thereof) and has concluded, the Company Stockholders have duly voted, and the Required Company Stockholder Approval was not obtained; or
(j) by written notice by either the Purchaser or the Company to the other if the Required Extension shall have not been obtained on or prior to October 20, 2020.
7.2
Effect of Termination. This Agreement may only be terminated in the circumstances described in
Section 7.1 and pursuant to a written notice delivered by the applicable Party to the other applicable Parties, which sets forth the basis for such termination, including the provision of
Section 7.1 under which such termination is made. In the event of the valid termination of this Agreement pursuant to
Section 7.1, this Agreement shall forthwith become void, and there shall be no Liability on the part of any Party or any of their respective Representatives, and all rights and obligations of each Party shall cease, except: (i)
Sections 5.15,
5.16,
7.3,
8.1,
Article IX and this
Section 7.2 shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any Party from Liability for any willful breach of any representation, warranty, covenant or obligation under this Agreement prior to termination of this Agreement (in each case of clauses (i) and (ii) above, subject to
Section 8.1). Without limiting the foregoing, and except as provided in
Sections 7.3 and this
Section 7.2 (but subject to
Section 8.1) and subject to the right to seek injunctions, specific performance or other equitable relief in accordance with
Section 9.7, the Parties’ sole right prior to the Closing with respect to any breach of any representation, warranty, covenant or other agreement contained in this Agreement by another Party or with respect to the transactions contemplated by this Agreement shall be the right, if applicable, to terminate this Agreement pursuant to
Section 7.1.
7.3
Fees and Expenses. Subject to
Sections 8.1,
9.14 and
9.15 all Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such expenses. As used in this Agreement, “Expenses” shall include all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financial advisors, financing sources, experts and consultants to a Party hereto or any of its Affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution or performance of this Agreement or any Ancillary Document related hereto and all other matters related to the consummation of this Agreement. With respect to the Purchaser, Expenses shall include any and all deferred expenses (including fees or commissions payable to the underwriters and any legal fees) of the IPO upon consummation of a Business Combination, any costs and expenses incurred by Purchaser in connection with any PIPE Investment and any Extension Expenses. With respect to the Company, Expenses shall include any payments pursuant to the Transaction Bonus Agreements or Employment Agreements due at or prior to the Closing.
WAIVERS AND RELEASES
8.1
Waiver of Claims Against Trust. Reference is made to the IPO Prospectus. The Company and the Seller Representative each hereby represents and warrants that it has read the IPO Prospectus and understands that Purchaser has established the Trust Account containing the proceeds of the IPO and the overallotment shares acquired by Purchaser’s underwriters and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of Purchaser’s public
shareholdersstockholders (including overallotment shares acquired by Purchaser’s underwriters) (the “
Public Stockholders”) and that, except as otherwise described in the IPO Prospectus, Purchaser may disburse monies from the Trust Account only: (a) to the Public Stockholders in the event they elect to redeem their shares of Purchaser Common Stock in connection with the consummation of its initial business combination (as such term is used in the IPO Prospectus) (“
Business Combination”) or in connection with an amendment to Purchaser’s Organizational Documents to extend Purchaser’s deadline to consummate a Business Combination, (b) to the Public Stockholders if the Purchaser fails to consummate a Business Combination within 18 months after the closing of the IPO, which has since been extended to October 20, 2020, and will upon the Required Extension be further extended to February 22, 2021, and is subject to further extension by amendment to Purchaser’s Organizational Documents, (c) with respect to any interest earned on the amounts held in the Trust Account, amounts necessary to pay for any taxes and up to $100,000 in dissolution expenses, and (d) to Purchaser after or concurrently with the consummation of a Business Combination. For and in consideration of Purchaser entering into this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the Company and the Seller Representative hereby agrees on behalf of itself and its Affiliates that, notwithstanding anything to the contrary in this Agreement, none of the Company or the Seller Representative nor any of their respective Affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Agreement or any proposed or actual business relationship between Purchaser or any of its Representatives, on the one hand, and the Company, the Seller Representative or any of their respective Representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”). Each of the Company and the Seller Representative on behalf of itself and its Affiliates hereby irrevocably waives any Released Claims that any such Party or any of its Affiliates may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with Purchaser or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Agreement or any other agreement with Purchaser or its Affiliates). The Company and the Seller Representative each agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by Purchaser and its Affiliates to induce Purchaser to enter in this Agreement, and each of the Company and the Seller Representative further intends and understands such waiver to be valid, binding and enforceable against such Party and each of its Affiliates under applicable Law. To the extent that the Company or the Seller Representative or any of their respective Affiliates commences any Action based upon, in connection with, relating to or arising out of any matter relating to Purchaser or its Representatives, which proceeding seeks, in whole or in part, monetary relief against Purchaser or its Representatives, each of the Company and the Seller Representative hereby acknowledges and agrees that its and its Affiliates’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit such Party or any of its Affiliates (or any Person claiming on any of their behalves or in lieu of them) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. In the event that the Company or the Seller Representative or any of their respective Affiliates commences Action based upon, in connection with, relating to or arising out of any matter relating to Purchaser or its Representatives which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom) or the Public Stockholders, whether in the form of money damages or injunctive relief, Purchaser and its Representatives, as applicable, shall be entitled to recover from the Company, the Seller Representative and their respective Affiliates, as applicable, the associated legal fees and costs in connection with any such Action, in the event Purchaser or its Representatives, as applicable, prevails in such Action. This
Section 8.1 shall survive termination of this Agreement for any reason and continue indefinitely.
MISCELLANEOUS
9.1
No Survival. The representations and warranties of the Company and the Purchaser contained in this Agreement or in any certificate or instrument delivered by or on behalf of the Company or the Purchaser pursuant to this Agreement shall not survive the Closing, and from and after the Closing, the Company and the Purchaser and their respective Representatives shall not have any further obligations, nor shall any claim be asserted or action be brought against the Company or the Purchaser or their respective Representatives with respect thereto. The covenants and agreements made by the Company and the Purchaser in this Agreement or in any certificate or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such covenants or agreements, shall not survive the Closing, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Closing (which such covenants shall survive the Closing and continue until fully performed in accordance with their terms).
9.2
Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means (including email), with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice):
If to the Purchaser or Merger Sub at or prior to the Closing, to: | with a copy (which will not constitute notice) to: |
| |
AMCI Acquisition Corp. | Ellenoff Grossman & Schole LLP |
975 Georges Station Road, Suite 900 | 1345 Avenue of the Americas, 11th Floor |
Greensburg, PA 15601 | New York, New York 10105 |
| |
Attn: William Hunter | Attn: | Matthew A. Gray, Esq. |
Telephone No.: (203) 856-7285 | | Stuart Neuhauser, Esq. |
Email: whunter@amcigroup.com | Facsimile No.: | (212) 370-7889 |
| Telephone No.: | (212) 370-1300 |
| Email: | mgray@egsllp.com |
| | sneuhauser@egsllp.com |
If to the Purchaser Representative, to: | with a copy (which will not constitute notice) to: |
| |
AMCI Sponsor LLC | Ellenoff Grossman & Schole LLP |
1501 Ligonier Street, Suite 370 | 1345 Avenue of the Americas, 11th Floor |
Latrobe, PA 15601 | New York, New York 10105 |
| |
Attn: William Hunter | Attn: | Matthew A. Gray, Esq. |
Telephone No.: (203) 856-7285 | | Stuart Neuhauser, Esq. |
Email: whunter@amcigroup.com | Facsimile No.: | (212) 370-7889 |
| Telephone No.: | (212) 370-1300 |
| Email: | mgray@egsllp.com |
| | sneuhauser@egsllp.com |
| |
If to the Company or the Surviving Corporation, to: | with a copy (which will not constitute notice) to: |
| |
c/o Advent Technologies Inc. | Ropes & Gray LLP |
One Mifflin Place | 1211 Avenue of the Americas |
119 Mt Auburn Street, Suite 400 | New York, New York 10036-8704 |
| |
Cambridge, MA 02138 | Attn: | Carl Marcellino, Esq |
Attn: James F. Coffey | | Paul D. Tropp, Esq. |
Telephone No.: (617) 645-0017 | Facsimile No.: | (212) 596-9090 |
Email: jcoffey@advent.energy | Telephone No.: | (212) 841-0623 |
| | (212) 596-9515 |
| Email | Carl.Marcellino@ropesgray.com |
| | Paul.Tropp@ropesgray.com |
| |
If to the Seller Representative to: | with a copy (which will not constitute notice) to: |
| |
Vassilios Gregoriou | Ropes & Gray LLP |
One Mifflin Place | 1211 Avenue of the Americas |
119 Mt Auburn Street, Suite 400 | New York, New York 10036-8704 |
| |
Cambridge, MA 02138 | Attn: | Carl Marcellino, Esq. |
Telephone No.: (857) 264-7035 | | Paul D. Tropp, Esq. |
Email: v@advent.energy | Facsimile No.: | (212) 596-9090 |
| Telephone No.: | (212) 841-0623 |
| | (212) 596-9515 |
| Email: | Carl.Marcellino@ropesgray.com |
| | Paul.Tropp@ropesgray.com |
If to the Purchaser after the Closing, to: | with a copy (which will not constitute notice) to: |
| | |
Advent Technologies Holdings Inc. | Ropes & Gray LLP |
One Mifflin Place | 1211 Avenue of the Americas |
119 Mt Auburn Street, Suite 400 | New York, New York 10036-8704 |
| |
Cambridge, MA 02138 | Attn: | Carl Marcellino, Esq. |
Attn: Vassilios Gregoriou | | Paul D. Tropp, Esq. |
Telephone No.: (857) 264-7035 | Facsimile No.: | (212) 596-9090 |
Email: v@advent.energy | Telephone No.: | (212) 841-0623 |
| | (212) 596-9515 |
and | Email: | Carl.Marcellino@ropesgray.com |
| | Paul.Tropp@ropesgray.com |
the Purchaser Representative | and |
| | |
| Ellenoff Grossman & Schole LLP |
| 1345 Avenue of the Americas, 11th Floor |
| New York, New York 10105 |
| |
| Attn: | Matthew A. Gray, Esq. |
| | Stuart Neuhauser, Esq. |
| Facsimile No.: | (212) 370-7889 |
| Telephone No.: | (212) 370-1300 |
| Email: | mgray@egsllp.com |
| | sneuhauser@egsllp.com |
9.3
Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without the prior written consent of the Purchaser and the Company (and after the Closing, the Purchaser Representative and the Seller Representative), and any assignment without such consent shall be null and void;
provided that no such assignment shall relieve the assigning Party of its obligations hereunder.
9.4
Third Parties. Except for the rights of the D&O Indemnified Persons set forth in
Section 5.19, which the Parties acknowledge and agree are express third party beneficiaries of this Agreement, nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a Party hereto or thereto or a successor or permitted assign of such a Party.
9.5
Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York without regard to the conflict of laws principles thereof. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate court thereof) (the “
Specified Courts”). Each Party hereto hereby (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at the applicable address set forth in
Section 9.2. Nothing in this
Section 9.5 shall affect the right of any Party to serve legal process in any other manner permitted by Law.
9.6
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.6.
9.7
Specific Performance. Each Party acknowledges that the rights of each Party to consummate the transactions contemplated hereby are unique, recognizes and affirms that in the event of a breach of this Agreement by any Party, money damages may be inadequate and the non-breaching Parties may have not adequate remedy at law, and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by an applicable Party in accordance with their specific terms or were otherwise breached.
Accordingly, each Party shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such Party may be entitled under this Agreement, at law or in equity.
9.8
Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
9.9
Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Purchaser, the Company, the Purchaser Representative and the Seller Representative.
9.10
Waiver. The Purchaser on behalf of itself and its Affiliates, the Company on behalf of itself and its Affiliates, and the Seller Representative on behalf of itself and the Company Stockholders, may in its sole discretion (i) extend the time for the performance of any obligation or other act of any other non-Affiliated Party hereto, (ii) waive any inaccuracy in the representations and warranties by such other non-Affiliated Party contained herein or in any document delivered pursuant hereto and (iii) waive compliance by such other non-Affiliated Party with any covenant or condition contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby (including by the Purchaser Representative or the Seller Representative in lieu of such Party to the extent provided in this Agreement). Notwithstanding the foregoing, no failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. Notwithstanding the foregoing, any waiver of any provision of this Agreement after the Closing shall also require the prior written consent of the Purchaser Representative.
9.11
Entire Agreement. This Agreement and the documents or instruments referred to herein, including any exhibits and schedules attached hereto, which exhibits and schedules are incorporated herein by reference, together with the Ancillary Documents, embody the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter contained herein.
9.12
Interpretation. The table of contents and the Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement. In this Agreement, unless the context otherwise requires: (a) any pronoun used shall include the corresponding masculine, feminine or neuter forms, and words in the singular, including any defined terms, include the plural and vice versa; (b) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity; (c) any accounting term used and not otherwise defined in this Agreement or any Ancillary Document has the meaning assigned to such term in accordance with GAAP; (d) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (e) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (f) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (g) the term “or” means “and/or”; (h) any reference to the term “ordinary course” or “ordinary course of business” shall be deemed in each case to be followed by the words “consistent with past practice”; (i) any agreement, instrument, insurance policy, Law or Order defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, insurance policy, Law or Order as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes, regulations, rules or orders) by succession of comparable successor statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein; (j) except as otherwise indicated, all references in this Agreement to the words “Section,” “Article”, “Schedule” and “Exhibit” are intended to refer to Sections, Articles, Schedules and Exhibits to this Agreement; and (k) the term “Dollars” or “$” means United States dollars. Any reference in this Agreement to a Person’s directors shall include any member of such Person’s governing body and any reference in this Agreement to a Person’s officers shall include any Person filling a substantially similar position for such Person. Any reference in this Agreement or any Ancillary Document to a Person’s
shareholdersstockholders or stockholders shall include any applicable owners of the equity interests of such Person, in whatever form. The Parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. To the extent that any Contract, document, certificate or instrument is represented and warranted to by the Company to be given, delivered, provided or made available by the Company, in order for such Contract, document, certificate or instrument to have been deemed to have been given, delivered, provided and made available to the Purchaser or its Representatives, such Contract, document, certificate or instrument shall have been posted to the electronic data site maintained on behalf of the Company for the benefit of the Purchaser and its Representatives and the Purchaser and its Representatives have been given access to the electronic folders containing such information.
9.13
Counterparts. This Agreement and each Ancillary Document may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
9.14
Purchaser Representative.
(a) The Purchaser, on behalf of itself and its Subsidiaries, successors and assigns, by execution and delivery of this Agreement, hereby irrevocably appoints AMCI Sponsor LLC, in the capacity as the Purchaser Representative, as each such Person’s agent, attorney-in-fact and representative, with full power of substitution to act in the name, place and stead of such Person, to act on behalf of such Person from and after the Closing in connection with: (i) terminating, amending or waiving on behalf of such Person any provision of this Agreement or any Ancillary Documents to which the Purchaser Representative is a party or otherwise has rights in such capacity (together with this Agreement, the “Purchaser Representative Documents”); (ii) signing on behalf of such Person any releases or other documents with respect to any dispute or remedy arising under any Purchaser Representative Documents; (iii) employing and obtaining the advice of legal counsel, accountants and other professional advisors as the Purchaser Representative, in its reasonable discretion, deems necessary or advisable in the performance of its duties as the Purchaser Representative and to rely on their advice and counsel; (iv) incurring and paying reasonable out-of-pocket costs and expenses, including fees of brokers, attorneys and accountants incurred pursuant to the transactions contemplated hereby, and any other reasonable out-of-pocket fees and expenses allocable or in any way relating to such transaction or any indemnification claim; and (v) otherwise enforcing the rights and obligations of any such Persons under any Purchaser Representative Documents, including giving and receiving all notices and communications hereunder or thereunder on behalf of such Person; provided, that the Parties acknowledge that the Purchaser Representative is specifically authorized and directed to act on behalf of, and for the benefit of, the holders of Purchaser Securities (other than the Company Stockholders immediately prior to the Effective Time and their respective successors and assigns). All decisions and actions by the Purchaser Representative shall be binding upon the Purchaser and its Subsidiaries, successors and assigns, and neither they nor any other Party shall have the right to object, dissent, protest or otherwise contest the same. The provisions of this Section 9.14 are irrevocable and coupled with an interest. The Purchaser Representative hereby accepts its appointment and authorization as the Purchaser Representative under this Agreement.
(b) The Purchaser Representative shall not be liable for any act done or omitted under any Purchaser Representative Document as the Purchaser Representative while acting in good faith and without willful misconduct or gross negligence, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Purchaser shall indemnify, defend and hold harmless the Purchaser Representative from and against any and all Losses incurred without gross negligence, bad faith or willful misconduct on the part of the Purchaser Representative (in its capacity as such) and arising out of or in connection with the acceptance or administration of the Purchaser Representative’s duties under any Purchaser Representative Document, including the reasonable fees and expenses of any legal counsel retained by the Purchaser Representative. In no event shall the Purchaser Representative in such capacity be liable hereunder or in connection herewith for any indirect, punitive, special or consequential damages. The Purchaser Representative shall be fully protected in relying upon any written notice, demand, certificate or document that it in good faith believes to be genuine, including facsimiles or copies thereof, and no Person shall have any Liability for relying on the Purchaser Representative in the foregoing manner. In connection with the performance of its rights and obligations hereunder, if reasonably determined to be necessary or appropriate by the Purchaser Representative, the Purchaser Representative shall have the right at any time and from time to time to select and engage, at the reasonable cost and expense of the Purchaser, attorneys, accountants, investment bankers, advisors, consultants and clerical personnel and obtain such other professional and expert assistance, maintain such records and incur other reasonable and documented out-of-pocket expenses, as the Purchaser Representative may reasonably deem necessary or appropriate from time to time. All of the indemnities, immunities, releases and powers granted to the Purchaser Representative under this Section 9.14 shall survive the Closing and continue indefinitely.
(c) The Person serving as the Purchaser Representative may resign upon ten (10) days’ prior written notice to the Purchaser and the Seller Representative, provided, that the Purchaser Representative appoints in writing a replacement Purchaser Representative. Each successor Purchaser Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Purchaser Representative, and the term “Purchaser Representative” as used herein shall be deemed to include any such successor Purchaser Representatives.
9.15
Seller Representative.
(a) Each Company Stockholder, by delivery of a Letter of Transmittal, on behalf of itself and its successors and assigns, hereby irrevocably constitutes and appoints Vassilios Gregoriou, in the capacity as the Seller Representative, as the true and lawful agent and attorney-in-fact of such Persons with full powers of substitution to act in the name, place and stead of thereof with respect to the performance on behalf of such Person under the terms and provisions of this Agreement and the Ancillary Documents to which the Seller Representative is a party or otherwise has rights in such capacity (together with this Agreement, the “Seller Representative Documents”), as the same may be from time to time amended, and to do or refrain from doing all such further acts and things, and to execute all such documents on behalf of such Person, if any, as the Seller Representative will deem necessary or appropriate in connection with any of the transactions contemplated under the Seller Representative Documents, including: (i) terminating, amending or waiving on behalf of such Person any provision of any Seller Representative Document (provided, that any such action, if material to the rights and obligations of the Company Stockholders in the reasonable judgment of the Seller Representative, will be taken in the same manner with respect to all Company Stockholders unless otherwise agreed by each Company Stockholder who is subject to any disparate treatment of a potentially material and adverse nature); (ii) signing on behalf of such Person any releases or other documents with respect to any dispute or remedy arising under any Seller Representative Document; (iii) employing and obtaining the advice of legal counsel, accountants and other professional advisors as the Seller Representative, in its reasonable discretion, deems necessary or advisable in the performance of its duties as the Seller Representative and to rely on their advice and counsel; (iv) incurring and paying reasonable costs and expenses, including fees of brokers, attorneys and accountants incurred pursuant to the transactions contemplated hereby, and any other reasonable fees and expenses allocable or in any way relating to such transaction or any indemnification claim, whether incurred prior or subsequent to Closing; (v) receiving all or any portion of the consideration provided to the Company Stockholders under this Agreement and to distribute the same to the Company Stockholders in accordance with their Pro Rata Share; and (vi) otherwise enforcing the rights and obligations of any such Persons under any Seller Representative Document, including giving and receiving all notices and communications hereunder or thereunder on behalf of such Person. All decisions and actions by the Seller Representative shall be binding upon each Company Stockholder and their respective successors and assigns, and neither they nor any other Party shall have the right to object, dissent, protest or otherwise contest the same. The provisions of this Section 9.15 are irrevocable and coupled with an interest. The Seller Representative hereby accepts its appointment and authorization as the Seller Representative under this Agreement.
(b) Any other Person, including the Purchaser Representative, the Purchaser and the Company may conclusively and absolutely rely, without inquiry, upon any actions of the Seller Representative as the acts of the Company Stockholders under any Seller Representative Documents. The Purchaser Representative, the Purchaser and the Company shall be entitled to rely conclusively on the instructions and decisions of the Seller Representative as to (i) any payment instructions provided by the Seller Representative or (ii) any other actions required or permitted to be taken by the Seller Representative hereunder, and no Company Stockholder shall have any cause of action against the Purchaser Representative, the Purchaser or the Company for any action taken by any of them in reliance upon the instructions or decisions of the Seller Representative. The Purchaser Representative, the Purchaser and the Company shall not have any Liability to any Company Stockholder for any allocation or distribution among the Company Stockholders by the Seller Representative of payments made to or at the direction of the Seller Representative. All notices or other communications required to be made or delivered to a Company Stockholder under any Seller Representative Document shall be made to the Seller Representative for the benefit of such Company Stockholder, and any notices so made shall discharge in full all notice requirements of the other parties hereto or thereto to such Company Stockholder with respect thereto. All notices or other communications required to be made or delivered by a Company Stockholder shall be made by the Seller Representative (except for a notice under Section 9.15(d) of the replacement of the Seller Representative).
(c) The Seller Representative will act for the Company Stockholders on all of the matters set forth in this Agreement in the manner the Seller Representative believes to be in the best interest of the Company Stockholders, but the Seller Representative will not be responsible to the Company Stockholders for any Losses that any Company Stockholder may suffer by reason of the performance by the Seller Representative of the Seller Representative’s duties under this Agreement, other than Losses arising from the bad faith, gross negligence or willful misconduct by the Seller Representative in the performance of its duties under this Agreement. From and after the Closing, the Company Stockholders shall jointly and severally indemnify, defend and hold the Seller Representative harmless from and against any and all Losses reasonably incurred without gross negligence, bad faith or willful misconduct on the part of the Seller Representative (in its capacity as such) and arising out of or in connection with the acceptance or administration of the Seller Representative’s duties under any Seller Representative Document, including the reasonable fees and expenses of any legal counsel retained by the Seller Representative. In no event shall the Seller Representative in such capacity be liable hereunder or in connection herewith for any indirect, punitive, special or consequential damages. The Seller Representative shall not be liable for any act done or omitted under any Seller Representative Document as the Seller Representative while acting in good faith and without willful misconduct or gross negligence, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Seller Representative shall be fully protected in relying upon any written notice, demand, certificate or document that it in good faith believes to be genuine, including facsimiles or copies thereof, and no Person shall have any Liability for relying on the Seller Representative in the foregoing manner. In connection with the performance of its rights and obligations hereunder, the Seller Representative shall have the right at any time and from time to time to select and engage, at the reasonable cost and expense of the Company Stockholders, attorneys, accountants, investment bankers, advisors, consultants and clerical personnel and obtain such other professional and expert assistance, maintain such records and incur other reasonable and documented out-of-pocket expenses, as the Seller Representative may reasonably deem necessary or appropriate from time to time. All of the indemnities, immunities, releases and powers granted to the Seller Representative under this Section 9.15 shall survive the Closing and continue indefinitely.
(d) If the Seller Representative shall die, become disabled, dissolve, resign or otherwise be unable or unwilling to fulfill its responsibilities as representative and agent of Company Stockholders, then the Company Stockholders shall, within ten (10) days after such death, disability, dissolution, resignation or other event, appoint a successor Seller Representative (by vote or written consent of the Company Stockholders holding in the aggregate a Pro Rata Share in excess of fifty percent (50%)), and promptly thereafter (but in any event within two (2) Business Days after such appointment) notify the Purchaser Representative and the Purchaser in writing of the identity of such successor. Any such successor so appointed shall become the “Seller Representative” for purposes of this Agreement.
9.16
Legal Representation.
(a) The Parties agree that, notwithstanding the fact that EGS may have, prior to Closing, jointly represented the Purchaser, Merger Sub, the Purchaser Representative and/or the Sponsor in connection with this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby, and has also represented the Purchaser and/or its Affiliates in connection with matters other than the transaction that is the subject of this Agreement, EGS will be permitted in the future, after Closing, to represent the Sponsor, the Purchaser Representative or their respective Affiliates in connection with matters in which such Persons are adverse to the Purchaser or any of its Affiliates, including any disputes arising out of, or related to, this Agreement. The Company and the Seller Representative, who are or have the right to be represented by independent counsel in connection with the transactions contemplated by this Agreement, hereby agree, in advance, to waive (and to cause their Affiliates to waive) any actual or potential conflict of interest that may hereafter arise in connection with EGS’s future representation of one or more of the Sponsor, the Purchaser Representative or their respective Affiliates in which the interests of such Person are adverse to the interests of the Purchaser, the Company and/or the Seller Representative or any of their respective Affiliates, including any matters that arise out of this Agreement or that are substantially related to this Agreement or to any prior representation by EGS of the Purchaser, Merger Sub, any Sponsor, the Purchaser Representative or any of their respective Affiliates. The Parties acknowledge and agree that, for the purposes of the attorney-client privilege, the Sponsor and the Purchaser Representative shall be deemed the clients of EGS with respect to the negotiation, execution and performance of this Agreement and the Ancillary Documents. All such communications shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to the Sponsor and the Purchaser Representative, shall be controlled by the Sponsor and the Purchaser Representative and shall not pass to or be claimed by Purchaser or the Surviving Corporation; provided, further, that nothing contained herein shall be deemed to be a waiver by the Purchaser or any of its Affiliates (including, after the Effective Time, the Surviving Corporation and its Affiliates) of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to any third party.
(b) Recognizing that Ropes & Gray LLP (“R&G”) has acted as legal counsel to the Seller Representative, its Affiliates and the Target Companies prior to the Closing, and that R&G intends to act as legal counsel to the Seller Representative and its Affiliates after the Closing, Purchaser, Purchaser Representative and the Company (on its own behalf and on behalf of each Target Company) hereby waives, and agrees to cause its Affiliates to waive, any conflicts that may arise in connection with R&G representing the Seller Representative and/or its Affiliates after the Closing as such representation may relate to Purchaser, any Target Company or any of the transactions contemplated by this Agreement or any of the Ancillary Documents. All communications involving attorney-client confidences between Seller Representative, its Affiliates or any Target Company, on the one hand, and R&G, on the other hand, in the course of the preparations, planning, negotiation, documentation and consummation of the transactions contemplated hereby shall be deemed to be attorney-client confidences that belong solely to Seller Representative. Accordingly, without the prior written consent of the Seller Representative, the Target Companies shall not have access to any such communications, or to the files of R&G relating to engagement, if the Closing shall have occurred. Without limiting the generality of the foregoing, upon and after the Closing, (i) Seller Representative shall be the sole holders of the attorney-client privilege with respect to such engagement, and none of the Target Companies shall be a holder thereof, (ii) to the extent that files of R&G in respect of such engagement constitute property of the client, only Seller Representative (and not the Target Companies) shall hold such property rights and (iii) R&G shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to any of the Target Companies by reason of any attorney-client relationship between R&G and any of the Target Companies or otherwise. Notwithstanding the foregoing, in the event that a dispute arises between Purchaser, the Target Companies or any of their Affiliates and a third party (other than a Party or any of its Affiliates) after the Closing, the Target Companies may assert the attorney-client privilege to prevent disclosure of confidential attorney-client communications by R&G to such third party.
9.17
Non-Recourse. This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against, the Named Parties, and then only with respect to the specific obligations set forth herein or in an Ancillary Document with respect to such Named Party. Except to the extent a Named Party to this Agreement or an Ancillary Document and then only to the extent of the specific obligations undertaken by such Named Party in this Agreement or in the applicable Ancillary Document, (a) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any named party to this Agreement or any Ancillary Document, and (b) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of any one or more of the Company, the Purchaser or Merger Sub under this Agreement or any Ancillary Document of or for any claim based on, arising out of, or related to this Agreement or the transactions contemplated hereby.
DEFINITIONS
10.1
Certain Definitions. For purpose of this Agreement, the following capitalized terms have the following meanings:
“AAA” means the American Arbitration Association or any successor entity conducting arbitrations.
“Accounting Principles” means in accordance with GAAP as in effect at the date of the financial statement to which it refers or if there is no such financial statement, then as of the Closing Date, using and applying the same accounting principles, practices, procedures, policies and methods (with consistent classifications, judgments, elections, inclusions, exclusions and valuation and estimation methodologies) used and applied by the Target Companies in the preparation of the latest audited Company Financials.
“Action” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any inquiry, hearing, proceeding or investigation, by or before any Governmental Authority.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. For the avoidance of doubt, Sponsor shall be deemed to be an Affiliate or the Purchaser prior to the consummation of its Business Combination.
“Ancillary Documents” means each agreement, instrument or document attached hereto as an Exhibit, and the other agreements, certificates and instruments to be executed or delivered by any of the Parties hereto in connection with or pursuant to this Agreement.
“Benefit Plans” of any Person means any and all deferred compensation, executive compensation, incentive compensation, equity purchase or other equity-based compensation plan, employment or consulting, severance or termination pay, holiday, vacation or other bonus plan or practice, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension, or retirement plan, program, agreement, commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement, including each “employee benefit plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to or required to be contributed to by a Person for the benefit of any employee or terminated employee of such Person, or with respect to which such Person has any Liability, whether direct or indirect, actual or contingent, whether formal or informal, and whether legally binding or not.
“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York are authorized to close for business, excluding as a result of “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems, including for wire transfers, of commercially banking institutions in New York, New York are generally open for use by customers on such day.
“Closing Company Cash” means, as of the Reference Time, the aggregate cash and cash equivalents of the Target Companies on hand or in bank accounts, including deposits in transit, minus the aggregate amount of outstanding and unpaid checks issued by or on behalf of the Target Companies as of such time (in each case determined in accordance with the Accounting Principles).
“Closing Net Indebtedness” means, as of the Reference Time, (i) the aggregate amount of all Indebtedness of the Target Companies, less (ii) the Closing Company Cash, in each case of clauses (i) and (ii), on a consolidated basis and as determined in accordance with the Accounting Principles.
“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute thereto, as amended. Reference to a specific section of the Code shall include such section and any valid treasury regulation promulgated thereunder.
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Company Charter” means the Certificate of Incorporation of the Company, as amended and effective under the DGCL, prior to the Effective Time.
“Company Common Stock” means the common stock, par value $0.001 per share, of the Company.
“Company Confidential Information” means all confidential or proprietary documents and information concerning the Target Companies or any of their respective Representatives, furnished in connection with this Agreement or the transactions contemplated hereby; provided, however, that Company Confidential Information shall not include any information which, (i) at the time of disclosure by the Purchaser or its Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by the Company or its Representatives to the Purchaser or its Representatives was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Company Confidential Information.
“Company Convertible Securities” means, collectively, the Company Options and any other options, warrants or rights to subscribe for or purchase any capital stock of the Company or securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any capital stock of the Company.
“Company Equity Plan” means the Advent Technologies Inc. 2020-2023 Stock Grant Plan.
“Company Option” means an option to purchase Company Stock that was granted pursuant to the Company Equity Plan.
“Company Preferred Stock” means the preferred stock, par value $0.001 per share, of the Company.
“Company Securities” means, collectively, the Company Stock, the Company Options and any other Company Convertible Securities.
“Company Stock” means any shares of the Company Common Stock and the Company Preferred Stock.
“Company Stockholders” means, collectively, the holders of Company Stock.
“Consent” means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority or any other Person.
“Contracts” means all binding contracts, agreements, arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase order, licenses (and all other binding contracts, agreements or arrangements concerning Intellectual Property), franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications thereto).
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast ten percent (10%) or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive ten percent (10%) or more of the profits, losses, or distributions of the Controlled Person; or (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a Person described in clause (a) above) of the Controlled Person.
“Copyrights” means any works of authorship, mask works and all copyrights therein, including all renewals and extensions, copyright registrations and applications for registration and renewal, and non-registered copyrights.
“Environmental Law” means any Law in any way relating to (a) the protection of human health and safety, (b) the protection, preservation or restoration of the environment and natural resources (including air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (c) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 USC. Section 9601 et. seq., the Resource Conservation and Recovery Act, 42 USC. Section 6901 et. seq., the Toxic Substances Control Act, 15 USC. Section 2601 et. seq., the Federal Water Pollution Control Act, 33 USC. Section 1151 et seq., the Clean Air Act, 42 USC. Section 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 USC. Section 111 et. seq., Occupational Safety and Health Act, 29 USC. Section 651 et. seq. (to the extent it relates to exposure to Hazardous Substances), the Asbestos Hazard Emergency Response Act, 15 USC. Section 2601 et. seq., the Safe Drinking Water Act, 42 USC. Section 300f et. seq., the Oil Pollution Act of 1990 and analogous state acts.
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Environmental Liabilities” means, in respect of any Person, all Liabilities, obligations, responsibilities, Remedial Actions, Losses, damages, costs, and expenses (including all reasonable fees, disbursements, and expenses of counsel, experts, and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any other Person or in response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, to the extent based upon, related to, or arising under or pursuant to any Environmental Law, Environmental Permit, Order, or Contract with any Governmental Authority or other Person, that relates to any environmental, health or safety condition, violation of Environmental Law, or a Release or threatened Release of Hazardous Materials.
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“GAAP” means generally accepted accounting principles as in effect in the United States of America.
“Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.
“Hazardous Material” means any waste, gas, liquid or other substance or material that is defined, listed or designated as a “hazardous substance”, “pollutant”, “contaminant”, “hazardous waste”, “regulated substance”, “hazardous chemical”, or “toxic chemical” (or by any similar term) under any Environmental Law, or any other material regulated, or that could result in the imposition of Liability or responsibility, under any Environmental Law, including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold, and urea formaldehyde insulation.
“Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money (including the outstanding principal and accrued but unpaid interest), (b) all obligations for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business), (c) any other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (d) all obligations of such Person under leases that should be classified as capital leases in accordance with GAAP, (e) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (f) all obligations of such Person in respect of banker’s acceptances issued or created, (g) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (h) all obligations secured by an Lien on any property of such Person, (i) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person and (j) all obligation described in clauses (a) through (i) above of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss; provided that, in the case of the Company, Indebtedness shall not include any Expenses, regardless as to whether or not incurred by or on behalf of the Company or any of its Subsidiaries.
“Intellectual Property” means all of the following as they exist in any jurisdiction throughout the world: Patents, Trademarks, Copyrights, Trade Secrets, Internet Assets, Software and other intellectual property, and all licenses, sublicenses and other agreements or permissions related to the preceding property.
“Internet Assets” means any and all domain name registrations, web sites and web addresses and related rights, items and documentation related thereto, and applications for registration therefor.
“IPO” means the initial public offering of Purchaser Public Units pursuant to the IPO Prospectus.
“IPO Prospectus” means the final prospectus of the Purchaser, dated as of November 15, 2018, and filed with the SEC pursuant to Rule 424(b) on November 16, 2018 (File No. 333-227994).
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IPO Underwriter” means Jefferies LLC as Sole Book-Running Manager and UBS Securities LLC as Lead Manager.
“IRS” means the U.S. Internal Revenue Service (or any successor Governmental Authority).
“Key Executives” means Vassilios Gregoriou, ChrisChristos Kaskavelis, Emory De Castro and James F. Coffey.
“Knowledge” means, with respect to (i) the Company, the actual knowledge of any of the Key Executives, or (ii) any other Party, (A) if an entity, the actual knowledge of its directors and executive officers, or (B) if a natural person, the actual knowledge of such Party, in each case of clauses (i) and (ii), after reasonable inquiry of employees and independent contractors who would reasonably be expected to have knowledge of such information and reasonable review of internal records and documentation.
“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“Liabilities” means any and all liabilities, Indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP or other applicable accounting standards).
“Lien” means any mortgage, pledge, security interest, attachment, right of first refusal, option, proxy, voting trust, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.
“Material Adverse Effect” means, with respect to any specified Person, any fact, event, occurrence, change or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect upon (a) the business, assets, Liabilities, results of operations or condition (financial or otherwise) of such Person and its Subsidiaries, taken as a whole, or (b) the ability of such Person or any of its Subsidiaries on a timely basis to consummate the transactions contemplated by this Agreement or the Ancillary Documents to which it is a party or bound or to perform its obligations hereunder or thereunder; provided, however, that for purposes of clause (a) above, any changes or effects directly or indirectly attributable to, resulting from, relating to or arising out of the following (by themselves or when aggregated with any other, changes or effects) shall not be deemed to be, constitute, or be taken into account when determining whether there has or may, would or could have occurred a Material Adverse Effect: (i) general changes in the financial or securities markets or general economic or political conditions in the country or region in which such Person or any of its Subsidiaries do business (including any effects of Brexit); (ii) changes, conditions or effects that generally affect the industries in which such Person or any of its Subsidiaries principally operate; (iii) changes in GAAP or other applicable accounting principles or mandatory changes in the regulatory accounting requirements applicable to any industry in which such Person and its Subsidiaries principally operate; (iv) conditions caused by acts of God, terrorism, war (whether or not declared), natural disaster or any outbreak of an epidemic or pandemic (including COVID-19); (v) any failure in and of itself by such Person and its Subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance for any period (provided that the underlying cause of any such failure may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent not excluded by another exception herein) and (vi), with respect to the Purchaser, the consummation and effects of the Redemption (or any redemption in connection with an Extension); provided further, however, that any event, occurrence, fact, condition, or change referred to in clauses (i) - (iv) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition, or change has a disproportionate effect on such Person or any of its Subsidiaries compared to other participants in the industries in which such Person or any of its Subsidiaries primarily conducts its businesses. Notwithstanding the foregoing, with respect to the Purchaser, the amount of the Redemption (or any redemption in connection with an Extension, if any) shall not be deemed to be a Material Adverse Effect on or with respect to the Purchaser.
“Merger Sub Common Stock” means the shares of common stock, par value $0.0001 per share, of Merger Sub.
“
Named Parties” means (i) with respect to this Agreement, the Company, the Purchaser and Merger Sub (and their permitted successors and assigns), and (ii) with respect to any Ancillary Documents, the parties named in the preamble thereto (and their permitted successors and assigns), and “
Named Party” means any of them.
“Nasdaq” means the Nasdaq Capital Market.
“Order” means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
“Organizational Documents” means, with respect to any Person that is an entity, its certificate of incorporation or formation, bylaws, operating agreement, memorandum and articles of association or similar organizational documents, in each case, as amended.
“Patents” means any patents, patent applications and the inventions, designs and improvements described and claimed therein, patentable inventions, and other patent rights (including any divisionals, provisionals, continuations, continuations-in-part, substitutions, or reissues thereof, whether or not patents are issued on any such applications and whether or not any such applications are amended, modified, withdrawn, or refiled).
“PCAOB” means the U.S. Public Company Accounting Oversight Board (or any successor thereto).
“Permits” means all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions, licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations, ratings, registrations, qualifications or orders of any Governmental Authority or any other Person.
“Permitted Liens” means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not delinquent or (ii) being contested in good faith and by appropriate proceedings, and adequate reserves have been established with respect thereto, (b) other Liens imposed by operation of Law arising in the ordinary course of business for amounts which are not due and payable and as would not in the aggregate materially adversely affect the value of, or materially adversely interfere with the use of, the property subject thereto, (c) Liens incurred or deposits made in the ordinary course of business in connection with social security, (d) Liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business, or (e) Liens arising under this Agreement or any Ancillary Document.
“Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
“Personal Property” means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, parts and other tangible personal property.
“Pro Rata Share” means with respect to each Company Stockholder, a fraction expressed a percentage equal to (i) the portion of the Merger Consideration payable by the Purchaser to such Company Stockholder in accordance with the terms of this Agreement, divided by (ii) the total Merger Consideration payable by the Purchaser to all Company Stockholders in accordance with the terms of this Agreement.
“Purchaser Common Stock” means the shares of common stock, par value $0.0001 per share, of the Purchaser.
“Purchaser Confidential Information” means all confidential or proprietary documents and information concerning the Purchaser or any of its Representatives; provided, however, that Purchaser Confidential Information shall not include any information which, (i) at the time of disclosure by the Company, the Seller Representative or any of their respective Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by the Purchaser or its Representatives to the Company, the Seller Representative or any of their respective Representatives, was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Purchaser Confidential Information. For the avoidance of doubt, from and after the Closing, Purchaser Confidential Information will include the confidential or proprietary information of the Target Companies.
“Purchaser Preferred Stock” means the shares of preferred stock, par value $0.0001 per share, of the Purchaser.
“
Purchaser Private Warrants” means one whole warrant that was issued by Purchaser in a private placement to the Sponsor at the time of the consummation of the IPO, entitling the holder thereof to purchase one (1) share of Purchaser Common Stock at a purchase price of $11.50 per share.
“Purchaser Public Units” means the units issued in the IPO (including overallotment units acquired by Purchaser’s underwriter) consisting of one (1) share of Purchaser Common Stock and one Purchaser Public Warrant.
“Purchaser Public Warrants” means one whole warrant that was included in as part of each Purchaser Public Unit, entitling the holder thereof to purchase one (1) share of Purchaser Common Stock at a purchase price of $11.50 per share.
“Purchaser Securities” means the Purchaser Public Units, the Purchaser Common Stock, the Purchaser Preferred Stock and the Purchaser Warrants, collectively.
“Purchaser Warrants” means Purchaser Private Warrants and Purchaser Public Warrants, collectively.
“Reference Time” means the close of business of the Company on the Closing Date (but without giving effect to the transactions contemplated by this Agreement, including any payments by Purchaser hereunder to occur at the Closing, but treating any obligations in respect of Indebtedness, that are contingent upon the consummation of the Closing as currently due and owing without contingency as of the Reference Time).
“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, or leaching into the indoor or outdoor environment, or into or out of any property.
“Remedial Action” means all actions to (i) clean up, remove, treat, or in any other way address any Hazardous Material, (ii) prevent the Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct a condition of noncompliance with Environmental Laws.
“Representatives” means, as to any Person, such Person’s Affiliates and the respective managers, directors, officers, employees, independent contractors, consultants, advisors (including financial advisors, counsel and accountants), agents and other legal representatives of such Person or its Affiliates.
“SEC” means the U.S. Securities and Exchange Commission (or any successor Governmental Authority).
“Securities Act” means the Securities Act of 1933, as amended.
“Software” means any computer software programs, including all source code, object code, and documentation related thereto and all software modules, tools and databases.
“SOX” means the U.S. Sarbanes-Oxley Act of 2002, as amended.
“Subsidiary” means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Target Company” means each of the Company and its direct and indirect Subsidiaries.
“Tax Return” means any return, declaration, report, claim for refund, information return or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.
“Taxes” means all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property, windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto.
“Trade Secrets” means any trade secrets, confidential business information, concepts, ideas, designs, research or development information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering drawings, methods, know-how, data, mask works, discoveries, inventions, modifications, extensions, improvements, and other proprietary rights (whether or not patentable or subject to copyright, trademark, or trade secret protection).
“Trademarks” means any trademarks, service marks, trade dress, trade names, brand names, internet domain names, designs, logos, or corporate names (including, in each case, the goodwill associated therewith), whether registered or unregistered, and all registrations and applications for registration and renewal thereof.
“Trading Day” means any day on which shares of Purchaser Common Stock are actually traded on the principal securities exchange or securities market on which the Purchaser Common Stock are then traded.
“Trust Account” means the trust account established by Purchaser with the proceeds from the IPO pursuant to the Trust Agreement in accordance with the IPO Prospectus.
“Trust Agreement” means that certain Investment Management Trust Agreement, dated as of November 15, 2018, as it may be amended, by and between the Purchaser and the Trustee, as well as any other agreements entered into related to or governing the Trust Account.
“Trustee” means Continental Stock Transfer & Trust Company, in its capacity as trustee under the Trust Agreement.
“Warrant Agreement” means the Warrant Agreement, dated as of November 15, 2018, as it may be amended, by and between Purchaser and Continental Stock Transfer & Trust Company, in its capacity as warrant agent.
10.2
Section References. The following capitalized terms, as used in this Agreement, have the respective meanings given to them in the Section as set forth below adjacent to such terms:
Term | | Section |
Accounts Receivable | | 4.7(f) |
Acquisition Proposal | | 5.6(a) |
Agreement | | Preamble |
Alternative Transaction | | 5.6(a) |
Amended Purchaser Charter | | 1.7 |
Antitrust Laws | | 5.9(b) |
Audited Company Financials | | 4.7(a) |
Business Combination | | 8.1 |
Certificate of Merger | | 1.2 |
Closing | | 2.1 |
Closing Date | | 2.1 |
Closing Filing | | 5.15(b) |
Closing Press Release | | 5.15(b) |
Closing Statement | | 1.12 |
Company | | Preamble |
Company Benefit Plan | | 4.19(a) |
Company Certificates | | 1.10(a) |
Company Directors | | 5.18(a) |
Company Disclosure Schedules | | Article IV |
Company Financials | | 4.7(a) |
Company IP | | 4.13(d) |
Term | | Section |
Company IP Licenses | | 4.13(a) |
Company Material Contracts | | 4.12(a) |
Company Permits | | 4.10 |
Company Personal Property Leases | | 4.16 |
Company Real Property Leases | | 4.15 |
Company Registered IP | | 4.13(a) |
Company Special Meeting | | 5.14 |
D&O Indemnified Persons | | 5.19(a) |
D&O Tail Insurance | | 5.19(b) |
DCGL | | Recitals |
Dissenting Shares | | 1.14 |
Dissenting Stockholder | | 1.14 |
Effective Time | | 1.2 |
EGS | | 2.1 |
Employment Agreements | | Recitals |
Enforceability Exceptions | | 3.2 |
Environmental Permits | | 4.20(a) |
Exchange Agent | | 1.10(a) |
Expenses | | 7.3 |
Extension | | 5.3(a) |
Extension Expenses | | 5.3(a) |
Term | | Section | | Term | | Section |
Accounts Receivable | | 4.7(f) | | Company IP Licenses | | 4.13(a) |
Acquisition Proposal | | 5.6(a) | | Company Material Contracts | | 4.12(a) |
Agreement | | Preamble | | Company Permits | | 4.10 |
Alternative Transaction | | 5.6(a) | | Company Personal Property Leases | | 4.16 |
Amended Purchaser Charter | | 1.7 | | Company Real Property Leases | | 4.15 |
Antitrust Laws | | 5.9(b) | | Company Registered IP | | 4.13(a) |
Audited Company Financials | | 4.7(a) | | Company Special Meeting | | 5.14 |
Business Combination | | 8.1 | | D&O Indemnified Persons | | 5.19(a) |
Certificate of Merger | | 1.2 | | D&O Tail Insurance | | 5.19(b) |
Closing | | 2.1 | | DCGL | | Recitals |
Closing Date | | 2.1 | | Dissenting Shares | | 1.14 |
Closing Filing | | 5.15(b) | | Dissenting Stockholder | | 1.14 |
Closing Press Release | | 5.15(b) | | Effective Time | | 1.2 |
Closing Statement | | 1.12 | | EGS | | 2.1 |
Company | | Preamble | | Employment Agreements | | Recitals |
Company Benefit Plan | | 4.19(a) | | Enforceability Exceptions | | 3.2 |
Company Certificates | | 1.10(a) | | Environmental Permits | | 4.20(a) |
Company Directors | | 5.18(a) | | Exchange Agent | | 1.10(a) |
Company Disclosure Schedules | | Article IV | | Expenses | | 7.3 |
Company Financials | | 4.7(a) | | Extension | | 5.3(a) |
Company IP | | 4.13(d) | | Extension Expenses | | 5.3(a) |
Term | | Section | | Term | | Section |
Federal Securities Laws | | 5.7 | | Purchaser Stockholder Approval Matters | | 5.13(b)(i) |
Forfeited Warrants | | Recitals | | Purchaser Special Meeting | | 5.13(b)(i) |
Incentive Plan | | 5.13(b)(i) | | R&G | | 9.16(b) |
Interim Balance Sheet Date | | 4.7(a) | | Redemption | | 5.13(a) |
Interim Period | | 5.1(a) | | Registration Statement | | 5.13(a) |
Letter of Transmittal | | 1.10(a) | | Related Person | | 4.21 |
Lock-Up Agreement | | Recitals | | Released Claims | | 8.1 |
Lost Certificate Affidavit | | 1.10(d) | | Required Company Stockholder Approval | | 6.1(c) |
Merger | | Recitals | | Required Extension | | 5.22 |
Merger Consideration | | 1.8 | | Required Purchaser Stockholder Approval | | 6.1(a) |
Merger Consideration Price Per Share | | 1.8 | | Required Warrantholder Approval | | 5.13(d) |
Merger Sub | | Preamble | | SEC Reports | | 3.6(a) |
Non-Competition Agreement | | Recitals | | Section 409A Plan | | 4.19(k) |
OFAC | | 3.19(c) | | Seller Representative | | Preamble |
Off-the-Shelf Software | | 4.13(a) | | Seller Representative Documents | | 9.15(a) |
Outbound IP License | | 4.13(c) | | Signing Filing | | 5.15(b) |
Outside Date | | 7.1(b) | | Signing Press Release | | 5.15(b) |
Party(ies) | | Preamble | | Specified Courts | | 9.5 |
PIPE Investment | | 5.21 | | Sponsor | | Recitals |
Post-Closing Purchaser Board | | 5.18(a) | | Sponsor Warrant Letter | | Recitals |
Proxy Statement | | 5.13(a) | | Surviving Corporation | | 1.1 |
Public Certifications | | 3.6(a) | | Top Customers | | 4.25 |
Public Stockholders | | 8.1 | | Top Suppliers | | 4.25 |
Purchaser | | Preamble | | Transaction Bonus Agreement | | Recitals |
Purchaser Directors | | 5.18(a) | | Transmittal Documents | | 1.10(b) |
Purchaser Disclosure Schedules | | Article III | | Voting Agreements | | Recitals |
Purchaser Financials | | 3.6(b) | | Warrant Amendment | | 5.13(b)(ii) |
Purchaser Material Contract | | 3.13(a) | | Warrantholder Approval Matters | | 5.13(b)(ii) |
Purchaser Representative | | Preamble | | Warrantholder Meeting | | 5.13(b)(ii) |
Purchaser Representative Documents | | 9.14(a) | | | | |
Term | | Section |
Federal Securities Laws | | 5.7 |
Forfeited Warrants | | Recitals |
Incentive Plan | | 5.13(b)(i) |
Interim Balance Sheet Date | | 4.7(a) |
Interim Period | | 5.1(a) |
Letter of Transmittal | | 1.10(a) |
Lock-Up Agreement | | Recitals |
Lost Certificate Affidavit | | 1.10(d) |
Merger | | Recitals |
Merger Consideration | | 1.8 |
Merger Consideration Price Per Share | | 1.8 |
Merger Sub | | Preamble |
Non-Competition Agreement | | Recitals |
OFAC | | 3.19(c) |
Off-the-Shelf Software | | 4.13(a) |
Outbound IP License | | 4.13(c) |
Outside Date | | 7.1(b) |
Party(ies) | | Preamble |
PIPE Investment | | 5.21 |
Post-Closing Purchaser Board | | 5.18(a) |
Proxy Statement | | 5.13(a) |
Public Certifications | | 3.6(a) |
Public Stockholders | | 8.1 |
Purchaser | | Preamble |
Purchaser Directors | | 5.18(a) |
Purchaser Disclosure Schedules | | Article III |
Purchaser Financials | | 3.6(b) |
Purchaser Material Contract | | 3.13(a) |
Purchaser Representative | | Preamble |
Purchaser Representative Documents | | 9.14(a) |
Term | | Section |
Purchaser Shareholder Approval Matters | | 5.13(b)(i) |
Purchaser Special Meeting | | 5.13(b)(i) |
R&G | | 9.16(b) |
Redemption | | 5.13(a) |
Registration Statement | | 5.13(a) |
Related Person | | 4.21 |
Released Claims | | 8.1 |
Required Company Stockholder Approval | | 6.1(c) |
Required Extension | | 5.22 |
Required Purchaser Shareholder Approval | | 6.1(a) |
Required Warrantholder Approval | | 5.13(d) |
SEC Reports | | 3.6(a) |
Section 409A Plan | | 4.19(k) |
Seller Representative | | Preamble |
Seller Representative Documents | | 9.15(a) |
Signing Filing | | 5.15(b) |
Signing Press Release | | 5.15(b) |
Specified Courts | | 9.5 |
Sponsor | | Recitals |
Sponsor Warrant Letter | | Recitals |
Surviving Corporation | | 1.1 |
Top Customers | | 4.25 |
Top Suppliers | | 4.25 |
Transaction Bonus Agreement | | Recitals |
Transmittal Documents | | 1.10(b) |
Voting Agreements | | Recitals |
Warrant Amendment | | 5.13(b)(ii) |
Warrantholder Approval Matters | | 5.13(b)(ii) |
Warrantholder Meeting | | 5.13(b)(ii) |
{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS}
IN WITNESS WHEREOF, each Party hereto has caused this Agreement and Plan of Merger to be signed and delivered as of the date first written above.
| The Purchaser: |
| |
| AMCI ACQUISITION CORP. |
| |
| By: | /s/ William Hunter |
| | |
| | Name: | William Hunter |
| | | |
| | Title: | Chief Executive Officer |
| The Purchaser Representative: |
| |
| AMCI SPONSOR LLC, solely in the capacity as the Purchaser Representative hereunder |
| |
| By: | /s/ William Hunter |
| | |
| | Name: | William Hunter |
| | | |
| | Title: | Managing Member |
| Merger Sub: |
| |
| AMCI MERGER SUB CORP. |
| |
| By: | /s/ William Hunter |
| | |
| | Name: | William Hunter |
| | | |
| | Title: | Secretary |
| The Company: |
| |
| ADVENT TECHNOLOGIES INC. |
| |
| By: | /s/ Vassilios Gregoriou |
| | |
| | Name: | Vassilios Gregoriou |
| | | |
| | Title: | Chairman and Chief Executive Officer |
| The Seller Representative: |
| |
| Vassilios Gregoriou, solely in the capacity as the Seller Representative hereunder |
| |
| By: | /s/ Vassilios Gregoriou |
| | |
| | Name: | Vassilios Gregoriou |
[Signature Page to Merger Agreement]
Exhibit A
FORM OF VOTING AGREEMENT
This Voting Agreement (this “Agreement”) is made as of October 12, 2020, by and among (i) AMCI Acquisition Corp., a Delaware corporation (the “Purchaser”), (ii) Advent Technologies Inc., a Delaware corporation (the “Company”), and (iii) the undersigned stockholder (“Holder”) of the Company. Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.
WHEREAS, on or about the date hereof, the Purchaser, the Company, AMCI Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), and the other parties named therein, have entered into that certain Agreement and Plan of Merger (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”), and as a result of which, among other matters, all of the issued and outstanding capital stock of the Company as of the Effective Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right to receive the Merger Consideration as set forth in the Merger Agreement, all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the DGCL;
WHEREAS, the Board of Directors of the Company has (a) approved and declared advisable the Merger Agreement, the Ancillary Documents, the Merger and the other transactions contemplated by any such documents (collectively, the “Transactions”), (b) determined that the Transactions are fair to and in the best interests of the Company and its shareholders (the “Company Shareholders”) and (c) recommended the approval and the adoption by each of the Company Shareholders of the Merger Agreement, the Ancillary Documents, the Merger and the other Transactions; and
WHEREAS, as a condition to the willingness of the Purchaser to enter into the Merger Agreement, and as an inducement and in consideration therefor, and in view of the valuable consideration to be received by Holder thereunder, and the expenses and efforts to be undertaken by the Purchaser and the Company to consummate the Transactions, the Purchaser, the Company and Holder desire to enter into this Agreement in order for Holder to provide certain assurances to the Purchaser regarding the manner in which Holder is bound hereunder to vote any shares of capital stock of the Company which Holder beneficially owns, holds or otherwise has voting power (the “Shares”) during the period from and including the date hereof through and including the date on which this Agreement is terminated in accordance with its terms (the “Voting Period”) with respect to the Merger Agreement, the Merger, the Ancillary Documents and the Transactions.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the parties hereby agree as follows:
1.Covenant to Vote in Favor of Transactions. Holder agrees, with respect to all of the Shares:
(a) during the Voting Period, at each meeting of the Company Shareholders or any class or series thereof, and in each written consent or resolutions of any of the Company Shareholders in which Holder is entitled to vote or consent, Holder hereby unconditionally and irrevocably agrees to be present for such meeting and vote (in person or by proxy), or consent to any action by written consent or resolution with respect to, as applicable, the Shares (i) in favor of, and adopt, the Merger, the Merger Agreement, the Ancillary Documents, any amendments to the Company’s Organizational Documents, and all of the other Transactions (and any actions required in furtherance thereof), (ii) in favor of the other matters set forth in the Merger Agreement, and (iii) to vote the Shares in opposition to: (A) any Acquisition Proposal and any and all other proposals (x) for the acquisition of the Company, (y) that could reasonably be expected to delay or impair the ability of the Company to consummate the Merger, the Merger Agreement or any of the Transactions, or (z) which are in competition with or materially inconsistent with the Merger Agreement or the Ancillary Documents; (B) other than as contemplated by the Merger Agreement, any material change in (x) the present capitalization of the Company or any amendment of the Company’s Organizational Documents or (y) the Company’s corporate structure or business; or (C) any other action or proposal involving any Target Company that is intended, or would reasonably be expected, to prevent, impede, interfere with, delay, postpone or adversely affect in any material respect the Transactions or would reasonably be expected to result in any of the conditions to the Closing under the Merger Agreement not being fulfilled;
(b)to execute and deliver all related documentation and take such other action in support of the Merger, the Merger Agreement, any Ancillary Documents and any of the Transactions as shall reasonably be requested by the Company or the Purchaser in order to carry out the terms and provision of this Section 1, including, without limitation, (i) execution and delivery to the Company of a Letter of Transmittal and the Transmittal Documents, (ii) delivery of Holder’s Company Certificate(s) (or a Lost Certificate Affidavit in lieu of the Company Certificate(s)), duly endorsed for transfer, to the Company and any related documents as may be reasonably requested by the Company or the Purchaser, (iii) any actions by written consent of the Company Shareholders presented to Holder, and (vi) any applicable Ancillary Documents (including, if applicable, a Lock-Up Agreement and a Non-Competition Agreement), customary instruments of conveyance and transfer, and any consent, waiver, governmental filing, and any similar or related documents;
(c) not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any Shares owned by Holder or his/her/its Affiliates in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the Company and the Purchaser in connection with the Merger Agreement, the Ancillary Documents and any of the Transactions;
(d)except as contemplated by the Merger Agreement or the Ancillary Documents, make, or in any manner participate in, directly or indirectly, a “solicitation” of “proxies” or consents (as such terms are used in the rules of the SEC) or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of, any shares of the Company capital stock in connection with any vote or other action with respect to the Transactions, other than to recommend that shareholders of the Company vote in favor of adoption of the Merger Agreement and the Transactions and any other proposal the approval of which is a condition to the obligations of the parties under the Merger Agreement (and any actions required in furtherance thereof and otherwise as expressly provided by Section 1 of this Agreement); and
(e) to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to the Merger, the Merger Agreement, the Ancillary Documents and any of the Transactions, including pursuant to the DGCL.
2.Grant of Proxy.Holder, with respect to all of the Shares, hereby irrevocably grants to, and appoints, the Purchaser and any designee of the Purchaser that is an Affiliate, officer or director of Purchaser (determined in the Purchaser’s reasonable discretion) as Holder’s attorney-in-fact and proxy, with full power of substitution and resubstitution, for and in Holder’s name, to vote, or cause to be voted (including by proxy or written consent, if applicable) any Shares owned (whether beneficially or of record) by Holder. The proxy granted by Holder pursuant to this Section 2 is irrevocable for the term of this Agreement and is granted in consideration of the Purchaser entering into this Agreement and the Merger Agreement and incurring certain related fees and expenses. Holder hereby affirms that such irrevocable proxy is coupled with an interest by reason of the Merger Agreement and, except upon the termination of this Agreement in accordance with Section 5(a), is intended to be irrevocable. Holder agrees, until this Agreement is terminated in accordance with Section 5(a), to vote its Shares in accordance with Section 1 above.
3.Other Covenants.
(a)No Transfers. Holder agrees that during the Voting Period it shall not, and shall cause its Affiliates not to, without the Purchaser’s prior written consent, (A) offer for sale, sell (including short sales), transfer, tender, pledge, encumber, assign or otherwise dispose of (including by gift) (collectively, a “Transfer”), or enter into any contract, option, derivative, hedging or other agreement or arrangement or understanding (including any profit-sharing arrangement) with respect to, or consent to, a Transfer of, any or all of the Shares; (B) grant any proxies or powers of attorney with respect to any or all of the Shares; (C) permit to exist any lien of any nature whatsoever (other than those imposed by this Agreement, applicable securities Laws or the Company’s Organizational Documents, as in effect on the date hereof) with respect to any or all of the Shares; or (D) take any action that would have the effect of preventing, impeding, interfering with or adversely affecting Holder’s ability to perform its obligations under this Agreement. The Company hereby agrees that it shall not permit any Transfer of the Shares in violation of this Agreement. Holder agrees with, and covenants to, the Purchaser and the Company that Holder shall not request that the Company register the Transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any Shares during the term of this Agreement without the prior written consent of the Purchaser, and the Company hereby agrees that it shall not effect any such Transfer.
(b)Permitted Transfers. Section 3(a) shall not prohibit a Transfer of Shares by Holder (i) to any family member or trust for the benefit of any family member, (ii) to any stockholder, member or partner of Holder, if an entity, (iii) to any Affiliate of Holder, or (iv) to any person or entity if and to the extent required by any non-consensual Order, by divorce decree or by will, intestacy or other similar Applicable Law, so long as, in the case of the foregoing clauses (i), (ii) and (iii), the assignee or transferee agrees to be bound by the terms of this Agreement and executes and delivers to the parties hereto a written consent and joinder memorializing such agreement. During the term of this Agreement, the Company will not register or otherwise recognize the transfer (book-entry or otherwise) of any Shares or any certificate or uncertificated interest representing any of Holder’s Shares, except as permitted by, and in accordance with, this Section 3(b).
(c)Changes to Shares. In the event of a stock dividend or distribution, or any change in the shares of capital stock of the Company by reason of any stock dividend or distribution, stock split, recapitalization, combination, conversion, exchange of shares or the like, the term “Shares” shall be deemed to refer to and include the Shares as well as all such stock dividends and distributions and any securities into which or for which any or all of the Shares may be changed or exchanged or which are received in such transaction. Holder agrees during the Voting Period to notify the Purchaser and the Company promptly in writing of the number and type of any additional Shares acquired by Holder, if any, after the date hereof.
(d)Compliance with Merger Agreement. Holder agrees to not during the Voting Period take or agree or commit to take any action that would make any representation and warranty of Holder contained in this Agreement inaccurate in any material respect. Holder further agrees that it shall use its commercially reasonable efforts to cooperate with the Purchaser to effect the Merger, all other Transactions, the Merger Agreement, the Ancillary Documents and the provisions of this Agreement. During the Voting Period, Holder shall not authorize or permit any of its Representatives to, directly or indirectly, take any action that the Company is prohibited from taking pursuant to Section 5.2 of the Merger Agreement (unless the Purchaser shall have consented thereto).
(e)Registration Statement. During the Voting Period, Holder agrees to provide to the Purchaser, the Company and their respective Representatives any information regarding Holder or the Shares that is reasonably requested by the Purchaser, Company or their respective Representatives for inclusion in the Registration Statement.
(f)Publicity. Holder shall not issue any press release or otherwise make any public statements with respect to the Transactions or the transactions contemplated herein without the prior written approval of the Company and the Purchaser. Holder hereby authorizes the Company and the Purchaser to publish and disclose in any announcement or disclosure required by the SEC, Nasdaq or the Registration Statement (including all documents and schedules filed with the SEC in connection with the foregoing), Holder’s identity and ownership of the Shares and the nature of Holder’s commitments and agreements under this Agreement, the Merger Agreement and any other Ancillary Documents.
4.Representations and Warranties of Holder. Holder hereby represents and warrants to the Purchaser and the Company as follows:
(a)Binding Agreement. Holder (i) if a natural person, is of legal age to execute this Agreement and is legally competent to do so and (ii) if not a natural person, is (A) a corporation, limited liability company, company or partnership duly organized and validly existing under the laws of the jurisdiction of its organization and (B) has all necessary power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. If Holder is not a natural person, the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby by Holder has been duly authorized by all necessary corporate, limited liability or partnership action on the part of Holder, as applicable. This Agreement, assuming due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of Holder, enforceable against Holder in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). Holder understands and acknowledges that the Purchaser is entering into the Merger Agreement in reliance upon the execution and delivery of this Agreement by Holder.
(b)Ownership of Shares. As of the date hereof, Holder has beneficial ownership over the type and number of the Shares set forth under Holder’s name on the signature page hereto, is the lawful owner of such Shares, has the sole power to vote or cause to be voted such Shares, and has good and valid title to such Shares, free and clear of any and all pledges, mortgages, encumbrances, charges, proxies, voting agreements, liens, adverse claims, options, security interests and demands of any nature or kind whatsoever, other than those imposed by this Agreement, applicable securities Laws or the Company’s Organizational Documents, as in effect on the date hereof. There are no claims for finder’s fees or brokerage commission or other like payments in connection with this Agreement or the transactions contemplated hereby payable by Holder pursuant to arrangements made by Holder. Except for the Shares and other securities of the Company set forth under Holder’s name on the signature page hereto, as of the date of this Agreement, Holder is not a beneficial owner or record holder of any: (i) equity securities of the Company, (ii) securities of the Company having the right to vote on any matters on which the holders of equity securities of the Company may vote or which are convertible into or exchangeable for, at any time, equity securities of the Company or (iii) options, warrants or other rights to acquire from the Company any equity securities or securities convertible into or exchangeable for equity securities of the Company.
(c)No Conflicts. No filing with, or notification to, any Governmental Authority, and no consent, approval, authorization or permit of any other person is necessary for the execution of this Agreement by Holder, the performance of its obligations hereunder or the consummation by it of the transactions contemplated hereby. None of the execution and delivery of this Agreement by Holder, the performance of its obligations hereunder or the consummation by it of the transactions contemplated hereby shall (i) conflict with or result in any breach of the certificate of incorporation, bylaws or other comparable organizational documents of Holder, if applicable, (ii) result in, or give rise to, a violation or breach of or a default under any of the terms of any Contract or obligation to which Holder is a party or by which Holder or any of the Shares or its other assets may be bound, or (iii) violate any applicable Law or Order, except for any of the foregoing in clauses (i) through (iii) as would not reasonably be expected to impair Holder’s ability to perform its obligations under this Agreement in any material respect.
(d)No Inconsistent Agreements. Holder hereby covenants and agrees that, except for this Agreement, Holder (i) has not entered into, nor will enter into at any time while this Agreement remains in effect, any voting agreement or voting trust with respect to the Shares inconsistent with Holder’s obligations pursuant to this Agreement, (ii) has not granted, nor will grant at any time while this Agreement remains in effect, a proxy, a consent or power of attorney with respect to the Shares and (iii) has not entered into any agreement or knowingly taken any action (nor will enter into any agreement or knowingly take any action) that would make any representation or warranty of Holder contained herein untrue or incorrect in any material respect or have the effect of preventing Holder from performing any of its material obligations under this Agreement.
5.Miscellaneous.
(a)Termination. Notwithstanding anything to the contrary contained herein, this Agreement shall automatically terminate, and none of the Purchaser, the Company or Holder shall have any rights or obligations hereunder, upon the earliest to occur of (i) the mutual written consent of the Purchaser, the Company and Holder, (ii) the Effective Time (following the performance of the obligations of the parties hereunder required to be performed at or prior to the Effective Time), and (iii) the date of termination of the Merger Agreement in accordance with its terms. The termination of this Agreement shall not prevent any party hereunder from seeking any remedies (at law or in equity) against another party hereto or relieve such party from liability for such party’s breach of any terms of this Agreement. Notwithstanding anything to the contrary herein, the provisions of this Section 5(a) shall survive the termination of this Agreement.
(b)Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Agreement and all obligations of Holder are personal to Holder and may not be assigned, transferred or delegated by Holder at any time without the prior written consent of the Purchaser and the Company, and any purported assignment, transfer or delegation without such consent shall be null and void ab initio.
(c)Third Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person that is not a party hereto or thereto or a successor or permitted assign of such a party.
(d)Governing Law; Jurisdiction. This Agreement and any dispute or controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of law principles thereof. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate courts thereof) (the “Specified Courts”). Each party hereto hereby (i) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and (ii) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth or referred to in Section 5(g). Nothing in this Section 5(d) shall affect the right of any party to serve legal process in any other manner permitted by applicable law.
(e)WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5(e).
(f)Interpretation. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) the term “including” (and with correlative meaning “include”) shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
(g)Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):
If to the Purchaser, to: | with a copy (which will not constitute notice) to: |
AMCI Acquisition Corp. 975 Georges Station Road, Suite 900 Greensburg, PA 15601 Attn: William Hunter Telephone No.: (203) 856-7285 Email: whunter@amcigroup.com | Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, NY 10105 Attn: Stuart Neuhauser, Esq. Matthew A. Gray, Esq. Facsimile No.: (212) 370-7889 Telephone No.: (212) 370-1300 Email: sneuhauser@egsllp.com mgray@egsllp.com |
If to the Company, to: Advent Technologies Inc. One Mifflin Place 119 Mt Auburn Street, Suite 400 Cambridge, MA 02138 Attn: James F. Coffey Telephone No.: (857) 264-7035 Email: jcoffey@advent.energy | with a copy (which will not constitute notice) to: Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036-8704 Attn: Carl Marcellino, Esq. Paul D. Tropp, Esq. Facsimile No.: (212) 596-9090 Telephone No.: (212) 841-0623 (212) 596-9515 Email: Carl.Marcellino@ropesgray.com Paul.Tropp@ropesgray.com |
If to Holder, to: the address set forth under Holder’s name on the signature page hereto, with a copy (which will not constitute notice) to, if not the party sending the notice, each of the Company and the Purchaser (and each of their copies for notices hereunder). |
(h)Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Purchaser, the Company and the Holder. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
(i)Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(j)Specific Performance. Holder acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach of this Agreement by Holder, money damages will be inadequate and the Company and the Purchaser will not have an adequate remedy at law, and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by Holder in accordance with their specific terms or were otherwise breached. Accordingly, the Company and the Purchaser shall be entitled to an injunction or restraining order to prevent breaches of this Agreement by Holder and to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such party may be entitled under this Agreement, at law or in equity.
(k)Expenses. Each party shall be responsible for its own fees and expenses (including the fees and expenses of investment bankers, accountants and counsel) in connection with the entering into of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby; provided, that in the event of any Action arising out of or relating to this Agreement, the non-prevailing party in any such Action will pay its own expenses and the reasonable documented out-of-pocket expenses, including reasonable attorneys’ fees and costs, reasonably incurred by the prevailing party.
(l)No Partnership, Agency or Joint Venture. This Agreement is intended to create a contractual relationship among Holder, the Company and the Purchaser, and is not intended to create, and does not create, any agency, partnership, joint venture or any like relationship among the parties hereto or among any other Company shareholders entering into voting agreements with the Company or the Purchaser. Holder has acted independently regarding its decision to enter into this Agreement. Nothing contained in this Agreement shall be deemed to vest in the Company or the Purchaser any direct or indirect ownership or incidence of ownership of or with respect to any Shares.
(m)Further Assurances. From time to time, at another party’s request and without further consideration, each party shall execute and deliver such additional documents and take all such further action as may be reasonably necessary or desirable to consummate the transactions contemplated by this Agreement.
(n)Entire Agreement. This Agreement (together with the Merger Agreement to the extent referred to herein) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Merger Agreement or any Ancillary Document. Notwithstanding the foregoing, nothing in this Agreement shall limit any of the rights or remedies of the Purchaser or any of the obligations of Holder under any other agreement between Holder and the Purchaser or any certificate or instrument executed by Holder in favor of the Purchaser, and nothing in any other agreement, certificate or instrument shall limit any of the rights or remedies of the Purchaser or any of the obligations of Holder under this Agreement.
(o)Counterparts; Facsimile. This Agreement may also be executed and delivered by facsimile or electronic signature or by email in portable document format in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
| The Purchaser: |
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| AMCI ACQUSITION CORP. |
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| By: | |
| Name: |
| Title: |
| |
| The Company: |
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| ADVENT TECHNOLOGIES INC. |
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{Signature Page to Voting Agreement}
Holder: |
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[_________________________________] |
Number and Type of Shares:
Shares of Company Common Stock:- | |
Shares of Company Preferred Stock (indicate each series of Company Preferred Stock):
Address for Notice:
Facsimile No.: | | |
Telephone No.: | | |
{Signature Page to Voting Agreement}
Exhibit B
FORM OF LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of October 12, 2020 by and among (i) AMCI Acquisition Corp., a Delaware corporation (together with its successors, the “Purchaser”), (ii) AMCI Sponsor LLC, in the capacity under the Merger Agreement as the Purchaser Representative (including any successor Purchaser Representative appointed in accordance therewith, the “Purchaser Representative”), and (iii) the undersigned (“Holder”). Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.
WHEREAS, on or about the date hereof, (i) the Purchaser, (ii) AMCI Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”),(iii)the Purchaser Representative, (iv) Vassilios Gregoriou, in the capacity as the Seller Representative under the Merger Agreement, and (v)Advent Technologies Inc., a Delaware corporation (together with its successors, the “Company”), entered into that certain Agreement and Plan of Merger (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”), pursuant to which, among other matters, upon the consummation of the transactions contemplated thereby (the “Closing”), Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”), and as a result of which, all of the issued and outstanding capital stock of the Company immediately prior to the Closing shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right to receive the Merger Consideration, all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the of the DGCL;
WHEREAS, as of the date hereof, Holder is a holder of the Company Stock in such amounts and classes or series as set forth underneath Holder’s name on the signature page hereto; and
WHEREAS, pursuant to the Merger Agreement, and in view of the valuable consideration to be received by Holder thereunder, the parties desire to enter into this Agreement, pursuant to which the Merger Consideration received by Holder in the Merger (all such securities, together with any securities paid as dividends or distributions with respect to such securities or into which such securities are exchanged or converted, the “Restricted Securities”), shall become subject to limitations on disposition as set forth herein.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the parties hereby agree as follows:
1.Lock-Up Provisions.
(a)Holder hereby agrees not to, during the period (the “Lock-Up Period”) commencing from the Closing and ending on the earlier of (x) the one (1) year anniversary of the date of the Closing, (y) the date on which the closing price of the Purchaser Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any thirty (30) trading day period commencing at least one-hundred fifty (150) days after the Closing, and (z) the date after the Closing on which Purchaser consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of Purchaser’s stockholders having the right to exchange their equity holdings in Purchaser for cash, securities or other property: (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Restricted Securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Restricted Securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i), (ii) or (iii) above is to be settled by delivery of Restricted Securities or other securities, in cash or otherwise (any of the foregoing described in clauses (i), (ii) or (iii), a “Prohibited Transfer”). The foregoing sentence shall not apply to the transfer of any or all of the Restricted Securities owned by Holder (I) by gift, will or intestate succession upon the death of Holder, (II) to any Permitted Transferee (as defined below) or (III) pursuant to a court order or settlement agreement related to the distribution of assets in connection with the dissolution of marriage or civil union; provided, however, that in any of cases (I), (II) or (III) it shall be a condition to such transfer that the transferee executes and delivers to the Purchaser and the Purchaser Representative an agreement stating that the transferee is receiving and holding the Restricted Securities subject to the provisions of this Agreement applicable to Holder, and there shall be no further transfer of such Restricted Securities except in accordance with this Agreement. As used in this Agreement, the term “Permitted Transferee” shall mean: (A) the members of Holder’s immediate family (for purposes of this Agreement, “immediate family” shall mean with respect to any natural person, any of the following: such person’s spouse, the siblings of such person and his or her spouse, and the direct descendants and ascendants (including adopted and step children and parents) of such person and his or her spouses and siblings), (B) any trust for the direct or indirect benefit of Holder or the immediate family of Holder, (C) if Holder is a trust, the trustor or beneficiary of such trust or to the estate of a beneficiary of such trust, (D) if Holder is an entity, as a distribution to limited partners, shareholders, members of, or owners of similar equity interests in Holder upon the liquidation and dissolution of Holder, and (E) any affiliate of Holder. Holder further agrees to execute such agreements as may be reasonably requested by Purchaser or the Purchaser Representative that are consistent with the foregoing or that are necessary to give further effect thereto.
(b)If any Prohibited Transfer is made or attempted contrary to the provisions of this Agreement, such purported Prohibited Transfer shall be null and void ab initio, and Purchaser shall refuse to recognize any such purported transferee of the Restricted Securities as one of its equity holders for any purpose. In order to enforce this Section 1, Purchaser may impose stop-transfer instructions with respect to the Restricted Securities of Holder (and Permitted Transferees and assigns thereof) until the end of the Lock-Up Period.
(c) During the Lock-Up Period, each certificate evidencing any Restricted Securities shall be stamped or otherwise imprinted with a legend in substantially the following form, in addition to any other applicable legends:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF OCTOBER 12, 2020, BY AND AMONG THE ISSUER OF SUCH SECURITIES (THE “ISSUER”), A CERTAIN REPRESENTATIVE OF THE ISSUER NAMED THEREIN AND THE ISSUER’S SECURITY HOLDER NAMED THEREIN, AS AMENDED. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
(d) For the avoidance of any doubt, Holder shall retain all of its rights as a stockholder of the Purchaser during the Lock-Up Period, including the right to vote any Restricted Securities, subject to the terms of the Merger Agreement.
2.Miscellaneous.
(a)Termination of Merger Agreement. This Agreement shall be binding upon Holder upon Holder’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the Closing. Notwithstanding anything to the contrary contained herein, in the event that the Merger Agreement is terminated in accordance with its terms prior to the Closing, this Agreement and all rights and obligations of the parties hereunder shall automatically terminate and be of no further force or effect.
(b)Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Agreement and all obligations of Holder are personal to Holder and may not be transferred or delegated by Holder at any time. The Purchaser may freely assign any or all of its rights under this Agreement, in whole or in part, to any successor entity (whether by merger, consolidation, equity sale, asset sale or otherwise) without obtaining the consent or approval of Holder. If the Purchaser Representative is replaced in accordance with the terms of the Merger Agreement, the replacement Purchaser Representative shall automatically become a party to this Agreement as if it were the original Purchaser Representative hereunder.
(c)Third Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person or entity that is not a party hereto or thereto or a successor or permitted assign of such a party.
(d)Governing Law; Jurisdiction. This Agreement and any dispute or controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of law principles thereof. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate courts thereof) (the “Specified Courts”). Each party hereto hereby (i) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and (ii) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth in Section 2(g). Nothing in this Section 2(d) shall affect the right of any party to serve legal process in any other manner permitted by applicable law.
(e)WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 2(e).
(f)Interpretation. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
(g)Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):
If to the Purchaser Representative or, at or prior to the Closing, Purchaser, to: AMCI Sponsor LLC 1501 Ligonier Street, Suite 370 Latrobe, PA 15601 Attn: William Hunter Telephone No.: (203) 856-7285 Email: whunter@amcigroup.com | With a copy (which will not constitute notice) to: Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, New York 10105 Attn: Stuart Neuhauser, Esq. Matthew A. Gray, Esq. Facsimile No.: (212) 370-7889 Telephone No.: (212) 370-1300 Email: sneuhauser@egsllp.com mgray@egsllp.com |
If to the Purchaser after the Closing, to: Advent Technologies Holdings, Inc. One Mifflin Place 119 Mt Auburn Street, Suite 400 Cambridge, MA 02138 Attn: James F. Coffey Telephone No.: (617) 645-0017 Email: jcoffey@advent.energy and the Purchaser Representative | with copies (which shall not constitute notice) to: and Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, New York 10105 Attn: Stuart Neuhauser, Esq. Matthew A. Gray, Esq. Facsimile No.: (212) 370-7889 Telephone No.: (212) 370-1300 Email: sneuhauser@egsllp.com mgray@egsllp.com and Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036-8704 Attn: Carl Marcellino, Esq. Paul D. Tropp, Esq. Facsimile No.: (212) 596-9090 Telephone No.: (212) 841-0623 (212) 596-9515 Email: Carl.Marcellino@ropesgray.com Paul.Tropp@ropesgray.com |
If to Holder, to: the address set forth below Holder’s name on the signature page to this Agreement. |
(h)Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Purchaser, the Purchaser Representative and Holder. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
(i)Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(j)Specific Performance. Holder acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach of this Agreement by Holder, money damages will be inadequate and Purchaser (and the Purchaser Representative on behalf of the Purchaser) will have no adequate remedy at law, and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by Holder in accordance with their specific terms or were otherwise breached. Accordingly, each of the Purchaser and the Purchaser Representative shall be entitled to an injunction or restraining order to prevent breaches of this Agreement by Holder and to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such party may be entitled under this Agreement, at law or in equity.
(k)Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Merger Agreement or any Ancillary Document. Notwithstanding the foregoing, nothing in this Agreement shall limit any of the rights or remedies of the Purchaser and the Purchaser Representative or any of the obligations of Holder under any other agreement between Holder and the Purchaser or the Purchaser Representative or any certificate or instrument executed by Holder in favor of the Purchaser or the Purchaser Representative, and nothing in any other agreement, certificate or instrument shall limit any of the rights or remedies of the Purchaser or the Purchaser Representative or any of the obligations of Holder under this Agreement.
(l)Further Assurances. From time to time, at another party’s request and without further consideration (but at the requesting party’s reasonable cost and expense), each party shall execute and deliver such additional documents and take all such further action as may be reasonably necessary to consummate the transactions contemplated by this Agreement.
(m)Counterparts; Facsimile. This Agreement may also be executed and delivered by facsimile signature or by email in portable document format in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
{Remainder of Page Intentionally Left Blank; Signature Pages Follow}
IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.
| Purchaser: |
| | |
| AMCI ACQUSITION CORP. |
| | |
| Name: |
| Title: |
| | |
| The Purchaser Representative: |
| | |
| AMCI Sponsor LLC, |
| solely in the capacity under the Merger Agreement as the Purchaser Representative |
| | |
{Additional Signature on the Following Page}
IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.
Holder:
Name of Holder: [__________________________]
Number and Type of Shares of Company Stock: | |
Company Common Stock: | | |
Series Seed Preferred Stock: | | |
Series A Preferred Stock: | | |
Exhibit C
FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT
THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this “Agreement”) is being executed and delivered as of October 12, 2020, by [_______________________] (the “Subject Party”) in favor of and for the benefit of AMCI Acquisition Corp., a Delaware corporation (together with its successors, the “Purchaser”), Advent Technologies Inc., a Delaware company (together with its successors, the “Company”), and each of the Purchaser’s and/or the Company’s respective present and future Affiliates, successors and Subsidiaries (collectively with the Purchaser and the Company, the “Covered Parties”). Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.
WHEREAS, on or about the date hereof, (i) the Purchaser, (ii) AMCI Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”),(iii)AMCI Sponsor LLC, in the capacity as the Purchaser Representative under the Merger Agreement (including any successor Purchaser Representative appointed in accordance therewith, the “Purchaser Representative”), (iv) Vassilios Gregoriou, in the capacity as the Seller Representative under the Merger Agreement, and (v)the Company entered into that certain Agreement and Plan of Merger (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”), pursuant to which, among other matters, upon the consummation of the transactions contemplated thereby (the “Closing”), Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”), and as a result of which, all of the issued and outstanding capital stock of the Company immediately prior to the consummation of the Merger shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right to receive shares of common stock of the Purchaser, in each case, subject to the terms and conditions of the Merger Agreement and in accordance with the applicable provisions of the of the Delaware General Corporation Law;
WHEREAS, the Company, directly and indirectly through its Subsidiaries, engages in the business of researching, developing, producing, marketing and selling fuel cell technologies, including hydrogen-based technologies (collectively, the “Business”);
WHEREAS, in connection with, and as a condition to the execution and delivery of the Merger Agreement and the consummation of the Merger and the other transactions contemplated by the Merger Agreement (collectively, the “Transactions”), and to enable the Purchaser to secure more fully the benefits of the Transactions, including the protection and maintenance of the goodwill and confidential information of the Company and its Subsidiaries, the Purchaser has required that the Subject Party enter into this Agreement;
WHEREAS, the Subject Party is entering into this Agreement in order to induce the Purchaser to enter into the Merger Agreement and consummate the Transactions, pursuant to which the Subject Party will directly or indirectly receive a material benefit; and
WHEREAS, the Subject Party, as a former and/or current shareholder, director, officer or employee of the Company or its Subsidiaries, has contributed to the value of the Company and its Subsidiaries and has obtained extensive and valuable knowledge and confidential information concerning the business of the Company and its Subsidiaries.
NOW, THEREFORE, in order to induce the Purchaser to enter into the Merger Agreement and consummate the Transactions, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Subject Party hereby agrees as follows:
1. Restriction on Competition.
(a)Restriction. The Subject Party hereby agrees that during the period from the Closing until the three (3) year anniversary of the Closing Date (the “Restricted Period”) the Subject Party will not, and will cause its Affiliates not to, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), anywhere in North America or the European Union (including Greece) or in any other markets in which the Covered Parties are engaged, or are actively contemplating to become engaged, in the Business as of the Closing Date or during the Restricted Period (the “Territory”), directly or indirectly engage in the Business (other than through a Covered Party) or own, manage, finance or control, or participate in the ownership, management, financing or control of, or become engaged or serve as an officer, director, member, partner, employee, agent, consultant, advisor or representative of, a business or entity (other than a Covered Party) that engages in the Business (a “Competitor”). Notwithstanding the foregoing, the Subject Party and its Affiliates may own passive investments of no more than two percent (2%) of any class of outstanding equity interests in a Competitor that is publicly traded, so long as the Subject Party and its Affiliates and immediate family members are not involved in the management or control of such Competitor (“Permitted Ownership”).
(b)Acknowledgment. The Subject Party acknowledges and agrees, based upon the advice of legal counsel and/or the Subject Party’s own education, experience and training, that (i) the Subject Party possesses knowledge of confidential information of the Company and its Subsidiaries and the Business, (ii) the Subject Party’s execution of this Agreement is a material inducement to the Purchaser and the Company to consummate the Transactions and to realize the goodwill of the Company and its Subsidiaries, for which the Subject Party and/or its Affiliates will receive a substantial direct or indirect financial benefit, and that the Purchaser and the Company would not have entered into the Merger Agreement or consummated the Transactions but for the Subject Party’s agreements set forth in this Agreement; (iii) it would impair the goodwill of the Company and its Subsidiaries and reduce the value of the assets of the Company and its Subsidiaries and cause serious and irreparable injury if the Subject Party were to use its ability and knowledge by engaging in the Business in competition with a Covered Party, and/or to otherwise breach the obligations contained herein and that the Covered Parties would not have an adequate remedy at law because of the unique nature of the Business, (iv) the Subject Party and its Affiliates have no intention of engaging in the Business (other than through the Covered Parties) during the Restricted Period other than through Permitted Ownership, (v) the relevant public policy aspects of restrictive covenants, covenants not to compete and non-solicitation provisions have been discussed, and every effort has been made to limit the restrictions placed upon the Subject Party to those that are reasonable and necessary to protect the Covered Parties’ legitimate interests, (vi) the Covered Parties conduct and intend to conduct the Business everywhere in the Territory and compete with other businesses that are or could be located in any part of the Territory, (vii) the foregoing restrictions on competition are fair and reasonable in type of prohibited activity, geographic area covered, scope and duration, (viii) the consideration provided to the Subject Party under this Agreement and the Merger Agreement is not illusory, and (ix) such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Covered Parties.
2. No Solicitation; No Disparagement.
(a)No Solicitation of Employees and Consultants. The Subject Party agrees that, during the Restricted Period, the Subject Party and its Affiliates will not, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), either on its own behalf or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of the Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) hire or engage as an employee, independent contractor, consultant or otherwise any Covered Personnel (as defined below); (ii) solicit, induce, encourage or otherwise knowingly cause (or attempt to do any of the foregoing) any Covered Personnel to leave the service (whether as an employee, consultant or independent contractor) of any Covered Party; or (iii) in any way interfere with or attempt to interfere with the relationship between any Covered Personnel and any Covered Party; provided, however, the Subject Party and its Affiliates will not be deemed to have violated this Section 2(a) if any Covered Personnel voluntarily and independently solicits an offer of employment from the Subject Party or its Affiliate (or other Person whom any of them is acting on behalf of) by responding to a general advertisement or solicitation program conducted by or on behalf of the Subject Party or its Affiliate (or such other Person whom any of them is acting on behalf of) that is not targeted at such Covered Personnel or Covered Personnel generally, so long as such Covered Personnel is not hired. For purposes of this Agreement, “Covered Personnel” shall mean any Person who is or was an employee, consultant or independent contractor of the Covered Parties, as of such date of the relevant act prohibited by this Section 2(a) or during the one (1)year period preceding such date.
(b)Non-Solicitation of Customers and Suppliers. The Subject Party agrees that, during the Restricted Period, the Subject Party and its Affiliates will not, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), individually or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of the Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) solicit, induce, encourage or otherwise knowingly cause (or attempt to do any of the foregoing) any Covered Customer (as defined below) to (A) cease being, or not become, a client or customer of any Covered Party with respect to the Business or (B) reduce the amount of business of such Covered Customer with any Covered Party, or otherwise alter such business relationship in a manner adverse to any Covered Party, in either case, with respect to or relating to the Business; (ii) interfere with or disrupt (or attempt to interfere with or disrupt) the contractual relationship between any Covered Party and any Covered Customer; (iii) divert any business with any Covered Customer relating to the Business from a Covered Party; (iv) solicit for business, provide services to, engage in or do business with, any Covered Customer for products or services that are part of the Business; or (v) interfere with or disrupt (or attempt to interfere with or disrupt), any Person that was a vendor, supplier, distributor, agent or other service provider of a Covered Party at the time of such interference or disruption, for a purpose competitive with a Covered Party as it relates to the Business. For purposes of this Agreement, a “Covered Customer” shall mean any Person who is or was an actual customer or client (or prospective customer or client with whom a Covered Party actively marketed or made or taken specific action to make a proposal) of a Covered Party, as of such date of the relevant act prohibited by this Section 2(b) or during the one (1)year period preceding such date.
(c)Non-Disparagement. The Subject Party agrees that from and after the Closing until the two (2) year anniversary of the end of the Restricted Period, the Subject Party and its Affiliates will not, directly or indirectly engage in any conduct that involves the making or publishing (including through electronic mail distribution or online social media) of any written or oral statements or remarks (including the repetition or distribution of derogatory rumors, allegations, negative reports or comments) that are disparaging, deleterious or damaging to the integrity, reputation or good will of one or more Covered Parties or their respective management, officers, employees, independent contractors or consultants. Notwithstanding the foregoing, subject to Section 3 below, the provisions of this Section 2(c) shall not restrict the Subject Party or its Affiliates from providing truthful testimony or information in response to a subpoena or investigation by a Governmental Authority or in connection with any legal action by the Subject Party or its Affiliate against any Covered Party under this Agreement, the Merger Agreement or any other Ancillary Document that is asserted by the Subject Party or its Affiliate in good faith.
3.Confidentiality. From the Closing until the five (5) year anniversary of the Closing Date, the Subject Party will, and will cause its Representatives to, keep confidential and not (except, if applicable, in the performance of the Subject Party’s duties on behalf of the Covered Parties) directly or indirectly use, disclose, reveal, publish, transfer or provide access to, any and all Covered Party Information without the prior written consent of the Purchaser (which may be withheld in its sole discretion). As used in this Agreement, “Covered Party Information” means all material and information relating to the business, affairs and assets of any Covered Party, including material and information that concerns or relates to such Covered Party’s bidding and proposal, technical information, computer hardware or software, administrative, management, operational, data processing, financial, marketing, customers, sales, human resources, employees, vendors, business development, planning and/or other business activities, regardless of whether such material and information is maintained in physical, electronic, or other form, that is: (A) gathered, compiled, generated, produced or maintained by such Covered Party through its Representatives, or provided to such Covered Party by its suppliers, service providers or customers; and (B) intended and maintained by such Covered Party or its Representatives, suppliers, service providers or customers to be kept in confidence. Covered Party Information also includes information disclosed to any Covered Party by a third party to the extent that a Covered Party has an obligation of confidentiality in connection therewith. The obligations set forth in this Section 3 will not apply to any Covered Party Information where the Subject Party can prove that such material or information: (i) is known or available through other lawful sources not bound by a confidentiality agreement or other confidentiality obligation with respect to such material or information; (ii) is or becomes publicly known through no violation of this Agreement or other non-disclosure obligation of the Subject Party or any of its Representatives; (iii) is already in the possession of the Subject Party at the time of disclosure through lawful sources not bound by a confidentiality agreement or other confidentiality obligation as evidenced by the Subject Party’s documents and records; or (iv) is required to be disclosed pursuant to an order of any administrative body or court of competent jurisdiction (provided that (A) the applicable Covered Party is given reasonable prior written notice, (B) the Subject Party cooperates (and causes its Representatives to cooperate) with any reasonable request of any Covered Party to seek to prevent or narrow such disclosure and (C) if after compliance with clauses (A) and (B) such disclosure is still required, the Subject Party and its Representatives only disclose such portion of the Covered Party Information that is expressly required by such order, as it may be subsequently narrowed).
4.Representations and Warranties. The Subject Party hereby represents and warrants, to and for the benefit of the Covered Parties as of the date of this Agreement and as of the Closing Date, that: (a) the Subject Party has full power and capacity to execute and deliver, and to perform all of the Subject Party’s obligations under, this Agreement; and (b) neither the execution and delivery of this Agreement nor the performance of the Subject Party’s obligations hereunder will result directly or indirectly in a violation or breach of any agreement or obligation by which the Subject Party is a party or otherwise bound. By entering into this Agreement, the Subject Party certifies and acknowledges that the Subject Party has carefully read all of the provisions of this Agreement, and that the Subject Party voluntarily and knowingly enters into this Agreement.
5.Remedies. The covenants and undertakings of the Subject Party contained in this Agreement relate to matters which are of a special, unique and extraordinary character and a violation of any of the terms of this Agreement may cause irreparable injury to the Covered Parties, the amount of which may be impossible to estimate or determine and which cannot be adequately compensated. The Subject Party agrees that, in the event of any breach or threatened breach by the Subject Party of any covenant or obligation contained in this Agreement, each applicable Covered Party will be entitled to obtain the following remedies (in addition to, and not in lieu of, any other remedy at law or in equity or pursuant to the Merger Agreement or the other Ancillary Documents that may be available to the Covered Parties, including monetary damages), and a court of competent jurisdiction may award: (i) an injunction, restraining order or other equitable relief restraining or preventing such breach or threatened breach, without the necessity of proving actual damages or that monetary damages would be insufficient or posting bond or security, which the Subject Party expressly waives; and (ii) recovery of the Covered Party’s attorneys’ reasonable fees and costs incurred in enforcing the Covered Party’s rights under this Agreement. The Subject Party hereby consents to the award of any of the above remedies to the applicable Covered Party in connection with any such breach or threatened breach. The Subject Party hereby acknowledges and agrees that in the event of any breach of this Agreement, any value attributed or allocated to this Agreement (or any other non-competition agreement with the Subject Party) under or in connection with the Merger Agreement shall not be considered a measure of, or a limit on, the damages of the Covered Parties.
6.Survival of Obligations. The expiration of the Restricted Period will not relieve the Subject Party of any obligation or liability arising from any breach by the Subject Party of this Agreement during the Restricted Period. The Subject Party further agrees that the time period during which the covenants contained in Section 1 and Section 2 of this Agreement will be effective will be computed by excluding from such computation any time during which the Subject Party is in violation of any provision of such Sections.
7. Miscellaneous.
(a)Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):
If to the Purchaser Representative, the Purchaser or the Company (or any other Covered Party), to: AMCI Sponsor LLC 1501 Ligonier Street, Suite 370 Latrobe, PA 15601 Attn: William Hunter Telephone No.: (203) 856-7285 Email: whunter@amcigroup.com and Advent Technologies Inc. One Mifflin Place 119 Mt Auburn Street, Suite 400 Cambridge, MA 02138 Attn: James F. Coffey Telephone No.: (617) 645-0017 Email: JCoffey@advent.energy | with a copy (that will not constitute notice) to: Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, New York 10105 Attn: Stuart Neuhauser, Esq. Matthew A. Gray, Esq. Facsimile No.: (212) 370-7889 Telephone No.: (212) 370-1300 Email: sneuhauser@egsllp.com mgray@egsllp.com and Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036-8704 Attn: Carl Marcellino, Esq. Paul D. Tropp, Esq. Facsimile No.: (212) 596-9090 Telephone No.: (212) 841-0623 (212) 596-9515 Email: Carl.Marcellino@ropesgray.com Paul.Tropp@ropesgray.com |
If to the Subject Party, to: the address below the Subject Party’s name on the signature page to this Agreement. |
(b)Integration and Non-Exclusivity. This Agreement, the Merger Agreement and the other Ancillary Documents contain the entire agreement between the Subject Party and the Covered Parties concerning the subject matter hereof. Notwithstanding the foregoing, the rights and remedies of the Covered Parties under this Agreement are not exclusive of or limited by any other rights or remedies which they may have, whether at law, in equity, by contract or otherwise, all of which will be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of the Covered Parties, and the obligations and liabilities of the Subject Party and its Affiliates, under this Agreement, are in addition to their respective rights, remedies, obligations and liabilities (i) under the laws of unfair competition, misappropriation of trade secrets, or other requirements of statutory or common law, or any applicable rules and regulations and (ii) otherwise conferred by contract, including the Merger Agreement and any other written agreement between the Subject Party or its Affiliate and any of the Covered Parties. Nothing in the Merger Agreement will limit any of the obligations, liabilities, rights or remedies of the Subject Party or the Covered Parties under this Agreement, nor will any breach of the Merger Agreement or any other agreement between the Subject Party or its Affiliate and any of the Covered Parties limit or otherwise affect any right or remedy of the Covered Parties under this Agreement. If any term or condition of any other agreement between the Subject Party or its Affiliate and any of the Covered Parties conflicts or is inconsistent with the terms and conditions of this Agreement, the more restrictive terms will control as to the Subject Party or its Affiliate, as applicable.
(c)Severability; Reformation. Each provision of this Agreement is separable from every other provision of this Agreement. If any provision of this Agreement is found or held to be invalid, illegal or unenforceable, in whole or in part, by a court of competent jurisdiction, then (i) such provision will be deemed amended to conform to applicable laws so as to be valid, legal and enforceable to the fullest possible extent, (ii) the invalidity, illegality or unenforceability of such provision will not affect the validity, legality or enforceability of such provision under any other circumstances or in any other jurisdiction, and (iii) the invalidity, illegality or unenforceability of such provision will not affect the validity, legality or enforceability of the remainder of such provision or the validity, legality or enforceability of any other provision of this Agreement. The Subject Party and the Covered Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision. Without limiting the foregoing, if any court of competent jurisdiction determines that any part hereof is unenforceable because of the duration, geographic area covered, scope of such provision, or otherwise, such court will have the power to reduce the duration, geographic area covered or scope of such provision, as the case may be, and, in its reduced form, such provision will then be enforceable. The Subject Party will, at a Covered Party’s request, join such Covered Party in requesting that such court take such action.
(d)Amendment; Waiver. This Agreement may not be amended or modified in any respect, except by a written agreement executed by the Subject Party, the Purchaser and the Purchaser Representative (or their respective permitted successors or assigns). No waiver will be effective unless it is expressly set forth in a written instrument executed by the waiving party (and if such waiving party is a Covered Party, the Purchaser Representative) and any such waiver will have no effect except in the specific instance in which it is given. Any delay or omission by a party in exercising its rights under this Agreement, or failure to insist upon strict compliance with any term, covenant, or condition of this Agreement will not be deemed a waiver of such term, covenant, condition or right, nor will any waiver or relinquishment of any right or power under this Agreement at any time or times be deemed a waiver or relinquishment of such right or power at any other time or times.
(e)Dispute Resolution. Any dispute, difference, controversy or claim arising in connection with or related or incidental to, or question occurring under, this Agreement or the subject matter hereof (other than applications for a temporary restraining order, preliminary injunction, permanent injunction or other equitable relief or application for enforcement of a resolution under this Section 7(e)) (a “Dispute”) shall be governed by this Section 7(e). A party must, in the first instance, provide written notice of any Disputes to the other parties subject to such Dispute, which notice must provide a reasonably detailed description of the matters subject to the Dispute. Any Dispute that is not resolved may at any time after the delivery of such notice immediately be referred to and finally resolved by arbitration pursuant to the then-existing Expedited Procedures of the Commercial Arbitration Rules (the “AAA Procedures”) of the American Arbitration Association (the “AAA”). Any party involved in such Dispute may submit the Dispute to the AAA to commence the proceedings after the Resolution Period. To the extent that the AAA Procedures and this Agreement are in conflict, the terms of this Agreement shall control. The arbitration shall be conducted by one arbitrator nominated by the AAA promptly (but in any event within five (5) Business Days) after the submission of the Dispute to the AAA and reasonably acceptable to each party subject to the Dispute, which arbitrator shall be a commercial lawyer with substantial experience arbitrating disputes under acquisition agreements. The arbitrator shall accept his or her appointment and begin the arbitration process promptly (but in any event within five (5) Business Days) after his or her nomination and acceptance by the parties subject to the Dispute. The proceedings shall be streamlined and efficient. The arbitrator shall decide the Dispute in accordance with the substantive law of the State of New York. Time is of the essence. Each party shall submit a proposal for resolution of the Dispute to the arbitrator within twenty (20) days after confirmation of the appointment of the arbitrator. The arbitrator shall have the power to order any party to do, or to refrain from doing, anything consistent with this Agreement, the Ancillary Documents and applicable Law, including to perform its contractual obligation(s); provided, that the arbitrator shall be limited to ordering pursuant to the foregoing power (and, for the avoidance of doubt, shall order) the relevant party (or parties, as applicable) to comply with only one or the other of the proposals. The arbitrator’s award shall be in writing and shall include a reasonable explanation of the arbitrator’s reason(s) for selecting one or the other proposal. The seat of arbitration shall be in New York County, State of New York. The language of the arbitration shall be English.
(f)Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York without regard to the conflict of laws principles thereof. Subject to Section 7(e), all Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate courts thereof) (the “Specified Courts”). Subject to Section 7(e), each party hereto hereby (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court and (c) waives any bond, surety or other security that might be required of any other party with respect thereto. Each party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law or in equity. Each party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth in Section 7(a). Nothing in this Section 7(f) shall affect the right of any party to serve legal process in any other manner permitted by Law.
(g)WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(g). ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 7(g) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
(h)Successors and Assigns; Third Party Beneficiaries. This Agreement will be binding upon the Subject Party and the Subject Party’s estate, successors and assigns, and will inure to the benefit of the Covered Parties, and their respective successors and assigns. Each Covered Party may freely assign any or all of its rights under this Agreement, at any time, in whole or in part, to any Person which acquires, in one or more transactions, at least a majority of the equity securities (whether by equity sale, merger or otherwise) of such Covered Party or all or substantially all of the assets of such Covered Party and its Subsidiaries, taken as a whole, without obtaining the consent or approval of the Subject Party. The Subject Party agrees that the obligations of the Subject Party under this Agreement are personal and will not be assigned by the Subject Party. Each of the Covered Parties are express third party beneficiaries of this Agreement and will be considered parties under and for purposes of this Agreement.
(i)Purchaser Representative Authorized to Act on Behalf of Covered Parties. The parties acknowledge and agree that the Purchaser Representative is authorized and shall have the sole right to act on behalf of Purchaser and the other Covered Parties under this Agreement, including the right to enforce the Purchaser’s rights and remedies under this Agreement. Without limiting the foregoing, in the event that the Subject Party serves as a director, officer, employee or other authorized agent of a Covered Party, the Subject Party shall have no authority, express or implied, to act or make any determination on behalf of a Covered Party in connection with this Agreement or any dispute or Action with respect hereto.
(j)Construction. The Subject Party acknowledges that the Subject Party has been represented, or had the opportunity to be represented by, counsel of the Subject Party’s choice. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be applied in the construction or interpretation of this Agreement. Neither the drafting history nor the negotiating history of this Agreement will be used or referred to in connection with the construction or interpretation of this Agreement. The headings and subheadings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement: (i) the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation”; (ii) the definitions contained herein are applicable to the singular as well as the plural forms of such terms; (iii) whenever required by the context, any pronoun shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (iv) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (v) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (vi) the term “or” means “and/or”; and (vii) any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented, including by waiver or consent and references to all attachments thereto and instruments incorporated therein.
(k)Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. A photocopy, faxed, scanned and/or emailed copy of this Agreement or any signature page to this Agreement, shall have the same validity and enforceability as an originally signed copy.
(l)Effectiveness. This Agreement shall be binding upon the Subject Party upon the Subject Party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the consummation of the Transactions. In the event that the Merger Agreement is validly terminated in accordance with its terms prior to the consummation of the Transactions, this Agreement shall automatically terminate and become null and void, and the parties shall have no obligations hereunder.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Non-Competition and Non-Solicitation Agreement as of the date first written above.
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| Address for Notice: |
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{Signature Page to Non-Competition Agreement}
Acknowledged and accepted as of the date first written above:
The Purchaser: | |
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AMCI ACQUISITION CORP. | |
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Name: | |
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The Company: | |
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ADVENT TECHNOLOGIES INC. | |
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{Signature Page to Non-Competition Agreement}
Exhibit D
Form Chris Kaskavelis Employment Agreement
See attachment.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of [Date] by and between Advent Technologies SA (the “Company”) and Christos Kaskavelis (the “Executive”), and is effective as of the Closing Date, as such term is defined in the Agreement and Plan of Merger by and among AMCI Acquisition Corp. (“Parent”), AMCI Merger Sub Corp., AMCI Sponsor LLC, Vassilios Gregoriou, and Advent Technologies, Inc., dated as of October 12, 2020 (the “Merger Agreement”). In the event that the Closing (as such term is defined in the Merger Agreement) does not occur, this Agreement will be void and of no force or effect.
WHEREAS, the Executive possesses certain experience and expertise that qualifies him to provide the direction and leadership required by the Company; and
WHEREAS, the Company desires to employ the Executive and the Executive wishes to accept such employment under the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legally bound hereby, the Company and the Executive agree as follows:
1.Position and Duties.
(a) Effective as of the Closing Date, the Executive will be employed by the Company, on a full-time basis, as its Chief Marketing Officer.
(b)The Executive’s duties, authorities, and responsibilities shall be those typical of a Chief Marketing Officer of a company with the size and scope of the Company. The Executive agrees that, while employed by the Company, he will devote his reasonable best efforts, business judgment, skill and knowledge to the advancement of the business interests of the Company and its Affiliates and to the discharge of his duties and responsibilities for them. Notwithstanding the foregoing, the Executive may (i) serve on the managing boards of for-profit or not-for-profit entities with the prior approval of the Board of Directors of Parent (including any committees thereof, the “Board”), (ii) participate in charitable, community, trade, or industry groups and activities and, (iii) engage in personal investment activities, in each case to the extent such activities, individually or in the aggregate, do not materially interfere with the performance of the Executive’s duties under this Agreement, create a conflict of interest, or violate any provision of Section 3 of this Agreement.
(c) The Executive’s main place of work will be [please insert place of work]. The Executive acknowledges, however, that it may be necessary for the Company to transfer the Executive to any other location within Greece during the term of his employment. The Executive acknowledges that such changes in the location of his employment shall not constitute a substantial, unilateral or onerous modification of the terms of his employment by the Company. Furthermore, the Executive acknowledges that it will also be necessary for the Executive to travel, without any extra pay, whether inside or outside Greece, as required for the performance of his duties or as the Company may require.
(d)Given his managerial status, it is self-evident that the Executive will not be subject to the law restrictions concerning, inter alia, statutory working hours, overwork, overtime work and work on the sixth day of the week, Sundays and public holidays.
(e) The Executive agrees that, while employed by the Company, he will comply in all material respects with all Company policies, practices and procedures and all codes of ethics or business conduct applicable to his position, as in effect from time to time.
2.Compensation and Benefits. During the Executive’s employment hereunder, as compensation for all services performed by the Executive for the Company and its Affiliates, the Company will provide the Executive the following compensation and benefits:
(a)Base Salary. The Company will pay the Executive a base salary at the rate of [$350,000]1 per year, which will include the Christmas, Easter and holiday allowances provided by Greek law and will be subject to increase (but not decrease) from time to time by the Board in its discretion (as adjusted, from time to time, the “Base Salary”). The Base Salary will be subject to all lawful withholdings concerning social security contributions and taxes. It is especially agreed that for the assessment of the Base Salary the contracting parties have taken into consideration the object, nature and the special conditions of the services to be rendered and have included all amounts and allowances e.g. marriage allowance, family allowance, previous employment, off-base compensation etc. under collective labor agreements, arbitration awards and law provisions, in such a way that the Company’s sole obligation consists of paying the agreed amount. Furthermore, it is agreed and the Executive admits that the Base Salary and especially the difference between the Base Salary and the lawful minimum remuneration which may be in force in the future for the Executive includes and compensates any potential claim of the Executive deriving from any source, including, without limitation, (i) any increase of the lawful remuneration and any increase of the lawful allowances or additional amounts or indemnities either enacted in the future or derived by an alternative calculation of any allowance or amount and (ii) any kind or form of allowances, such as marriage allowance, family allowance, previous employment, or off-base compensation, including as may be enacted in the future.
(b)Bonus Compensation. For each fiscal year completed during the Executive’s employment under this Agreement, beginning with fiscal year 2021, the Executive will be eligible to earn an annual bonus. The Executive’s target bonus will be 100% of the Base Salary (the “Target Bonus”), with the actual amount of any such bonus to be determined by the Board in its discretion, based on the Executive’s performance and the Company’s performance against goals established by the Board in consultation with the Executive. In order to receive any annual bonus hereunder, the Executive must be employed through last day of the fiscal year to which such bonus relates, except as provided in Sections 5(b) and 5(c) below. Any bonus earned will be payable not later than two and one-half (2.5) months following the close of the fiscal year to which such bonus relates.
1 NTD: To be stated in Euro.
(c)Participation in Employee Benefit Plans. The Executive will be entitled to participate in all employee benefit plans from time to time in effect for senior executives of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided to the Executive under this Agreement. The Executive’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law. It is expressly agreed that any bonus or other benefit granted by the Company to the Executive in addition to the Base Salary, including the benefits provided in Section 2(b), constitutes a benefit granted by the Company voluntarily and on an exceptional basis. The Executive unreservedly recognizes that the Company has the right to unilaterally revoke, amend or suspend such benefit at any time. The above applies to all benefits, whether in money or kind, without need for the above be repeated on every occasion on which such voluntary benefit is granted, even if such voluntary benefit is granted regularly and over an extended period of time. Benefits, as provided in this Section 2(c), cannot be considered to fall within the Executive’s regular emoluments.
(d)Vacations. The Executive will be entitled to twenty-five (25) days of vacation per year, in addition to holidays observed by the Company. Vacation may be taken at such times and intervals as the Executive shall determine, subject to the business needs of the Company. Vacation shall otherwise be subject to the policies of the Company and the applicable provisions of Greek employment law, as in effect from time to time.
(e)Business Expenses. The Company will pay or reimburse the Executive for all reasonable business expenses incurred or paid by the Executive in the performance of his duties and responsibilities for the Company, subject to any maximum annual limit and other restrictions on such expenses set by the Company and to such reasonable substantiation and documentation as may be specified by the Company from time to time. The Executive’s right to payment or reimbursement hereunder shall be subject to the following additional rules: (i) the amount of expenses eligible for payment or reimbursement during any calendar year shall not affect the expenses eligible for payment or reimbursement in any other calendar year, (ii) payment or reimbursement shall be made not later than December 31 of the calendar year following the calendar year in which the expense or payment was incurred and (iii) the right to payment or reimbursement shall not be subject to liquidation or exchange for any other benefit.
3.Confidential Information and Restricted Activities.
(a)Confidential Information. During the course of the Executive’s employment with the Company, the Executive will learn of Confidential Information, and will develop Confidential Information on behalf of the Company and its Affiliates. The Executive agrees that he will not use or disclose to any Person (except as required by applicable law or for the proper performance of his regular duties and responsibilities for the Company) any Confidential Information obtained by the Executive incident to his employment or any other association with the Company or any of its Affiliates; provided, however, that the provisions of this Section 3(a) will not prohibit (A) disclosure to the Executive’s legal or financial advisors to the extent reasonably required in connection with their services to the Executive, provided such advisers agree not to further disclose such information; (B) retention of any documents relating to the Executive’s compensation, benefits or ongoing obligations to the Company or any of its Affiliates and any information reasonably required for tax preparation purposes; or (C) any disclosure made in connection with the enforcement of any right or remedy relating to this Agreement or the transactions contemplated by the Merger Agreement. The Executive agrees that this restriction will continue to apply after his employment terminates, regardless of the reason for such termination. For the avoidance of doubt, (i) nothing contained in this Agreement limits, restricts or in any other way affects the Executive’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to such governmental agency or entity and (ii) the Executive will not be held criminally or civilly liable under any applicable trade secret law for disclosing a trade secret (y) in confidence to a competent government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (z) in a complaint or other document lawfully filed in a lawsuit or other proceeding; provided, however, that notwithstanding this immunity from liability, the Executive may be held liable if he unlawfully accesses trade secrets by unauthorized means.
(b)Protection of Documents. All documents, records and files, in any media of whatever kind and description, relating to the business, present or otherwise, of the Company or any of its Affiliates, and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company. The Executive agrees to safeguard all Documents and to surrender to the Company, at the time his employment terminates or at such earlier time or times as the Board or its designee may specify, all Documents then in his possession or control. The Executive also agrees to disclose to the Company, at the time his employment terminates or at such earlier time or times as the Board or its designee may specify, all passwords necessary or desirable to obtain access to, or that would assist in obtaining access to, any Documents which the Executive has password-protected on any computer equipment, network or system of the Company or any of its Affiliates.
(c)Assignment of Rights to Intellectual Property. It is expressly agreed that all Intellectual Property as defined in Section 6 hereunder to be developed by the Executive during the term of his employment as part or in implementation of this Agreement or Intellectual Property to be created or invented by the Executive in implementation of his duties or in line with the Company’s instructions, whether or not the work was created or invented during his engagement hereunder, during working hours or in the Company’s premises, or through use of Executive- or Company-owned resources (e.g. personal computer, lap top computer, tablet, mobile phone, or other electronic device), which relates to, or howsoever affects, the Company’s business activities, or may be used or adjusted accordingly, shall be promptly disclosed to the Company and shall be assigned to the Company (or as otherwise directed by the Company) and shall become and remain Company’s exclusive property, to the extent permitted by law. The Executive hereby further assigns to the Company all copyright and industrial property rights subsisting in above work products and acknowledges that he shall have no rights, interests or claims, during or after expiry of this agreement, in relation thereto. The Company shall be free to use and exploit the Intellectual Property rights hereunder assigned for all its internal and external purposes, without compensation to the Executive beyond the agreed in Section 2 hereinabove Compensation and Benefits. Without limiting the foregoing:
(i)Copyright.
(1) The Executive declares hereby freely, irrevocably and unconditionally that any and all copyrightable Intellectual Property created in the future under this Agreement by the same, either exclusively by the latter or in collaboration with other employees, are works, the exploitation (economic) powers of which are in their entirety transferred to the Company, to the extent that said exploitation rights do not ipso jure vest in the Company, pursuant to articles 8 and 40, as the case may be, of the Greek Copyright Law No. 2121/1993. The said transfer and assignment applies to any and all Intellectual Property, even derivative works constituting upgraded versions of the initial ones, to be created in the future during the term of his employment.
(2) Following foregoing transfer the Company, being the sole and lawful right-holder, shall have the right to exercise any kind of exploitation powers without any limitations, in terms of time or place or means of exploitation etc., as these powers are set forth in Greek Law 2121/1993 and to whatever cause, public presentation and amendment of any kind, granting of licenses, distribution, production of derivative works on any and all copyrightable Intellectual Property to be created by the Executive.
(3) With regard to copyrightable works that had been created prior to the commencement of his employment, yet are further developed by the Executive in such a way that new derivative works are created, the exploitation (economic) powers are also in their entirety transferred to the Company; to that effect all the aforementioned terms set forth do further apply.
(4) The Executive undertakes the obligation to disclose immediately and in completeness to the Company any copyright protectable Intellectual Property that should come into being in the course of the Executive’s employment under this Agreement. To that effect the Executive is further obliged to submit to the Company any data, files and other material supportive of and in general pertaining to the aforementioned copyright.
(ii)Industrial Property.
(1) The Executive agrees to transfer and hereby fully transfers to the Company any right, title and interest of his own on any Intellectual Property protected by the industrial property legislation, to the extent that, as per Greek law, such rights are not deemed to belong ipso jure to the Company (e.g. in case of “service inventions”) that should be either solely or jointly conceived, developed or made technically applicable during his employment under the stipulations made above. Said transfer shall take place to the extent permitted by Greek law.
(2) The Executive undertakes the obligation to disclose immediately and in completeness to the Company any Intellectual Property protected by the industrial property legislation that should come into being in the course of this Agreement. The Executive further undertakes the obligation to acknowledge and verify the authenticity of and deliver to the Company any documents supportive of and in general pertaining to the aforementioned Intellectual Property.
(3) If so requested by Company, the Executive shall, at Company’s expense :(i) apply for a patent or request any other form of protection or registration in Greece or in any other part of the world, in relation to any of the aforementioned Intellectual Property, acting individually or in an understanding with the Company, and/or (ii) carry out any actions necessary for the concession to Company, as sole and exclusive beneficiary, of any such patents, protection or registration or any title or benefit in relation to the above, e.g. endorse any document needed in order for the Company or a third party that the Company may indicate, to acquire all Intellectual Property rights, titles and diplomas etc., in relation to the aforesaid Intellectual Property, to the extent permitted by law.
(4) The Executive hereby irrevocably appoints the Company as his representative in order to carry out on his behalf and in his name, if so required, any action and generally use his name in order to render to the Company the total benefit deriving from this Agreement.
(5) Above transfer of copyright and industrial property rights is valid for the term of protection of these rights, as the latter is stipulated in law, while the territorial extent of the transfer covers both Greece and the entire world. At no time will the Executive act in a manner to prejudice the rights of the Company, including by failing to notify the latter promptly in writing if the Executive becomes aware of any infringement, or suspected infringement, of the rights to the Intellectual Property. The Executive will during or after the term of this Agreement and upon the Company’s request and at the expense of the latter, assist the Company (or as otherwise directed by the Company) in obtaining, enforcing and/or maintaining the Company’s rights in the Intellectual Property. The Executive warrants that the exploitation of the assigned rights and interests does not and will not infringe the rights of any third party and in general there is nothing that might prevent the normal exploitation by the Company of the rights and interests hereunder transferred. To that effect, the Executive shall hold the Company harmless against any and all claims eventually to be raised against the latter by any third party maintaining the infringement of its Intellectual Property rights as a result of the transfer effected as per this Agreement. For the term of this Agreement and even after the expiry thereof, the Executive explicitly undertakes the obligation not to exercise or invoke against the Company, its successors, assignees and licensees, on any Intellectual Property to be delivered pursuant to this Section 3(c) against good faith or against business practices or in a way that the economic exploitation by the Company of the works is hindered. In particular, in terms of copyright, the Executive, as per article 16 of Law 2121/1993, unconditionally and irrevocably consents to actions and omissions on the part of the Company constituting limitation especially of: (i) the right under article 4(1) (b) of Law 2121/1993 (right to be mentioned as creator of any such work); (ii) the right under article 4(1)(c) of Law 2121/1993 (such work not to be distorted), insofar as above limitations are necessary for the exploitation of the Intellectual Property.
(d)Restricted Activities. The Executive agrees that the following restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential Information, trade secrets and other legitimate interests of the Company and its Affiliates. Therefore, in consideration of the SPAC Award (as defined below), the Executive’s continued employment with the Company, and the Executive being granted access to the trade secrets, other Confidential Information and good will of the Company and its Affiliates, the Executive agrees as follows:
(i)Non-Competition.
(1)While the Executive is employed by the Company and during the twelve (12)-month period immediately following termination of employment, (in the aggregate, the “Non-Competition Period”), the Executive will not, in any way involving the Services, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, engage in or compete with, or undertake any planning to engage in or compete with, any business conducted or in active planning to be conducted by the Company or any of its Affiliates at any time during the Executive’s employment with the Company or, with respect to the portion of the Non-Competition Period that follows termination of the Executive’s employment, at the time of such termination, in the Restricted Area.
(ii)Business Partner Non-Solicitation. While the Executive is employed by the Company and during the eighteen (18)-month period immediately following termination of employment, regardless of the reason therefor (in the aggregate, the “Non-Solicitation Period”), the Executive will not, directly or indirectly, (a) solicit or encourage any customer, vendor, supplier or other business partner of the Company or any of its Affiliates to terminate or diminish his, her or its relationship with any of them or (b) seek to persuade any such customer, vendor, supplier or other business partner, or any prospective customer, vendor, supplier, or other business partner of the Company or any of its Affiliates, to conduct with anyone else any business or activity which such business partner or prospective business partner conducts or could conduct with the Company or any of its Affiliates; provided, however, that these restrictions shall apply (y) only with respect to those Persons who are or have been a business partner of the Company or any of its Affiliates at any time within the twelve (12)-month period immediately preceding the activity restricted by this Section 3(d)(ii) or whose business has been solicited on behalf of the Company or any of its Affiliates by any of their officers, employees or agents within such twelve (12)-month period, other than by form letter, blanket mailing or published advertisement, and (z) only if the Executive has performed work for such Person during his employment with the Company or any of its Affiliates or been introduced to, or otherwise had contact with, such Person as a result of his employment or other associations with the Company or one of its Affiliates or has had access to Confidential Information which would assist in his solicitation of such Person.
(iii)Employee Non-Solicitation. During the Non-Solicitation Period, the Executive will not, directly or indirectly, (a) hire or engage, or solicit for hiring or engagement, any employee of the Company or any of its Affiliates or seek to persuade any such employee to discontinue employment or (b) solicit or encourage any independent contractor providing services to the Company or any of its Affiliates to terminate or diminish his, her or its relationship with any of them. For the purposes of this Section 3(d)(iii), an “employee” or an “independent contractor” of the Company or any of its Affiliates is any Person who was such at any time during the twelve (12)-month period immediately preceding the activity restricted by this Section 3(d)(iii). Notwithstanding the foregoing, nothing contained herein shall prohibit or restrict Executive from (1) engaging in any general solicitation not targeted at any employee of the Company or any of its Affiliates, including non-directed executive searches or placing general advertisements for employees in newspapers or other media of general circulation, or (2) hiring such Persons who have not been employees of the Company or any of its Affiliates for at least six (6) months prior to the time of hiring.
(e) In signing this Agreement, the Executive gives the Company assurance that the Executive has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed on the Executive under this Section 3. The Executive agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. The Executive further agrees that, were the Executive to breach any of the covenants contained in this Section 3, the damage to the Company and its Affiliates would be irreparable. The Executive therefore agrees that in case of breach the obligations assumed under this Section 3, the Executive shall pay the Company as penalty an amount of Euro one hundred fifty thousand (€150,000). The payment of this penalty shall be due without prejudice to any other rights or claims of the Company, including any other right of restitution of any positive or consequential damages, and shall not release the Executive from his obligations hereunder. The Executive further agrees that the Non-Solicitation Period shall be tolled, and shall not run, during the period of any breach by the Executive of any of the covenants contained in Section 3(d)(ii) or 3(d)(iii) above. The Executive and the Company further agree that, in the event that any provision of this Section 3 is determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, that provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. It is also agreed that each of the Company’s Affiliates shall have the right to enforce all of the Executive’s obligations to that Affiliate under this Agreement, including without limitation pursuant to this Section 3. No claimed breach of this Agreement or other violation of law attributed to the Company or any of its Affiliates, or change in the nature or scope of the Executive’s employment or other relationship with the Company or any of its Affiliates, shall operate to excuse the Executive from the performance of his obligations under this Section 3.
4.Termination of Employment. The Executive’s employment under this Agreement shall continue until terminated pursuant to this Section 4.
(a)By the Company For Cause. The Company may terminate the Executive’s employment for Cause upon notice to the Executive setting forth in reasonable detail the nature of the Cause following a formal vote of the Board carrying at least a three-quarters (3/4) majority. For purposes of this Agreement, “Cause” shall mean the occurrence of any of the following: (i) the Executive’s material failure to perform (other than by reason of disability), or gross negligence in the performance of, the Executive’s duties and responsibilities to the Company or any of its Affiliates, which material failure or gross negligence, if capable of cure, is not cured by the Executive within thirty (30) days following the Board’s notice to the Executive of such material failure or gross negligence; (ii) the Executive’s material breach of any provision of this Agreement or any other written agreement by and between the Executive and the Company or any of its Affiliates, which material breach, if capable of cure, is not cured by the Executive within thirty (30) days following the Board’s notice to the Executive of such material breach; (iii) the Executive’s indictment for a felony or other crime involving moral turpitude; or (iv) other willful misconduct by the Executive with respect to his duties and responsibilities to the Company or any of its Affiliates that is or could reasonably be expected to be materially harmful to the business interests or reputation of the Company or any of its Affiliates.
(b)By the Company Without Cause. The Company may terminate the Executive’s employment at any time other than for Cause upon notice to the Executive.
(c)By the Executive for Good Reason. The Executive may terminate his employment for Good Reason, provided that (i) the Executive provides written notice to the Company, setting forth in reasonable detail the nature of the condition giving rise to Good Reason, within sixty (60) days of the initial existence of such condition, (ii) the condition remains uncured by the Company for a period of thirty (30) days following such notice and (iii) the Executive terminates his employment, if at all, not later than sixty (60) days after the expiration of such cure period. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following without the Executive’s consent: (A) a reduction in the Executive’s Base Salary or Target Bonus opportunity; (B) a material diminution in the Executive’s authority, duties or responsibilities; (C) a relocation of the Executive’s principal office by more than fifty (50) kilometers; or (D) a material breach by the Company of this Agreement or any other material agreement between the Executive and the Company.
(d)By the Executive Without Good Reason. The Executive may terminate his employment without Good Reason at any time upon sixty (60) days’ notice to the Company. The Board may elect to waive such notice period or any portion thereof but, in such event, will pay to the Executive the Base Salary for the period so waived.
(e)Death and Disability. The Executive’s employment hereunder shall automatically terminate in the event of the Executive’s death during employment. The Company may terminate the Executive’s employment, in accordance with the relevant provisions of Greek employment law as in effect from time to time, in the event that the Executive becomes disabled during his employment hereunder through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his duties and responsibilities hereunder (notwithstanding the provision of any reasonable accommodation) for a period of one hundred and eighty (180) days during any period of three hundred sixty-five (365) consecutive days. If any question shall arise as to whether the Executive is disabled to the extent that he is unable to perform substantially all of his duties and responsibilities for the Company and its Affiliates, the Executive shall, at the Company’s request, submit to a medical examination by a physician selected by the Company to whom the Executive or the Executive’s guardian, if any, has no reasonable objection to determine whether the Executive is so disabled, and such determination shall for purposes of this Agreement be conclusive of the issue.
5.Other Matters Related to Termination.
(a)Final Compensation. In the event of termination of the Executive’s employment with the Company, howsoever occurring, the Company shall pay the Executive (i) the Base Salary for the final payroll period of his employment, through the date his employment terminates; (ii) compensation for any vacation time earned but not used as of the date his employment terminates; (iii) any earned but unpaid annual bonus for the year prior to the year in which his employment terminates (which shall be paid at the same time that annual bonuses for such year are paid to similarly-situated active employees of the Company); and (iv) reimbursement, in accordance with Section 2(e) hereof, for business expenses incurred by the Executive but not yet paid to the Executive as of the date his employment terminates, provided that the Executive submits all expenses and supporting documentation required within sixty (60) days of the date his employment terminates, and provided further that such business expenses are reimbursable under Company policies then in effect (all of the foregoing, “Final Compensation”). Except as otherwise provided in Section 5(a)(iii) or 5(a)(iv), Final Compensation will be paid to the Executive on the date of termination.
(b)Severance Payments. In the event of any termination of the Executive’s employment pursuant to Section 4(b) or Section 4(c) above, except as provided in Section 5(c) below, the Company will pay the Executive, in addition to Final Compensation, an aggregate amount equal to one (1) times the Base Salary plus the Target Bonus plus an amount equal to the premium cost of twelve (12) months of coverage under the Company’s group medical, dental, and visions plans provided to other senior executives of the Company for their individual coverage, payable on the date of termination, which is inclusive of any minimum severance indemnity due to the Executive under Greek law.
(c)Severance Payments Upon a Change of Control. In the event of any termination of the Executive’s employment pursuant to Section 4(b) or Section 4(c) above within (x) 12 months following a Change of Control or (y) within the sixty (60) day period prior to the date of a Change of Control where the Change in Control was under consideration at the time of the Executive’s termination, the Company will pay the Executive, in addition to Final Compensation, an aggregate amount equal to two (2) times the Base Salary plus the Target Bonus plus an amount equal to the premium cost of eighteen (18) months of coverage under the Company’s group medical, dental, and visions plans provided to other senior executives of the Company for their individual coverage, payable on the date of termination, which is inclusive of any minimum severance indemnity due to the Executive under Greek law (Section 5(b) or 5(c), as applicable, the “Severance Payments”).
(d)Conditions To Severance Payments. Any obligation of the Company to provide the Executive the Severance Payments is conditioned on his signing and returning, without revoking, to the Company a timely and effective separation agreement containing a general release of claims and other customary terms in the form provided to the Executive by the Company at the time that the Executive’s employment terminates (the “Separation Agreement”). The Separation Agreement must become effective, if at all, on the date the Executive’s employment terminates. In case this condition is not satisfied, the Executive will be entitled to any minimum severance indemnity due to him under Greek law.
(e)Severance Payment in the Event of Termination by the Company for Cause. In the event of termination of the Executive’s employment by the Company pursuant to Section 4(a), the Executive will be entitled to the minimum severance indemnity provided by Greek law, if any.
(f)Treatment of SPAC Award Upon Certain Qualifying Terminations of Employment or Change of Control.
(i)If the Executive’s employment is terminated pursuant to Section 4(b) or Section 4(c) either (x) within 12 months following a Change of Control or (y) within the sixty (60) day period prior to the date of a Change of Control where the Change in Control was under consideration at the time of Executive’s termination, (A) the Executive shall become fully vested and exercisable in the award of stock option and restricted stock units issued by Purchaser (as defined in the Merger Agreement) to the Executive pursuant to the terms of the Incentive Plan and an equity award agreement at or promptly following the Closing (such award, the “SPAC Award”) and (B) any outstanding award of stock options issued pursuant to the SPAC Award will remain exercisable until the earlier of (x) a period of one year following Executive’s termination date or (y) the original term of such award. The accelerated vesting contemplated herein is conditioned upon Executive’s timely execution and nonrevocation of the Separation Agreement, as contemplated pursuant to Section 5(d).
(ii) If, as of the date of a Change of Control the acquirer does not agree to assume or substitute for equivalent stock options any options held by Executive issued pursuant to the SPAC Award, such stock options shall become fully vested and exercisable as of the date of the Change of Control.
(g)Benefits Termination. The Executive’s participation in all employee benefit plans shall terminate in accordance with the terms of the applicable benefit plans based on the date of termination of his employment.
(h)Survival. Provisions of this Agreement shall survive any termination of employment if so provided in this Agreement or if necessary or desirable to accomplish the purposes of other surviving provisions, including without limitation the Executive’s obligations under Section 3 of this Agreement. The obligation of the Company to make payments or provide benefits to the Executive under Section 5(b), and the Executive’s right to retain the same, are expressly conditioned upon his continued full performance in all material respects of his obligations under Section 3 of this Agreement. Upon termination by either the Executive or the Company, all rights, duties and obligations of the Executive and the Company to each other shall cease, except as otherwise expressly provided in this Agreement.
6.Definitions. For purposes of this Agreement, the following definitions apply:
“Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by management authority, equity interest or otherwise.
“Change of Control” has the meaning ascribed to such term in the Incentive Plan (as defined in the Merger Agreement).
“Confidential Information” means any and all information of the Company and its Affiliates that is not generally available to the public. Confidential Information also includes any information received by the Company or any of its Affiliates from any Person with any understanding, express or implied, that it will not be disclosed. Confidential Information does not include information that enters the public domain, other than through the Executive’s breach of his obligations under this Agreement or any other agreement between the Executive and the Company or any of its Affiliates.
“Intellectual Property” means inventions, patents (inclusive of the right to be awarded with a patent), utility models, designs, improvements on existing inventions or designs, work methods and knowhow, discoveries, developments, methods, processes, compositions, works, concepts and ideas, end results, projects, preliminary or final deliverables, upgrades, trademarks, logos and/or any other information or data (whether or not patentable or protected as utility model or as an industrial design or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by the Executive (whether alone or with others, whether or not during normal business hours or on or off Company premises) during the Executive’s employment that relate either to the business of the Company or any of its Affiliates or to any prospective activity of the Company or any of its Affiliates or that result from any work performed by the Executive for the Company or any of its Affiliates or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its Affiliates.
“Restricted Area” means any geographic area in which the Company or any of its Affiliates does business or is actively planning to do business during Executive’s employment or, with respect to the portion of the Non-Competition Period that follows the termination of the Executive’s employment, any geographic area in which the Executive, at any time within the last two (2) years of the Executive’s employment with the Company, provided services or had a material presence or influence.
“Services” means any of the services that the Executive provided to the Company or any of its Affiliates at any time during the Executive’s employment with the Company or, with respect to the portion of the Non-Competition Period that follows the termination of the Executive’s employment, during the last two (2) years of the Executive’s employment with the Company.
“Person” means an individual, a corporation, a limited liability company, an association, a partnership, an estate, a trust or any other entity or organization, other than the Company or any of its Affiliates.
7.Conflicting Agreements. The Executive hereby represents and warrants that his signing of this Agreement and the performance of his obligations under it will not breach or be in conflict with any other agreement to which the Executive is a party or is bound, and that the Executive is not now subject to any covenants against competition or similar covenants or any court order that could affect the performance of his obligations under this Agreement. The Executive agrees that the Executive will not disclose to or use on behalf of the Company any confidential or proprietary information of a third party without that party’s consent.
8.Withholding. All payments made by the Company under this Agreement shall be reduced by any tax, social security contributions or other amounts required to be withheld by the Company to the extent required by applicable law.
9.Severability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
10.Miscellaneous. This Agreement sets forth the entire agreement between the Executive and the Company, and replaces all prior and contemporaneous communications, agreements and understandings, written or oral, with respect to the terms and conditions of the Executive’s employment; provided, however that this Agreement shall not supersede any prior assignment of intellectual property to the Company or any of its Affiliates. This Agreement may not be modified or amended, and no breach shall be deemed to be waived, unless agreed to in writing by the Executive and an expressly authorized representative of the Board. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This is a Greek contract and shall be governed and construed in accordance with the laws of Greece, without regard to any conflict of laws principles that would result in the application of the laws of any other jurisdiction, and the contracting parties subject themselves with respect to the interpretation or resolution of disputes arising hereunder to the jurisdiction of the Athens courts.
11.Notices. Any notices provided for in this Agreement shall be in writing and shall be effective when delivered in person and addressed to the Executive at his last known address on the books of the Company or, in the case of the Company, to it at its principal place of business, attention of the Chairman of the Board, or to such other address as either party may specify by notice to the other actually received.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly authorized representative, and by the Executive, as of the date first above written.
| THE EXECUTIVE: | | THE COMPANY: |
| | | |
| | | By: | | |
| Christos Kaskavelis | | | Name: |
| | | | Title: |
Exhibit E
AMCI Acquisition Corp.
975 Georges Station Road, Suite 900
Greensburg, PA 15601
October 12, 2020
AMCI Sponsor LLC 1501 Ligonier Street, Suite 370 Latrobe, PA 15601 Attn: William Hunter | Advent Technologies, Inc. One Mifflin Place 119 Mt Auburn Street, Suite 400 Cambridge, MA 02138 Attn: James F. Coffey |
Re:Sponsor Warrant Letter
Ladies and Gentlemen:
Reference is hereby made to that certain Agreement and Plan of Merger, dated as of October 12, 2020 (as amended, the “Merger Agreement”), by and among AMCI Acquisition Corp., a Delaware corporation (the “Purchaser”), AMCI Merger Sub Corp., a Delaware corporation, AMCI Sponsor LLC, a Delaware limited liability company, in the capacity as the Purchaser Representative thereunder, Vassilios Gregoriou, in the capacity as the Seller Representative thereunder, and Advent Technologies, Inc., a Delaware corporation (the “Company”). Any capitalized terms used but not defined in this letter agreement (this “Agreement”) will have the meanings ascribed thereto in the Merger Agreement.
In connection with the Merger Agreement, AMCI Sponsor LLC, a Delaware limited liability company (“Sponsor”), has agreed to enter into this Agreement with the Purchaser and the Company relating to the 5,910,416 warrants to purchase shares of Class A Common Stock, par value $0.0001 per share, of the Purchaser (such warrants, the “Private Placement Warrants”) initially purchased by Sponsor in a private placement prior to the Purchaser’s initial public offering, which Private Placement Warrants are currently held by Sponsor.
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sponsor, the Purchaser and the Company hereby agree as follows:
1. | Sponsor hereby agrees that, upon and subject to the Closing, Sponsor will, subject to and in accordance with the terms and conditions of this Agreement, forfeit one-third (1/3rd) of the Private Placement Warrants that it owns as of the Closing (the “Forfeited Warrants”), prior to giving effect to the Warrant Amendment (and for the avoidance of doubt, prior to giving effect to any transfers of Private Placement Warrants by Sponsor to Orion Resource Partners (USA) LP, a Delaware limited partnership (“Orion”)). |
2. | Notwithstanding anything to the contrary herein, at or prior to the Closing, Sponsor may transfer any Private Placement Warrants to any third-party investor who provides equity or debt financing for the transactions contemplated by the Merger Agreement without the consent of any party hereto, and any Private Placement Warrants so transferred shall reduce the number of Private Placement Warrants used to calculate the number of Forfeited Warrants hereunder. Any such transferred Private Placement Warrants shall not be subject to the terms and conditions of this Agreement (but shall be subject to the Warrant Amendment). |
3. | This Agreement (including the Merger Agreement, to the extent incorporated herein) constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof. This Agreement may not be changed, amended, modified or waived as to any particular provision, except by a written instrument executed by all parties hereto. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. |
4. | Subject to Section 2 above, no party hereto may assign either this Agreement or any of its rights or obligations hereunder without the prior written consent of the other parties. Any purported assignment in violation of this Section 4 shall be null and void ab initio and of no force or effect. This Agreement shall be binding on the undersigned parties and their respective successors and permitted assigns. |
5. | Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent in the same manner as provided in Section 9.2 of the Merger Agreement. Unless otherwise specified in writing by the Sponsor, notices to the Sponsor shall be sent to the address of the Purchaser Representative set forth in the Merger Agreement. |
6. | This Agreement shall be construed, interpreted and enforced in a manner consistent with the provisions of the Merger Agreement. The provisions set forth in Sections 9.4 through 9.8, 9.12 and 9.13 of the Merger Agreement, as in effect as of the date hereof, are hereby incorporated by reference into, and shall be deemed to apply to, this Agreement as if all references to the “Agreement” in such sections were instead references to this Agreement, and the references therein to the “Parties” were instead to the parties to this Agreement. |
7. | This Agreement shall terminate at such time, if any, as the Merger Agreement is terminated in accordance with its terms prior to the Closing, and upon such termination this Agreement shall be null and void and of no effect whatsoever, and the parties hereto shall have no obligations under this Agreement. |
{Remainder of Page Left Blank; Signature Page Follows}
Please indicate your agreement to the foregoing by signing in the space provided below.
Accepted and agreed, effective as of the date first set forth above:
ADVENT TECHNOLOGIES, INC. | |
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Name: | |
Title: | |
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AMCI SPONSOR LLC | |
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{Signature Page to Sponsor Warrant Letter}
Exhibit F
Annex A
INSTRUCTIONS FOR LETTER OF TRANSMITTAL
FOR STOCKHOLDERS (“HOLDERS”)
OF ADVENT TECHNOLOGIES INC. (THE “COMPANY”)
1. | Delivery of Letter of Transmittal, Exhibits and Certificates. The Letter of Transmittal, together with the exhibits attached thereto, properly completed and duly executed, together with the certificate(s) for the securities described, should be delivered to the Company’s exchange agent, Continental Stock Transfer & Trust Company (the “Exchange Agent”), at the address below in the envelope enclosed for your convenience. If the space provided on the Letter of Transmittal is inadequate, the applicable information should be listed on a separate schedule to be attached thereto. |
THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER, BUT IF SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE SENT BY REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. DELIVERY OF THE DOCUMENTS WILL BE EFFECTIVE, AND RISK OF LOSS AND TITLE WITH RESPECT THERETO SHALL PASS, ONLY WHEN THE MATERIALS ARE ACTUALLY RECEIVED BY THE EXCHANGE AGENT AT THE ADDRESS BELOW.
| a. | If the Letter of Transmittal is signed by the registered owner(s) of the stock certificate(s) listed and surrendered thereby, no endorsements of certificates or separate stock powers are required. If the certificate(s) surrendered is (are) owned of record by two or more joint owners, all such owners must sign the Letter of Transmittal. If the owner of record is a natural person and is married and the shares constitute community property, the owner’s spouse must sign the Consent of Spouse attached to this Letter of Transmittal. |
| b. | If, with respect to any surrendered certificate(s), the Letter of Transmittal is signed by a person other than the registered owner of the certificate(s) listed or its duly authorized representative (as confirmed by proper evidence satisfactory to the Company, the Exchange Agent and AMCI Acquisition Corp., a Delaware corporation (the “Purchaser”)), such certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificate(s), along with evidence satisfactory to the Exchange Agent, the Company and the Purchaser that such transfer was permitted in accordance with applicable securities laws and any agreements to which the registered owner is a party or the securities represented by the stock certificate are bound. Signatures on such Letters of Transmittal and such certificates or stock powers must be guaranteed by a financial institution that is a member of a Securities Transfer Association approved medallion program such as STAMP, SEMP or MSP (an “Eligible Institution”). |
| c. | If the Letter of Transmittal or any certificate, stock power, or other exhibit to the Letter of Transmittal is signed by trustees, executors, administrators, guardians, attorney-in-fact, officers of corporations or other entities or others, acting in a fiduciary or representative capacity, such persons should so indicate when signing and proper evidence, satisfactory to the Exchange Agent, of their authority to do so must be submitted. |
3. | Special Payment and Delivery Instructions. Indicate on the Letter of Transmittal all names and addresses to which consideration for the securities is to be issued and the amounts thereto, if different from the name and address of the person(s) signing the Letter of Transmittal. Signatures on such Letters of Transmittal must be guaranteed by an Eligible Institution. |
4. | IRS Form W-8/W-9. If you are a U.S. person, please enter your social security or employer identification number, and complete, sign and date the attached Internal Revenue Service (“IRS”) Form W-9. If you are a non-U.S. person, you must provide a properly completed and executed IRS Form W-8BEN or other Form W-8, which you can obtain from the Exchange Agent by contacting the designated person below. |
5. | Additional Copies. Additional copies of the Letter of Transmittal may be obtained from the Exchange Agent at the address listed below. |
6. | Lost, Stolen or Destroyed Certificates. If any stock certificates have been lost, stolen or destroyed, please so indicate on the front of the Letter of Transmittal, and additional paperwork will be sent to you to replace the lost, stolen or destroyed certificates. |
All questions as to the validity, form and eligibility of any surrender of certificates will be determined by the Exchange Agent, the Company and the Purchaser, and such determination shall be final and binding on each holder of the Company’s capital stock (each, a “Holder”). The Exchange Agent, the Company and the Purchaser reserve the right to together waive any irregularities or defects in the surrender of any certificates. A surrender will not be deemed to have been made until all irregularities have been cured or waived. None of the Exchange Agent, the Company or the Purchaser are under any obligation to waive or to provide any notification of any irregularities or defects in the surrender of any certificates, nor shall the Exchange Agent, the Company or the Purchaser be liable for any failure to give such notification.
All documentation and requests should be sent to the Exchange Agent at the following address:
Continental Stock Transfer & Trust Company
Attn: Corporate Actions
1 State Street, 30th Floor
New York, NY 10004
1-917-262-2378
Method of delivery of the certificate(s) is at the option and risk of the Holder. See Instruction 1.
All Holders, please mail or deliver each of the following:
* | An original of this Letter of Transmittal, duly executed by Holder, including Schedules 1 and 2 hereto |
* | A completed and executed IRS Form W-9 which is attached as Exhibit A-1 or Form W-8BEN (or other IRS Form W-8), as applicable, the form of which is attached as Exhibit A-2. |
* | The certificate(s) representing your shares of Company stock |
* | If required, as described in the Instructions, an original stock power, duly executed by Holder, the form of which is attached as Exhibit B, along with other documents as required by the Instructions. |
Please return all documents to the Exchange Agent using the address set forth in the Instructions.
LETTER OF TRANSMITTAL
To Exchange Securities of Advent Technologies Inc. Pursuant to
the Merger of Advent Technologies Inc. and AMCI Merger Sub Corp.
This letter of transmittal (this “Letter of Transmittal”) is being furnished in connection with the merger of AMCI Merger Sub Corp., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of AMCI Acquisition Corp., a Delaware corporation (the “Purchaser”), with and into Advent Technologies Inc., a Delaware corporation (the “Company”), pursuant to the Agreement and Plan of Merger, dated as of October 12, 2020 (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”), by and among (i) the Purchaser, (ii) Merger Sub, (iii) AMCI Sponsor LLC, a Delaware limited liability company, in the capacity thereunder as the Purchaser Representative (the “Purchaser Representative”), (iv) Vassilios Gregoriou, in the capacity thereunder as the Seller Representative (the “Seller Representative”), and (v) the Company. Pursuant to the Merger Agreement, among other matters, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company with the Company surviving the Merger as a wholly-owned subsidiary of the Purchaser (the “Merger”). At the effective time of the Merger (the “Effective Time”), each issued and outstanding share in the capital stock of the Company (other than shares in respect of which dissenters or appraisal rights have been properly exercised and perfected under Delaware law and shares held in treasury) (“Company Stock”) will be cancelled and cease to exist in exchange for the right to receive shares of common stock of the Purchaser (the “Merger Consideration”). Any capitalized term used but not defined in this Letter of Transmittal will have the meaning ascribed to such term in the Merger Agreement.
The undersigned holder (“Holder”) of Company Stock understands that this Letter of Transmittal is being provided to both the Company and the Purchaser in connection with the Merger, and that the Company and the Purchaser are relying upon the representations, warranties, covenants and agreements of Holder set forth in this Letter of Transmittal.
IN ADDITION, HOLDER HAS READ, UNDERSTANDS AND AGREES TO ALL OF THE TERMS AND CONDITIONS SET FORTH IN THE MERGER AGREEMENT, THE ANCILLARY DOCUMENTS TO WHICH THE HOLDER IS BOUND, THE MATERIALS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND THE ACCOMPANYING INSTRUCTIONS BEFORE COMPLETING ANY OF THE INFORMATION BELOW.
Please read carefully this entire Letter of Transmittal and the accompanying instructions before completing any of the boxes below.
1.Representations and Warranties of Holder. Holder hereby represents, warrants and covenants to the Company and the Purchaser as follows as of the date of this Letter of Transmittal and as of the Effective Time:
(a)Ownership of Securities. All of the shares of Company Stock owned by Holder, including without limitation the number, type, class and series thereof, are set forth and accurately described in Schedule 1 below (the “Holder Company Shares”). Holder has beneficial ownership over, is the lawful owner of, and has good and valid title to, the Holder Company Shares, free and clear of any and all pledges, mortgages, encumbrances, charges, proxies, voting agreements, liens, adverse claims, options, security interests and demands of any nature or kind whatsoever (other than those imposed by applicable securities laws or the Company’s organizational documents, as in effect on the date hereof, or, if applicable, the Voting Agreement entered into by Holder with the Company and the Purchaser in connection with the Merger Agreement). There are no claims for finder’s fees or brokerage commission or other like payments in connection with the Merger Agreement or the transactions contemplated thereby payable by Holder pursuant to arrangements made by such Holder. Except for the Holder Company Shares set forth on Schedule 1, Holder is not a beneficial owner or record holder of any: (i) equity securities of the Company, (ii) securities of the Company having the right to vote on any matters on which the holders of equity securities of the Company may vote, or (iii) options, warrants or other rights to acquire from the Company any equity securities or securities convertible into or exchangeable for equity securities of the Company.
(b)Binding Agreement. Holder (i) if a natural person, is of legal age to execute this Letter of Transmittal and each of the Exhibits hereto, and other documents required by this Letter of Transmittal (collectively with the Letter of Transmittal, the “Transmittal Documents”), and is legally competent to do so and (ii) if not a natural person, is (A) a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its organization and (B) has all necessary power and authority to execute and deliver the Transmittal Documents, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. If Holder is a natural person and is married and the Holder Company Shares constitute community property, the Holder’s spouse has also executed the Consent of Spouse on the form attached hereto as Exhibit C, and is of legal age to execute such and is legally competent to do so. If Holder is not a natural person, the execution and delivery of the Transmittal Documents, the performance of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby by Holder has been duly authorized by all necessary corporate or similar action on the part of Holder. This Letter of Transmittal and each other Transmittal Document, assuming due authorization, execution and delivery hereof by the other parties hereto and thereto, constitutes a legal, valid and binding obligation of Holder, enforceable against Holder in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles).
(c)No Conflicts. No filing with, or notification to, any governmental authority, and no consent, approval, authorization or permit of any other person or entity is necessary for the execution of this Letter of Transmittal or any other Transmittal Document by Holder, the performance of its obligations hereunder or thereunder or the consummation by it of the transactions contemplated hereby or thereby. None of the execution and delivery of this Letter of Transmittal or any other Transmittal Document by Holder, the performance of its obligations hereunder or thereunder or the consummation by it of the transactions contemplated hereby or thereby will (i) conflict with or result in any breach of the organizational documents of Holder, if applicable, (ii) result in, or give rise to, a violation or breach of or a default under any of the terms of any contract or obligation to which Holder is a party or by which Holder or any of the Holder Company Shares or its other assets may be bound, or (iii) violate any applicable law or order, except for any of the foregoing in clauses (i) through (iii) as would not reasonably be expected to impair in any material respect Holder’s ability to perform its obligations under this Letter of Transmittal or the other Transmittal Documents. Holder has not entered into any agreement or knowingly taken any action (nor will enter into any agreement or knowingly take any action) that would make any representation or warranty of Holder contained in this Letter of Transmittal untrue or incorrect in any material respect or have the effect of preventing Holder from performing any of its material obligations under this Letter of Transmittal or any Transmittal Document.
2.Escrow. Holder acknowledges, covenants and agrees that pursuant to Section 1.16 of the Merger Agreement, three percent (3%) of the Merger Consideration (allocated among Company Stockholders pro rata based on the portion of the Merger Consideration to otherwise be received by each Company Stockholder at the Closing) (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, the “Escrow Shares”) will be held in escrow, together with any dividends, distributions or other income on the Escrow Shares (collectively with the Escrow Shares, the “Escrow Property”), and shall serve as the sole source of payment for the post-Closing Merger Consideration adjustment obligations of the Company Stockholders pursuant to Section 1.13 of the Merger Agreement, and consequently, Holder’s Pro Rata Share of the Escrow Property will be held in escrow in accordance with the Merger Agreement and the Escrow Agreement to be entered into in connection with the Merger Agreement, and may be used to satisfy Company Stockholder obligations owed under Section 1.13 of the Merger Agreement.
3.Disposition of Company Stock. Pursuant to the Merger Agreement, Holder hereby surrenders, cancels and terminates Holder’s shares of Company Stock, if any, in exchange for Holder’s share of the Merger Consideration determined in accordance with the Merger Agreement (net of any Escrow Shares), subject to the terms and conditions of the Merger Agreement and the Escrow Agreement. Holder hereby authorizes and instructs the Purchaser to prepare in the name of and deliver to the address indicated below (unless otherwise instructed in this Letter of Transmittal) book-entry shares representing the portion of the Merger Consideration due to Holder as a result of the Merger (net of any Escrow Shares), if any.
4.Appointment of Seller Representative to Act on Holder’s Behalf. By the execution and delivery of this Letter of Transmittal, Holder on behalf of itself and its successors and assigns, hereby agrees to the provisions of Section 9.15 of the Merger Agreement and irrevocably constitutes and appoints Vassilios Gregoriou, in the capacity as the Seller Representative as set forth in the Merger Agreement, as the true and lawful agent and attorney-in-fact of Holder with full powers of substitution to act in the name, place and stead thereof with respect to the performance on behalf of Holder under the terms and provisions of this Letter of Transmittal, the Merger Agreement and the Ancillary Documents to which the Seller Representative is a party or otherwise has rights in such capacity, as the same may be from time to time amended, and to do or refrain from doing all such further acts and things, and to execute all such documents on behalf of the Holder, if any, as the Seller Representative will deem necessary or appropriate in connection with any of the transactions contemplated under this Letter of Transmittal, the Merger Agreement or any of the Ancillary Documents to which the Seller Representative is a party or otherwise has rights in such capacity, and as further set forth in Section 9.15 of the Merger Agreement. Holder acknowledges and agrees that Vassilios Gregoriou is relying upon the provisions of Section 9.15 of the Merger Agreement and this Letter of Transmittal and Holder’s agreement to be bound thereby in agreeing to act as the Seller Representative.
5.Release of Claims. Holder, intending to be legally bound, effective as of the Effective Time, hereby releases and discharges the Company and its affiliates and their respective directors, officers, employees, agents, representatives, successors and assigns (collectively, “Releasees”) fully, finally and forever, from all and any manner of claims, actions, rights, causes of actions, suits, obligations, liabilities debts, due sums of money, agreements, promises, damages, judgments, executions, accounts, expenses, costs, attorneys’ fees and demands whatsoever, whether in law, contract or equity, whether known or unknown, matured or unmatured, foreseen or unforeseen, arising out of events existing or occurring contemporaneously with or prior to the Effective Time, in each case, in Holder’s capacity as a shareholder of the Company (or its precedessors) or otherwise relating to Holder’s acquisition, ownership, control or sale of shares of Company Stock; provided, that nothing contained herein shall operate to release any liabilities of a Releasee based upon, arising out of or relating to, without duplication, this Letter of Transmittal and each of the Exhibits hereto and any other document required by this Letter of Transmittal, the Merger Agreement, or any of the Ancillary Documents. Holder hereby irrevocably covenants to refrain from, directly or indirectly asserting, commencing or instituting any cause of action, suit or claim of any kind against any Releasee based upon any matter intended or purported to be released hereby. This release may not be altered except in a writing signed by the person or entity against whose interest such change shall operate. This release shall be governed by and construed under the laws of the State of New York, without regard to principals of conflicts of law.
6.Confidentiality. Holder hereby agrees for a period of two (2) years from and after the date hereof to, and to cause Holder’s Representatives to: (i) treat and hold in strict confidence any Company Confidential Information and any Purchaser Confidential Information (together, “Confidential Information”), and not use for any purpose (except in connection with the consummation of the transactions contemplated by this Letter of Transmittal, the Merger Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Confidential Information without the Company’s and the Purchaser’s prior written consent; and (ii) in the event that Holder or any of Holder’s Representatives becomes legally compelled to disclose any Confidential Information, (A) provide the Company and the Purchaser with prompt written notice of such requirement so that the Company and the Purchaser may seek a protective order or other remedy or waive compliance with this Section 6 and (B) in the event that such protective order or other remedy is not obtained, or the Company and the Purchaser do not waive compliance with this this Section 6, furnish only that portion of such Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Confidential Information.
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IMPORTANT — HOLDERS SIGN HERE
(Must be signed by registered Holder(s) exactly as name(s) appear(s) on stock certificate(s) and/or on a securityposition listing or by person(s) authorized to become registered holder(s) as evidenced by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 2.)
Method of delivery of the certificate(s) is at the option and risk of the Holder. See Instruction 1.
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GUARANTEE OF SIGNATURE(S)
(See Instruction 2)
Complete ONLY if required by Instruction 2.
FOR USE BY ELIGIBLE INSTITUTION ONLY.
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
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Schedule 1
Holder Company Shares
Names(s) and Address(es) of Registered Owner(s) (Please fill in exactly as name(s) appear(s) on the records of the Company) | | Company Stock (Attach additional list if necessary) | |
| | Company Certificate Number(s) | | | Number and Class of Shares of Company Stock | |
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| ☐ | If any certificate(s) representing shares of Company Stock that you own have been lost or destroyed, check this box and see Instruction 6. Please fill out the remainder of this Letter of Transmittal and indicate here the number and class of Company Stock represented by the lost or destroyed certificates: |
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(number and class of shares of Company Stock) | |
Schedule 2
Special Issuance and Delivery Instructions
SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 2 and 3) | | SPECIAL DELIVERY INSTRUCTIONS (See Instructions 2 and 3) |
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To be completed ONLY if the Merger Consideration is to be issued in the name of someone other than the undersigned Holder. | | To be completed ONLY if the physical copies of the new certificates for the Merger Consideration are to be delivered to someone other than the undersigned or to the undersigned at an address other than that shown above. |
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Holder Company Shares to which the Special Issuance Instructions apply (must match at least one of the Holder Company Shares listed on Schedule 1): | | Holder Company Shares to which the Special Delivery Instructions apply (must match at least one of the Holder Company Shares listed on Schedule 1): |
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Issue to: | | |
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Name: | | | Deliver to: |
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Address: | | | (Please Print) |
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(Include Zip Code) | | Address: | |
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(Tax Identification or Social Security No.) | | (Include Zip Code) |
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If the above space is inadequate, please note that fact above and continue on a separate attachment | | If the above space is inadequate, please note that fact above and continue on a separate attachment |
Exhibit A-1
IRS Form W-9
TO BE COMPLETED BY ALL U.S. HOLDERS
(See Instruction 4)
[Complete attached Form W-9]
Exhibit A-2
Form W-8BEN
TO BE COMPLETED BY ALL NON-U.S. HOLDERS
(See Instruction 4)
[Complete attached Form W-8BEN]
Exhibit B
Form of Stock Power
TO BE COMPLETED BY HOLDERS OF COMPANY STOCK
WHERE THE LETTER OF TRANSMITTAL IS NOT SIGNED BY THE
REGISTERED OWNER OF THE STOCK CERTIFICATE(S)
(See Instruction 2)
[Complete attached Form Stock Power]
Exhibit C
Form of Consent of Spouse
TO BE COMPLETED BY THE SPOUSE OF HOLDERS OF COMPANY STOCK
WHO ARE MARRIED AND WHOSE HOLDER COMPANY SHARES
CONSTITUTE COMMUNITY PROPERTY
(See Instruction 2)
Holder’s Name: | | (“Holder”) |
Spouse’s Name: | | (“Spouse”) |
Spouse’s State of Residence: | | |
Spouse’s County of Residence: | | |
The undersigned Spouse, residing in the County and State specified above, as the spouse of Holder, a holder of capital stock in Advent Technologies Inc., a Delaware corporation (the “Company”), under that certain Agreement and Plan of Merger, dated as of October 12, 2020 (as amended, the “Merger Agreement”), by and among AMCI Acquisition Corp., a Delaware corporation (“Purchaser”), AMCI Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of Purchaser, AMCI Sponsor LLC, a Delaware limited liability company, in its capacity as Purchaser Representative thereunder, Vassilios Gregoriou, in the capacity as Seller Representative thereunder, and the Company, hereby consent to the transactions contemplated by the Merger Agreement, including without limitation the cancellation of all shares of Company Stock held by my spouse, Holder, at the Effective Time in exchange for the right to receive a portion of the Merger Consideration in accordance with the Merger Agreement. I hereby waive and relinquish all right, claim and interest, however arising, that I may have in the Company Stock, including without limitation those arising under any laws governing community property and marital and non-marital property ownership and disposition thereof or otherwise, or otherwise with respect to the Company. I agree that I will take no action at any time to challenge the validity of the Merger Agreement or the contemplated cancellation of the Company Stock pursuant to the Merger Agreement. I hereby consent and agree to be bound by the terms of the Merger Agreement applicable to the holders of Company Stock. All capitalized terms used but not defined herein have the meanings ascribed to them in the Letter of Transmittal contemplated by the Merger Agreement.
EXECUTION COPY
CONFIDENTIAL
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment (this “First Amendment”) to Agreement and Plan of Merger is made and entered into effective as of October 19, 2020, by and among (i) AMCI Acquisition Corp., a Delaware corporation (together with its successors, the “Purchaser”), (ii) AMCI Merger Sub Corp.,a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), (iii) AMCI Sponsor LLC, a Delaware limited liability company, in the capacity as the Purchaser Representative under the Merger Agreement (as defined below) (the “Purchaser Representative”), (iv) Vassilios Gregoriou, in the capacity as the Seller Representative under the Merger Agreement (the “Seller Representative”), and (v) Advent Technologies Inc., a Delaware corporation (the “Company”). Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Merger Agreement.
WHEREAS, Purchaser, Merger Sub, the Purchaser Representative, the Seller Representative and the Company are parties to that certain Agreement and Plan of Merger made and entered into as of October 12, 2020 (the “Original Agreement”); and
WHEREAS, the parties desire to amend the Original Agreement on the terms and conditions set forth herein (as amended, including by this First Amendment, the “Merger Agreement”).
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in accordance with the terms of the Merger Agreement, the parties hereto, intending to be legally bound, do hereby agree as follows:
1.Amendments to Remove Warrant Amendment. The parties hereby agree to amend the Original Agreement as follows:
a. Sections 3.5(c) and 5.3(b) of the Original Agreement are hereby amended to delete each of the references to “Warrant Amendment” contained therein.
b. Section 5.13 of the Original Agreement is hereby deleted in its entirety and replaced with the following:
“5.13The Registration Statement.
(a)As promptly as practicable after the date hereof, the Purchaser shall prepare with the reasonable assistance of the Company, and file with the SEC a registration statement on Form S-4 (as amended or supplemented from time to time, and including the Proxy Statement contained therein, the “Registration Statement”) in connection with the registration under the Securities Act of the Purchaser Common Stock to be issued under this Agreement as the Merger Consideration, which Registration Statement will also contain a proxy statement (as amended, the “Proxy Statement”) for the purpose of soliciting proxies from Purchaser stockholders for the matters to be acted upon at the Purchaser Special Meeting and providing the Public Stockholders an opportunity in accordance with the Purchaser’s Organizational Documents and the IPO Prospectus to have their shares of Purchaser Common Stock redeemed (the “Redemption”) in conjunction with the stockholder vote on the Purchaser Shareholder Approval Matters.
(b)The Proxy Statement shall include proxy materials for the purpose of soliciting proxies from Purchaser stockholders to vote, at a special meeting of Purchaser stockholders to be called and held for such purpose (the “Purchaser Special Meeting”), in favor of resolutions approving (A) the adoption and approval of this Agreement and the transactions contemplated hereby or referred to herein, including the Merger (and, to the extent required, the issuance of any shares in connection with any PIPE Investment), by the holders of Purchaser Common Stock in accordance with the Purchaser’s Organizational Documents, the DCGL and the rules and regulations of the SEC and Nasdaq, (B) the adoption and approval of the Amended Purchaser Charter, (C) adoption and approval of a new equity incentive plan in substantially the form attached as Exhibit G hereto (the “Incentive Plan”), which will provide for awards for a number of shares of Purchaser Common Stock equal to fifteen percent (15%) of the aggregate number of shares of Purchaser Common Stock issued and outstanding immediately after the Closing (giving effect to the Redemption), (D) the appointment of the members of the Post-Closing Purchaser Board in accordance with Section 5.18 hereof, (E) such other matters as the Company and Purchaser shall hereafter mutually determine to be necessary or appropriate in order to effect the Merger and the other transactions contemplated by this Agreement (the approvals described in foregoing clauses (A) through (E), collectively, the “Purchaser Shareholder Approval Matters”), and (F) the adjournment of the Purchaser Special Meeting, if necessary or desirable in the reasonable determination of Purchaser.
(c) If on the date for which the Purchaser Special Meeting is scheduled, Purchaser has not received proxies representing a sufficient number of shares to obtain the Required Purchaser Shareholder Approval, whether or not a quorum is present, Purchaser may make one or more successive postponements or adjournments of the Purchaser Special Meeting. Purchaser shall use its reasonable best efforts to solicit from the Purchaser stockholders proxies in favor of the Purchaser Shareholder Approval Matters prior to such Purchaser Special Meeting, and to take all other reasonable actions necessary or advisable to secure the Required Purchaser Shareholder Approval.
(d) [RESERVED]
(e) In connection with the Registration Statement, Purchaser will file with the SEC financial and other information about the transactions contemplated by this Agreement in accordance with applicable Law and applicable proxy solicitation and registration statement rules set forth in the Purchaser’s Organizational Documents, the DGCL and the rules and regulations of the SEC and Nasdaq. Purchaser shall cooperate and provide the Company (and its counsel) with a reasonable opportunity to review and comment on the Registration Statement and any amendment or supplement thereto prior to filing the same with the SEC, and Purchaser shall consider any such comments in good faith. The Company shall provide Purchaser with such information concerning the Target Companies and their stockholders, officers, directors, employees, assets, Liabilities, condition (financial or otherwise), business and operations that may be required or appropriate for inclusion in the Registration Statement, or in any amendments or supplements thereto, which information provided by the Company shall be true and correct and not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading.
(f) Purchaser shall exert reasonable best efforts to satisfy the requirements of the Securities Act, the Exchange Act and other applicable Laws in connection with the Registration Statement, the Purchaser Special Meeting and the Redemption. Each of Purchaser and the Company shall, and shall cause each of its Subsidiaries to, make their respective directors, officers and employees, upon reasonable advance notice, available to the Company, Purchaser and, after the Closing, the Purchaser Representative, and their respective Representatives in connection with the drafting of the public filings with respect to the transactions contemplated by this Agreement, including the Registration Statement, and responding in a timely manner to comments from the SEC. Each Party shall promptly correct any information provided by it for use in the Registration Statement (and other related materials) if and to the extent that such information is determined to have become false or misleading in any material respect or as otherwise required by applicable Laws. Purchaser shall amend or supplement the Registration Statement and cause the Registration Statement, as so amended or supplemented, to be filed with the SEC and to be disseminated to Purchaser stockholders as and to the extent required by applicable Laws and subject to the terms and conditions of this Agreement and the Purchaser’s Organizational Documents.
(g) Purchaser, with the assistance of the other Parties, shall promptly respond to any SEC comments on the Registration Statement and shall otherwise use its commercially reasonable efforts to cause the Registration Statement to “clear” comments from the SEC and become effective. Purchaser shall provide the Company with copies of any written comments, and shall inform the Company of any material oral comments, that Purchaser or its Representatives receive from the SEC or its staff with respect to the Registration Statement, the Purchaser Special Meeting, and the Redemption promptly after the receipt of such comments and shall give the Company a reasonable opportunity under the circumstances to review and comment on any proposed written or material oral responses to such comments (and Purchaser shall consider any such comments by the Company in good faith).
(h) As soon as practicable following the Registration Statement “clearing” comments from the SEC and becoming effective, Purchaser shall distribute the Registration Statement to the Company Stockholders and the Proxy Statement to Purchaser’s stockholders, and, pursuant thereto, shall call the Purchaser Special Meeting in accordance with the DGCL for a date no later than thirty (30) days following the effectiveness of the Registration Statement.
(i) Purchaser shall apply for, and shall use reasonable best efforts to cause the Purchaser Common Stock to be issued in connection with the Merger to be approved for listing on Nasdaq as of the Closing Date and shall comply with all applicable Laws, any applicable rules and regulations of Nasdaq, Purchaser’s Organizational Documents and this Agreement in the preparation, filing and distribution of the Registration Statement, any solicitation of proxies thereunder, the calling and holding of the Purchaser Special Meeting and the Redemption.”
c. Section 5.20 of the Original Agreement is hereby amended to delete clause (i) thereof in its entirety and replace it with the following: “[RESERVED]”.
d. Section 6.1(b) of the Original Agreement is hereby deleted in its entirety and replaced with the following: “[RESERVED]”.
e. Section 6.2(c) of the Original Agreement is hereby deleted in its entirety and replaced with the following:
“(c)Warrant Forfeiture. Sponsor shall have forfeited the Forfeited Warrants in accordance with the Sponsor Warrant Letter.
f. Section 6.2(e) of the Original Agreement is hereby amended to delete clause (iii) thereof in its entirety and replace it with the following: “[RESERVED]”.
g. Section 10.2 of the Original Agreement is hereby amended to delete the references to the “Required Warrantholder Approval”. “Warrant Amendment”, “Warrantholder Approval Matters” and “Warrantholder Meeting”.
2.Miscellaneous. Except as expressly provided in this First Amendment, all of the terms and provisions in the Original Agreement and the Ancillary Documents are and shall remain unchanged and in full force and effect, on the terms and subject to the conditions set forth therein. This First Amendment does not constitute, directly or by implication, an amendment or waiver of any provision of the Original Agreement or any Ancillary Document, or any other right, remedy, power or privilege of any party, except as expressly set forth herein. Any reference to the Merger Agreement in the Merger Agreement or any other agreement, document, instrument or certificate entered into or issued in connection therewith shall hereinafter mean the Original Agreement, as amended by this First Amendment (or as the Merger Agreement may be further amended or modified after the date hereof in accordance with the terms thereof). The Original Agreement, as amended by this First Amendment, and the documents or instruments attached hereto or thereto or referenced herein or therein, constitutes the entire agreement between the parties with respect to the subject matter of the Merger Agreement, and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to its subject matter. If any provision of the Original Agreement is materially different from or inconsistent with any provision of this First Amendment, the provision of this First Amendment shall control, and the provision of the Original Agreement shall, to the extent of such difference or inconsistency, be disregarded. This First Amendment shall be interpreted, construed, governed and enforced in a manner consistent with the Original Agreement, and, without limiting the foregoing, Sections 9.2 through 9.10, 9.12 and 9.13 of the Original Agreement are hereby incorporated herein by reference as if fully set forth herein, and such provisions apply to this First Amendment as if all references to the “Agreement” contained therein were instead references to this First Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Agreement and Plan of Merger as of the date first written above.
| The Purchaser: |
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| AMCI ACQUISITION CORP. |
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| By: | /s/ William Hunter | |
| | Name: William Hunter |
| | Title: Chief Executive Officer |
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| The Purchaser Representative: |
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| AMCI SPONSOR LLC, solely in the capacity as the Purchaser Representative |
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| By: | /s/ William Hunter | |
| | Name: William Hunter |
| | Title: Managing Member |
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| Merger Sub: |
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| AMCI MERGER SUB CORP. |
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| By: | /s/ William Hunter | |
| | Name: William Hunter |
| | Title: Secretary |
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| The Company: |
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| ADVENT TECHNOLOGIES INC. |
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| By: | /s/ Vassilios Gregoriou | |
| | Name: Vassilios Gregoriou |
| | Title: Chief Executive Officer |
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| The Seller Representative: |
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| Vassilios Gregoriou, solely in the capacity as the Seller Representative |
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| By: | /s/ Vassilios Gregoriou | |
| | Name: Vassilios Gregoriou |
{Signature Page to First Amendment to Agreement and Plan of Merger}
SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This Second Amendment (this “Second Amendment”) to Agreement and Plan of Merger is made and entered into effective as of December 30, 2020, by and among (i) AMCI Acquisition Corp., a Delaware corporation (together with its successors, the “Purchaser”), (ii) AMCI Merger Sub Corp.,a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), (iii) AMCI Sponsor LLC, a Delaware limited liability company, in the capacity as the Purchaser Representative under the Merger Agreement (as defined below) (the “Purchaser Representative”), (iv) Vassilios Gregoriou, in the capacity as the Seller Representative under the Merger Agreement (the “Seller Representative”), and (v) Advent Technologies Inc., a Delaware corporation (the “Company”). Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Merger Agreement.
WHEREAS, Purchaser, Merger Sub, the Purchaser Representative, the Seller Representative and the Company are parties to that certain Agreement and Plan of Merger made and entered into as of October 12, 2020 (the “Original Agreement”);
WHEREAS, Purchaser, Merger Sub, the Purchaser Representative, the Seller Representative and the Company entered into that certain First Amendment to Agreement and Plan of Merger, dated October 19, 2020 (the “First Amendment”, and the Original Agreement as amended by the First Amendment, the “First Amended Agreement”); and
WHEREAS, the parties desire to further amend the First Amended Agreement on the terms and conditions set forth herein (as amended, including by this Second Amendment, the “Merger Agreement”).
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in accordance with the terms of the Merger Agreement, the parties hereto, intending to be legally bound, do hereby agree as follows:
1.Amendment to Change Size of Post-Closing Purchaser Board. The parties hereby agree that Section 5.18(a) of the First Amended Agreement is hereby deleted in its entirety and replaced with the following:
“(a)The Parties shall take all necessary action, including causing the directors of the Purchaser to resign, so that effective as of the Closing, the Purchaser’s board of directors (the “Post-Closing Purchaser Board”) will consist of seven (7) individuals. Immediately after the Closing, the Parties shall take all necessary action to designate and appoint to the Post-Closing Purchaser Board (i) the two (2) persons that are designated by the Purchaser prior to the Closing (the “Purchaser Directors”), at least one (1) of whom shall be required to qualify as an independent director under Nasdaq rules, and (ii) the five (5) persons that are designated by the Company prior to the Closing (the “Company Directors”), at least three (3) of whom shall be required to qualify as an independent director under Nasdaq rules. Pursuant to the Amended Purchaser Charter as in effect as of the Closing, the Post-Closing Purchaser Board will be a classified board with three classes of directors, with (I) one class of directors, the Class I Directors, initially serving a one (1) year term, such term effective from the Closing (but any subsequent Class I Directors serving a three (3) year term), (II) a second class of directors, the Class II Directors, initially serving a two (2) year term, such term effective from the Closing (but any subsequent Class II Directors serving a three (3) year term), and (III) a third class of directors, the Class III Directors, serving a three (3) year term, such term effective from the Closing. One of the Purchaser Directors shall be a Class II Director and the other shall be a Class III Director. In accordance with the Amended Purchaser Charter as in effect at the Closing, no director on the Post-Closing Purchaser Board may be removed without cause. The Parties shall also take all necessary action, including causing the directors and officers of the Company to resign effective as of the Closing, so that the board of directors of the Surviving Corporation immediately after the Closing shall be the same as the Post-Closing Purchaser Board. At or prior to the Closing, the Purchaser will provide each member of the Post-Closing Purchaser Board with a customary director indemnification agreement, in form and substance reasonable acceptable to such director, to be effective upon the Closing (or if later, such director’s appointment).”
2.Amendment to Increase the Size of the Amounts Payable Under the Transaction Bonus Agreements. The parties hereby agree that clause G of the Recitals to the First Amended Agreement is hereby amended to change the number $2,955,208 therein to $4,995,202.
3.Amendment to Chris Kaskavelis Employment Agreement. The parties hereby agree that the form of Employment Agreement for Chris Kaskavelis attached to Exhibit D to the First Amended Agreement is hereby deleted in its entirety and replaced with the form of Employment Agreement for Chris Kaskavelis attached to Exhibit D to this Second Amendment.
4.Miscellaneous. Except as expressly provided in this Second Amendment, all of the terms and provisions in the First Amended Agreement and the Ancillary Documents are and shall remain unchanged and in full force and effect, on the terms and subject to the conditions set forth therein. This Second Amendment does not constitute, directly or by implication, an amendment or waiver of any provision of the First Amended Agreement or any Ancillary Document, or any other right, remedy, power or privilege of any party, except as expressly set forth herein. Any reference to the Merger Agreement in the Merger Agreement or any other agreement, document, instrument or certificate entered into or issued in connection therewith shall hereinafter mean the First Amended Agreement, as amended by this Second Amendment (or as the Merger Agreement may be further amended or modified after the date hereof in accordance with the terms thereof). The First Amended Agreement, as amended by this Second Amendment, and the documents or instruments attached hereto or thereto or referenced herein or therein, constitutes the entire agreement between the parties with respect to the subject matter of the Merger Agreement, and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to its subject matter. If any provision of the First Amended Agreement is materially different from or inconsistent with any provision of this Second Amendment, the provision of this Second Amendment shall control, and the provision of the First Amended Agreement shall, to the extent of such difference or inconsistency, be disregarded. This Second Amendment shall be interpreted, construed, governed and enforced in a manner consistent with the First Amended Agreement, and, without limiting the foregoing, Sections 9.2 through 9.10, 9.12 and 9.13 of the First Amended Agreement are hereby incorporated herein by reference as if fully set forth herein, and such provisions apply to this Second Amendment as if all references to the “Agreement” contained therein were instead references to this Second Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Agreement and Plan of Merger as of the date first written above.
| The Purchaser: |
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| AMCI ACQUISITION CORP. |
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| By: | | |
| | Name: |
| | Title: |
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| The Purchaser Representative: |
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| AMCI SPONSOR LLC, solely in the capacity as the Purchaser Representative |
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| By: | | |
| | Name: |
| | Title: |
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| Merger Sub: |
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| AMCI MERGER SUB CORP. |
| |
| By: | | |
| | Name: |
| | Title: |
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| The Company: |
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| ADVENT TECHNOLOGIES INC. |
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| By: | | |
| | Name: |
| | Title: |
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| The Seller Representative: |
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| Vassilios Gregoriou, solely in the capacity as the Seller Representative |
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| | |
| | |
{Signature Page to Second Amendment to Agreement and Plan of Merger}
ANNEX B
FORM OF
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ADVENT TECHNOLOGIES HOLDINGS, INC.AMCI ACQUISITION CORP.
Advent Technologies Holdings, Inc.Acquisition Corp., a Delaware corporation (the “Corporation”), hereby certifies that this Second Amended and Restated Certificate of Incorporation has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”), and that:
A. The name of the Corporation is: Advent Technologies Holdings, Inc.
B. The name of the Corporation was formerly: AMCI Acquisition Corp.
C.B. The original Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of the State of Delaware on June 18, 2018; an Amended and Restated Certificate of Incorporation of the Corporation was filed on November 15, 2018; a Certificate of Amendment to such Amended and Restated Certificate of Incorporation of the Corporation was filed on May 19, 2019; and a further Certificate of Amendment to such Amended and Restated Certificate of Incorporation of the Corporation was filed on October 16, 2020 (as amended by such amendments, the “Amended and Restated Certificate”).
C. This Second Amended and Restated Certificate of Incorporation amends and restates the Amended and Restated Certificate.
D. Upon filingThe text of this Secondthe Amended and Restated Certificate of Incorporation of the Corporation, the Certificate of Incorporation of the Corporation shallis hereby restated and amended in its entirety to read as follows:
ARTICLE I – NAME
The name of the corporation is Advent Technologies Holdings, Inc. (the “Corporation”). The name of the corporate was formerly AMCI Acquisition Corp.
ARTICLE II -- REGISTERED OFFICE AND AGENT
The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.
ARTICLE III – PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.Delaware General Corporation Law, as may be amended from time to time (“DGCL”).
ARTICLE IV – CAPITALIZATION
(a) Authorized Shares. The total number of shares of stock which the Corporation shall have authority to issue is [111,000,000]111,000,000 shares, consisting of [110,000,000]110,000,000 shares of Common Stock, par value $0.0001 per share (“Common Stock”), and [1,000,000]1,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”).
(b) Preferred Stock. Shares of Preferred Stock may be issued in one or more series, from time to time, with each such series to consist of such number of shares and to have such voting powers relative to other classes of Preferred Stock, if any, or Common Stock, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issuance of such series adopted by the Board of Directors of the Corporation, and the Board of Directors is hereby expressly vested with the authority, to the full extent now or hereafter provided by applicable law, to adopt any such resolution or resolutions.
(c) Voting. Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate of Incorporation (including, but not limited to,
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any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second Amended and Restated Certificate of Incorporation (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.
(d) No Class Vote On Changes In Authorized Number of Shares Of Preferred Stock. Subject to the rights of the holders of any series of Preferred Stock pursuant to the terms of this Second Amended and Restated Certificate of Incorporation, any certificate of designations or any resolution or resolutions providing for the issuance of such series of stock adopted by the Board of Directors, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock irrespective of the provisions of Section 242(b)(2) of the DGCL.
ARTICLE V -- BOARD OF DIRECTORS
(a) Number of Directors; Vacancies and Newly Created Directorships. The number of directors constituting the Board of Directors shall be not fewer than seven (7) and not more than nine (9), each of whom shall be a natural person. The number of directors initially shall be nine (9). Subject to the previous sentence and to the special rights of the holders of any class or series of stock to elect directors, the precise number of directors shall be fixed exclusively pursuant to a resolution adopted by the Board of Directors. Vacancies and newly-created directorships shall be filled exclusively pursuant to a resolution adopted by the Board of Directors. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Any election of directors by stockholders shall be determined by a plurality of the votes cast by stockholders entitled to vote in the election.
(b) Classified Board of Directors. Subject to the special right of the holders of any class or series of stock to elect directors, the Board of Directors shall be classified with respect to the time for which directors severally hold office into three classes, as nearly equal in number as possible. The initial Class I Directors shall serve for a term expiring at the first annual meeting of stockholders of the Corporation following the filing of this Second Amended and Restated Certificate of Incorporation; the initial Class II Directors shall serve for a term expiring at the second annual meeting of stockholders following the filing of this Second Amended and Restated Certificate of Incorporation; and the initial Class III Directors shall serve for a term expiring at the third annual meeting of stockholders following the filing of this Second Amended and Restated Certificate of Incorporation. Each director in each class shall hold office until his or her successor is duly elected and qualified. At each annual meeting of stockholders beginning with the first annual meeting of stockholders following the filing of this Second Amended and Restated Certificate of Incorporation, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders to be held in the third year following the year of their election, with each director in each such class to hold office until his or her successor is duly elected and qualified.
ARTICLE VI -- LIMITATION OF DIRECTOR LIABILITY; INDEMNIFICATION AND ADVANCEMENT OF EXPENSES
(a) Limitation of Director Liability. To the fullest extent that the DGCL or any other law of the State of Delaware (as they exist on the date hereof or as they may hereafter be amended) permits the limitation or elimination of the liability of directors, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. No amendment to, or modification or repeal of, this Article VI shall adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to such amendment, modification or repeal.
(b) Indemnification and Advancement of Expenses. The Corporation shall indemnify and advance expenses to, and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (an “Indemnitee”) who was or is made, or is threatened to be made, a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or an officer of the Corporation or, while a director or an officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, member, trustee or agent of another corporation or of a partnership, joint venture, trust, nonprofit entity or other enterprise (including, but not limited to, service with respect to employee benefit plans), against all liability and loss suffered (including, but not limited to, expenses (including, but not limited
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to, attorneys’ fees and expenses), judgments, fines and amounts paid in settlement and reasonably incurred by such Indemnitee). Notwithstanding the preceding sentence, the Corporation shall be required to indemnify, or advance expenses to, an Indemnitee in connection with a Proceeding (or part thereof) commenced by such Indemnitee only if the commencement of such Proceeding (or part thereof) by the Indemnitee was authorized by the Board of Directors of the Corporation or the Proceeding (or part thereof) relates to the enforcement of the Corporation’s obligations under this Article VI(b).
(c) Insurance. The Corporation shall purchase and maintain insurance on behalf of any person who is or was a director, officer, trustee, employee or agent of the Corporation, or was serving at the request of the Corporation as a director, officer, trustee, employee or agent of another corporation, partnership, joint venture, trust, non-profit entity or other enterprise (including, but not limited to, service with respect to employee benefit plans), against any liability asserted against the person and incurred by the person in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VI.
(d) Non-Exclusivity of Rights. The indemnification provided by this Article VI is not exclusive of other indemnification rights arising under any bylaw, agreement, vote of directors or stockholders or otherwise, and shall inure to the benefit of the heirs and legal representatives of such Indemnitee.
(e) Fulfillment of Standard of Conduct. Any Indemnitee shall be deemed to have met the standard of conduct required for such indemnification unless the contrary has been established by a final, non-appealable judgment by a court of competent jurisdiction.
ARTICLE VII -- MEETINGS OF STOCKHOLDERS
(a) No Action by Written Consent. Except as otherwise provided for or fixed by or pursuant to the provisions of this Second Amended and Restated Certificate of Incorporation or any resolution or resolutions of the Board of Directors providing for the issuance of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.
(b) Special Meetings of Stockholders. Subject to the rights of the holders of any series of Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by (a) the [Chairman of the Board of Directors], (b) the Board of Directors or (c) holders of a majority of the total votes entitled to be cast by the holders of all of the outstanding capital stock of the Corporation entitled to vote generally in an election of directors.
(c) Election of Directors by Written Ballot. Election of directors need not be by written ballot.
ARTICLE VIII -- FORUM FOR ADJUDICATION OF CERTAIN DISPUTES
To the fullest extent permitted by the applicable law and unless the Corporation consents in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any current or former director, officer, stockholder, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation or any current or former director, officer, stockholder, employee or agent of the Corporation arising out of or relating to any provision of the DGCL or the Corporation’s Second Amended and Restated Certificate of Incorporation or Bylaws (each, as in effect from time to time), or (iv) any action asserting a claim against the Corporation or any current or former director, officer, stockholder, employee or agent of the Corporation governed by the internal affairs doctrine of the State of Delaware; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein. Unless the Corporation gives an Alternative Forum Consent, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Notwithstanding the foregoing, the provisions of this Article VIII will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended or any other claim for which the federal courts have exclusive jurisdiction. Failure to enforce the foregoing provisions would cause the Corporation irreparable harm and the Corporation shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions. Any person or entity purchasing, otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article VIII. The existence of any prior Alternative Forum Consent shall not act as a waiver of the Corporation’s ongoing consent right as set forth above in this Article VIII with respect to any current or future actions or claims.
ARTICLE IX -- AMENDMENTS TO THE
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND
BYLAWS
In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation, subject to the power of the stockholders of the Corporation to make, alter, amend or repeal the Bylaws; provided, that with respect to the powers of stockholders to make, alter, amend or repeal the Bylaws, the affirmative vote of holders of at least [sixty-six and two-thirds percent (66 2/3%)] of the capital stock of the Corporation entitled to vote generally in an election of directors, voting together as a single class, shall be required to make, alter amend or repeal the Bylaws of the Corporation.
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IN WITNESS WHEREOF, the undersigned has caused this Second Amended and Restated Certificate of Incorporation to be executed by the officer below this day of , 2020.2021.
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[ADVENT TECHNOLOGIES HOLDINGS, INC.]
20202021 EQUITY INCENTIVE PLAN1. DEFINED TERMS
Exhibit A, which is incorporated by reference, defines certain terms used in the Plan and includes certain operational rules related to those terms.
2. PURPOSE
The Plan has been established to advance the interests of the Company by providing for the grant to Participants of Stock and Stock-based Awards.
3. ADMINISTRATION
The Plan will be administered by the Administrator. The Administrator has discretionary authority, subject only to the express provisions of the Plan, (a) to administer and interpret the Plan and any Awards; (b) to determine eligibility for and grant Awards; (c) to determine the exercise price or base value from which appreciation is measured, or the purchase price, if any, applicable to any Award; (d) to determine, modify, accelerate or waive the terms and conditions of any Award; (e) to determine the form of settlement of Awards (whether in cash, shares of Stock, other Awards or other property); (f) to prescribe forms, rules and procedures relating to the Plan and Awards; (g) to determine the time or times of receipt, type of and the number of shares of Stock covered by Awards, and (h) to otherwise do all things necessary or desirable to carry out the purposes of the Plan or any Award. Determinations of the Administrator made with respect to the Plan or any Award are conclusive and bind all persons.
4. LIMITS ON AWARDS UNDER THE PLAN
(a) Number of Shares. Subject to adjustment as provided in Section 7(b), the maximum number of shares of Stock that may be delivered in satisfaction of Awards under the Plan is [•]1 shares (the “Initial Share Pool”). Up to [•] shares of Stock from the Share Pool may be delivered in satisfaction of ISOs, but nothing in this Section 4(a) will be construed as requiring that any, or any fixed number of, ISOs be awarded under the Plan. For purposes of this Section 4(a), the number of shares of Stock delivered in satisfaction of Awards will be determined (i) by including shares of Stock withheld by the Company in payment of the exercise price or purchase price of the Award or in satisfaction of tax withholding requirements with respect to the Award, (ii) by including the full number of shares of Stock covered by any portion of the SAR that is settled in Stock (and not, for the avoidance of doubt, only the number of shares of Stock delivered in settlement thereof), and (iii) by excluding any shares of Stock underlying Awards settled in cash or that expire, become unexercisable, terminate or are forfeited to the Company without the delivery (or retention, in the case of Restricted Stock or Unrestricted Stock) of Stock. For the avoidance of doubt, the Share Pool will not be increased by any shares of Stock delivered under the Plan that are subsequently repurchased using proceeds directly attributable to Stock Option exercises. The limits set forth in this Section 4(a) will be construed to comply with Section 422.
(b) Substitute Awards. The Administrator may grant Substitute Awards under the Plan. To the extent consistent with the requirements of Section 422 and the regulations thereunder and other applicable legal requirements (including applicable stock exchange requirements), shares of Stock delivered in respect of Substitute Awards will be in addition to and will not reduce the Share Pool. Notwithstanding the foregoing or anything in Section 4(a) to the contrary, if any Substitute Award is settled in cash or expires, becomes unexercisable, terminates or is forfeited to or repurchased by the Company without the delivery (or retention, in the case of Restricted Stock or Unrestricted Stock) of Stock, the shares of Stock previously subject to such Award will not increase the Share Pool or otherwise be available for future grant under the Plan. The Administrator will determine the extent to which the terms and conditions of the Plan apply to Substitute Awards, if at all.
(c) Type of Shares. Stock delivered by the Company under the Plan may be authorized but unissued Stock, treasury Stock or previously issued Stock acquired by the Company. No fractional shares of Stock will be delivered under the Plan.
1 | .Note to Draft: Share Pool to reflect 15% of fully diluted common shares outstanding at the time of the De-SPAC transaction.
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(d) Director Limits. Notwithstanding the foregoing, the aggregate value of all compensation granted or paid to any Director with respect to any calendar year, including Awards granted under the Plan and cash fees or other compensation paid by the Company to such Director outside of the Plan for his or her services as a Director during such calendar year, may not exceed $[•]$500,000 in the aggregate, ($[•] in the aggregate with respect to a Director’s first year of service on the Board), calculating the value of any Awards based on the grant date Fair Market Value in accordance with the Accounting Rules, assuming a maximum payout; provided, however, in no event shall any Director be awarded in the aggregate in a calendar year an Award with respect to more than [•] number of shares of Stock, except for any Director in such director’s initial year of election, which maximum number of Shares underlying an Award shall be no more than [•] shares of Stock.payout. For the avoidance of doubt, the limitation in this Section 4(d) will not apply to any compensation granted or paid to a Director for his or her services to the Company or a subsidiary other than as a Director.
5. ELIGIBILITY AND PARTICIPATION
The Administrator will select Participants from among Employees and Directors of, and consultants and advisors to, the Company and its subsidiaries. Eligibility for ISOs is limited to individuals described in the first sentence of this Section 5 who are Employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code. Eligibility for Stock Options, other than ISOs, and SARs is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Award to the Company or to a subsidiary of the Company that would be described in the first sentence of Section 1.409A-1(b)(5)(iii)(E) of the Treasury Regulations.
6. RULES APPLICABLE TO AWARDS
(a) All Awards.
(1) Award Provisions. The Administrator will determine the terms and conditions of all Awards, subject to the limitations provided herein. Each Award granted under the Plan shall be evidenced by an Award agreement in such form as the Administrator shall determine (any such agreement, an “Award Agreement”). No term of an Award shall provide for automatic “reload” grants of additional Awards upon the exercise of an Option or SAR. By accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant will be deemed to have agreed to the terms and conditions of the Award and the Plan. Notwithstanding any provision of the Plan to the contrary, Substitute Awards may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.
(2) Term of Plan. No Awards may be made after ten years from the Date of Adoption, but previously granted Awards may continue beyond that date in accordance with their terms.
(3) Transferability. Neither ISOs nor, except as the Administrator otherwise expressly provides in accordance with the third sentence of this Section 6(a)(3), other Awards may be transferred other than by will or by the laws of descent and distribution. During a Participant’s lifetime, ISOs and, except as the Administrator otherwise expressly provides in accordance with the third sentence of this Section 6(a)(3), SARs and NSOs may be exercised only by the Participant or the Participant’s legal representative. The Administrator may permit the gratuitous transfer (i.e., transfer not for value) of Awards other than ISOs, subject to applicable securities and other laws and such terms and conditions as the Administrator may determine.
(4) Vesting; Exercisability. The Administrator will determine the time or times at which an Award vests or becomes exercisable and the terms and conditions on which a Stock Option or SAR remains exercisable. Without limiting the foregoing, the Administrator may at any time accelerate the vesting and/or exercisability of an Award (or any portion thereof), regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participant’s Employment ceases:
(A)Except as provided in (B) and (C) below, immediately upon the cessation of the Participant’s Employment each Stock Option and SAR (or portion thereof) that is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will terminate and each other Award that is then held by the Participant or by the Participant’s permitted transferees, if any, to the extent not then vested will be forfeited.
(B)Subject to (C) and (D) below, each vested and unexercised Stock Option and SAR (or portion thereof) held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the
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cessation of the Participant’s Employment, to the extent then exercisable, will remain exercisable for the lesser of (i) a period of three months following such cessation of Employment or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.
(C)Subject to (D) below, each vested and unexercised Stock Option and SAR (or portion thereof) held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment due to his or her death or by the Company due to his or her Disability, to the extent then exercisable, will remain exercisable for the lesser of (i) the one-year period ending on the first anniversary of such cessation of Employment or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.
(D)All Awards (whether or not vested or exercisable) held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation of Employment if the termination is for Cause or occurs in circumstances that in the determination of the Administrator would have constituted grounds for the Participant’s Employment to be terminated for Cause (in each case, without regard to the lapsing of any required notice or cure periods in connection therewith).
(5) Additional Restrictions. The Administrator may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award Agreement and the Plan, or if the Participant breaches any agreement with the Company or its affiliates with respect to non-competition, non-solicitation, non-disparagement, confidentiality or other restrictive covenant.
(6) Recovery of Compensation. The Administrator may provide in any case that any outstanding Award (whether or not vested or exercisable), the proceeds from the exercise or disposition of any Award or Stock acquired under any Award, and any other amounts received in respect of any Award or Stock acquired under any Award will be subject to forfeiture and disgorgement to the Company, with interest and other related earnings, if the Participant to whom the Award was granted (or the Participant’s permitted transferee) is not in compliance with any provision of the Plan or any applicable Award, any non-competition, non-solicitation, no-hire, non-disparagement, confidentiality, invention assignment, or other restrictive covenant by which he or she is bound. Each Award will be subject to any policy of the Company or any of its subsidiaries that relates to trading on non-public information and permitted transactions with respect to shares of Stock, including limitations on hedging and pledging. In addition, each Award will be subject to any policy of the Company or any of its affiliates that provides for forfeiture, disgorgement, or clawback with respect to incentive compensation that includes Awards under the Plan and will be further subject to forfeiture and disgorgement to the extent required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Exchange Act. Each Participant, by accepting or being deemed to have accepted an Award under the Plan, agrees (or will be deemed to have agreed) to the terms of this Section 6(a)(6) and any clawback, recoupment or similar policy of the Company or any of its subsidiaries and further agrees (or will be deemed to have further agreed) to cooperate fully with the Administrator, and to cause any and all permitted transferees of the Participant to cooperate fully with the Administrator, to effectuate any forfeiture or disgorgement described in this Section 6(a)(6). Neither the Administrator nor the Company nor any other person, other than the Participant and his or her permitted transferees, if any, will be responsible for any adverse tax or other consequences to a Participant or his or her permitted transferees, if any, that may arise in connection with this Section 6(a)(6).
(7) Taxes. The grant of an Award and the issuance, delivery, vesting and retention of Stock, cash or other property under an Award are conditioned upon the full satisfaction by the Participant of all tax and other withholding requirements with respect to the Award. The Administrator will prescribe such rules for the withholding of taxes and other amounts with respect to any Award as it deems necessary. Without limitation to the foregoing, the Company or any parent or subsidiary of the Company will have the authority and the right to deduct or withhold (by any means set forth herein or in an Award Agreement), or require a Participant to remit to the Company or a parent or subsidiary of the Company, an amount sufficient to satisfy all U.S. and non-U.S. federal, state and local income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to participation in the Plan and legally applicable to the Participant and required by law to be withheld (including, any amount deemed by the Company, in its discretion, to be an appropriate charge to the Participant even if legally applicable to the Company or any parent or subsidiary of the Company). The
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Administrator, in its sole discretion, may hold back shares of Stock from an Award or permit a Participant to tender previously-owned shares of Stock in satisfaction of tax or other withholding requirements (but not in excess of the maximum withholding amount consistent with the Award being subject to equity accounting treatment under the Accounting Rules). Any amounts withheld pursuant to this Section 6(a)(7) will be treated as though such payment had been made directly to the Participant. In addition, the Company may, to the extent permitted by law, deduct any such tax and other withholding amounts from any payment of any kind otherwise due to a Participant from the Company or any parent or subsidiary of the Company.
(8) Dividend Equivalents. The Administrator may provide for the payment of amounts (on terms and subject to such restrictions and conditions established by the Administrator) in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award whether or not the holder of such Award is otherwise entitled to share in the actual dividend or distribution in respect of such Award; provided, however, that (a) dividends or dividend equivalents relating to an Award that, at the dividend payment date, remains subject to a risk of forfeiture (whether service-based or performance-based) shall be subject to the same risk of forfeiture as applies to the underlying Award and such additional limitations or restrictions as the Administrator may impose and (b) no dividends or dividend equivalents shall be payable with respect to Stock Options or SARs. Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, the applicable requirements of Section 409A.
(9) Rights Limited. Nothing in the Plan or any Award will be construed as giving any person the right to be granted an Award or to continued employment or service with the Company or any of its subsidiaries, or any rights as a stockholder except as to shares of Stock actually delivered under the Plan. The loss of existing or potential profit in any Award will not constitute an element of damages in the event of a termination of a Participant’s Employment for any reason, even if the termination is in violation of an obligation of the Company or any of its subsidiaries to the Participant.
(10) Section 409A.
(A)Without limiting the generality of Section 11(b) hereof, each Award will contain such terms as the Administrator determines and will be construed and administered, such that the Award either qualifies for an exemption from the requirements of Section 409A or satisfies such requirements.
(B)Notwithstanding anything to the contrary in the Plan or any Award Agreement, the Administrator may unilaterally amend, modify or terminate the Plan or any outstanding Award, including but not limited to changing the form of the Award, if the Administrator determines that such amendment, modification or termination is necessary or desirable to avoid the imposition of an additional tax, interest or penalty under Section 409A. If any provision of the Plan would otherwise frustrate or conflict with this intent, the provision will be interpreted and deemed amended so as to avoid this conflict. If an operational failure occurs with respect to the requirements of Section 409A, any affected Participant shall fully cooperate with the Company to correct the failure, to the extent possible, in accordance with any correction procedure established by the Internal Revenue Service. No provision of the Plan shall be interpreted to transfer any liability for a failure to comply with Section 409A from a Participant or any other Person to the Company.
(C)If a Participant is determined on the date of the Participant’s termination of Employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then, with regard to any payment that is considered nonqualified deferred compensation under Section 409A, to the extent applicable, payable on account of a “separation from service”, such payment will be made or provided on the date that is the earlier of (i) the first business day following the expiration of the six-month period measured from the effective date of such “separation from service” and (ii) the date of the Participant’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 6(a)(10)(C) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) will be paid, without interest, on the first business day following the expiration of the Delay Period in a lump sum and any remaining payments due under the Award will be paid in accordance with the normal payment dates specified for them in the applicable Award Agreement.
(D)For purposes of Section 409A, each payment made under the Plan or any Award will be treated as a separate payment.
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(E)With regard to any payment considered to be nonqualified deferred compensation under Section 409A, to the extent applicable, that is payable upon a change in control of the Company or other similar event, to the extent required to avoid the imposition of an additional tax, interest or penalty under Section 409A, no amount will be payable unless such change in control constitutes a “change in control event” within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.
(b) Stock Options and SARs.
(1) Time and Manner of Exercise. Unless the Administrator expressly provides otherwise, no Stock Option or SAR will be deemed to have been exercised until the Administrator receives a notice of exercise in a form acceptable to the Administrator that is signed by the appropriate person and accompanied by any payment required under the Award. The Administrator may limit or restrict the exercisability of any Stock Option or SAR in its discretion, including in connection with any Covered Transaction. Any attempt to exercise a Stock Option or SAR by any person other than the Participant will not be given effect unless the Administrator has received such evidence as it may require that the person exercising the Award has the right to do so.
(2) Exercise Price. The exercise price (or the base value from which appreciation is to be measured) per share of each Award requiring exercise must be no less than 100% (in the case of an ISO granted to a 10-percent stockholder within the meaning of Section 422(b)(6) of the Code, 110%) of the Fair Market Value of a share of Stock, determined as of the date of grant of the Award, or such higher amount as the Administrator may determine in connection with the grant.
(3) Payment of Exercise Price. Where the exercise of an Award (or portion thereof) is to be accompanied by payment, payment of the exercise price must be made by cash or check acceptable to the Administrator or, if so permitted by the Administrator and if legally permissible, (i) through the delivery of previously acquired unrestricted shares of Stock, or the withholding of unrestricted shares of Stock otherwise deliverable upon exercise, in either case that have a Fair Market Value equal to the exercise price; (ii) through a broker-assisted cashless exercise program acceptable to the Administrator; (iii) by other means acceptable to the Administrator; or (iv) by any combination of the foregoing permissible forms of payment. The delivery of previously acquired shares in payment of the exercise price under clause (i) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may prescribe.
(4) Maximum Term. The maximum term of Stock Options and SARs must not exceed 10 years from the date of grant (or five years from the date of grant in the case of an ISO granted to a 10-percent stockholder described in Section 6(b)(2) above).
(5) No Repricing. Except in connection with a corporate transaction involving the Company (which term includes, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares) or as otherwise contemplated by Section 7 below, the Company may not, without obtaining stockholder approval, (A) amend the terms of outstanding Stock Options or SARs to reduce the exercise price or base value of such Stock Options or SARs, (B) cancel outstanding Stock Options or SARs in exchange for Stock Options or SARs that have an exercise price or base value that is less than the exercise price or base value of the original Stock Options or SARs, or (C) cancel outstanding Stock Options or SARs that have an exercise price or base value greater than the Fair Market Value of a share of Stock on the date of such cancellation in exchange for cash or other consideration.
7. EFFECT OF CERTAIN TRANSACTIONS
(a) Mergers, etc. Except as otherwise expressly provided in an Award Agreement or other agreement or by the Administrator, the following provisions will apply in the event of a Covered Transaction:
(1) Assumption or Substitution. If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may provide for (A) the assumption or continuation of some or all outstanding Awards or any portion thereof or (B) the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.
(2) Cash-Out of Awards. Subject to Section 7(a)(5) below, the Administrator may provide for payment (a “cash-out”), with respect to some or all Awards or any portion thereof (including only the vested portion
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thereof, with the unvested portion terminating as provided in Section 7(a)(4) below), equal in the case of each applicable Award or portion thereof to the excess, if any, of (A) the Fair Market Value of one share of Stock multiplied by the number of shares of Stock subject to the Award or such portion, minus (B) the aggregate exercise or purchase price, if any, of such Award or such portion thereof (or, in the case of a SAR, the aggregate base value above which appreciation is measured), in each case on such payment and other terms and subject to such conditions (which need not be the same as the terms and conditions applicable to holders of Stock generally), as the Administrator determines, including that any amounts paid in respect of such Award in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate. For the avoidance of doubt, if the per share exercise or purchase price (or base value) of an Award or portion thereof is equal to or greater than the Fair Market Value of one share of Stock, such Award or portion may be cancelled with no payment due hereunder or otherwise in respect thereof.
(3) Acceleration of Certain Awards. Subject to Section 7(a)(5) below, the Administrator may provide that any Award requiring exercise will become exercisable, in full or in part, and/or that the delivery of any shares of Stock remaining deliverable under any outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated, in full or in part, in each case on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following the exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction.
(4) Termination of Awards upon Consummation of Covered Transaction. Except as the Administrator may otherwise determine, each Award will automatically terminate (and in the case of outstanding shares of Restricted Stock, will automatically be forfeited) immediately upon the consummation of the Covered Transaction, other than (A) any Award that is assumed, continued or substituted for pursuant to Section 7(a)(1) above, and (B) any Award that by its terms, or as a result of action taken by the Administrator, continues following the Covered Transaction.
(5) Additional Limitations. Any share of Stock and any cash or other property or other award delivered pursuant to Section 7(a)(1), Section 7(a)(2) or Section 7(a)(3) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate, including to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction. For purposes of the immediately preceding sentence, a cash-out under Section 7(a)(2) above or an acceleration under Section 7(a)(3) above will not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition. In the case of Restricted Stock that does not vest and is not forfeited in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.
(6) Uniform Treatment. For the avoidance of doubt, the Administrator need not treat Participants or Awards (or portions thereof) in a uniform manner, and may treat different Participants and/or Awards differently, in connection with a Covered Transaction.
(b) Changes in and Distributions with Respect to Stock.
(1) Basic Adjustment Provisions. In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure that constitutes an equity restructuring within the meaning of the Accounting Rules, the Administrator shall make appropriate adjustments to the maximum number of shares of Stock specified in Section 4(a) that may be delivered under the Plan, and shall make appropriate adjustments to the number and kind of shares of stock or securities underlying Awards then outstanding or subsequently granted, any exercise or purchase prices (or base values) relating to Awards and any other provision of Awards affected by such change.
(2) Certain Other Adjustments. The Administrator may in its sole discretion also make adjustments of the type described in Section 7(b)(1) above to take into account distributions to stockholders other than those provided for in Sections 7(a) and 7(b)(1), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan or any Award.
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(3) Continuing Application of Plan Terms. References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 7.
8. LEGAL CONDITIONS ON DELIVERY OF STOCK
The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. The Company may require, as a condition to the exercise of an Award or the delivery of shares of Stock under an Award, such representations or agreements as counsel for the Company may consider necessary and appropriate to avoid violation of the Securities Act of 1933, as amended, or any applicable state or non-U.S. securities law. Any Stock delivered to Participants under the Plan will be evidenced in such manner as the Administrator determines appropriate, including book-entry registration or delivery of stock certificates. In the event that the Administrator determines that stock certificates will be issued in connection with Stock issued under the Plan, the Administrator may require that such certificates bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending the lapse of the applicable restrictions.
9. AMENDMENT AND TERMINATION
The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose, and may at any time suspend or terminate the Plan as to any future grants of Awards; provided, however, that except as otherwise expressly provided in the Plan or the applicable Award Agreement, the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so in the applicable Award Agreement. Any amendments to the Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by applicable law (including the Code), regulations, or stock exchange requirements, as determined by the Administrator. For the avoidance of doubt, without limiting the Administrator’s rights hereunder, no adjustment to any Award pursuant to the terms of Section 7 or Section 12 will be treated as an amendment requiring a Participant’s consent.
10. OTHER COMPENSATION ARRANGEMENTS
The existence of the Plan or the grant of any Award will not affect the right of the Company or any of its subsidiaries to grant any person bonuses or other compensation in addition to Awards under the Plan. The Company, in establishing and maintaining the Plan as a voluntary and unilateral undertaking, expressly disavows the creation of any rights in Participants or others claiming entitlement under the Plan or any obligations on the part of the Company or any of its subsidiaries, or the Administrator, except as expressly provided herein. No Award shall be deemed to be salary or compensation for the purposes of computing benefits under any employee benefit, severance, pension or retirement plan of the Company or any of its subsidiaries, unless the Administrator shall determine otherwise, applicable local law provides otherwise or the terms of such plan specifically include such compensation.
11. MISCELLANEOUS
(a) Waiver of Jury Trial. By accepting or being deemed to have accepted an Award under the Plan, each Participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan or any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury. By accepting or being deemed to have accepted an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit any dispute arising under the terms of the Plan or any Award to binding arbitration or as limiting the ability of the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.
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(b) Limitation of Liability. Notwithstanding anything to the contrary in the Plan or any Award, neither the Company, nor any of its subsidiaries, nor the Administrator, nor any person acting on behalf of the Company, any of its subsidiaries, or the Administrator, will be liable to any Participant, to any permitted transferee, to the estate or beneficiary of any Participant or any permitted transferee, or to any other person by reason of any acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to any Award.
(c) Unfunded Plan. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. The Company’s obligations under the Plan are unfunded, and no Participant will have any right to specific assets of the Company in respect of any Award. Participants will be general unsecured creditors of the Company with respect to any amounts due or payable under the Plan.
(d) Severability. If any provision of this Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify this Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws in the manner that most closely reflects the original intent of the Award or the Plan, or if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of this Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of this Plan and any such Award shall remain in full force and effect.
12. ESTABLISHMENT OF SUB-PLANS
The Administrator may at any time and from time to time (including before or after an Award is granted) establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan for Participants based outside of the U.S. and/or subject to the laws of countries other than the U.S., including by establishing one or more sub-plans, supplements or appendices under the Plan or any Award Agreement for the purpose of complying or facilitating compliance with non-U.S. laws or taking advantage of tax favorable treatment or for any other legal or administrative reason determined by the Administrator. Any such sub-plan, supplement or appendix may contain, in each case, (i) such limitations on the Administrator’s discretion under the Plan and (ii) such additional or different terms and conditions, as the Administrator deems necessary or desirable and will be deemed to be part of the Plan but will apply only to Participants within the group to which the sub-plan, supplement or appendix applies (as determined by the Administrator); provided, however, that no sub-plan, supplement or appendix, rule or regulation established pursuant to this provision shall increase the Share Pool.
13. GOVERNING LAW
(a) Certain Requirements of Corporate Law. Awards and shares of Stock will be granted, issued and administered consistent with the requirements of applicable Delaware law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case as determined by the Administrator.
(b) Other Matters. Except as otherwise provided by the express terms of an Award Agreement, under a sub-plan described in Section 12 or as provided in Section 13(a) above, the laws of the State of Delaware govern the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of or based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof without giving effect to any choice or conflict of laws provision or rule that would cause the application of the laws of any other jurisdiction.
(c) Jurisdiction. Subject to Section 11(a) and except as may be expressly set forth in an Award Agreement, by accepting (or being deemed to have accepted) an Award, each Participant agrees or will be deemed to have agreed to (i) submit irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or any Award; (ii) not commence any suit, action or other proceeding arising out of or based upon the Plan or any Award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware; and (iii) waive, and not assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not subject personally to the jurisdiction of the above-named courts that his or her property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the Plan or any Award or the subject matter thereof may not be enforced in or by such court.
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EXHIBIT A
Definition of Terms
The following terms, when used in the Plan, have the meanings and are subject to the provisions set forth below:
“Accounting Rules”: Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor provision.
“Administrator”: The Compensation Committee, except with respect to such matters that are not delegated to the Compensation Committee by the Board (whether pursuant to committee charter or otherwise). The Compensation Committee (or the Board, with respect to such matters over which it retains authority under the Plan or otherwise) may delegate (i) to one or more of its members (or one or more other members of the Board) such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant Awards to the extent permitted by Section 152 or 157(c) of the Delaware General Corporation Law; and (iii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate. For purposes of the Plan, the term “Administrator” will include the Board, the Compensation Committee, and the person or persons delegated authority under the Plan to the extent of such delegation, as applicable.
“Award”: Any or a combination of the following:
(i) Stock Options.
(ii) SARs.
(iii) Restricted Stock.
(iv) Unrestricted Stock.
(v) Stock Units, including Restricted Stock Units.
(vi) Performance Awards.
(vii) Awards (other than Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock.
“Board”: The Board of Directors of the Company.
“Cause”: In the case of any Participant who is party to an employment, change of control or severance-benefit agreement, plan or policy with the Company or any of its subsidiaries that contains a definition of “Cause,” the definition set forth in such agreement applies with respect to such Participant for purposes of the Plan for so long as such agreement is in effect. In every other case, “Cause” means, as determined by the Administrator, (i) a failure of the Participant to perform the Participant’s duties and responsibilities to the Company or any of its subsidiaries or negligence in the performance of such duties and responsibilities; (ii) the commission by the Participant of a felony or a crime involving moral turpitude; (iii) the commission by the Participant of theft, fraud, embezzlement, material breach of trust or any material act of dishonesty involving the Company or any of its subsidiaries; (iv) a significant violation by the Participant of the code of conduct of the Company or any of its subsidiaries of any material policy of the Company or any of its subsidiaries (including those relating to sexual harassment), or of any statutory or common law duty of loyalty to the Company or any of its subsidiaries; (v) a material breach of any of the terms of the Plan or any Award made under the Plan, or of the terms of any other agreement between the Company or any of its subsidiaries and the Participant; (vi) other conduct by the Participant that could be expected to be harmful to the business, interests or reputation of the Company or any of its subsidiaries; or (vii) willful misconduct with respect to the Participant’s duties. If, subsequent to a Participant’s termination of employment other than for Cause, it is determined that such Participant’s employment could have been terminated for Cause, the Participant’s employment shall be deemed for purposes of the Plan and any Award issued thereunder to have been terminated for Cause retroactively to the date of the action or event giving rise to such Cause.
“Change of Control”: the occurrence of any of the following events:
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than [•fifty percent (•%(50%)] of the total voting power represented by the Company’s then outstanding voting securities;
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(ii) the consummation by the Company of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than [•fifty percent (•%(50%)] of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation (in substantially the same proportions relative to each other as immediately prior to the transaction); or
(iii) the consummation of the sale or disposition by the Company of all or substantially all of the Company'sCompany’s assets (it being understood that the sale or spinoff of one or more (but not all material) divisions of the Company shall not constitute the sale or disposition of all or substantially all of the Company’s assets).
Further and for the avoidance of doubt, a transaction will not constitute a Change of Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
“Code”: The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute as from time to time in effect.
“Company”: [AdventAdvent Technologies Holdings, Inc.]
“Compensation Committee”: The Compensation Committee of the Board.
“Covered Transaction”: The consummation of any of (i) a consolidation, merger or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, (iii) a Change of Control, or (iv) a dissolution or liquidation of the Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction will be deemed to have occurred upon consummation of the tender offer.
“Date of Adoption”: The earlier of the date the Plan was approved by the Company’s stockholders or adopted by the Board, as determined by the Compensation Committee.
“Director”: A member of the Board who is not an Employee.
“Disability”: In the case of any Participant who is party to an employment, change of control or severance-benefit agreement that contains a definition of “Disability” (or a corollary term), the definition set forth in such agreement applies with respect to such Participant for purposes of the Plan for so long as such agreement is in effect. In every other case, “Disability” means, as determined by the Administrator, absence from work due to a disability for a period in excess of 90 days in any 12-month period that would entitle an employee of the Company to receive benefits under the Company’s long-term disability program as in effect from time to time (if the Participant were a participant in such program).
“Employee”: Any person who is employed by the Company or any of its subsidiaries.
“Employment”: A Participant’s employment or other service relationship with the Company or any of its subsidiaries. Employment will be deemed to continue, unless the Administrator otherwise determines, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to, the Company or any of its subsidiaries; provided, that if a Participant is both an employee and a director or member of a board of directors of the Company and/or any of its affiliates, as applicable, Employment with respect to such Participant shall only mean service as an employee of the Company and/or its affiliates, unless the Administrator determines otherwise; provided, further, that if a Participant receives an Award in his or her capacity as an employee and later transitions to a consulting or non-employee service provider role, Employment with respect to such Participant shall only mean service as an Employee of the Company and/or its affiliates, unless the Administrator determines otherwise. If a Participant’s employment or other service relationship is with any subsidiary of the Company and that entity ceases to be a subsidiary of the Company, the Participant’s Employment will be deemed to have terminated when the entity ceases to be a subsidiary of the Company unless the Participant transfers Employment to the Company or one of its remaining subsidiaries. Notwithstanding the foregoing, in construing the provisions of any
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Award relating to the payment of “nonqualified deferred compensation” (subject to Section 409A) upon a termination or cessation of Employment, references to termination or cessation of employment, separation from service, retirement or similar or correlative terms will be construed to require a “separation from service” (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations), after giving effect to the presumptions contained therein) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of the Treasury Regulations. The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election will be deemed a part of the Plan.
“Exchange Act”: The Securities Exchange Act of 1934, as amended.
“Fair Market Value”: As of a particular date, as determined by the Administrator consistent with the rules of Section 422 and Section 409A, as applicable, (i) if the Stock is traded on the Nasdaq Capital Market (or any other national securities exchange on which the Stock is then listed), the closing price for a share of Stock for that date or, if no closing price is reported for that date, the closing price on the immediately preceding date on which a closing price was reported or (ii) in the event that the Stock is not traded on a national securities exchange, the fair market value of a share of Stock determined by the Administrator.
“ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of Section 422. Each Stock Option granted pursuant to the Plan will be treated as providing by its terms that it is to be an NSO unless, as of the date of grant, it is expressly designated as an ISO in the applicable Award Agreement.
“NSO”: A Stock Option that is not intended to be an “incentive stock option” within the meaning of Section 422.
“Participant”: A person who is granted an Award under the Plan.
“Performance Award”: An Award subject to performance vesting conditions, which may include Performance Criteria.
“Performance Criteria”: Specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. A Performance Criterion and any targets with respect thereto need not be based upon an increase, a positive or improved result or avoidance of loss and may be applied to a Participant individually, or to a business unit or division of the Company or to the Company as a whole. A Performance Criterion may also be based on individual performance and/or subjective performance criteria. The Administrator may provide that one or more of the Performance Criteria applicable to an Award will be adjusted in a manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.
“Plan”: The [AdventAdvent Technologies Holdings, Inc.] 20202021 Equity Incentive Plan, as from time to time amended and in effect.
“Restricted Stock”: Stock subject to restrictions requiring that it be forfeited, redelivered or offered for sale to the Company if specified performance or other vesting conditions are not satisfied.
“Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or of cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.
“SAR”: A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the excess of the Fair Market Value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured.
“Section 409A”: Section 409A of the Code and the regulations thereunder.
“Section 422”: Section 422 of the Code and the regulations thereunder.
“Stock”: Common stock of the Company, par value $0.0001 per share.
“Stock Option”: An option entitling the holder to acquire shares of Stock upon payment of the exercise price.
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“Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.
“Substitute Awards”: Awards granted under the Plan in substitution for one or more equity awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition.
“Unrestricted Stock”: Stock not subject to any restrictions under the terms of the Award.
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AnnexANNEX D
(a) Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the mergerMerger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the mergerMerger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a corporation; the words “stock” and “share” mean and include what is ordinarily meant by those words; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title:
| (1) | Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation (or, in the case of a merger pursuant to § 251(h), as of immediately prior to the execution of the agreement of merger), were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the mergerMerger did not require for its approval the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title. |
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(2) | Notwithstanding paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except: | |
| a. | Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; |
| b. | Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the mergerMerger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders; |
| c. | Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or |
| d. | Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section. |
| (3) | In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 or § 267 of this title is not owned by the parent immediately prior to the merger,Merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation. |
(c) Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the provisions of this section, including those set forth in subsections (d),(e), and (g) of this section, shall apply as nearly as is practicable.
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(d) Appraisal rights shall be perfected as follows:
(1) | If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the mergerMerger or consolidation, a written demand for appraisal of such stockholder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the mergerMerger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the mergerMerger or consolidation of the date that the mergerMerger or consolidation has become effective; or |
(2) | If the mergerMerger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of this title, then either a constituent corporation before the effective date of the mergerMerger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the mergerMerger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the mergerMerger or consolidation, shall, also notify such stockholders of the effective date of the mergerMerger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of giving such notice or, in the case of a merger approved pursuant to § 251(h) of this title, within the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days after the date of giving such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the mergerMerger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the mergerMerger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the mergerMerger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of this title, later than the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the Merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given. |
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the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the mergerMerger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the mergerMerger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the mergerMerger or consolidation. Within 120 days after the effective date of the mergerMerger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon request given in writing (or by electronic transmission directed to an information processing system (if any) expressly designated for that purpose in the notice of appraisal), shall be entitled to receive from the corporation surviving the mergerMerger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the mergerMerger or consolidation (or, in the case of a merger approved pursuant to § 251(h) of this title, the aggregate number of shares (other than any excluded stock (as defined in § 251(h)(6)d. of this title)) that were the subject of, and were not tendered into, and accepted for purchase or exchange in, the offer referred to in § 251(h)(2)), and, in either case, with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such statement shall be given to the stockholder within 10 days after such stockholder’s request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the corporation the statement described in this subsection.
(f) Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. If immediately before the mergerMerger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange, the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal, (2) the value of the consideration provided in the mergerMerger or consolidation for such total number of shares exceeds $1 million, or (3) the mergerMerger was approved pursuant to § 253 or § 267 of this title.
(h) After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the mergerMerger or consolidation, together with interest, if any,
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to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in this subsection, interest from the effective date of the mergerMerger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the mergerMerger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Court, and (2) interest theretofore accrued, unless paid at that time. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the mergerMerger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the mergerMerger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the mergerMerger or consolidation, either within 60 days after the effective date of the mergerMerger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the mergerMerger or consolidation within 60 days after the effective date of the mergerMerger or consolidation, as set forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the mergerMerger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
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December 22, 2020
AMCI Acquisition Corp.
975 Georges Station Road, Suite 900
Greensburg, PA 15601
Advent Technologies, Inc.
One Mifflin Place
119 Mt Auburn Street, Suite 400
Cambridge, MA 02138
Ladies and Gentlemen:
In connection with the proposed business combination (the “Transaction”) between AMCI Acquisition Corp., a Delaware corporation (the “Company”), and Advent Technologies, Inc., a Delaware corporation (“Target”), pursuant to that certain Agreement and Plan of Merger, dated as of October 12, 2020 (as amended by the First Amendment to Agreement and Plan of Merger on October 19, 2020 (the “First Amendment”), and as it may further be amended, the “Transaction Agreement”), by and among, the Company, Target and certain other parties named therein, the Company is seeking commitments to purchase shares of the Company’s Class A Common Stock, par value $0.0001 per share (the “Common Stock”), for a purchase price of $10.00 per share (the “Purchase Price”), in a private placement to be conducted by the Company (the “Offering”). In connection therewith, the undersigned subscriber (“Subscriber”) and the Company agree in this subscription agreement (this “Subscription Agreement”) as follows:
1.Subscription. As of the date written above (the “Subscription Date”), the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of shares of Common Stock as is set forth on the signature page of this Subscription Agreement (the “Shares”) at the Purchase Price per Share and on the terms provided for herein.
2.Closing; Delivery of Shares.
(a)The closing of the sale of Shares contemplated hereby (the “Closing”, and the date that the Closing actually occurs, the “Closing Date”) is contingent upon the substantially concurrent consummation of the Transaction (the “Transaction Closing”). The Closing shall occur on the date of, and immediately prior to, the Transaction Closing.
(b)The Company shall provide written notice (which may be via email) to the Subscriber (the “Closing Notice”) that the Company reasonably expects the Transaction Closing to occur on a date specified in the notice (the “Scheduled Closing Date”) that is not less than three (3) business days from the date of the Closing Notice, which Closing Notice shall contain the Company’s wire instructions for an escrow account (the “Escrow Account”) established by the Company with a third party escrow agent (the “Escrow Agent”) to be identified in the Closing Notice. At least two (2) business days prior to the Scheduled Closing Date (unless otherwise agreed to with the Company), the Subscriber shall deliver to the Escrow Account the aggregate Purchase Price for the Shares subscribed by wire transfer of United States dollars in immediately available funds. Upon the Closing, the Company shall provide instructions to the Escrow Agent to release the funds in the Escrow Account to the Company against delivery to the Subscriber of the Shares, free and clear of any liens or other restrictions whatsoever (other than those arising under state or federal securities laws), in book-entry form as set forth in Section 2(c) below. If this Subscription Agreement is terminated prior to the Closing and any funds have already been sent by the Subscriber to the Escrow Account, then promptly after such termination, the Company will instruct the Escrow Agent to promptly return such funds to the Subscriber.
(c) On the Closing Date, promptly after the Closing, the Company shall deliver (or cause the delivery of) the Shares in book-entry form with restrictive legends in the amount as set forth on the signature page to the Subscriber as indicated on the signature page or to a custodian designated by the Subscriber, as applicable, as indicated below.
3.Closing Conditions. In addition to the condition set forth in the first sentence of Section 2(a) above:
(a) The Closing is also subject to the satisfaction or valid waiver by each party of the conditions that, on the Closing Date:
(i) no suspension of the qualification of the Shares for offering or sale or trading in any jurisdiction, or initiation or threatening of any proceedings for any of such purposes, shall have occurred;
(ii) no applicable governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby, and no governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition; and
(iii) all material conditions precedent to the Transaction Closing set forth in the Transaction Agreement shall have been satisfied or waived (other than those conditions which, by their nature, are to be satisfied at the Transaction Closing).
(b) The obligations of the Company to consummate the Closing are also subject to the satisfaction or valid waiver by the Company of the additional conditions that, on the Closing Date:
(i) all representations and warranties of the Subscriber contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect, which representations and warranties shall be true in all respects) as of such date), and consummation of the Closing, shall constitute a reaffirmation by the Subscriber of each of the representations, warranties and agreements of the Subscriber contained in this Subscription Agreement as of the Closing Date; and
(ii) the Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to Closing.
(c) The obligations of the Subscriber to consummate the Closing are also subject to the satisfaction or valid waiver by the Subscriber of the additional conditions that, on the Closing Date:
(i) all representations and warranties of the Company contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect, which representations and warranties shall be true in all respects) as of such date), and consummation of the Closing, shall constitute a reaffirmation by the Company of each of the representations, warranties and agreements of the Company contained in this Subscription Agreement as of the Closing Date; and
(ii) the Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to Closing.
4.Company Representations and Warranties. The Company represents and warrants to the Subscriber that:
(a) As of the date hereof, the Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Immediately following the Transaction Closing under the Transaction Agreement, the Company will be validly existing and in good standing under the laws of its jurisdiction of organization. The Company has the corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.
(b) The Shares have been duly authorized and, when issued and delivered to the Subscriber against full payment therefor in accordance with the terms of this Subscription Agreement, the Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Company’s Amended and Restated Certificate of Incorporation or under the laws of the State of Delaware.
(c) This Subscription Agreement has been duly authorized, executed and delivered by the Company and is enforceable against the Company in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
(d)The issuance and sale of the Shares and the compliance by the Company with all of the provisions of this Subscription Agreement and the consummation of the transactions herein will be done in accordance with the NASDAQ marketplace rules and will not conflict with or result in a material breach or material violation of any of the terms or provisions of, or constitute a material default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company or any of its subsidiaries pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, license, lease or any other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company is subject, which would have a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of the Company (a “Material Adverse Effect”) or materially affect the validity of the Shares or the legal authority of the Company to comply in all material respects with the terms of this Subscription Agreement; (ii) result in any material violation of the provisions of the organizational documents of the Company; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties that would have a Material Adverse Effect or materially affect the validity of the Shares or the legal authority of the Company to comply with this Subscription Agreement; subject, in the case of the foregoing clauses (i) and (iii) with respect to the consummation of the transactions therein contemplated.
(e)The Company has not entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other person to any broker’s or finder’s fee or any other commission or similar fee in connection with the transactions contemplated by this Subscription Agreement for which the Subscriber could become liable. Other than Jefferies LLC and Fearnley Securities, Inc. (together with its affiliate Fearnley Securities AS) (collectively, the “Placement Agents”), the Company is not aware of any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any shares of Common Stock in the Offering.
(f) The Company is not, and immediately after receipt of payment for the Shares, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(g)Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section 5, in connection with the offer, sale and delivery of the Shares in the manner contemplated by this Subscription Agreement, it is not necessary to register the Shares under the Securities Act of 1933, as amended (the “Securities Act”).
(h) The Company understands that the foregoing representations and warranties shall be deemed material to and have been relied upon by the Subscriber.
5.Subscriber Representations, Warranties and Covenants. The Subscriber represents and warrants to the Company that:
(a) The Subscriber hereby represents and warrants to the Company that it is either a U.S. investor or non-U.S. investor as set forth under its name on the signature page hereto, and accordingly represents the applicable additional matters under clause (i) or (ii) below:
(i)Applicable to U.S. investors: At the time the Subscriber was offered the Shares, it was, and as of the date hereof, the Subscriber is (A) a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) of Regulation D under the Securities Act) as indicated in the questionnaire attached as Exhibit A hereto, and (B) is acquiring the Shares only for its own account and (C) not for the account of others, and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. The Subscriber is not an entity formed for the specific purpose of acquiring the Shares.
(ii)Applicable to non-U.S. investors: The Subscriber understands that the sale of the Securities is made pursuant to and in reliance upon Regulation S promulgated under the Securities Act (“Regulation S”). The Subscriber is not a U.S. Person (as defined in Regulation S), it is acquiring the Securities in an offshore transaction in reliance on Regulation S, and it has received all the information that it considers necessary and appropriate to decide whether to acquire the Securities hereunder. The Subscriber is not relying on any statements or representations made in connection with the transactions contemplated hereby other than representations contained in this Subscription Agreement. The Subscriber understands and agrees that Securities sold pursuant to Regulation S may be subject to restrictions thereunder, including compliance with the distribution compliance period provisions therein.
(b) The Subscriber understands that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares delivered at the Closing have not been registered under the Securities Act. The Subscriber understands that the Shares may not be resold, transferred, pledged (except in ordinary course prime brokerage relationships to the extent permitted by applicable law) or otherwise disposed of by the Subscriber absent an effective registration statement under the Securities Act except (i) to the Company or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (i) and (iii) in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates (if any) or any book-entry shares representing the Shares delivered at the Closing shall contain a legend or restrictive notation to such effect. The Subscriber acknowledges that the Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. The Subscriber understands and agrees that the Shares, until registered under an effective registration statement, will be subject to transfer restrictions and, as a result of these transfer restrictions, the Subscriber may not be able to readily resell the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. The Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Shares.
(c) The Subscriber understands and agrees that the Subscriber is purchasing Shares directly from the Company. The Subscriber further acknowledges that there have been no representations, warranties, covenants and agreements made to the Subscriber by the Company, or any of its officers or directors, expressly (other than those representations, warranties, covenants and agreements included in this Subscription Agreement) or by implication.
(d) The Subscriber’s acquisition and holding of the Shares will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.
(e)The Subscriber acknowledges and agrees that the Subscriber has received such information as the Subscriber deems necessary in order to make an investment decision with respect to the Shares. Without limiting the generality of the foregoing, the Subscriber acknowledges that it has received and carefully reviewed the following items (collectively, the “Disclosure Documents”): (i) the final prospectus of the Company, dated as of November 15, 2018 and filed with the U.S. Securities and Exchange Commission (the “SEC”) (File No. 333-227994) on November 16, 2018 (the “Prospectus”), (ii) each filing made by the Company with the SEC following the filing of the Prospectus through the date of this Agreement, and (iii) the Company’s Current Reports on Form 8-K filed with the SEC on October 16, 2020 and October 20, 2020, which contain the Transaction Agreement (including the First Amendment) and key ancillary documents and the updated investor presentation by the Company and the Target. The undersigned understands the significant extent to which certain of the disclosures contained in items (i) and (ii) above shall not apply following the Transaction Closing. The Subscriber represents and agrees that the Subscriber and the Subscriber’s professional advisor(s), if any, have had the full opportunity to ask the Company’s management questions, receive such answers and obtain such information as the Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares. The Subscriber has conducted its own investigation of the Company, the Target and the Shares and the Subscriber has made its own assessment and have satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Shares. The Subscriber further acknowledges that the information contained in the Disclosure Documents is subject to change, and that any changes to the information contained in the Disclosure Documents, including any changes based on updated information or changes in terms of the Transaction, shall in no way affect the Subscriber’s obligation to purchase the Shares hereunder, except as otherwise provided herein.
(f) The Subscriber became aware of this Offering of the Shares solely by means of direct contact between the Subscriber and the Company, the Placement Agents or a representative of the Company or the Placement Agents, and the Shares were offered to the Subscriber solely by direct contact between the Subscriber and the Company, the Placement Agents or a representative of the Company or the Placement Agents. The Subscriber acknowledges that the Company represents and warrants that the Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. The Subscriber has a substantive pre-existing relationship with the Company, Target or their respective affiliates or the Placement Agents for this Offering of the Shares. Neither the Subscriber, nor any of its directors, officers, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder, (i) to its knowledge, engaged in any general solicitation, or (ii) published any advertisement in connection with the Offering.
(g) The Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares, including those set forth in the Disclosure Documents and in the Company’s filings with the SEC. The Subscriber is able to fend for itself in the transactions contemplated herein and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and the Subscriber has sought such accounting, legal and tax advice as the Subscriber has considered necessary to make an informed investment decision.
(h) Alone, or together with any professional advisor(s), the Subscriber has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for the Subscriber and that the Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Subscriber’s investment in the Company. The Subscriber acknowledges specifically that a possibility of total loss exists.
(i) In making its decision to purchase the Shares, the Subscriber has relied solely upon independent investigation made by the Subscriber and the representations and warranties of the Company set forth herein. Without limiting the generality of the foregoing, the Subscriber has not relied on any statements or other information provided by the Placement Agents concerning the Company, Target or the Shares or the offer and sale of the Shares.
(j) The Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of this Offering of the Shares or made any findings or determination as to the fairness of this investment or the accuracy or adequacy of the Company SEC Filings.
(k) The Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation.
(l) The execution, delivery and performance by the Subscriber of this Subscription Agreement are within the powers of the Subscriber, have been duly authorized and will not constitute or result in a breach or default under or conflict with any federal or state statute, rule or regulation applicable to the Subscriber, any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Subscriber is a party or by which the Subscriber is bound, and, if the Subscriber is not an individual, will not violate any provisions of the Subscriber’s charter documents, including its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature on this Subscription Agreement is genuine, and the signatory, if the Subscriber is an individual, has legal competence and capacity to execute the same or, if the Subscriber is not an individual the signatory has been duly authorized to execute the same, and this Subscription Agreement constitutes a legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.
(m) Neither the due diligence investigation conducted by the Subscriber in connection with making its decision to acquire the Shares nor any representations and warranties made by the Subscriber herein shall modify, amend or affect the Subscriber’s right to rely on the truth, accuracy and completeness of the Company’s representations and warranties contained herein.
(n)The Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program, (ii) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a “Prohibited Investor”). The Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that the Subscriber is permitted to do so under applicable law. If the Subscriber is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), the Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by the Subscriber and used to purchase the Shares were legally derived.
(o)As of the date hereof and as of the date of the Closing, neither the Subscriber, nor, to the extent it has them, any of its Rule 506(d) Related Parties (collectively with the Subscriber, the “Covered Persons”), are subject to any of the “Bad Actor” disqualifications described in Rule 506(d) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Subscriber has exercised reasonable care to determine whether any Covered Person is subject to a Disqualification Event. The acquisition of Shares by the Subscriber will not subject the Company to any Disqualification Event. “Rule 506(d) Related Parties” shall mean a person that is a beneficial owner of Subscriber’s securities for purposes of Rule 506(d) under the Securities Act.
(p) No disclosure or offering document has been prepared by the Placement Agents in connection with the offer and sale of the Shares. The Placement Agents and each of their respective members, directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Company or the Shares or the accuracy, completeness or adequacy of any information supplied to the Subscriber by the Company. In connection with the issue and purchase of the Shares, the Placement Agents have not acted as the Subscriber’s financial advisor or fiduciary.
(q) The Subscriber acknowledges its obligations under applicable securities laws with respect to the treatment of non-public information relating to the Company.
6.Registration Rights.
(a)The Company agrees that, within thirty (30) calendar days after the Transaction Closing, the Company will file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and the Company shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day following the filing date (or the 90th calendar day if the SEC notifies the Company (orally or in writing) that it will “review” the Registration Statement) and (ii) the 10th business day after the date the Company is notified (orally or in writing) by the SEC that the Registration Statement will not be “reviewed” or will not be subject to further review.
(b)The Company agrees that the Company will cause such Registration Statement or another registration statement (which may be a “shelf” registration statement) to remain effective until the earlier of (i) two years from the issuance of the Shares, (ii) the date on which the Subscriber ceases to hold the Shares covered by such Registration Statement, or (iii) on the first date on which the Subscriber can sell all of its Shares (or shares received in exchange therefor) under Rule 144 of the Securities Act without limitation as to the manner of sale or the amount of such securities that may be sold. The Subscriber agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Shares to the Company (or its successor) upon request to assist the Company in making the determination described above. The Company’s obligations to include the Shares in the Registration Statement are contingent upon the Subscriber furnishing in writing to the Company such information regarding the Subscriber, the securities of the Company held by the Subscriber and the intended method of disposition of the Shares as shall be reasonably requested by the Company to effect the registration of the Shares, and shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations. If the SEC prevents the Company from including any or all of the Shares proposed to be registered for resale under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Company’s securities by the applicable shareholders or otherwise, (i) such Registration Statement shall register for resale such number of Company securities which is equal to the maximum number of Company securities as is permitted by the SEC and (ii) the number of Company securities to be registered for each selling shareholder named in the Registration Statement shall be reduced pro rata among all such selling shareholders. The Company will provide a draft of the Registration Statement to the Subscriber for review reasonably in advance of filing the Registration Statement. In no event shall the Subscriber be identified as a statutory underwriter in the Registration Statement unless requested by the SEC; provided, that if the SEC requests that the Subscriber be identified as a statutory underwriter in the Registration Statement, the Subscriber will have an opportunity to withdraw from the Registration Statement.
(c)The Company may delay filing or suspend the use of any such registration statement if it determines that in order for the registration statement to not contain a material misstatement or omission, an amendment thereto would be needed, or if such filing or use could materially affect a bona fide business or financing transaction of the Company or would require premature disclosure of information that could materially adversely affect the Company (each such circumstance, a “Suspension Event”); provided, that the Company shall use commercially reasonable efforts to make such registration statement available for the sale by the Subscriber of such securities as soon as practicable thereafter. Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Subscriber agrees that it will (i) immediately discontinue offers and sales of the Shares under the Registration Statement until the Subscriber receives (A) (x) copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and (y) notice that any post-effective amendment has become effective or (B) notice from the Company that it may resume such offers and sales, and (ii) maintain the confidentiality of any information included in such written notice delivered by the Company unless otherwise required by applicable law. If so directed by the Company, the Subscriber will deliver to the Company or destroy all copies of the prospectus covering the Shares in the Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Shares shall not apply to (i) the extent the Subscriber is required to retain a copy of such prospectus (A) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document retention policy or (ii) copies stored electronically on archival servers as a result of automatic data back-up.
(d)From and after the Closing, the Company agrees to indemnify and hold Subscriber, each person, if any, who controls Subscriber within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of Subscriber within the meaning of Rule 405 under the Securities Act, and each broker, placement agent or sales agent to or through which Subscriber effects or executes the resale of any Shares (collectively, the “Subscriber Indemnified Parties”), harmless against any and all losses, claims, damages and liabilities (including any out-of-pocket legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (collectively, “Losses”) incurred by the Subscriber Indemnified Parties directly that are caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any other registration statement which covers the Shares (including, in each case, the prospectus contained therein) or any amendment thereof (including the prospectus contained therein) or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made), not misleading, except to the extent insofar as the same are caused by or contained in any information or affidavit so furnished in writing to the Company by Subscriber expressly for use therein. Notwithstanding the forgoing, the Company’s indemnification obligations shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned).
(e)From and after the Closing, the Subscriber agrees to, severally and not jointly with any other selling shareholders using the applicable registration statement, indemnify and hold the Company, and the officers, employees, directors, partners, members, attorneys and agents of the Company, each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of the Company within the meaning of Rule 405 under the Securities Act (collectively, the “Company Indemnified Parties”), harmless against any and all Losses incurred by the Company Indemnified Parties directly that are caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any other registration statement which covers the Shares (including, in each case, the prospectus contained therein) or any amendment thereof (including the prospectus contained therein) or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made), not misleading, to the extent insofar as the same are caused by or contained in any information or affidavit so furnished in writing to the Company by Subscriber expressly for use therein. Notwithstanding the forgoing, the Subscriber’s indemnification obligations shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the prior written consent of the Subscriber (which consent shall not be unreasonably withheld, delayed or conditioned).
7.Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of: (a) the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement; (b) such date and time as the Transaction Agreement is terminated in accordance with its terms; or (c) written notice by either party to the other party to terminate this Subscription Agreement if the transactions contemplated by this Subscription Agreement are not consummated on or prior to February 22, 2021; provided that (i) nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Company shall notify the Subscriber of the termination of the Transaction Agreement promptly after the termination of such agreement and (ii) the provisions of Sections 7 through 10 of this Subscription Agreement will survive any termination of this Subscription Agreement and continue indefinitely.
8.Trust Account Waiver. The Subscriber hereby represents and warrants that it has read the Prospectus and understands that the Company has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and the overallotment shares acquired by its underwriters and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the Company’s public stockholders (including overallotment shares acquired by the Company’s underwriters, the “Public Stockholders”), and that, except as otherwise described in the Prospectus, the Company may disburse monies from the Trust Account only: (a) to the Public Stockholders in the event they elect to redeem their Company shares in connection with the consummation of the Company’s initial business combination (as such term is used in the Prospectus) (the “Business Combination”) or in connection with an extension of its deadline to consummate a Business Combination, (b) to the Public Stockholders if the Company fails to consummate a Business Combination within 18 months after the closing of the IPO, which has since been extended to February 22, 2021, and is subject to further extension by amendment to the Company’s organizational documents, (c) with respect to any interest earned on the amounts held in the Trust Account, amounts necessary to pay for any taxes and up to $100,000 in dissolution expenses, or (d) to the Company after or concurrently with the consummation of a Business Combination. For and in consideration of the Company entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Subscriber hereby agrees on behalf of itself and its affiliates that, notwithstanding anything to the contrary in this Subscription Agreement, neither the Subscriber nor any of its affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Subscription Agreement or any proposed or actual business relationship between the Company or its Representatives, on the one hand, and the Subscriber or its Representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”). The Subscriber on behalf of itself and its affiliates hereby irrevocably waives any Released Claims that the Subscriber or any of its affiliates may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Company or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Subscription Agreement or any other agreement with the Company or its affiliates). The Subscriber agrees and acknowledges that such irrevocable waiver is material to this Subscription Agreement and specifically relied upon by the Company and its affiliates to induce the Company to enter in this Subscription Agreement, and the Subscriber further intends and understands such waiver to be valid, binding and enforceable against the Subscriber and each of its affiliates under applicable law. To the extent the Subscriber or any of its affiliates commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Company or its Representatives, which proceeding seeks, in whole or in part, monetary relief against the Company or its Representatives, the Subscriber hereby acknowledges and agrees that the Subscriber’s and its affiliates’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit the Subscriber or its affiliates (or any person claiming on any of their behalves or in lieu of any of them) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. In the event the Subscriber or any of its affiliates commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Company or its Representatives, which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom) or the Public Stockholders, whether in the form of money damages or injunctive relief, the Company and its Representatives, as applicable, shall be entitled to recover from the Subscriber and its affiliates the associated legal fees and costs in connection with any such action in the event the Company or its Representatives, as applicable, prevails in such action or proceeding. Notwithstanding the foregoing, this Section 8, shall not affect any rights of Subscriber or its affiliates as a Public Stockholder to receive distributions from the Trust Account in its capacity as a Public Stockholder. For purposes of this Subscription Agreement, “Representatives” with respect to any person shall mean such person’s affiliates and its and its affiliate’s respective directors, officers, employees, consultants, advisors, agents and other representatives. Notwithstanding anything to the contrary contained in this Subscription Agreement, the provisions of this Section 8 shall survive the Closing or any termination of this Subscription Agreement and last indefinitely.
9.Miscellaneous.
(a) Neither this Subscription Agreement nor any rights that may accrue to the Subscriber hereunder (other than the Shares acquired hereunder, if any, subject to applicable securities laws) may be transferred or assigned by the Subscriber without the prior written consent of the Company, and any purported transfer or assignment without such consent shall be null and void ab initio.
(b) The Company may request from the Subscriber such additional information as the Company may reasonably deem necessary to evaluate the eligibility of the Subscriber to acquire the Shares, and the Subscriber shall provide such information to the Company as may be reasonably requested, it being understood by the Subscriber that the Company may without any liability hereunder reject the Subscriber’s subscription prior to the Closing Date in the event the Subscriber fails to provide such additional information requested by the Company to evaluate the Subscriber’s eligibility or the Company determines that the Subscriber is not eligible.
(c) The Subscriber acknowledges that the Company, the Placement Agents, the Target and others will rely on the acknowledgments, understandings, agreements, representations and warranties of the Subscriber contained in this Subscription Agreement as if they were made directly to them. Prior to the Closing, the Subscriber agrees to promptly notify the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate. The Subscriber agrees that the purchase by the Subscriber of Shares from the Company will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties herein (as modified by any such notice) by the Subscriber as of the time of such purchase. The Subscriber acknowledges and agrees that each of the Placement Agents and the Target is a third-party beneficiary of the representations, warranties and covenants of the Subscriber contained in Section 5 of this Subscription Agreement, and that the Target is otherwise an express third party beneficiary of this Agreement, entitled to enforce the terms hereof against Subscriber as if it were an original party hereto. Except as expressly set forth herein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successor and assigns.
(d) The Company is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby to the extent required by law or regulatory bodies or applicable stock exchange requirements. The Subscriber shall not issue any press release or make any other similar public statement with respect to the transactions contemplated hereby without the prior written consent of the Company (such consent not to be unreasonably withheld or delayed).
(e) All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
(f) This Subscription Agreement may not be amended, modified, waived or terminated except by an instrument in writing, signed by the party against whom enforcement of such modification, waiver, or termination is sought.
(g) This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof (other than any confidentiality agreement entered into by the Company and the Subscriber in connection with the Offering).
(h) This Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
(i) If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
(j) This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(k) The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.
(l)THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS SUBSCRIPTION AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
(m) All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered by facsimile or email, with affirmative confirmation of receipt, (iii) one business day after being sent, if sent by reputable, internationally recognized overnight courier service or (iv) three (3) business days after being mailed, if sent by registered or certified mail, prepaid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):
If to the Company, to: AMCI Acquisition Corp. 1501 Ligonier Street, Suite 370 Latrobe, PA 15601 Attn: William Hunter Telephone No.: (203) 856-7285 Email: whunter@amcigroup.com | with copies (which shall not constitute notice) to: Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, NY 10105 Attn: Stuart Neuhauser, Esq. Matthew A. Gray, Esq. Email: sneuhauser@egsllp.com mgray@egsllp.com Telephone No.: (212) 370-1300 Facsimile No.: (212) 370-7889 and Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036-8704 Attn: Carl Marcellino, Esq. Paul D. Tropp, Esq. Facsimile No.: (212) 596-9090 Telephone No.: (212) 841-0623 (212) 596-9515 Email: Carl.Marcellino@ropesgray.com Paul.Tropp@ropesgray.com |
Notice to the Subscriber shall be given to the address underneath the Subscriber’s name on the signature page hereto. |
(n) The headings set forth in this Subscription Agreement are for convenience of reference only and shall not be used in interpreting this Subscription Agreement. In this Subscription Agreement, unless the context otherwise requires: (i) whenever required by the context, any pronoun used in this Subscription Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; and (iii) the words “herein”, “hereto” and “hereby” and other words of similar import in this Subscription Agreement shall be deemed in each case to refer to this Subscription Agreement as a whole and not to any particular portion of this Subscription Agreement. As used in this Subscription Agreement, the term: (x) “business day” shall mean any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York are authorized to close for business (excluding as a result of “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems, including for wire transfers, of commercially banking institutions in New York, New York are generally open for use by customers on such day); (y) “person” shall refer to any individual, corporation, partnership, trust, limited liability company or other entity or association, including any governmental or regulatory body, whether acting in an individual, fiduciary or any other capacity; and (z) “affiliate” shall mean, with respect to any specified person, any other person or group of persons acting together that, directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with such specified person (where the term “control” (and any correlative terms) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities, by contract or otherwise). For the avoidance of doubt, any reference in this Subscription Agreement to an affiliate of the Company will include the Company’s sponsor, AMCI Sponsor, LLC.
(o) At Closing, the parties hereto shall execute and deliver such additional documents and take such additional actions as the parties may reasonably deem practical and necessary in order to consummate the Offering as contemplated by this Subscription Agreement.
10.Non-Reliance and Exculpation. The Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person other than the statements, representations and warranties contained in this Subscription Agreement in making its investment or decision to invest in the Company. The Subscriber agrees that neither (i) any other purchaser pursuant to other subscription agreements entered into in connection with the Offering (including the controlling persons, members, officers, directors, partners, agents, or employees of any such other purchaser) nor (ii) the Placement Agents, their respective affiliates or any of their or their affiliates’ respective control persons, officers, directors or employees, shall be liable to the Subscriber pursuant to this Subscription Agreement for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares. The Subscriber acknowledges that neither the Placement Agents, nor their respective Representatives (a) shall be liable to the Subscriber for any improper payment made in accordance with the information provided by the Company; (b) makes any representation or warranty, or has any responsibilities as to the validity, accuracy, value or genuineness of any information, certificates or documentation delivered by or on behalf of the Company pursuant to this Agreement or the Transaction Agreement (together with any related documents, the “Transaction Documents”); or (c) shall be liable to the Subscriber (x) for any action taken, suffered or omitted by any of them in good faith and reasonably believed to be authorized or within the discretion or rights or powers conferred upon it by this Agreement or any Transaction Document or (y) for anything which any of them may do or refrain from doing in connection with this Agreement or any Transaction Document, except for their gross negligence, willful misconduct or bad faith.
11.Cutback. Notwithstanding anything contrary herein, the Company, in its sole discretion, shall have the right to reduce the number of Shares to be issued to the Subscriber pursuant to this Subscription Agreement, as long as the Company is reducing the number of shares to be issued and sold to all investors pursuant to the other subscription agreements, on a pro rata basis. The Company or the Placement Agents shall notify the Subscriber in writing at least two (2) business days in advance of Closing if the Company elects to reduce the number of Shares to be issued and sold to the Subscriber pursuant to this Section 11.
{SIGNATURE PAGES FOLLOW}
IN WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| | AMCI Acquisition Corp. |
| | |
| By: | | |
| | Name: |
| | Title: |
{Signature Page to Subscription Agreement}
{SUBSCRIBER SIGNATURE PAGE TO THE SUBSCRIPTION AGREEMENT}
IN WITNESS WHEREOF, the undersigned has caused this Subscription Agreement to be duly executed by its authorized signatory as of the date first indicated above.
Signature of Authorized Signatory of Subscriber: | | |
Name of Authorized Signatory: | | |
Title of Authorized Signatory: | | |
Address for Notice to Subscriber:
Address for Delivery of Shares to Subscriber (if not same as address for notice):
Subscriber status (mark one): ☐ U.S. investor ☐ Non-U.S. investor
Exhibit A
Accredited Investor Questionnaire
Capitalized terms used and not defined in this Exhibit A shall have the meanings given in the Subscription Agreement to which this Exhibit A is attached.
The undersigned represents and warrants that the undersigned is an “accredited investor” (an “Accredited Investor”) as such term is defined in Rule 501(a) of Regulation D under the U.S. Securities Act of 1933, as amended (the “Securities Act”), for one or moreof the reasons specified below (please check all boxes that apply):
| | (i) | A natural person whose net worth, either individually or jointly with such person’s spouse or spousal equivalent, at the time of the Subscriber’s purchase, exceeds $1,000,000; |
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| | | The term “net worth” means the excess of total assets over total liabilities (including personal and real property, but excluding the estimated fair market value of the Subscriber’s primary home). For the purposes of calculating joint net worth with the person’s spouse or spousal equivalent, joint net worth can be the aggregate net worth of the Subscriber and spouse or spousal equivalent; assets need not be held jointly to be included in the calculation. There is no requirement that securities be purchased jointly. A spousal equivalent means a cohabitant occupying a relationship generally equivalent to a spouse. |
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| | (ii) | A natural person who had an individual income in excess of $200,000, or joint income with the Subscriber’s spouse or spousal equivalent in excess of $300,000, in each of the two most recent years and reasonably expects to reach the same income level in the current year; |
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| | | In determining individual “income,” the Subscriber should add to the Subscriber’s individual taxable adjusted gross income (exclusive of any spousal or spousal equivalent income) any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, alimony payments, and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income. |
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| | (iii) | A director or executive officer of the Company; |
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| | (iv) | A natural person holding in good standing with one or more professional certifications or designations or other credentials from an accredited educational institution that the U.S. Securities Exchange Commission (“SEC”) has designated as qualifying an individual for accredited investor status; |
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| | | The SEC has designated the General Securities Representative license (Series 7), the Private Securities Offering Representative license (Series 82) and the Licensed Investment Adviser Representative (Series 65) as the initial certifications that qualify for accredited investor status. |
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| | (v) | A natural person who is a “knowledgeable employee” as defined in Rule 3c-5(a)(4) under the Investment Company Act of 1940 (the “Investment Company Act”), of the issuer of the securities being offered or sold where the issuer would be an investment company, as defined in section 3 of the Investment Company Act, but for the exclusion provided by either section 3(c)(1) or section 3(c)(7) of the Investment Company Act; |
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| | (vi) | A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity; |
| | (vii) | A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); |
| | (viii) | An investment adviser registered pursuant to section 203 of the Investment Advisers Act of 1940 (the “Investment Advisers Act”) or registered pursuant to the laws of a state, or an investment adviser relying on the exemption from registering with the SEC under the section 203(l) or (m) of the Investment Advisers Act; |
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| | (ix) | An insurance company as defined in section 2(13) of the Exchange Act; |
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| | (x) | An investment company registered under the Investment Company Act or a business development company as defined in Section 2(a)(48) of that Act; |
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| | (xi) | A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; |
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| | (xii) | A Rural Business Investment Company as defined in section 384A of the Consolidated Farm and Rural Development Act; |
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| | (xiii) | A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state, or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
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| | (xiv) | An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors; |
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| | (xv) | A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; |
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| | (xvi) | An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, business trust, partnership, or limited liability company, or any other entity not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000; |
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| | (xvii) | A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company; |
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| | (xviii) | A “family office” as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act with assets under management in excess of $5,000,000 that is not formed for the specific purpose of acquiring the securities offered and whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; |
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| | (xix) | A “family client” as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act, of a family office meeting the requirements set forth in (xviii) and whose prospective investment in the issuer is directed by a person from a family office that is capable of evaluating the merits and risks of the prospective investment; |
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| | (xx) | A “qualified institutional buyer” as defined in Rule 144A under the Securities Act; |
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| | (xxi) | An entity, of a type not listed above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; and/or |
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| | (xxii) | An entity in which all of the equity owners qualify as an accredited investor under any of the above subparagraphs. |
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| | (xxiii) | The Subscriber does not qualify under any of the investor categories set forth in (i) through (xxii) above. |
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2.1 | Type of the Subscriber. Indicate the form of entity of the Subscriber: |
| ☐ | Individual | ☐ | Limited Partnership |
| ☐ | Corporation | ☐ | General Partnership |
| ☐ | Revocable Trust | ☐ | Limited Liability Company |
| ☐ | Other Type of Trust (indicate type): | | | |
| ☐ | Other (indicate form of organization): | | | |
2.2.1 | If the Subscriber is not an individual, indicate the approximate date the Subscriber entity was formed: _____________________. |
2.2.2 | If the Subscriber is not an individual, initial the line below which correctly describes the application of the following statement to the Subscriber’s situation: the Subscriber (x) was not organized or reorganized for the specific purpose of acquiring the Securities and (y) has made investments prior to the date hereof, and each beneficial owner thereof has and will share in the investment in proportion to his or her ownership interest in the Subscriber. |
If the “False” line is initialed, each person participating in the entity will be required to fill out a Subscription Agreement.
| Subscriber: |
| |
| Subscriber Name: | |
| Signatory Name: |
| Signatory Title: |
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. | Indemnification of Directors and Officers. |
Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act.
AMCI’s amended and restated certificate of incorporation provides for indemnification of its directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law, and AMCI’s bylaws provide for indemnification of its directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law.
In addition, effective upon the consummation of the Business Combination, as defined in Part I of this registration statement, AMCI has entered or will enter into indemnification agreements with directors, officers, and some employees containing provisions which are in some respects broader than the specific indemnification provisions contained in the Delaware General Corporation Law. The indemnification agreements will require AMCI, among other things, to indemnify its directors against certain liabilities that may arise by reason of their status or service as directors and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Item 21. | Exhibits and Financial Statement Schedules. |
| (a) | The following exhibits are filed as part of this Registration Statement: |
EXHIBIT INDEX
| | Underwriting Agreement dated November 15, 2018, by and among the Company and Jefferies LLC. (1)
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2.1 | | Plan of Merger, Agreement, dated as of October 12, 2020, betweenby and among the Company, AmciAMCI, Sponsor, LLC, in its capacity as purchaser representative,Purchaser Representative thereunder, Advent and Vassilios Gregoriou in his capacity as Seller Representative thereunder (included as Annex A-1 to thisthe proxy statement/prospectus/consent solicitation)solicitation which is part of this Registration Statement). |
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| | First Amendment No. 1 to Agreement and Plan of Merger, Agreement, dated as of October 19, 2020, betweenby and among the Company, AmciAMCI, Sponsor, LLC, in its capacity as purchaser representative,the Purchaser Representative thereunder, Advent, and Vassilios Gregoriou in his capacity as Seller Representative.,Representative thereunder (included as Annex A-2 to the proxy statement/prospectus/consent solicitation which is part of this Registration Statement). |
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| | Second Amendment to Agreement and Plan of Merger, dated as of December 30, 2020, by and among AMCI, Sponsor, in its capacity as the Purchaser Representative thereunder, Advent, and Vassilios Gregoriou in his capacity as Seller Representative thereunder (included as Annex A-3 to the proxy statement/prospectus/consent solicitation which is part of this Registration Statement). |
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| | Amended and Restated Certificate of Incorporation. (1)Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-38742), filed by the Registrant on November 20, 2018 |
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| | Bylaws. (2)
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3.3 | | SecondFirst Amendment to Amended and Restated Certificate of Incorporation (included as Annex Bof the Registrant (incorporated by reference to this proxy statement/prospectus/consent solicitation)Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-38742), filed by the Registrant on May 21, 2020. |
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| | Second Amendment to Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-38742), filed by the Registrant on October 19, 2020. |
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| | Specimen Unit Certificate. (3)Form of Second Amended and Restated Certificate of Incorporation of AMCI to become effective in connection with the Business Combination (included as Annex B to the proxy statement/prospectus/consent solicitation which is part of this Registration Statement).
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| | Form of Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to the Registration Statement on Form S-1 (File No. 333-227994), filed by the Registrant on October 25, 2018. |
| | Warrant Agreement, dated November 15, 2018, by and between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-38742), filed by the Registrant on November 20, 2018). |
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| | Specimen Common Stock Certificate. (3) |
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| | Specimen Warrant Certificate.(3) |
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| | Warrant Agreement, dated November 15, 2018, by and between Continental Stock TransferOpinion of Ellenoff Grossman & Trust Company and the Company. (1)
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4.5 | | Description of Capital Stock of AMCI Acquisition Corp.Schole LLP. |
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| | Promissory Note, dated as of June 25, 2018, issued to AMCIthe Sponsor LLC (2) |
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| | Letter Agreement, dated November 15, 2018, by and between the Company,Registrant, its officers, directors and the sponsor. Sponsor. (1) |
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| | Investment Management Trust Account Agreement, dated November 15, 2018, by and between the Registrant and Continental Stock Transfer & Trust Company, LLC and the Company. (1) as trustee. |
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| | Registration Rights Agreement, dated November 15, 2018, by and among AMCI, the Company, AMCI Sponsor LLC and the holders party thereto. (1) |
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| | Securities Subscription Agreement, dated June 25, 2018, between AMCI and the Company and AMCI Sponsor LLC Sponsor. (3) |
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| | Warrants Purchase Agreement, dated November 15, 2018, between AMCI and the Company and AMCI Sponsor LLC Sponsor. (1) |
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| | Form of Indemnity Agreement. (2) |
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| | Contingent Forward Purchase Contract, dated November 15, 2018, between AMCI and the Company and AMCI Sponsor LLC Sponsor. (4) |
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| | Form of 20202021 equity incentive plan (included as Annex C to thisthe proxy statement/prospectus/consent solicitation)solicitation which is part of this Registration Statement) |
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23.1 | | Ernst & Young (Hellas) Certified Auditors Accountants S.A.Promissory Note, dated November 20, 2020, issued to the Sponsor.** |
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| | Promissory Note, dated May 20, 2020, issued to Orion. |
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| | Orion Note Amendment, dated as of October 12, 2020, by and between AMCI and Orion. |
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| | Form of PIPE Subscription Agreement (included as Annex E to the proxy statement/prospectus/consent solicitation which is part of this Registration Statement) |
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| | Consent of Ernst & Young (Hellas) Certified Auditors Accountants S.A |
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| | Consent of Marcum LLP*LLP |
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| | Consent of Ellenoff Grossman & Schole LLP (included in Exhibit 5.1) |
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| | Power of Attorney (included as part of the signature page hereof) |
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| | Consent of Vassilios Gregoriou to be named as a director. |
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| | Consent of Christos Kaskavelis to be named as a director. |
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| | Consent of Katherine E. Fleming to be named as a director. |
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| | Consent of Anggelos Skutaris to be named as a director. |
| | Consent of Katrina Fritz to be named as a director. |
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| | Section 262 of the DGCL (included as Annex D to the proxy statement/prospectus/consent solicitation which is part of this Registration Statement) |
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101 | | The following financial information from AMCI Acquisition Corp. Form S-4 filed with the SEC, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Changes in Stockholders’ Equity; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. |
(1) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on November 20, 2018. |
(2) | Incorporated by reference to the Company’s Form S-1, filed with the SEC on October 25, 2018. |
(3) | Incorporated by reference to the Company’s Form S-1/A, filed with the SEC on November 9, 2018. |
(4) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on November 27, 2018. |
| (a) | The undersigned registrant hereby undertakes as follows: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| i. | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| ii. | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
| iii. | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the IPO of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the IPO. |
| (4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
| (5) | That, for the purpose of determining any liability under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| i. | Any preliminary prospectus or prospectus of the undersigned registrant relating to the IPO required to be filed pursuant to Rule 424; |
| ii. | Any free writing prospectus relating to the IPO prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| iii. | The portion of any other free writing prospectus relating to the IPO containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| iv. | Any other communication that is an offer in the IPO made by the undersigned registrant to the purchaser. |
| (6) | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
| (7) | That every prospectus: (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the IPO of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (8) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the undersigned pursuant to the foregoing provisions, or otherwise, the undersigned has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the undersigned of expenses incurred or paid by a director, officer or controlling person of the undersigned in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the undersigned will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
| (b) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
| (c) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Latrobe, State of Pennsylvania, on December 31, 2020.
| | AMCI ACQUISITION CORP. |
| | |
| By: | /s/ WILLIAM HUNTER | |
| | William Hunter |
| | Chief Executive Officer |
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William Hunter and Hans J. Mende, each acting alone, as his true and lawful attorney-in-fact and agent, with full power to act alone, with full powers of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement on Form S-4, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or her substitute or resubstitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York,Latrobe, State of New York,Pennsylvania, on November 9,December 31, 2020.
| | AMCI ACQUISITION CORP. |
| | |
| By: | /S/ WILLIAM HUNTER |
| | William Hunter |
| | Chief Executive Officer (Principal Executive Officer) |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Name | | Position | | Date |
| | | | |
/s/ Hans J. Mende | | Executive Chairman of the Board of Directors | | November 9,December 31, 2020 |
Hans J. Mende | | | | |
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/s/ William Hunter | | President, Chief Executive Officer, Chief Financial Officer and Director | | November 9,December 31, 2020 |
William Hunter | | (Principal Executive, Financial and FinancialAccounting Officer) | | |
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/s/ Brian Beem | | Vice President | | November 9,December 31, 2020 |
Brian Beem | | | | |
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/s/ Nimesh Patel | | Vice President | | November 9,December 31, 2020 |
Nimesh Patel | | | | |
| | | | |
/s/ Gary Uren | | Director | | November 9,December 31, 2020 |
Gary Uren | | | | |
| | | | |
/s/ Lawrence M. Clark, Jr. | | Director | | November 9,December 31, 2020 |
Lawrence M. Clark, Jr. | | | | |
| | | | |
/s/ Jason Grant | | Director | | November 9,December 31, 2020 |
Jason Grant | | | | |