ORGANIZATION, BASIS OF PRESENTATION, BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES | (1) ORGANIZATION, BASIS OF PRESENTATION, BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES On October 10, 2021, Aspen Technology, Inc. ("AspenTech") and Emerson Electric Co. (“Emerson”) entered into a Transaction Agreement and Plan of Merger, as amended by Amendment No. 1, dated as of March 23, 2022, and Amendment No. 2, dated as of May 3, 2022 (as it may be further amended from time to time, the “Transaction Agreement”) to combine two of Emerson’s industrial software businesses, Open Systems International, Inc. and its Geological Simulation Software business (the “Emerson Industrial Software Business”), and AspenTech under a new publicly traded company. The Transaction Agreement provides for (i) Emerson contributing $6,014,000,000 in cash to Emersub CX, Inc., a wholly owned subsidiary of Emerson (“Newco” or "the Company"), in exchange for Newco common stock, (ii) EMR Worldwide Inc., a wholly owned subsidiary of Emerson (“Emerson Sub”), contributing the Emerson Industrial Software Business, to Newco in exchange for Newco common stock, (iii) the merger of Emersub CXI, Inc., a wholly owned subsidiary of Newco (“Merger Sub”), with and into AspenTech, with AspenTech being the surviving corporation and becoming a wholly owned subsidiary of Newco (the “Merger”) and (iv) as a result of the Merger, each issued and outstanding share of AspenTech common stock (subject to certain exceptions) converting into the right to receive both 0.42 shares of Newco common stock and a per share cash consideration, calculated by dividing $6,014,000,000 by the number of outstanding shares of AspenTech common stock as of the closing of the transaction (the “Closing”) on a fully diluted basis (the foregoing and the other transactions contemplated by the Transaction Agreement collectively, the “Transactions”). This Form 10-Q is reporting the shell company results for Newco for the three and six months ended March 31, 2022. Since the date of its incorporation, Newco has not engaged in any activities other than as contemplated by the Transaction Agreement and related agreements (the “Transaction Documents”). A special meeting of Aspen Technology, Inc. stockholders will be held on May 16, 2022 for the following purposes: 1. To consider and vote on a proposal to adopt the Transaction Agreement and Plan of Merger, dated October 10, 2021, as amended by Amendment No. 1, dated as of March 23, 2022, and as amended by Amendment No. 2, dated as of May 3, 2022 among AspenTech, Emerson, Emerson Sub, Newco and Emersub CXI, Inc., a wholly owned subsidiary of Newco, and approve the transactions contemplated by the Transaction Agreement, including the merger of Merger Sub with and into AspenTech; 2. To consider and vote on a proposal to approve, on a non-binding, advisory basis, the compensation that will or may become payable to AspenTech’s named executive officers in connection with the Transactions; 3. To consider and vote on a proposal to approve the adjournment of the special meeting if AspenTech determines that it is necessary or advisable to permit further solicitation of proxies in the event there are not sufficient votes at the time of the special meeting to adopt the Transaction Agreement; and 4. To transact any other business properly brought before the special meeting and any adjournment or postponement thereof, in each case, by or at the direction of the AspenTech board of directors. Only stockholders of record on the books of AspenTech at the close of business on April 14, 2022, will be entitled to vote at the special meeting or any adjournment or postponement thereof. Upon the Closing of the Transactions, the Emerson Industrial Software Business will be considered to be the "acquirer" for accounting purposes and AspenTech will be treated as the "acquired" company. For further information regarding the parties to the Transactions and the details of the Transactions, see Note 2. Events subsequent to March 31, 2022, including the completion of the Transactions, are not reflected in the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements of Newco have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S." and such principles, "U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. All intercompany accounts and transactions have been eliminated. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of Newco for the periods presented and are not indicative of the results that may be expected for a full year. At the Closing, Newco will change its registered name with the Secretary of State of Delaware to “Aspen Technology, Inc.” (and thereafter referred to as “New AspenTech”). Immediately following the Closing, Emerson will beneficially own 55% of the outstanding shares of New AspenTech common stock (on a fully diluted basis) and former AspenTech stockholders will own the remaining outstanding shares of New AspenTech common stock. Following the Closing, AspenTech common stock will be delisted from NASDAQ and deregistered under the Securities Exchange Act of 1934, and cease to be publicly traded. New AspenTech and its subsidiaries will operate under AspenTech’s current name “Aspen Technology, Inc.” and New AspenTech common stock will be traded on NASDAQ under AspenTech’s current stock ticker symbol “AZPN”. |