Cayman Islands* |
6770 |
98-1571400 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Ariel J. Deckelbaum, Esq. Raphael M. Russo, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 (212) 373-3000 |
Steven J. Gavin, Esq. Matthew F. Bergmann, Esq. Winston & Strawn LLP 35 W. Wacker Drive Chicago, IL 60601 (312) 558-5600 |
Ryan Martin Fathom Holdco, LLC 1050 Walnut Ridge Drive Hartland, WI 53209 (262) 367-8254 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
* | Immediately prior to the consummation of the Business Combination described in the proxy statement/prospectus, Altimar Acquisition Corp. II intends to effect a deregistration under the Cayman Islands Companies Act (As Revised) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which Altimar Acquisition Corp. II’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the “Domestication”). All securities being registered will be issued by the continuing entity following the Domestication, which will be renamed Fathom Digital Manufacturing Corporation (“Fathom”) in connection with the Business Combination, as further described in the proxy statement/prospectus. As used in this proxy statement/prospectus, the term “registrant” refers to Altimar Acquisition Corp. II (a Cayman Islands exempted company), prior to the Domestication, and to Fathom (a Delaware corporation), following the Domestication. |
| ||||||||
Title of Each Class of Securities to be Registered |
Amount to be Registered(4) |
Proposed Maximum Offering Price Per Unit |
Proposed Maximum Aggregate Offering Price |
Amount of Registration Fee | ||||
Class A common stock(1) |
43,125,000 |
$9.92(5) |
$1,714,253,000(6) |
$183,463.15(8) | ||||
Class A common stock(2) |
130,293,750 |
|||||||
Warrants to purchase Class A common stock(3) |
18,525,000 |
N/A |
N/A(7) |
N/A(9) | ||||
Total |
$1,714,253,000 |
$183,463.15(10) | ||||||
| ||||||||
|
1. |
The number of shares of Class A common stock of Fathom being registered includes (i) those relating to 34,500,000 Class A ordinary shares that were sold in connection with Altimar Acquisition Corp. II’s (“Altimar II”) initial public offering pursuant to its Registration Statement on Form S-1 (File No. 333-252260), each of which will automatically convert into shares of Fathom Class A common stock in the Domestication (as defined herein) and remain outstanding following the Business Combination and (ii) 8,625,000 shares of Fathom Class A common stock representing 8,625,000 shares of Altimar II Class B ordinary shares held by the Altimar II Founders (as defined herein) that will automatically convert into 8,625,000 shares of Fathom Class C common stock, which shares will then automatically convert into 8,625,000 shares of Fathom Class A common stock prior to pro rata forfeiture by the Altimar II Founders of an aggregate of 2,587,500 of their shares of Class A common stock pursuant to the Forfeiture and Support Agreement as described herein. The 8,625,000 shares of Class A common stock identified above includes 1,267,500 shares of Class A common stock which constitute the Sponsor Earnout Shares (as defined herein). |
2. |
Represents the maximum number of shares of Class A common stock that may be issued as merger consideration consisting of: (i) 121,293,750 shares of Class A common stock that may be issued as consideration for the direct or indirect ownership interests in Fathom Holdco, LLC (“Fathom OpCo”) in connection with the Business Combination (including shares of Class A common stock that may be issued upon the exchange of units of Fathom OpCo that will be issued in the Business Combination (the “New Fathom Units”)) and (ii) 9,000,000 shares of Class A common stock to be issued as earnout consideration in the Business Combination (including shares of Class A common stock issuable upon the exchange of the portion of the earnout consideration to be issued initially in the form of New Fathom Units) and subject to vesting and forfeiture events under the terms of the documents governing the Business Combination. |
3. |
Calculated based on 8,625,000 redeemable warrants (the “Public Warrants”) and 9,900,000 redeemable warrants (the “Private Placement Warrants”), in each case issued by Altimar II, which will become warrants to purchase shares of Class A common stock in connection with the Business Combination. |
4. |
Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the “Securities Act”), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions. |
5. |
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f)(l) under the Securities Act, (i) based on $9.92, the average of the high and low prices of the Class A ordinary shares of Altimar II on the New York Stock Exchange (the “NYSE”) on November 12, 2021 with respect to 21,893,750 additional shares of Fathom class A common stock registered in connection with the November 16, 2021 filing of Amendment No. 2 of this Registration Statement on Form S-4, (ii) based on $9.88, the average of the high and low prices of the Class A ordinary shares of Altimar II on NYSE on September 13, 2021 with respect to 151,525,000 shares of Class A common stock previously registered in connection with the September 20, 2021 filing of this Registration Statement on Form S-4. Fathom will succeed Altimar II following the Business Combination described in this registration statement and the accompanying proxy statement/prospectus. |
6. |
The proposed maximum aggregate offering price consists of (i) $ 1,497,067,000 previously set forth in the September 20, 2021 filing of this Registration Statement on Form S-4 with respect to 151,525,000 shares of Class A common stock plus (ii) $217,186,000 with respect to 21,893,750 additional shares of Class A common stock registered in connection with the November 16, 2021 filing of Amendment No. 2 of this Registration Statement on Form S-4. |
7. |
The maximum number of Warrants are being simultaneously registered hereunder. |
8. |
Calculated by the sum of (i) the product of $217,186,000 and 0.0000927 (the SEC filing fee rate effective from October 1, 2021 to September 30, 2022) and (ii) the product of $1,497,067,000 and 0.0001091 (the SEC filing fee rate effective from October 1, 2020 to September 30, 2021). |
9. |
No separate registration fee is required pursuant to Rule 457(g) under the Securities Act. |
10. |
Previously paid. |
(i) | (a) hold public shares or (b) hold units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and |
(ii) | prior to 5:00 p.m., Eastern Time, on , 2021, (a) submit a written request to Continental Stock Transfer & Trust Company, Altimar II’s transfer agent (the “transfer agent”), that Altimar II redeem your public shares for cash and (b) deliver your public shares to the transfer agent, physically or electronically through Depository Trust Company (“DTC”). |
(a) | (i) All the cash proceeds from the Trust Account established for the purpose of holding the net proceeds of Altimar II’s initial public offering, net of any amounts paid to Altimar II’s shareholders that exercise their redemption rights in connection with the Business Combination, together with the proceeds from the PIPE Investment (as defined herein) (the “Available Cash Amount”), (ii) minus minus minus |
(b) | A number of shares of Class A common stock and newly issued Class A units of Fathom OpCo (the “New Fathom Units”) (together with one share of Class B common stock to be issued at par value for cash in respect of each New Fathom Units), to be allocated as set forth on a schedule, dated as of the Closing Date, setting forth (i) the name of each Continuing Fathom Unitholder and Fathom Blocker Owner, and (ii) the allocation of the Closing Cash Consideration, the Closing Seller Equity Consideration and the Earnout Shares at the Closing to each of the Continuing Fathom Unitholders and Fathom Blocker Owners (the “Allocation Schedule”), in an aggregate number (rounded up to the nearest whole share) equal to (a) the quotient of (i) the result of (A) $1,200,000,000 minus divided by |
(c) | An aggregate of 9,000,000 shares of earnout equity consideration (in Class A common stock and New Fathom Units) (the “Earnout Shares”). These earnout shares will vest in three equal tranches of 3,000,000 shares, with each tranche vesting at each of the following share price thresholds: $12.50, $15.00 and $20.00, in each case subject to the vesting and forfeiture provisions set forth in the Investor Rights Agreement (as defined herein) and Fathom OpCo’s Amended and Restated Limited Liability Company Agreement (the “Fathom Operating Agreement”). The earnout period will be five years from the date of the closing of the Business Combination. The achievement of the price threshold will be determined based on a VWAP for 20 trading days within any 30-trading day period or a change of control transaction of Fathom that implies the same per share valuation as the applicable price threshold. |
, 2021 | By Order of the Board of Directors, | |
| ||
Tom Wasserman Chief Executive Officer and Director |
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• | “Adjournment Proposal” |
• | “Adjusted EBITDA”, non-GAAP measure, means net losses before the impact of interest income or expense, income tax expense and depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, and certain other non-cash and non-core items |
• | “ Advisory Charter Proposals sub-proposals to take effect upon the Closing Date if the Organizational Documents Proposal is approved, consisting of Advisory Charter Proposal 4A, Advisory Charter Proposal 4B, Advisory Charter Proposal 4C, Advisory Charter Proposal 4D, Advisory Charter Proposal 4E, Advisory Charter Proposal 4F, Advisory Charter Proposal 4G, and Advisory Charter Proposal 4H. |
• | “Allocation Schedule” |
• | “Altimar II |
• | “Altimar II Founders” . |
• | “ Altimar II Stockholder Redemption |
• | “Amended and Restated Memorandum and Articles of Association” Annex K , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “ Available Cash Amount |
• | “Available Cash Amount Condition” |
• | “ Available Cash Shortfall |
• | “Balance Sheet Contribution” |
• | “ Backstop Investment |
• | “ Backstop Investors |
• | “ Backstop Formula |
• | “ Backstop Shares |
• | “BCA” or “Business Combination Agreement” Annex C , as the same may be further amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “Board” |
• | “Business Combination” |
• | “ Business Combination Issuance Proposal ” |
• | “Cayman Islands Companies Act” . |
• | “Centex” . |
• | “Class A common stock” . |
• | “Class B common stock” |
• | “Class C common ” . |
• | “Closing” . |
• | “Closing Cash Consideration” minus minus minus |
• | “Closing Seller Equity Consideration” minus divided by |
• | “common stock” refers to shares of the Class A common stock, the Class B common stock and the Class C common stock, collectively. |
• | “Company,” “our,” “we” or “us” . |
• | “Continuing Fathom Unitholders” |
• | “ CORE Backstop Agreement Annex L , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “CORE Investors” |
• | “ Dahlquist ” |
• | “Debt Pay-Down Amount” . |
• | “DGCL” . |
• | “dollars” or $ . |
• | “Domestication” Annex A , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms) consistent with the DGCL and changing the name and registered office of Altimar II. |
• | “Domestication Proposal” |
• | “Earnout Shares” |
• | “Equity Incentive Plan Proposal” |
• | “ESPP” Annex I , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “ESPP Proposal” |
• | “Fathom” . |
• | “Fathom Blocker Owners” |
• | “Fathom OpCo” |
• | “Fathom Operating Agreement” Annex G , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms). |
• | “Forfeiture and Support Agreement” |
• | “Forfeited Shares” |
• | “Founder shares” |
• | “GAAP” |
• | “ GPI |
• | “ Incodema |
• | “Investor Rights Agreement” Annex E , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “IPO . |
• | “Laser” |
• | “Legacy Fathom Owners” |
• | “ Majestic Metals |
• | “ Mark Two |
• | “Merger” |
• | “Merger Sub” |
• | “Micropulse West” |
• | “New Credit Agreement” |
• | “New Fathom Units” |
• | “ Newchem |
• | “NYSE” . |
• | “ Organizational Documents Proposal |
• | “Original PIPE Investment” . |
• | “Original PIPE Investors” . |
• | “Original PIPE Securities . |
• | “Original Subscription Agreements” Annex J , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “ PIPE Investment |
• | “ PIPE Investors |
• | “ PIPE Securities |
• | “ PIPE Subscription Agreements |
• | “PPC |
• | “ Prior Acquisitions |
• | “Private Placement Warrants” |
• | “Pro Forma Adjusted EBITDA” non-GAAP measure, means pro forma net loss before the impact of interest income or expense, income tax expense or benefit and depreciation and amortization, and further adjusted for the same items as Adjusted EBITDA. |
• | “ Proposed Bylaws Annex B , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “ Proposed Charter Annex A , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “Public Shareholders” |
• | “Public Shares” |
• | “Public Warrants” . |
• | “record date” |
• | “Redemption Rights” . |
• | “Registration Rights Agreement” Annex F , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “SEC . |
• | “Securities Act” . |
• | “ Shareholder Proposals ” |
• | “ Special Meeting ” |
• | “Sponsor” . |
• | “Sponsor Earnout Shares” |
• | “ Summit |
• | “Tax Receivable Agreement” or “TRA Annex D , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “Transfer agent” |
• | “Trust Account” . |
• | “ 2020 Acquisitions |
• | “ 2021 Acquisitions |
• | “2021 Term Loan” |
• | “2021 Omnibus Plan” Annex H , as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms. |
• | “Voting and Support Agreements” |
• | “Warrant Agent” . |
• | “Warrants” . |
1. | The Original PIPE Investors acquire 8,000,000 shares of Class A common stock in connection with the Closing, for an aggregate purchase price of $80 million. |
2. | No Altimar II Public Shareholders exercise their redemption rights in connection with the Business Combination and as a result of the foregoing assumption, no Class A common stock will be forfeited by the Altimar II Founders. |
3. | The balance of the Trust Account as of the Closing is, and (as a result of the foregoing assumptions) the available proceeds from the Trust Account are, approximately $345 million. As a result, the Available Cash Amount is equal to approximately $425 million. |
4. | The Debt Pay-Down Amount (i.e., amount of the indebtedness of Fathom OpCo to be paid down at the Closing from funds in the Trust Account) is equal to $20 million. |
5. | The Balance Sheet Contribution is equal to $10 million. |
6. | None of the Warrants have been exercised and no shares of Class A common stock reserved for issuance under the proposed 2021 Omnibus Plan and the ESPP Plan have been issued. |
7. | No New Fathom Units have been exchanged for Class A common stock (with a corresponding surrender of an equal number of shares of Class B common stock) in accordance with the terms of such securities. |
8. | Earnout Shares and Sponsor Earnout Shares are not vested. |
9. | No Backstop Shares have been issued pursuant to the CORE Backstop Agreement, except under the Maximum Redemptions scenario. In the Maximum Redemptions scenario, the Backstop Investors will be deemed to have purchased 1,000,000 Backstop Shares. |
10. | Pro rata forfeiture by Altimar II Founders of an aggregate of 2,587,500 shares of Class A common stock. |
• | The Closing Cash Consideration would be equal to $335.0 million; |
• | The Closing Seller Equity Consideration would be comprised of an aggregate of 87,793,750 shares of Class A common stock and New Fathom Units (with each holder of New Fathom Units receiving an equal number of voting shares of Class B common stock); and |
• | Holders of Altimar II Class B ordinary shares immediately prior to the Closing would receive an aggregate of 4,770,000 shares of Class A common stock in connection with the Closing (with 1,267,500 of those shares of Class A common stock constituting Sponsor Earnout Shares (as defined herein)) |
• | our ability to complete the Business Combination, or, if we do not consummate the Business Combination, any other initial business combination; |
• | the inability to complete the transactions contemplated by the proposed Business Combination due to the failure to satisfy any conditions to Closing, including the failure to obtain certain approvals of Altimar II’s shareholders or to satisfy the Available Cash Amount Condition; |
• | the occurrence of any event, change or other circumstances that could give rise to the termination of the BCA, including the failure to satisfy any of the conditions to Closing in the BCA; |
• | the projected financial information, anticipated growth rate and market opportunity of Fathom; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the Business Combination; |
• | our directors and officers potentially having conflicts of interest with our business or in approving the Business Combination, as a result of which they would receive compensation; |
• | intense competition and competitive pressures from other companies in the digital manufacturing industry in which the combined company will operate; |
• | factors relating to the business, operations and financial performance of Fathom, including market conditions and global and economic factors beyond Fathom’s control; |
• | the impact of COVID-19 and related significant market volatility on our business, our industry and the global economy; |
• | costs related to the Business Combination; |
• | the effect of legal, tax and regulatory changes; and |
• | other factors detailed under the section entitled “ Risk Factors. |
Q: |
WHAT IS THE BUSINESS COMBINATION? |
A: | Altimar II and Fathom OpCo have entered into the Business Combination Agreement, dated as of July 15, 2021 and subsequently amended on November 16, 2021, pursuant to which, among other things: |
(a) | Altimar II will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation under the laws of the State of Delaware (the “Domestication”), upon which Altimar II will change its name to “Fathom Digital Manufacturing Corporation.” |
(b) | Fathom OpCo will issue managing member interests in Fathom OpCo to Altimar II in exchange for a nominal cash payment; and |
(c) | Following a series of reorganization transactions among certain equity holders of Fathom OpCo’s businesses (the “Fathom Blockers”) and Altimar II, as specified in the Business Combination Agreement, Rapid Merger Sub, LLC, a wholly owned subsidiary of Altimar II, will merge with and into Fathom OpCo (the “Fathom Merger”), with Fathom OpCo as the surviving entity of the Fathom Merger (Fathom OpCo, in its capacity as the surviving entity of the Fathom Merger, is sometimes referred to as the “Fathom Surviving Entity”). Following the Fathom Merger, the Fathom Surviving Entity will be owned by Altimar II and all other holders of Fathom OpCo units outstanding as of immediately prior to the Fathom Merger (such other holders, excluding Altimar II, are referred to as the “Continuing Fathom Unitholders”). |
Upon consummation of the transactions contemplated by the Business Combination Agreement, the combined company will be organized in an “Up-C” structure, in which substantially all of the assets and business of the combined company will be held by Fathom OpCo. Altimar II and the Continuing Fathom Unitholders will be issued Class A units of Fathom OpCo (“New Fathom Units”). Altimar II will be the managing member of Fathom OpCo. Altimar II will issue to Continuing Fathom Unitholders for cash at par value a number of shares of Class B common stock equal to the number New Fathom Units held by the Continuing Fathom Unitholders. Altimar II’s other stockholders will hold Class A common stock of the combined company. Shares of Class A common stock will be entitled to economic rights and one vote per share and shares of Class B common stock will be entitled to one vote per share but no economic rights. The combined company’s business will continue to operate through Fathom OpCo. |
Altimar II will hold the Special Meeting to, among other things, obtain the approvals required for the Business Combination and the other transactions contemplated by the Business Combination Agreement and you are receiving this proxy statement/prospectus in connection with such meeting. See “ The Business Combination Agreement Annex C . We urge you to read carefully this proxy statement/prospectus and the Business Combination Agreement in their entirety. |
Q: |
WHY AM I RECEIVING THIS DOCUMENT? |
A: | Altimar II is sending this proxy statement /prospectus to its shareholders to help them decide how to vote their shares of Altimar II ordinary shares with respect to the matters to be considered at the Special Meeting. |
The Business Combination cannot be completed unless Altimar II’s shareholders approve the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Stock Issuance Proposal, the Business Combination Issuance Proposal, the Equity Incentive Plan Proposal and the ESPP Proposal set forth in this proxy statement/prospectus. Information about the Special Meeting, the Business Combination and the other business to be considered by shareholders at the Special Meeting is contained in this proxy statement/prospectus. |
This document constitutes a proxy statement of Altimar II and a prospectus of Altimar II. It is a proxy statement because the board of directors of Altimar II is soliciting proxies using this proxy statement/prospectus from its shareholders. It is a prospectus because Altimar II, in connection with the Business Combination, is offering shares of Class A common stock in exchange for its outstanding Class A ordinary shares and as part of the consideration to be received as part of the Business Combination. See “ The Business Combination Agreement — Consideration to be Received in the Business Combination |
Q: |
WHAT WILL ALTIMAR II EQUITYHOLDERS OWN AS A RESULT OF THE BUSINESS COMBINATION? |
A: | Following completion of the Business Combination, Altimar II’s Public Shareholders will own approximately 25.5% of the fully-diluted common equity of Fathom (assuming that no shares of Altimar II’s Class A ordinary shares are elected to be redeemed by Altimar Public Shareholders and subject to the other assumptions set forth in “Unaudited Pro Forma Condensed Combined Financial Information”). Assuming maximum redemptions by Altimar II Public Shareholders and subject to the other assumptions set forth in “Unaudited Pro Forma Condensed Combined Financial Information”, Altimar II’s non-redeeming Public Shareholders will own 0% of the fully-diluted common equity of Fathom following the Business Combination. |
Q: |
WHAT WILL ALTIMAR II FOUNDERS OWN AS A RESULT OF THE BUSINESS COMBINATION? |
A: | Following completion of the Business Combination, Altimar II Founders will own approximately 3.5% of the fully-diluted common equity of Fathom (assuming that no shares of Altimar II’s Class A ordinary shares are elected to be redeemed by Altimar Public Shareholders and subject to the other assumptions set forth in “Unaudited Pro Forma Condensed Combined Financial Information”). Assuming maximum redemptions by Altimar II Public Shareholders and subject to the other assumptions set forth in “Unaudited Pro Forma Condensed Combined Financial Information,” Altimar II Founders will own approximately 3.5% of the fully-diluted common equity of Fathom following the Business Combination. Assuming exercise of the 8,625,000 Public Warrants and the 9,900,000 Private Placement Warrants, the Altimar II Founders’ pro forma economic ownership of Fathom following the Business Combination is set forth below: |
Assuming No Redemptions (1) |
Assuming Maximum Redemptions (2) |
|||||||||||||||||||||||
Shares |
Ownership % (3) |
Voting % (3) |
Shares |
Ownership % (3) |
Voting % (3) |
|||||||||||||||||||
Altimar II Founders (4) |
14,670,000 | 9.6 | % | 9.6 | % | 14,670,000 | 9.6 | % | 9.6 | % |
(1) | This presentation assumes pro rata forfeiture by the Altimar II Founders’ of an aggregate of 2,587,500 shares of Class A common stock pursuant to the Forfeiture and Support Agreement. |
(2) | This presentation assumes maximum redemptions. The assumptions under the maximum redemptions scenario include the assumption that Public Shareholders redeem all 34,500,000 outstanding shares of Altimar II’s Class A ordinary shares. |
(3) | Percentage calculations assume the exercise and conversion of: (i) 8,625,000 Public Warrants and (ii) 9,900,000 Private Placement Warrants held by Sponsor. Percentage calculations exclude: (i) the Earnout Shares and the Sponsor Earnout Shares (each as defined herein), all of which will be unvested as of the Closing and (ii) shares and awards issuable under the 2021 Omnibus Plan. |
(4) | Holdings of Altimar II Founders consist of (i) the shares of Class A common stock held by the Sponsor and the other Altimar II Founders upon automatic conversion of their Class B ordinary shares into Class C common stock as a result of the Business Combination which shares of Class C common stock will then convert into Class A common stock and (ii) 9,900,000 shares issuable upon exercise of the Private Placement Warrants held by Sponsor. Holdings of Sponsor exclude 1,267,500 shares of Class A common stock that constitute Sponsor Earnout Shares (as defined herein). |
Q: |
WHAT EQUITY STAKE WILL CURRENT ALTIMAR II EQUITYHOLDERS AND CONTINUING FATHOM UNITHOLDERS HOLD IN FATHOM IMMEDIATELY AFTER THE CONSUMMATION OF THE BUSINESS COMBINATION? |
A: | The following table summarizes the pro forma economic ownership of Class A common stock of Fathom following the Business Combination. For additional information, including the assumptions underlying the no redemptions and maximum redemptions scenarios presented below, see “Unaudited Pro Forma Condensed Combined Financial Information.” For purposes of the below No Redemptions presentation, the term “PIPE Investors” excludes the Backstop Investors pursuant to the CORE Backstop Agreement. For purposes of the below Maximum Redemptions presentation, (i) the term “PIPE Investors” includes the Backstop Investors pursuant to the CORE Backstop Agreement and (ii) the term “Legacy Fathom Owners” excludes the Backstop Shares issued to the Backstop Investors. |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||
Altimar II Public Shareholders |
25.5 | % | 0.0 | % | ||||
Altimar II Founders |
3.5 | % | 3.5 | % | ||||
PIPE Investors |
5.9 | % | 6.7 | % | ||||
Legacy Fathom Owners |
65 | % | 89.8 | % | ||||
|
|
|
|
|||||
Total |
100.0 |
% |
100.0 |
% | ||||
|
|
|
|
Q: |
WHAT WILL FATHOM EQUITYHODLERS RECEIVE IN THE BUSINESS COMBINATION? |
A: | The total consideration to be paid to CORE Industrial Partners Fund I Parallel, LP, Siguler Guff Small Buyout Opportunities Fund III, LP, Siguler Guff Small Buyout Opportunities Fund III (F), LP, Siguler Guff Small Buyout Opportunities Fund III (C), LP, Siguler Guff Small Buyout Opportunities III (UK), LP, Siguler Guff HP Opportunities Fund II, LP, and Siguler Guff Americas Opportunities Fund, LP (collectively, the “Fathom Blocker Owners”) and the Continuing Fathom Unitholders, including CORE Industrial Partners Fund I, LP, at the Closing shall equal the aggregate of: |
(a) | (i) All the cash proceeds from the Trust Account established for the purpose of holding the net proceeds of Altimar II’s initial public offering, net of any amounts paid to Altimar II’s shareholders that exercise their redemption rights in connection with the Business Combination, together with the proceeds from the PIPE Investment (as defined herein) (the “Available Cash Amount”), (ii) minus $10,000,000 to be contributed by Altimar II to the balance sheet of Fathom OpCo, (iii) minus $20,000,000 to be used to pay down certain indebtedness of Fathom OpCo, (iv) minus certain transaction expenses of Fathom OpCo and Altimar II, which include fees and expenses of various advisors, transfer taxes, employee transaction bonuses, and filing and listing fees (the “Closing Cash Consideration”); |
(b) | A number of shares of Class A common stock and New Fathom Units (together with one share of Class B common stock to be issued at par value for cash in respect of each New Fathom Units), to be allocated in accordance with the allocation schedule to be delivered at the Closing (the “Allocation Schedule”), in an aggregate number (rounded up to the nearest whole share) equal to (a) the quotient of (i) the result of (A) $1,200,000,000 minus (B) the Closing Cash Consideration divided by (ii) $10.00 (the “Closing Seller |
Equity Consideration”) plus (ii) 1,293,750 in each case of clauses (a) and (b), to be allocated as set forth on the Allocation Schedule (the “Closing Seller Equity Consideration); and |
(c) | An aggregate of 9,000,000 shares of Class A common stock and New Fathom Units (the “Earnout Shares”). These earnout shares will be issued in three equal tranches of 3,000,000 shares and allocated in accordance with the Allocation Schedule, with each tranche vesting at each of the following share price thresholds: $12.50, $15.00 and $20.00, in each case subject to the vesting and forfeiture provisions set forth in the Investor Rights Agreement (as defined herein) and Fathom OpCo’s Amended and Restated Limited Liability Company Agreement (the “Fathom Operating Agreement”). The earnout period will be five years from the date of the closing of the Business Combination. The achievement of the price threshold will be determined based on a VWAP for 20 trading days within any 30-trading day period or a change of control transaction of Fathom that implies the same per share valuation as the applicable price threshold. |
The methodology to be followed in the Allocation Schedule at the Closing will provide for the payment of approximately $ of the Closing Cash Consideration to direct and indirect holders of outstanding preferred units of Fathom OpCo (including accrued but unpaid preferred distributions thereon), and will allocate the balance of the Closing Cash Consideration and the total Closing Seller Equity Consideration to direct and indirect holders of outstanding common units of Fathom OpCo, on a pro rata basis in accordance with the number of outstanding common units held. The Earnout Shares will be allocated in accordance with the Allocation Schedule to the direct and indirect holders of outstanding common units of Fathom OpCo on a pro rata basis in accordance with the number of outstanding common units held. The portion of the Closing Cash Consideration to be paid to direct and indirect holders of outstanding preferred units of Fathom OpCo as described above assumes, for illustration, the inclusion of accrued preferred distributions through , 2021. The total amount to be paid to the holders of preferred units will vary to reflect the accrued preferred distributions as of the Closing Date. |
Q: |
WHAT INFLUENCE WILL THE CORE INVESTORS HAVE ON FATHOM’S MANAGEMENT AND POLICIES FOLLOWING THE BUSINESS COMBINATION? |
A: | Immediately following completion of the Business Combination and assuming no redemptions by Altimar II’s Public Shareholders, the CORE Investors will beneficially own approximately 46.1% of our Class A common stock and Class B common stock (or 63.7% assuming maximum redemptions by Altimar II Public Shareholders and not counting the Backstop Shares as part of the CORE Investors’ pro forma ownership). The Class A common stock and Class B common stock generally will vote together on matters submitted to a vote of our stockholders, including the election of directors. As a result, the CORE Investors will have the ability to influence our business and affairs through “negative control” rights resulting from their ownership of our Class A common stock and Class B common stock combined with certain supermajority voting provisions of the Proposed Charter and Proposed Bylaws, their general ability to vote on the election of directors to our board and the provisions in the Investor Rights Agreement described below. |
In addition, in connection with the Business Combination, we will enter into the Investor Rights Agreement with the CORE Investors which will provide for an initial eleven-person board of directors, initially consisting of nine individuals to be designated by the CORE Investors, and one independent director to be mutually agreed by the CORE Investors and the Sponsor. The CORE Investors will have certain continued nomination rights for a number of directors ranging from the majority of the board of directors to one director, while they beneficially own shares of common stock in excess of certain ownership percentage of the amount owned by the CORE Investors at Closing, as determined in accordance with the Investor Rights Agreement. See “The Business Combination Agreement – Related Agreements – Investor Rights Agreement and Registration Rights Agreement” for more details with respect to the Investor Rights Agreement. |
Q: |
WHEN WILL THE BUSINESS COMBINATION BE COMPLETED? |
A: | The parties currently expect that the Business Combination will be completed in December 2021. However, neither Altimar II nor Fathom OpCo can assure you of when or if the Business Combination will be completed, and it is possible that factors outside of the control of Altimar II and Fathom OpCo could result in the Business Combination being completed at a different time or not at all. The outside date for consummation of the Business Combination is December 31, 2021. Altimar II must first obtain the approval of Altimar II shareholders for each of the Condition Precedent Proposals, Fathom OpCo must obtain the approval of its members, and Altimar II and Fathom OpCo must also first obtain certain necessary regulatory approvals and satisfy other closing conditions. See “ The Business Combination Agreement — Conditions to Closing of the Business Combination Agreement |
Q: |
WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT COMPLETED? |
A: | If Altimar II does not complete the Business Combination with Fathom OpCo for any reason, Altimar II would need to search for another target business with which to complete a business combination. If Altimar II does not complete the Business Combination with Fathom OpCo or a business combination with another target business by February 9, 2023, Altimar II must redeem 100% of the outstanding Class A ordinary shares, at a per-share price, payable in cash, equal to the amount then held in the Trust Account (less income taxes paid or payable, if any, and up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding Class A ordinary shares. The Sponsor has no redemption rights in the event a business combination is not effected in the required time period and, accordingly, its founder shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to Altimar II’s outstanding warrants. Accordingly, such warrants will expire worthless. |
Q: |
WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY? |
A: | Altimar II shareholders are being asked to vote on the following Shareholder Proposals: |
1. | the Business Combination Proposal; |
2. | the Domestication Proposal; |
3. | the Organizational Documents Proposal; |
4. | the Advisory Charter Proposals; |
5. | the Stock Issuance Proposal; |
6. | the Business Combination Issuance Proposal; |
7. | the Equity Incentive Plan Proposal; |
8. | the ESPP Proposal; and |
9. | the Adjournment Proposal. |
The Business Combination is conditioned upon the approval of the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Stock Issuance Proposal, the Business Combination Issuance Proposal, the Equity Incentive Plan Proposal and the EPP Proposal, subject to the terms of the Business Combination Agreement. The Business Combination is not conditioned on the approval of the Advisory Charter Proposals or the Adjournment Proposal. If the Business Combination Proposal is not approved, the other proposals (except the Adjournment Proposal) will not be presented to the shareholders for a vote. |
Q: |
WHY IS ALTIMAR II PROPOSING THE BUSINESS COMBINATION? |
A: | Altimar II was incorporated to effect a merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses or entities (each, a “business combination”). |
On February 9, 2021, Altimar II completed its IPO, generating gross proceeds of $345,000,000 (including the full exercise of the underwriters’ over-allotment option). Since Altimar II’s initial public offering, Altimar II’s activity has been limited to the evaluation of business combination candidates. |
Fathom OpCo, doing business as Fathom Digital Manufacturing, is a leading on-demand digital manufacturing platform in North America, providing comprehensive product development and manufacturing services to many of the largest and most innovative companies in the world. |
The board of directors of Altimar II and the board of managers of Fathom OpCo have unanimously approved the proposed transaction. The proposed Business Combination will create a publicly traded leader in the $25 billion low-to-mid on-demand manufacturing industry. |
Based on its due diligence investigation of Fathom OpCo and the industry in which it operates, including the financial and other information provided by Fathom OpCo in the course of its negotiations in connection with the Business Combination Agreement, Altimar II believes that Fathom will have a uniquely attractive financial profile due to its compelling growth trajectory, robust margins, strong software platform and the highly fragmented, opportunity rich $25 billion low-to-mid “one-stop-shop” solution and scale will be difficult to replicate. As a result, Altimar II believes that Fathom will be well positioned to be a long-term leader in the $25 billion low-to-mid on-demand manufacturing industry, and that the Business Combination with Fathom OpCo will provide Altimar II shareholders with an opportunity to participate in the ownership of a company with significant growth potential. |
Q: |
DID THE ALTIMAR II BOARD OBTAIN A THIRD-PARTY VALUATION OR FAIRNESS OPINION IN DETERMINING WHETHER OR NOT TO PROCEED WITH THE BUSINESS COMBINATION? |
A: | Altimar II’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. |
Altimar II’s officers, directors and advisors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Altimar II’s financial advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, Altimar II’s officers, directors and advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of Altimar II’s officers, board of directors and advisors in valuing Fathom OpCo’s business. |
Q: |
DO I HAVE REDEMPTION RIGHTS? |
A: | If you are a holder of Class A ordinary shares, you have the right to demand that Altimar II redeem such shares for a pro rata portion of the cash held in the Trust Account, which holds the proceeds of Altimar II’s IPO, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to Altimar II to pay its taxes) upon the closing of the transactions contemplated by the Business Combination Agreement (such rights, “Redemption Rights”). |
Notwithstanding the foregoing, a holder of Class A ordinary shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the Class A ordinary shares. Accordingly, all Class A ordinary shares in excess of 15% held by a Public Shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group”, will not be redeemed. |
If passed, the Organizational Documents Proposal would remove the requirement that Altimar II have at least $5,000,001 of net tangible assets after giving effect to the redemption of all such shares. |
Q: |
WILL HOW I VOTE AFFECT MY ABILITY TO EXERCISE REDEMPTION RIGHTS? |
A: | No. You may exercise your redemption rights whether you vote your Class A ordinary shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other Shareholder Proposal. As a result, the Business Combination Proposal can be approved by shareholders who will redeem their Class A ordinary shares and no longer remain shareholders and subject to the terms and conditions of the BCA, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Shareholders are substantially reduced as a result of redemptions by Public Shareholders. Also, with fewer Class A ordinary shares and Public Shareholders, the trading market for Altimar II Class A ordinary shares may be less liquid than the market for Altimar II Class A ordinary shares prior to the Business Combination and Altimar II may not be able to meet the listing standards of a national securities exchange. In addition, with fewer funds available from the Trust Account, the capital infusion from the Trust Account into Fathom OpCo’s business will be reduced. |
Q: |
HOW DO I EXERCISE MY REDEMPTION RIGHTS? |
A: | If you are a holder of Class A ordinary shares and wish to exercise your redemption rights, you must demand that Altimar II redeem your shares for cash no later than the second business day preceding the vote on the Business Combination Proposal by delivering your share certificates (if any) and other redemption forms to Altimar II’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system prior to the vote at the Special Meeting. Holders of units must elect to separate the underlying Class A ordinary shares and public warrants prior to exercising redemption rights with respect to the Class A ordinary shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into underlying Class A ordinary shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company, Altimar II’s transfer agent, directly and instruct them to do so. Any holder of Class A ordinary shares will be entitled to demand that such holder’s shares be redeemed for a full pro rata portion of the amount then in the Trust Account (which, for illustrative purposes, was approximately $ million, or $ per share, as of , 2021, the record date). Such amount, including interest earned on the funds held in the Trust Account and not previously released to Altimar II to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be paid promptly upon consummation of the Business Combination. However, the proceeds deposited in the Trust Account could become subject to the claims of Altimar II’s creditors, if any, which could have priority over the claims of Altimar II’s Public Shareholders, regardless of whether such Public Shareholders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. Your vote on any Shareholder Proposal will have no impact on the amount you will receive upon exercise of your redemption rights. |
Any request for redemption made by a holder of Class A ordinary shares may not be withdrawn once submitted to Altimar II unless the board of directors of Altimar II determines (in its sole discretion) to permit the withdrawal of such redemption request (which it may do in whole or in part). |
Any written demand of redemption rights must be received by Altimar II’s transfer agent prior to the vote taken on the Business Combination Proposal at the Special Meeting. No demand for redemption will be honored unless the holder’s share certificates (if any) and other redemption forms have been delivered (either physically or electronically) to the transfer agent prior to the vote at the Special Meeting. |
If a holder of Class A ordinary shares properly makes a request for redemption and the certificates for the Class A ordinary shares (if any) along with the redemption forms are delivered as described to Altimar II’s transfer agent as described herein, then, if the Business Combination is consummated, Altimar II will redeem these shares for a pro rata portion of funds deposited in the Trust Account. If you exercise your redemption rights, then you will be exchanging your Class A ordinary shares for cash. |
Q: |
WHAT ARE THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY REDEMPTION RIGHTS? |
A: | We expect that a U.S. holder (as defined in “ Material U.S. Federal Income Tax Considerations — U.S. Holders Material U.S. Federal Income Tax Considerations Material U.S. Federal Income Tax Considerations — U.S. Holders — Effect to U.S. Holders of Altimar II Ordinary Shares Exercising Redemption Rights |
Q: |
DO I HAVE APPRAISAL RIGHTS IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION AND THE PROPOSED DOMESTICATION? |
A: | No. Neither Altimar II shareholders nor Altimar II warrantholders have appraisal rights in connection with the Business Combination or the Domestication under Cayman Islands law or under the DGCL. |
Q: |
WHY IS ALTIMAR II PROPOSING THE DOMESTICATION? |
A: | Altimar II’s board of directors believes that there are significant advantages to Fathom that will arise as a result of a change of domicile to Delaware, including, (i) the prominence, predictability and flexibility of Delaware law, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors, each of the foregoing as discussed in greater detail in the section entitled “ Proposal No. 2 — The Domestication Proposal — Reasons for the Domestication |
To effect the Domestication, Altimar II will file a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Altimar II will be domesticated and continue as a Delaware corporation, at which time Altimar II will change its name to “Fathom Digital Manufacturing Corporation.” |
The approval of the Domestication Proposal is a condition to the closing of the transactions contemplated by the Business Combination Agreement. The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the ordinary shares who, being present and entitled to vote at the Special Meeting, vote at the Special Meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the Special Meeting. Under the Amended and Restated Memorandum and Articles of Association, prior to the closing of a business combination (as defined therein) only the holders of Altimar II Class B ordinary shares will be entitled to vote on the Domestication Proposal. |
Q: |
HOW WILL THE DOMESTICATION AFFECT MY PUBLIC SHARES, PUBLIC WARRANTS AND UNITS? |
A: | On the effective date of the Domestication, (a) each outstanding Class A ordinary share will automatically convert into one share of Fathom Class A common stock, (b) each outstanding Class B ordinary share will |
automatically convert into one share of Fathom Class C common stock (and subsequently at the closing of the Business Combination, each outstanding share of Fathom Class C common stock will automatically convert into Fathom Class A common stock prior to the pro rata forfeiture by the Altimar II Founders of an aggregate of 2,587,500 of their Class A common stock pursuant to the Forfeiture and Support Agreement as described herein) and (c) the outstanding warrants to purchase Class A ordinary shares will automatically become exercisable for shares of Fathom Class A common stock. At a moment in time after the effectiveness of the Domestication and before the closing of the Business Combination, each outstanding unit of Altimar II (each of which consists of one share of Altimar II Class A ordinary shares and one-fourth of one warrant to purchase one share of Altimar II Class A ordinary shares) will be separated into its component common stock and warrant. Such warrants will become exercisable into shares of Class A common stock any time after the later of the one year following the completion of Altimar II’s IPO and 30 days following the completion of the Business Combination. |
Q: |
WHAT HAPPENS TO THE FUNDS DEPOSITED IN THE TRUST ACCOUNT AFTER CONSUMMATION OF THE BUSINESS COMBINATION? |
A: | The net proceeds of Altimar II’s initial public offering, together with funds raised from the sale of Private Placement Warrants simultaneously with the consummation of Altimar II’s initial public offering, was placed in the Trust Account immediately following Altimar II’s initial public offering. After consummation of the Business Combination, the funds in the Trust Account will be used to pay holders of the Class A ordinary shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination (including aggregate fees of approximately $12,075,000 as deferred underwriting commissions related to Altimar II’s initial public offering) and, together with the proceeds of the PIPE Investment, to pay the Closing Cash Consideration. |
Q: |
WHAT ARE THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DOMESTICATION? |
A: | As discussed more fully under “ Material U.S. Federal Income Tax Considerations Material U.S. Federal Income Tax Considerations — U.S. Holders |
• | A U.S. holder of Altimar II ordinary shares whose Altimar II ordinary shares have a fair market value of less than $50,000 at the time of the Domestication should not recognize any gain or loss and generally should not be required to include any part of Altimar II’s earnings in income; |
• | A U.S. holder of Altimar II ordinary shares whose Altimar II ordinary shares have a fair market value of $50,000 or more on the date of the Domestication, but who at the time of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of Altimar II ordinary shares entitled to vote and less than 10% of the total value of all classes of Altimar II ordinary shares will generally recognize gain (but not loss) as a result of the Domestication. As an alternative to recognizing gain, such U.S. holders may file an election to include in income as a dividend earnings and profits (as defined in the U.S. Treasury regulations (“Treasury Regulations”) under Section 367 of the Code) attributable to its Altimar II ordinary shares provided certain other requirements are satisfied. Altimar II does not expect that Altimar II’s cumulative earnings and profits will be material at the time of the Domestication. |
• | A U.S. holder of Altimar II ordinary shares who at the time of the Domestication owns (actually and constructively) 10% or more of the total combined voting power of all classes of Altimar II ordinary shares or 10% of the total value of all classes of Altimar II shares entitled to vote will |
generally be required to include in income as a dividend earnings and profits (as defined in the Treasury Regulations under Section 367 of the Code) attributable to its Altimar II ordinary shares. Altimar II does not expect that Altimar II’s cumulative earnings and profits will be material at the time of domestication. If Altimar II were to be treated as a PFIC for U.S. federal income tax purposes, certain U.S. holders may be subject to adverse tax consequences as a result of the Domestication. Pursuant to a start-up exception, a corporation will not be a PFIC for the first taxable year the corporation has gross income (the “start-up year”), if (i) no predecessor of the corporation was a PFIC; (ii) the corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the start-up year; and (iii) the corporation is not in fact a PFIC for either of those two years. Altimar II believes, although subject to uncertainty, that Altimar II’s 2021 taxable year may be the start-up year and that Altimar II may not be treated as a PFIC for 2021. The application of the start-up exception will depend, in part, on whether the Domestication is consummated in 2021. In addition, the application of the start-up exception to the present transaction involves the application of complicated rules with respect to which there is no clear authority. Accordingly, there can be no assurance with respect to Altimar II’s status as a PFIC for 2021. All holders are urged to consult their tax advisors concerning the application of the PFIC rules to Altimar II under such holder’s particular circumstances, including the potential to make a “qualified electing fund” election or a protective “qualified electing fund” election. The requirement to qualify for the start-up exception and the potential application of the PFIC rules to the Domestication are discussed more fully under “Material U.S. Federal Income Tax Considerations — U.S. Holders — PFIC Considerations”. |
Additionally, the Domestication may cause non-U.S. holders (as defined in “Material U.S. Federal Income Tax Considerations — Non-U.S. Holdersnon-U.S. holder’s Fathom common stock (or warrants) subsequent to the Domestication. |
The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are strongly urged to consult their tax advisor for a full description and understanding of the tax consequences of the Domestication, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “ Material U.S. Federal Income Tax Considerations |
Q: |
HOW DOES THE SPONSOR INTEND TO VOTE ON THE SHAREHOLDER PROPOSALS? |
A: | The Sponsor owns of record and is entitled to vote an aggregate of approximately 20% of the outstanding shares of Altimar ordinary shares. The Sponsor has agreed to vote any founder shares and any Class A ordinary shares held by it as of the record date in favor of the Shareholder Proposals. See “ The Business Combination Agreement — Related Agreements — Forfeiture and Support Agreement |
Agreement; and (3) against (A) any proposal or offer from any person concerning (I) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving Altimar II, or (II) the issuance or acquisition of shares of capital stock or other Altimar II equity securities (other than as contemplated or permitted by the Business Combination Agreement); and (B) any action, proposal, transaction or agreement that would reasonably be expected to (x) impede the fulfillment of Altimar II’s conditions under the Business Combination Agreement or change in any manner the voting rights of any class of Altimar II’s shares or (y) result in a breach of any covenant, representation or warranty or other obligation or agreement of Sponsor or any of the other Altimar II Founders contained in the Forfeiture and Support Agreement. See also “ Certain Relationships and Related Party Transactions — Forfeiture and Support Agreement |
Q: |
WHAT CONSTITUTES A QUORUM AT THE SPECIAL MEETING? |
A: | The holders of a majority of the voting power of the issued and outstanding Altimar II ordinary shares entitled to vote at the Special Meeting must be present, in person or virtually or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The holders of the founder shares, who currently own approximately 20% of the issued and outstanding shares of Altimar II ordinary shares, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. As of the record date for the Special Meeting, holders of Altimar II ordinary shares would be required to be present to achieve a quorum. |
Q: |
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE SPECIAL MEETING? |
A: | The Business Combination Proposal: The Business Combination Agreement — Related Agreements — Forfeiture and Support Agreement |
The Adjournment Proposal: |
Q: |
DO ANY OF ALTIMAR II’S DIRECTORS OR OFFICERS HAVE INTERESTS IN THE BUSINESS COMBINATION THAT MAY DIFFER FROM OR BE IN ADDITION TO THE INTERESTS OF ALTIMAR II SHAREHOLDERS? |
A: | Altimar II’s executive officers and certain non-employee directors may have interests in the Business Combination that may be different from, or in addition to, the interests of Altimar II’s shareholders generally. The Altimar II board of directors was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the Business Combination Agreement and in recommending that the Business Combination Agreement and the transactions contemplated thereby be approved by the shareholders of Altimar II . See “The Business Combination Proposal — Interests of Altimar II Directors and Officers in the Business Combination |
For additional information regarding pre-existing relationships between certain of the parties to the Business Combination Agreement and certain of their affiliates, see “Risk Factors — Risks Related to the Business Combination and Altimar II — Pre-existing relationships between participants in the Business Combination and the related transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the Business Combination. |
Q: |
WHAT DO I NEED TO DO NOW? |
A: | After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxies as soon as possible so that your shares will be represented at the Special Meeting. Please follow the instructions set forth on the proxy card or on the voting instruction form provided by your broker, bank or other nominee if your shares are held in the name of your broker, bank or other nominee. |
Q: |
HOW DO I VOTE? |
A: | If you are a shareholder of record of Altimar II as of , 2021 (the “record date”) you may submit your proxy before the Special Meeting in any of the following ways, if available: |
• | use the toll-free number shown on your proxy card; |
• | visit the website shown on your proxy card to vote via the Internet; or |
• | complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope. |
If you are a shareholder of record of Altimar II as of the record date, you may also cast your vote at the Special Meeting. |
If your shares are held in “street name” through a broker, bank or other nominee, your broker, bank or other nominee will send you separate instructions describing the procedure for voting your shares. “Street name” shareholders who wish to vote at the Special Meeting will need to obtain a proxy form from their broker, bank or other nominee. |
Q: |
WHEN AND WHERE IS THE SPECIAL MEETING? |
A: | The Special Meeting will be held on , 2021, at local time. For the purposes of Altimar II’s Amended and Restated Memorandum and Articles of Association, the physical place of the meeting will |
be Boundary Hall, Cricket Square, Grand Cayman, KY1-1102, Cayman Islands. In light of the novel coronavirus pandemic and to support the well-being of Altimar II’s shareholders, directors and officers, Altimar II encourages you to use remote methods of attending the Special Meeting or to attend via proxy. You may attend the Special Meeting and vote your shares electronically during the Special Meeting via live webcast by visiting https://www.cstproxy.com/altimarii/2021. You will need the meeting control number that is printed on your proxy card to enter the Special Meeting. You may also attend the meeting telephonically by dialing +1 877-770-3647 (within the U.S. and Canada and toll-free) or +1 312-780-0854 (outside of the U.S. and Canada, standard rates apply). All Altimar II shareholders as of the record date, or their duly appointed proxies, may attend the Special Meeting. |
Q: |
IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK OR OTHER NOMINEE, WILL MY BROKER, BANK OR OTHER NOMINEE VOTE MY SHARES FOR ME? |
A: | If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to Altimar II or by voting at the Special Meeting unless you provide a “legal proxy”, which you must obtain from your broker, bank or other nominee. In addition to such legal proxy, if you plan to attend the Special Meeting, but are not a shareholder of record because you hold your shares in “street name”, please have evidence of your beneficial ownership of your shares (e.g., a copy of a recent brokerage statement showing the shares) and valid photo identification with you at the Special Meeting. |
Under the rules of the NYSE, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all of the Shareholder Proposals are “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular Shareholder Proposal for which the broker does not have discretionary voting power. |
If you are an Altimar II shareholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Charter Proposals, the Stock Issuance Proposal, the Business Combination Issuance Proposal, the Equity Incentive Plan Proposal or the Adjournment Proposal. Such abstentions and broker non-votes will have no effect on the vote count for any of the proposals. |
Q: |
WHAT IF I ATTEND THE SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE? |
A: | For purposes of the Special Meeting, an abstention occurs when a shareholder attends the meeting and does not vote or returns a proxy with an “abstain” vote. |
If you are an Altimar II shareholder that attends the Special Meeting and fails to vote on the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Charter Proposals, the Stock Issuance Proposal, the Business Combination Issuance Proposal, the Equity Incentive Plan Proposal, the ESPP Proposal or the Adjournment Proposal, or if you respond to such proposals with an “abstain” vote, your failure to vote or “abstain” vote in each case will have no effect on the vote count for such proposals. |
Q: |
WHAT WILL HAPPEN IF I RETURN MY PROXY CARD WITHOUT INDICATING HOW TO VOTE? |
A: | If you sign and return your proxy card without indicating how to vote on any particular Shareholder Proposal, the Altimar II shares represented by your proxy will be voted as recommended by the Altimar II board of directors with respect to that Shareholder Proposal. |
Q: |
MAY I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY OR VOTING INSTRUCTION CARD? |
A: | Yes. You may change your vote at any time before your proxy is voted at the Special Meeting. You may do this in one of three ways: |
• | filing a notice with Altimar II or its proxy solicitor; |
• | mailing a new, subsequently dated proxy card; or |
• | by attending the Special Meeting and electing to vote your shares. |
If you are a shareholder of record of Altimar II and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or your new proxy to Altimar II, 40 West 57th Street, 33 rd Floor, New York, NY, 10019 and it must be received at any time before the vote is taken at the Special Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy by mail, or online or by telephone, not later than 5:00 p.m. New York City time on , 2021, or by voting at the Special Meeting. Simply attending the Special Meeting will not revoke your proxy. If you have instructed a broker, bank or other nominee to vote your shares of Altimar II ordinary shares, you must follow the directions you receive from your broker, bank or other nominee in order to change or revoke your vote. |
Q: |
WHAT HAPPENS IF I FAIL TO TAKE ANY ACTION WITH RESPECT TO THE SPECIAL MEETING? |
A: | If you fail to take any action with respect to the Special Meeting and the Business Combination is approved by shareholders and consummated, you will continue to be a shareholder of Altimar II. Failure to take any action with respect to the Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the Special Meeting and the Business Combination is not approved, you will continue to be a shareholder of Altimar II while Altimar II searches for another target business with which to complete a business combination. |
Q: |
WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS? |
A: | Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered under more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares. |
Q: |
WHOM SHOULD I CONTACT IF I HAVE ANY QUESTIONS ABOUT THE PROXY MATERIALS OR VOTING? |
A: | If you have any questions about the proxy materials, need assistance submitting your proxy or voting your shares or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact Innisfree M&A Incorporated, the proxy solicitor for Altimar II, toll-free at (817) 750-8129 (banks and brokers call (212) 750-5833). |
(a) | Altimar II will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation under the laws of the State of Delaware (the “Domestication”), upon which Altimar II will change its name to “Fathom Digital Manufacturing Corporation.” |
(b) | Fathom OpCo will issue managing member interests in Fathom OpCo to Altimar II in exchange for a nominal cash payment; and |
(c) | Following a series of reorganization transactions among certain equity holders of Fathom OpCo’s businesses (the “Fathom Blockers”) and Altimar II, as specified in the Business Combination |
Agreement, Rapid Merger Sub, LLC, a wholly owned subsidiary of Altimar II, will merge with and into Fathom OpCo (the “Fathom Merger”), with Fathom OpCo as the surviving entity of the Fathom Merger (Fathom OpCo, in its capacity as the surviving entity of the Fathom Merger, is sometimes referred to as the “Fathom Surviving Entity”). Following the Fathom Merger, the Fathom Surviving Entity will be owned by Altimar II and all other holders of Fathom OpCo units outstanding immediately prior to the Merger (such other holders, excluding Altimar II, are referred to as the “Continuing Fathom Unitholders”). |
1. | Altimar II Founders include Altimar Sponsor II, LLC and the seven current directors of Altimar II. |
2. | The warrants held by Public Shareholders are Public Warrants and the warrants held by Altimar Sponsor II, LLC are Private Placement Warrants. |
3. | Legacy Fathom Owners include Fathom Blocker Owners and Continuing Fathom Unitholders, which include the CORE Investors. |
4. | The Class B common stock is non-economic, voting stock of Fathom. |
5. | New Fathom Units owned by the Continuing Fathom Unitholders are exchangeable on a one-for-one basis for shares of Class A common stock (with corresponding surrender of an equal number of shares of Class B common stock for cancellation by Fathom), in accordance with the Fathom Operating Agreement. |
6. | PIPE Investors exclude the Backstop Investors as no Backstop Shares are issued in this illustration assuming no redemptions. |
(a) | (i) All the cash proceeds from the Trust Account established for the purpose of holding the net proceeds of Altimar II’s initial public offering, net of any amounts paid to Altimar II’s shareholders that exercise their redemption rights in connection with the Business Combination, together with the proceeds from the PIPE Investment (as defined herein) (the “Available Cash Amount”), (ii) minus minus minus |
(b) | A number of shares of Class A common stock and newly issued Class A units of Fathom OpCo (the “New Fathom Units”) (together with one share of Class B common stock to be issued at par value for cash in respect of each New Fathom Units), to be allocated as set forth on the Allocation Schedule, in an aggregate number (rounded up to the nearest whole share) equal to (a) the quotient of (i) the result of (A) $1,200,000,000 minus divided by |
(i) | (a) hold public shares or (b) hold units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and |
(ii) | prior to p.m., Eastern Time, on , 2021, (a) submit a written request to the transfer agent that Altimar II redeem your public shares for cash and (b) deliver your share certificates for your public shares (if any) to the transfer agent, physically or electronically through DTC. |
• | If Altimar II does not consummate a business combination by February 9, 2023 (unless such date is extended in accordance with the Amended and Restated Memorandum and Articles of Association), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding Class A ordinary shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the 8,625,000 Class B ordinary shares would be worthless because following the redemption of the Class A ordinary shares, Altimar II would likely have few, if any, net assets and because the holders of our Class B ordinary shares have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Class B ordinary shares if we fail to complete a Business Combination within the required period. Sponsor purchased the Class B ordinary shares prior to our initial public offering for approximately $0.003 per share. The 4,770,000 shares of Class A common stock that the Altimar II Founders will hold following the Business Combination (excluding the Sponsor Earnout Shares), if unrestricted and freely tradable, would have had aggregate market value of $ based upon the closing price of $ per share of public share on the NYSE on , the record date. Given such shares will be subject to lock-up restrictions, we believe such shares have less value. |
• | Sponsor purchased 9,900,000 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant, and such private placement warrants will expire and be worthless if a business combination is not consummated within 24 months of the consummation of the IPO (unless such date is extended in accordance with the Existing Organizational Documents). |
• | Altimar II’s existing directors and officers will be eligible for continued indemnification and continued coverage under Altimar II’s directors’ and officers’ liability insurance after the Business Combination. |
• | In order to protect the amounts held in the Trust Account, Sponsor has agreed that it will be liable to Altimar II if and to the extent any claims by a vendor for services rendered or products sold to Altimar II, or a prospective target business with which Altimar II has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. 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 our indemnity of the underwriters of Altimar II’s initial public offering against certain liabilities, including liabilities under the Securities Act. |
• | Following consummation of the Business Combination, Sponsor, our officers and directors and their respective affiliates would be entitled to reimbursement for certain reasonable out-of-pocket |
• | Pursuant to the Registration Rights Agreement, the Altimar II Founders Holders will have customary registration rights, including demand, shelf and piggy-back rights, subject to cooperation and cut-back provisions, with respect to the shares of Fathom Class A common stock and warrants held by such parties. |
• | For additional information regarding pre-existing relationships between certain of the parties to the Business Combination Agreement and certain of their affiliates, see “Risk Factors — Risks Related to the Business Combination and Altimar II — Pre-existing relationships between participants in the Business Combination and the related transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the Business Combination. |
Sources |
Uses |
|||||||||
Proceeds from Trust Account |
$ | 345 | Balance Sheet Contribution |
$ | 10 | |||||
Original PIPE Investment |
80 | Closing Cash Consideration |
335 | |||||||
Debt Pay-Down Amount |
20 | |||||||||
Transaction Costs |
60 | |||||||||
|
|
|
|
|||||||
Total Sources |
$ |
425 |
Total Uses |
$ |
425 |
|||||
|
|
|
|
Sources |
Uses |
|||||||||
Proceeds from Trust Account |
$ | 0 | Balance Sheet Contribution |
$ | 10 | |||||
Backstop Investment |
$ | 10 | ||||||||
Original PIPE Investment |
80 | Closing Cash Consideration |
0 | |||||||
Debt Pay-Down Amount |
20 | |||||||||
Transaction Costs |
60 | |||||||||
|
|
|
|
|||||||
Total Sources |
$ |
90 |
Total Uses |
$ |
90 |
|||||
|
|
|
|
• | Assuming No Redemption s |
• | Assuming Maximum Redemption s |
• | Fathom OpCo Owner Consideratio n |
• | We are subject to risks related to the ongoing COVID-19 pandemic; |
• | We may be subject to cybersecurity risks and changes to data protection regulation; |
• | We face increasing competition in many aspects of our business; |
• | We may not realize the anticipated benefits of our business acquisitions, and any acquisition, strategic relationship, joint venture or investment could disrupt our business and harm our operating results and financial condition; |
• | If we are unable to manage our growth and expand our operations successfully, our reputation, brands, business and results of operations may be harmed; |
• | Our success depends on our ability to deliver on-demand manufacturing capabilities and custom parts that meet the needs of our customers and to effectively respond to changes in our industry; |
• | Our failure to meet our customers’ expectations regarding quick turnaround time, price or quality could adversely affect our business and results of operations; |
• | We are subject to risks related to our dependency on our key management members and other key personnel, as well as attracting, retaining and developing qualified personnel in a highly competitive talent market; |
• | The Proposed Charter will not limit the ability of the CORE Investors and their affiliates to compete with us; |
• | Through their ownership of our common stock, “negative control” rights and their rights to nominate directors to our board under the Investor Rights Agreement, the CORE Investors will have substantial influence over our management and policies; |
• | We are subject to risks related to our dependency on Fathom OpCo to pay dividends, taxes, make payments under the Tax Receivable Agreement and pay other expenses; |
• | We may be subject to litigation risks and may face liabilities and damage to our professional reputation as a result; |
• | Our businesses are subject to extensive domestic and foreign regulations that may subject us to significant costs and compliance requirements; |
• | We are subject to risks related to effectuating the Domestication including potentially adverse tax consequences and less favorable shareholder rights under the DGCL than under Cayman Islands Law; |
• | We are subject to risks related to the Tax Receivable Agreement; |
• | We may be subject to risks related to our status as an emerging growth company within the meaning of the Securities Act; |
• | In the event that the CORE Investors own more than 50% of Fathom’s outstanding common stock as a result of the Business Combination, we would be subject to the risks related to Fathom being categorized as a “controlled company” within the meaning of the NYSE listing standards; |
• | Because the Company will become a publicly traded company by means other than a traditional underwritten initial public offering, the Company’s stockholders may face additional risks and uncertainties; |
• | Altimar II and Fathom OpCo are subject to risks that may prevent the consummation and completion of the Business Combination, including the approval of each Condition Precedent Proposal, the failure to meet closing conditions and the failure of the PIPE Investment to close; |
• | Some of Altimar II’s officers and directors may have conflicts of interest that may influence or have influenced them to support or approve the Business Combination without regard to your interests or in determining whether Fathom is appropriate for Altimar II’s initial business combination; |
• | Pre-existing relationships between participants in the Business Combination and the related transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the Business Combination; |
• | If third parties bring claims against Altimar II, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share; |
• | You may only be able to exercise your Public Warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer Class A common stock from such exercise than if you were to exercise such warrants for cash; |
• | The grant of registration rights to certain of our investors and the future exercise of such rights may adversely affect the market price of our Class A common stock; |
• | We may have been a PFIC, which could result in adverse United States federal income tax consequences to U.S. investors; |
• | We may amend the terms of the warrants in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of the then outstanding Public Warrants. As a result, the exercise price of the warrants could be increased, the exercise period could be shortened and the number of Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without approval of each warrant affected; |
• | We have identified material weaknesses in our internal control over financial reporting. Failure to achieve and maintain effective internal control over financial reporting could result in our failure to accurately or timely report our financial condition or results of operations which could have a material adverse effect on our business and stock price; and |
• | The compliance obligations of Altimar II and us under the Sarbanes-Oxley Act require substantial financial and management resources, and increase the time and costs of completing an acquisition. |
Nine months ended September 30, 2021 |
||||
Statement of Operations Data: |
||||
Net operating loss |
$ | (1,691,620 | ) | |
|
|
|||
Balance Sheet Data (at period end): |
||||
Total assets |
$ | 346,087,622 | ||
Total liabilities |
31,981,473 | |||
Shareholder’s Equity: |
||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding |
— | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding |
— | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding |
863 | |||
Additional paid-in capital |
— | |||
Accumulated surplus (deficit) |
(30,894,714 | ) | ||
Total shareholders’ equity (deficit) |
(30,893,851 | ) | ||
Cash Flow Data: |
||||
Net income: |
755,552 | |||
Adjustments to reconcile net loss to net cash used in operating activities |
||||
Interest income on investments held in the Trust Account |
(11,697 | ) | ||
Change in fair value of warrant liability |
(3,190,546 | ) | ||
Transaction costs allocated to the Warrants |
755,071 | |||
Changes in operating assets and liabilities |
||||
Prepaid expenses |
(744,813 | ) | ||
Accrued expenses |
259,896 | |||
Net cash used in operating activities |
(2,176,537 |
) | ||
Non-cash investing and financing activities |
||||
Offering costs included in accrued offering costs |
$ | 3,607 | ||
Offering costs paid through promissory note |
$ | 89,890 | ||
Deferred underwriting fee payable |
$ | 12,075,000 | ||
Weighted average number of Class B ordinary shares outstanding (basic and diluted) |
8,460,165 |
Nine Months Ended September 30, |
||||||||
($ in thousands) |
2021 |
2020 |
||||||
Revenue |
$ | 107,887 | $ | 42,249 | ||||
Cost of revenue |
61,749 | 22,637 | ||||||
|
|
|
|
|||||
Gross profit |
46,138 | 19,612 | ||||||
Operating Expenses: |
||||||||
Selling, General and Administrative |
29,470 | 13,484 | ||||||
Depreciation and Amortization |
9,327 | 2,797 | ||||||
|
|
|
|
|||||
Total operating expenses |
38,797 | 16,281 | ||||||
|
|
|
|
|||||
Operating income |
7,341 | 3,331 | ||||||
|
|
|
|
|||||
Interest expense and other expense (income) |
||||||||
Interest expense |
8,800 | 2,335 | ||||||
Other expense |
9,007 | 2,524 | ||||||
Other income |
(3,215 | ) | (423 | ) | ||||
|
|
|
|
|||||
Total other expense, net |
14,592 | 4,436 | ||||||
|
|
|
|
|||||
Net loss before income taxes |
(7,251 | ) | (1,105 | ) | ||||
Provision for income taxes |
807 | — | ||||||
|
|
|
|
|||||
Net loss |
(8,058 | ) | (1,105 | ) | ||||
|
|
|
|
($ in thousands) |
As of September 30, 2021 |
As of December 31, 2020 |
||||||
Cash |
$ | 10,531 | $ | 8,188 | ||||
Working capital |
(146,897 | ) | 14,392 | |||||
Total assets |
283,345 | 206,779 | ||||||
Total debt |
170,257 | 93,339 | ||||||
Total liabilities |
201,152 | 116,655 | ||||||
Total contingently redeemable preferred equity |
54,105 | 54,105 | ||||||
Total members’ equity |
28,088 | 36,019 |
Nine Months Ended September 30, |
||||||||
($ in thousands) |
2021 |
2020 |
||||||
Cash provided by (used in): |
||||||||
Operating activities |
$ | 1,737 | $ | 2,789 | ||||
Investing activities |
(74,076 | ) | (41,693 | ) | ||||
Financing activities |
74,682 | 44,335 | ||||||
|
|
|
|
|||||
Net increase in cash |
2,343 |
5,431 |
||||||
Other Financial Data: |
||||||||
($ in thousands) |
||||||||
Adjusted EBITDA(1) |
$ | 23,820 | $ | 9,684 |
(1) | The following table presents the reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA: |
Nine Months Ended September 30, |
||||||||
($ in thousands) |
2021 |
2020 |
||||||
Net loss |
(8,058 | ) | (1,105 | ) | ||||
Adjusted for: |
||||||||
Depreciation and amortization |
12,006 | 4,993 | ||||||
Interest expense, net |
8,800 | 2,335 | ||||||
Income tax expense |
807 | — | ||||||
Contingent consideration |
(1,120 | ) | — | |||||
Acquisition expenses |
4,045 | 1,925 | ||||||
Loss on extinguishment of debt |
2,031 | — | ||||||
Non-recurring and non-cash costs (1) |
5,309 | 1,536 | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
23,820 |
9,684 |
||||||
|
|
|
|
(1) | Includes adjustments for other non-recurring, non-operating, and non-cash costs related primarily to integration costs for new acquisitions, severance, and charges for the increase of fair value of inventory related to acquisitions, and management fees paid to Fathom OpCo’s previous owners. |
• | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
• | the historical audited financial statements of Altimar II for the period from inception (December 7, 2020) through December 31, 2020 and related notes, found elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of Fathom OpCo for the year ended December 31, 2020, found elsewhere in this proxy statement/prospectus; |
• | the historical combined audited financial statements of Incodema and Newchem for the year ended December 31, 2019, found elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of Dahlquist for the nine months ended September 30, 2020, found elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of Majestic Metals for the nine months ended September 30, 2020, found elsewhere in this proxy statement/prospectus; and |
• | other information relating to Altimar II and Fathom OpCo contained in this proxy statement/prospectus, including the Business Combination Agreement and the description of certain terms thereof set forth in the section entitled “The Business Combination.” |
• | Fathom OpCo is a variable interest entity (“VIE”). Fathom will be the sole managing member and primary beneficiary who has full and complete charge of all affairs of Fathom OpCo, and the Class A units of Fathom OpCo do not have substantive participating or kick out rights; and |
• | No single party controls Fathom pre and post transaction, hence, the Business Combination is not considered a common control transaction. |
• | Assuming No Redemptions |
• | Assuming Maximum Redemptions |
• | Fathom OpCo Owner Consideratio n |
For the Nine Months Ended September 30, 2021 |
For the Year Ended December 31, 2020 |
|||||||||||||||
Pro Forma Combined Assuming No Redemptions |
Pro Forma Combined Assuming Maximum Redemptions |
Pro Forma Combined Assuming No Redemptions |
Pro Formation Combined Assuming Maximum Redemptions |
|||||||||||||
Revenue |
$ | 118,254 | $ | 118,254 | $ | 149,405 | $ | 149,405 | ||||||||
Cost of revenue |
67,511 | 67,511 | 81,677 | 81,677 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
50,743 | 50,743 | 67,728 | 67,728 | ||||||||||||
Operating expenses |
||||||||||||||||
Selling, general, and administrative |
33,141 | |
33,141 |
|
90,769 | 90,769 | ||||||||||
Depreciation and amortization |
16,892 | 16,892 | 22,523 | 22,523 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
50,033 | 50,033 | 113,292 | 113,292 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
710 | 710 | (45,564 | ) | (45,564 | ) | ||||||||||
Interest expense and other expense (income) |
||||||||||||||||
Interest expense/(income) |
4,518 | 4,518 | 6,131 | 6,131 | ||||||||||||
Other expense |
10,193 | 10,193 | 8,470 | 8,470 | ||||||||||||
Other (income) |
(7,065 | ) | (7,065 | ) | (2,818 | ) | (2,818 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expenses, net |
7,646 | 7,646 | 11,783 | 11,783 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET LOSS BEFORE INCOME TAXES |
(6,936 | ) | |
(6,936 |
) |
(57,347 | ) | (57,347 | ) | |||||||
Provision for income taxes |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET LOSS |
(6,936 | ) | |
(6,936 |
) |
(57,347 | ) | (57,347 | ) | |||||||
Net loss attributable to noncontrolling interest |
(3,481 | ) | (2,129 | ) | (25,989 | ) | (35,887 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Fathom |
(3,455 | ) | (4,807 | ) | (31,358 | ) | (21,460 | ) | ||||||||
Basic and diluted weighted outstanding |
73,849,425 | 50,534,508 | 73,849,425 | 50,534,508 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted (loss) Per Share: |
$ | (0.05 | ) | $ | (0.07 | ) | $ | (0.42 | ) | $ | (0.42 | ) |
Selected Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2021 |
Pro Forma Combined Assuming No Redemptions |
Pro Forma Combined Assuming Maximum Redemptions |
||||||
Total Assets |
1,684,854 | $ | 1,673,721 | |||||
Total Liabilities |
218,375 | $ | 206,792 | |||||
Total stockholders’ equity |
1,466,479 | $ | 1,466,479 |
Nine Months Ended September 30, |
Year Ended December 31, |
|||||||
($ in thousands) |
2021 |
2020 |
||||||
Pro Forma Adjusted EBITDA (1) |
27,114 | 39,890 | ||||||
|
|
|
|
(1) | The table below presents our Non-GAAP Pro Forma Adjusted EBITDA reconciled to pro forma net loss, the closest U.S. GAAP measure, for the period indicated. |
Nine Months Ended September 30, |
Year Ended December 31, |
|||||||
($ in thousands) |
2021 |
2020 |
||||||
Pro forma net loss |
(6,936 | ) | (57,347 | ) | ||||
Adjusted for: |
||||||||
Depreciation and amortization |
21,028 | 29,391 | ||||||
Interest expense, net |
4,518 | 6,131 | ||||||
Contingent consideration |
(1,120 | ) | 1,055 | |||||
Acquisition expenses (1) |
4,050 | 56,535 | ||||||
Loss on extinguishment of debt |
2,031 | — | ||||||
Non-recurring and non-cash costs (2) |
3,543 | 4,125 | ||||||
|
|
|
|
|||||
Pro Forma Adjusted EBITDA |
27,114 | 39,890 | ||||||
|
|
|
|
(1) | Mainly includes capital markets advisory, consulting, accounting and legal expenses in connection with mergers and acquisitions activities, including related evaluation, negotiation, and capital-raising activities related to the Business Combination. |
(2) | Includes adjustments for other non-recurring, non-operating, and non-cash costs related primarily to integration costs for new acquisitions, severance, and charges for the increase of fair value of inventory related to acquisitions. |
• | Historical per share information of Altimar II for period from inception (December 7, 2020) through December 31, 2020; |
• | Historical per share information of Fathom OpCo for the year ended December 31, 2020; and |
• | Unaudited pro forma per share information of the combined company for the year ended December 31, 2020 after giving effect to the Business Combination, assuming the redemption scenarios as follows: |
• | Assuming No Redemptions |
• | Assuming Interim Redemptions |
• | Assuming Maximum Redemptions |
Altimar Acquisition Corp II |
Pro Forma Fathom OpCo (2) |
Pro Forma Combined (Assuming No Redemptions) |
Pro Forma Combined (Assuming Interim Redemptions) |
Pro Forma Combined (Assuming Maximum Redemptions) |
||||||||||||||||
Period Ended September 30, 2021 |
||||||||||||||||||||
(in thousands except share and per share amounts) |
||||||||||||||||||||
Book Value per share |
(0.81 | ) | N/A | 19.86 | 23.72 | 29.02 | ||||||||||||||
Net income (loss) |
$ | 756 | $ | 2,261 | $ | (6,936 | ) | $ | (6,936 | ) | $ | (6,936 | ) | |||||||
Altimar II Public Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class A ordinary shares |
29,571,429 | |||||||||||||||||||
Basic and diluted income per share, Class A ordinary shares |
0.02 | |||||||||||||||||||
Founder Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class B ordinary shares |
8,460,165 | |||||||||||||||||||
Basic and diluted net loss per common share |
0.02 | |||||||||||||||||||
Fathom Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted |
73,849,425 | 61,821,837 | 50,534,508 | |||||||||||||||||
Basic and diluted net loss per common share |
$ | (0.05 | ) | $ | (0.05 | ) | $ | (0.07 | ) | |||||||||||
Cash distributions per common share |
N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Year Ended December 31, 2020 |
||||||||||||||||||||
(in thousands except share and per share amounts) |
||||||||||||||||||||
Net income (loss) |
(5 | ) | (7,728 | ) | (57,347 | ) | (57,347 | ) | (57,347 | ) | ||||||||||
Altimar II Public Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class A ordinary shares |
N/A | |||||||||||||||||||
Basic and diluted income per share, Class A ordinary shares |
N/A | |||||||||||||||||||
Founder Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class B ordinary shares |
7,500,000 | (1) | ||||||||||||||||||
Basic and diluted net loss per common share |
$ | — | ||||||||||||||||||
Fathom Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted |
73,849,425 | 61,821,837 | 50,534,508 | |||||||||||||||||
Basic and diluted net loss per common share |
$ | (0.42 | ) | $ | (0.42 | ) $ | (0.42 | ) | ||||||||||||
Cash distributions per common share |
N/A | N/A | N/A | N/A | N/A |
(1) | Excludes an aggregate of up to 1,125,000 shares of Class B ordinary shares which were subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters (see Note 5 in the Altimar Acquisition Corp II 2020 Financial Statements). |
(2) | Given Fathom OpCo’s historical equity structure, the calculation of historical Fathom OpCo per share data has been omitted. |
• | an acquired company, asset or technology not furthering our business strategy as anticipated; |
• | difficulties entering and competing in new product or geographic markets and increased competition, including price competition; |
• | integration challenges; |
• | challenges in working with strategic partners and resolving any related disagreements or disputes; |
• | high valuation for a company, asset or technology, or changes in the economic or market conditions or assumptions underlying our decision to make an acquisition; |
• | significant problems or liabilities associated with acquired businesses, assets or technologies, including increased intellectual property and employment-related litigation exposure; |
• | acquisition of a significant amount of goodwill, which could result in future impairment charges that would reduce our earnings; and |
• | requirements to record substantial charges and amortization expense related to certain purchased intangible assets, deferred stock compensation and other items, as well as other charges or expenses. |
• | enhance our operational, financial and management controls and infrastructure, human resource policies, and reporting systems and procedures; |
• | effectively scale our operations, including accurately predicting the need for floor space, equipment, and additional staffing; and |
• | successfully identify, recruit, hire, train, develop, maintain, motivate and integrate additional employees. |
• | retain and further penetrate existing customers, as well as attract new customers; |
• | consistently execute on custom part orders in a manner that satisfies our customers’ product needs and provides them with a superior experience; |
• | develop new technologies or manufacturing processes and broaden the range of custom parts we offer; |
• | capitalize on customers’ product expectations for access to comprehensive, user-friendly e-commerce capabilities 24 hours per day, 7 days per week; |
• | increase the strength and awareness of our brands across geographic regions; |
• | respond to changes in customers’ needs, technology and our industry; |
• | react to challenges from existing and new competitors; and |
• | respond to an economic recession which negatively impacts manufacturers’ ability to innovate and bring new products to market. |
• | We cannot assure you that we will be successful in addressing the factors above and continuing to grow our business and revenue. |
• | be unable to meet the shipping deadlines of our customers; |
• | experience disruptions in our ability to process submissions and generate quotations, manufacture and ship parts, provide marketing and sales support and customer service and otherwise operate our business, any of which could negatively impact our business; |
• | be forced to rely on third-party manufacturers; |
• | need to expend significant capital and other resources to address any damage caused by the disaster; and |
• | lose customers and be unable to reacquire those customers. |
• | disruptions to or restrictions on our ability to ensure the continuous provision of our manufacturing services and solutions; |
• | reductions in our capacity utilization levels; |
• | temporary closures of our direct and indirect suppliers, resulting in adverse effects to our supply chain, and other supply chain disruptions, which adversely affect our ability to procure sufficient inventory to support customer orders; |
• | temporary shortages of skilled employees available to staff manufacturing facilities due to shelter-in-place |
• | restrictions or disruptions of transportation, such as reduced availability of air transport, port closures and increased border controls or closures; |
• | increases in operational expenses and other costs related to requirements implemented to mitigate the impact of the pandemic; |
• | delays or limitations on the ability of our customers to perform or make timely payments; |
• | reductions in short- and long-term demand for our manufacturing services and solutions, or other disruptions in technology buying patterns; |
• | workforce disruptions due to illness, quarantines, governmental actions, other restrictions and/or the social distancing measures we have taken to mitigate the impact of COVID-19 at our locations in an effort to protect the health and well-being of our employees, customers, suppliers and of the communities in which we operate (including certain employees working from home, restricting the number of employees attending events or meetings in person, limiting the number of people in our buildings and factories at any one time, further restricting access to our facilities and suspending employee travel); and |
• | our management team continuing to commit significant time, attention and resources to monitoring the COVID-19 pandemic and seeking to mitigate its effects on our business and workforce. |
• | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; |
• | not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
• | reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and |
• | exemptions from the requirements of holding a nonbinding advisory vote of stockholders on executive compensation, stockholder approval of any golden parachute payments not previously approved and having to disclose the ratio of the compensation of our chief executive officer to the median compensation of our employees. |
• | a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Fathom Board; |
• | the ability of the Fathom Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | the limitation of the liability of, and the indemnification of, Fathom’s directors and officers; |
• | the right of the Fathom Board to elect a director to fill a vacancy created by the expansion of the Fathom Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Fathom Board; |
• | the requirement that directors may only be removed from the Fathom Board for cause; |
• | the requirement that a special meeting of stockholders may be called only by the Fathom Board or the chairman of the Fathom Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; |
• | controlling the procedures for the conduct and scheduling of the Fathom Board and stockholder meetings; |
• | the ability of the Fathom Board to amend the Proposed Bylaws, which may allow the Fathom Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Proposed Bylaws to facilitate an unsolicited takeover attempt; and |
• | advance notice procedures with which stockholders must comply to nominate candidates to the Fathom Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the composition of the Fathom Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company. |
• | any warrants or options to purchase the Class A common stock, including the Public Warrants and the Private Placement Warrants, that will be outstanding following the Business Combination; |
• | any equity awards that may be issued by Fathom; and |
• | the Earnout Shares or the Sponsor Earnout Shares. |
Assuming No Redemptions |
Assuming Maximum Redemptions (1) |
|||||||||||||||||||||||
Shares |
Ownership % (2) |
Voting % (2) |
Shares |
Ownership % (2) |
Voting % (2) |
|||||||||||||||||||
Altimar II Founders (3) |
14,670,000 | 9.6 | % | 9.6 | % | 14,670,000 | 9.6 | % | 9.6 | % |
(1) | This presentation assumes maximum redemptions in which the Altimar II Public Shareholders redeem all 34,500,000 outstanding shares of Altimar II’s Class A ordinary shares. |
(2) | Percentage calculations assume the exercise and conversion of: (i) 8,625,000 Public Warrants and (ii) 9,900,000 Private Placement Warrants held by Sponsor. Percentage calculations exclude: (i) the Earnout Shares and the Sponsor Earnout Shares (each as defined herein), all of which will be unvested as of the Closing and (ii) shares and awards issuable under the 2021 Omnibus Plan. |
(3) | Holdings of Altimar II Founders consists of (i) the shares of Class A common stock held by the Sponsor and the other Altimar II Founders upon automatic conversion of their Class B ordinary shares into Class C common stock as a result of the Business Combination which shares of Class C common stock will then convert into Class A common stock prior to pro rata forfeiture by the Altimar II Founders of an aggregate of 2,587,500 shares of Class A common stock and (ii) 9,900,000 shares issuable upon exercise of the Private Placement Warrants held by Sponsor. Holdings of Sponsor excludes 1,267,500 shares of Class A common stock held by Sponsor that constitute Sponsor Earnout Shares (as defined herein). |
• | if there are no redemptions of Public Shares, 26% of Fathom’s Common Stock expected to be outstanding immediately after the Business Combination; |
• | if there are redemptions of 50% of maximum redemptions, 13% of Fathom’s Common Stock expected to be outstanding immediately after the Business Combination; or |
• | if there are maximum redemptions, 0% of Fathom’s Common Stock expected to be outstanding immediately after the Business Combination. |
• | the issuance of up to 8,625,000 shares upon exercise of the Public Warrants at a price of $11.50 per share; |
• | the issuance of up to 9,900,000 shares upon exercise of the Private Placement Warrants held by the Sponsor at a price of $11.50 per share; |
• | the issuance of the Earnout Shares and the Sponsor Earnout Shares (each as defined herein); and |
• | the issuance of shares under the 2021 Omnibus Plan. |
• | if there are no redemptions of Public Shares, 25% of Fathom’s Common Stock outstanding assuming all such shares were issued immediately after the Business Combination; |
• | if there are redemptions of 50% of maximum redemptions, 15% of Fathom’s Common Stock outstanding assuming all such shares were issued immediately after the Business Combination; |
• | if there are maximum redemptions of the outstanding Public Shares, 5% of Fathom’s Common Stock outstanding assuming all such shares were issued immediately after the Business Combination. |
• | a U.S. holder of Altimar II ordinary shares whose Altimar II ordinary shares have a fair market value of less than $50,000 on the date of the Domestication should not recognize any gain or loss and generally should not be required to include any part of Altimar II’s earnings in income pursuant to the Domestication; |
• | a U.S. holder of Altimar II ordinary shares whose Altimar II ordinary shares have a fair market value of $50,000 or more on the date of the Domestication, but who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of Altimar II ordinary shares entitled to vote and less than 10% of the total value of all classes of Altimar II ordinary shares will generally recognize gain (but not loss) with respect to the Domestication, as if such U.S. holder exchanged its Altimar II ordinary shares for Fathom common stock in a taxable |
transaction. As an alternative to recognizing gain, such U.S. holders may file an election to include in income as a dividend the “all earnings and profits amount” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to their Altimar II ordinary shares, provided certain other requirements are satisfied. Altimar II does not expect that Altimar II’s cumulative earnings and profits will be material at the time of Domestication; and |
• | a U.S. holder of Altimar II ordinary shares who on the date of the Domestication owns (actually and constructively) 10% or more of the total combined voting power of all classes of Altimar II ordinary shares entitled to vote or 10% or more of the total value of all classes of Altimar II ordinary shares will generally be required to include in income as a dividend the “all earnings and profits amount” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to its Altimar II ordinary shares. Any such U.S. holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code. Altimar II does not expect that Altimar II’s cumulative earnings and profits will be material at the time of the Domestication. |
Public Shares held by Public Shareholders |
34,500,000 shares | |||
Founder shares held by the Sponsor and Altimar II independent directors |
8,625,000 shares | |||
Total number of ordinary shares |
43,125,000 shares |
Total funds in trust at the initial business combination |
$ | 345,000,000 | ||
Public Shareholders’ investment per Public Share (1) |
$ | 10.00 | ||
The Sponsor’s investment per founder share (2) |
$ | 0.03 | ||
Implied value per share of Fathom common stock upon the initial business combination |
$ | 8.00 |
(1) | While the Public Shareholders’ investment is in both the Public Shares and the Public Warrants, for purposes of this table, the full investment amount is ascribed to the Public Shares only. |
(2) | The Sponsor’s total investment in the equity of the company, inclusive of the founder shares and the Sponsor’s $9,900,000 investment in the Private Placement Warrants, is $9,925,000. For purposes of this table, the full investment amount is ascribed to the founder shares only. |
• | numerous meetings and calls with the management team and advisors of Fathom OpCo regarding operations and forecasts; |
• | review of material contracts, material liabilities and other material matters; |
• | financial, legal, insurance, and accounting due diligence; |
• | consultation with Altimar II management and legal counsel and financial advisor; |
• | review of Fathom OpCo’s historical financial performance (including audited and unaudited financials) and management projections for the business; and |
• | financial and valuation analyses of the business of Fathom. |
• | Fathom OpCo is an Attractive Business Opportunity |
• | Large and Expanding Growth Industry on-demand manufacturing company in a $25+ billion low-to-mid re-shore manufacturing activities, digitalize product development, mass customize products and search for higher value add, all at lower cost with shorter lead times. |
• | Growth Prospects low-to-mid |
• | Platform Supports Further Growth Initiatives on-demand manufacturing capabilities, including additive manufacturing and injection molding technologies. Fathom OpCo is positioned to capture growth across several markets through its robust portfolio growth with healthy upside to expand across a diversified revenue profile and technology offerings. |
• | Industry Leading Technology Platform and Proprietary Information |
• | Deep Relationships with a Broad and Diverse Customer Base |
• | Attractive Valuation |
• | Experienced and Proven Management Team |
• | Continued Ownership by the Key Holders |
• | Due Diligence |
• | Terms and Conditions of the Business Combination Agreement arm’s-length negotiations between the parties. |
• | Stockholder Liquidity |
• | Involvement of the Original PIPE Investors |
• | Changes to Altimar II Capital Structure |
• | Altimar II Shares Subject to Vesting |
• | Macroeconomic Risks COVID-19 pandemic, and the effects they could have on the combined company’s revenues and financial performance. |
• | Business Plan and Projections May Not Be Achieved |
• | Potential Misalignment of Interests between Fathom and the Public Stockholders |
• | Growth Initiatives May Not be Achieved |
• | No Third-Party Valuation |
• | Liquidation |
• | Exclusivity non-solicitation provision that prohibits Altimar II from soliciting other initial business combination proposals, which restricts Altimar II’s ability to consider other potential initial business combinations prior to the Closing or termination of the Business Combination Agreement. Altimar II’s Board, in certain circumstances, may change its recommendation in favor of the Business Combination, subject to the terms and conditions of the Business Combination Agreement. |
• | Restrictions in the Conduct of Business |
• | Distraction to Operations |
• | Shareholder Vote |
• | Closing Conditions |
• | Altimar II Shareholders Holding a Minority Position in the Post-Combination Company |
• | Governance and Structure of the Fathom Board |
• | Control of Fathom’s Board non-voting observer to Altimar II’s Board for as long as CORE owns at least 5% of the shares owned by CORE at the Closing. |
• | Litigation |
• | Fees and Expenses |
• | Redemptions |
• | NYSE Listing |
• | Interests of Certain Persons Certain Relationships and Related Party Transactions |
• | Other Risks Factors. Risk Factors |
• | Further market adoption and growth of additive manufacturing and Fathom’s ability to capture the revenue opportunity associated with such growth. |
• | Continued market penetration into Fathom’s existing core manufacturing technologies: additive manufacturing, CNC machining, precision sheet metal fabrication and injection molding. |
• | Cohort-based customer sales forecast model with projected revenue growth driven by share of wallet growth with existing customers, acquisition of new customers and cross-selling of recently acquired, complementary manufacturing technologies. |
• | Key customer projections assumptions include: |
• | Annual customer retention remains in line with historical rate of 91%; |
• | Sales growth with existing strategic customers is between 15% and 25% annually beginning in 2022; |
• | New customer sales growth is between 30% and 45% annually beginning in 2022; and |
• | The addition of approximately 150 new strategic customers beginning in 2022 through 2025 at an average initial annual spend of $250,000 per customer, growing to an average annual spend of $400,000 per customer over time. |
• | Expected cost of goods sold ranging from $85 million in 2021 to $193 million in 2025. |
• | Increasing gross profit margin from 48% in 2021 to 53% in 2025 driven by positive manufacturing technology sales mix, continued price optimization initiatives, technology advancements and factory efficiencies. |
• | Expected operating expenses increasing from $38 million in 2021 to $101 million in 2025, primarily attributable to increases in headcount, including salesforce expansion and marketing expenses. |
• | Projected annual capital expenditures increasing from $8 million in 2021 to $36 million in 2025, primarily towards the purchase/procurement of manufacturing equipment and technology infrastructure. |
Fathom OpCo Annual Income Statement |
||||||||||||||||||||||||
($ in millions) |
2020 (1) |
2021E (1) |
2022E |
2023E |
2024E |
2025E |
||||||||||||||||||
Pro Forma Revenue |
$ |
149.4 |
$ |
168.3 |
$ |
204.9 |
$ |
252.4 |
$ |
317.2 |
$ |
408.2 |
||||||||||||
% YoY growth |
13 | % | 22 | % | 23 | % | 26 | % | 29 | % | ||||||||||||||
Pro Forma Gross Profit |
$ |
79.8 |
$ |
87.1 |
$ |
106.5 |
$ |
131.2 |
$ |
165.9 |
$ |
215.5 |
||||||||||||
Gross Margin |
53 | % | 52 | % | 52 | % | 52 | % | 52 | % | 53 | % | ||||||||||||
Pro Forma Adj. EBITDA (2) |
$ |
39.9 |
$ |
44.5 |
$ |
54.3 |
$ |
69.0 |
$ |
87.9 |
$ |
115.0 |
||||||||||||
Adj. EBITDA Margin |
27 | % | 26 | % | 27 | % | 27 | % | 28 | % | 28 | % | ||||||||||||
Pro Forma CapEx |
$ |
(3.5 |
) |
$ |
(7.5 |
) |
$ |
(12.1 |
) |
$ |
(16.1 |
) |
$ |
(23.8 |
) |
$ |
(36.2 |
) | ||||||
Pro Forma FCF (3) |
$ |
36.4 |
$ |
37.0 |
$ |
42.3 |
$ |
52.9 |
$ |
64.1 |
$ |
78.9 |
(1) | Information for 2020 and 2021E reflects various adjustments to give pro forma effect to the Prior Acquisitions and the 2021 Acquisitions as though such transactions occurred on January 1, 2020. This unaudited, adjusted financial data does not conform to SEC Regulation S-X or Public Company Accounting Oversight Board standards. |
(2) | Pro Forma Adjusted EBITDA is a non-GAAP measure and such measure for 2020 and 2021E is not comparable to Adjusted EBITDA presented elsewhere in this proxy statement/prospectus as it includes pro forma adjustments for acquisitions. Adjustments to EBITDA also include transaction and integration costs, non-recurring and non-cash items, compensation normalization and other accounting adjustments. Pro Forma Adjusted EBITDA presented above for 2020 and 2021E is most comparable to Pro Forma Adjusted EBITDA presented elsewhere in this proxy statement/Prospectus. See Fathom OpCo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Information. |
(3) | Represents Pro Forma Adjusted EBITDA minus Pro Forma CapEx. |
Fathom OpCo Annual Income Statement |
||||||||||||||||||||||||
($ in millions) |
2020 (1) |
2021E (1)(4) |
2022E |
2023E |
2024E |
2025E |
||||||||||||||||||
Pro Forma Revenue |
$ |
149.4 |
$ |
162.1 |
$ |
204.9 |
$ |
252.4 |
$ |
317.2 |
$ |
408.2 |
||||||||||||
% YoY growth |
9 | % | 26 | % | 23 | % | 26 | % | 29 | % | ||||||||||||||
Pro Forma Gross Profit |
$ |
72.9 |
$ |
77.5 |
$ |
99.8 |
$ |
128.5 |
$ |
165.9 |
$ |
215.5 |
||||||||||||
Gross Margin |
49 | % | 48 | % | 49 | % | 51 | % | 52 | % | 53 | % | ||||||||||||
Pro Forma Adj. EBITDA (2) |
$ |
39.9 |
$ |
40.0 |
$ |
54.3 |
$ |
69.0 |
$ |
87.9 |
$ |
115.0 |
||||||||||||
Adj. EBITDA Margin |
27 | % | 25 | % | 27 | % | 27 | % | 28 | % | 28 | % | ||||||||||||
Pro Forma CapEx |
$ |
(3.5 |
) |
$ |
(7.5 |
) |
$ |
(12.1 |
) |
$ |
(16.1 |
) |
$ |
(23.8 |
) |
$ |
(36.2 |
) | ||||||
Pro Forma FCF (3) |
$ |
36.4 |
$ |
32.5 |
$ |
42.3 |
$ |
52.9 |
$ |
64.1 |
$ |
78.9 |
(1) | Information for 2020 and 2021E reflects various adjustments to give pro forma effect to the Prior Acquisitions and the 2021 Acquisitions as though such transactions occurred on January 1, 2020. This unaudited, adjusted financial data does not conform to SEC Regulation S-X or Public Company Accounting Oversight Board standards. |
(2) | Pro Forma Adjusted EBITDA is a non-GAAP measure and such measure for 2020 and 2021E is not comparable to Adjusted EBITDA presented elsewhere in this proxy statement/prospectus as it includes pro forma adjustments for acquisitions. Adjustments to EBITDA also include transaction and integration costs, non-recurring and non-cash items, compensation normalization and other accounting adjustments. Pro Forma Adjusted EBITDA presented above for 2020 and 2021E is most comparable to Pro Forma Adjusted EBITDA presented elsewhere in this proxy statement/Prospectus. See Fathom OpCo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Information. |
(3) | Represents Pro Forma Adjusted EBITDA minus Pro Forma CapEx. |
(4) | 2021E Pro Forma Revenue, Pro Forma Gross Profit, Pro Forma Gross Margin, Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin figures shown reflect the lower end of Fathom OpCo management’s guidance range for 2021E performance. |
(a) | Altimar II will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation under the laws of the State of Delaware (the “Domestication”), upon which Altimar II will change its name to “Fathom Digital Manufacturing Corporation.” |
(b) | Fathom OpCo will issue managing member interests in Fathom OpCo to Altimar II in exchange for a nominal cash payment; |
(c) | Following step (b) above, each of CORE Fund I Blocker-5 LLC, a Delaware limited liability company (“Fathom Blocker 1”), CORE Fund I Blocker-2 LLC, a Delaware limited liability company (“Fathom Blocker 2”), and SG (MCT) Blocker, LLC, a Delaware limited liability company (Fathom Blocker 3” and, together with Fathom Blocker 1 and Fathom Blocker 2, the “Fathom Blockers”), will merge with and into Rapid Blocker 1 Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Altimar II (“Blocker Merger Sub 1”), Rapid Blocker 2 Merger Sub, LLC , a Delaware limited liability company and a direct, wholly owned subsidiary of Altimar II (“Blocker Merger Sub 2”), and Rapid Blocker 3 Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Altimar II (“Blocker Merger Sub 3” and, together with Blocker Merger Sub 1 and Blocker Merger Sub 2, the “Blocker Merger Subs”), respectively, in each case, with the Fathom Blockers surviving as the surviving companies and wholly owned subsidiaries of Altimar II (collectively, the “Surviving Fathom Blockers”); |
(d) | Immediately following step (c) above, the Surviving Fathom Blockers will each merge with and into Altimar II (the “Blocker Altimar Mergers”), in each case, with Altimar II as the surviving company; and |
(e) | Immediately following the Blocker Altimar Mergers, Rapid Merger Sub will merge with and into Fathom OpCo (the “Fathom Merger”), with Fathom OpCo as the surviving entity of the Fathom Merger (Fathom OpCo, in its capacity as the surviving entity of the Fathom Merger, is sometimes referred to as the “Fathom Surviving Entity”). Following the Fathom Merger, the Fathom Surviving Entity will be owned by Altimar II and all other holders of Fathom OpCo units outstanding as of immediately prior to the Fathom Merger (such other holders, excluding Altimar II are referred to as the “Continuing Fathom Unitholders”). |
1. | Altimar II Founders include Altimar Sponsor II, LLC and the seven current directors of Altimar II. |
2. | The warrants held by Public Shareholders are Public Warrants and the warrants held by Altimar Sponsor II, LLC are Private Placement Warrants. |
3. | Legacy Fathom Owners include Fathom Blocker Owners and Continuing Fathom Unitholders, which include the CORE Investors. |
4. | The Class B common stock is non-economic, voting stock of Fathom. |
5. | New Fathom Units owned by the Continuing Fathom Unitholders are exchangeable on a one-for-one basis for shares of Class A common stock (with corresponding surrender of an equal number of shares of Class B common stock for cancellation by Fathom), in accordance with the Fathom Operating Agreement. |
6. | PIPE Investors exclude the Backstop Investors as no Backstop Shares are issued in this illustration assuming no redemptions. |
(a) | (i) All the cash proceeds from the Trust Account established for the purpose of holding the net proceeds of Altimar II’s initial public offering, net of any amounts paid to Altimar II’s shareholders that exercise their redemption rights in connection with the Business Combination, together with the proceeds from the PIPE Investment (as defined herein) (the “Available Cash Amount”), (ii) minus minus minus |
(b) | A number of shares of Class A common stock and newly issued Class A units of Fathom OpCo (the “New Fathom Units”) (together with one share of Class B common stock to be issued at par value for cash in respect of each New Fathom Units), to be allocated as set forth on the Allocation Schedule, in an aggregate number (rounded up to the nearest whole share) equal to (a) the quotient of (i) the result of (A) $1,200,000,000 minus divided by |
(a) | the representations and warranties of Fathom OpCo and the Fathom Blockers, in most instances disregarding qualifications relating to materiality or material adverse effect, must be true and correct as of the execution of the Business Combination Agreement and as of the Closing as though then made (or if such representations and warranties expressly relate to a specific date, such representations and warranties shall be true and correct as of such date) (i) to the extent such failure of the representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect (as is defined in the Business Combination Agreement) or (ii) in limited cases, in all material respects; |
(b) | Fathom OpCo and the Fathom Blockers shall not be in material breach as of the Closing of any covenant or agreement contained in the Business Combination Agreement to be performed or complied with by each of them, as applicable, prior to the Closing; |
(c) | there shall not have been a Material Adverse Effect since the date of the Business Combination Agreement; |
(d) | Fathom OpCo shall have delivered a customary closing certificate certifying, among other things, that the conditions described in clauses (a) and (b) above have been satisfied with respect to Fathom OpCo; and (ii) each Fathom Blocker shall have delivered a customary closing certificate certifying, among other things, that the conditions described in clauses (a), (b) and (c) above have been satisfied with respect to such Fathom Blocker; and |
(e) | Fathom OpCo and the Fathom Blockers shall have delivered certain other certificates and documents as required by the terms of the Business Combination Agreement. |
(a) | the representations and warranties of Altimar II, in most instances disregarding qualifications relating to materiality or material adverse effect, must be true and correct as of the execution of the Business Combination Agreement and as of the Closing as though then made (or if such representations and warranties expressly relate to a specific date, such representations and warranties shall be true and correct as of such date) (i) to the extent such failure of the representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on Altimar II or prevent or materially delay or impair the ability of Altimar II to perform its obligations under the Business Combination Agreement or to consummate the transactions contemplated thereby, or (ii) in limited cases, in all material respects; |
(b) | Altimar II shall not be in material breach as of the Closing of any covenant or agreement contained in the Business Combination Agreement to be performed or complied with by it prior to the Closing; |
(c) | the Available Cash Amount shall not be less than $90,000,000 (after giving effect to receipt of proceeds from the Backstop Investment, if applicable); |
(d) | Altimar II shall have delivered a customary closing certificate certifying, among other things, that the conditions described in clauses (a), (b) and (c) above have been satisfied with respect to Altimar II; |
(e) | Each of the covenants of each of the parties to the Forfeiture and Support Agreement (as defined below) required under the Forfeiture and Support Agreement to be performed as of or prior to the Closing shall have been performed in all material respects, and the Forfeiture and Support Agreement shall be in full force and effect; |
(f) | Altimar II shall have delivered certain other certificates and documents as required by the terms of the Business Combination Agreement; and |
(g) | The board of directors of Altimar II shall be constituted with the Persons designated in accordance with Section 11.09 of the Business Combination Agreement. |
(a) | change, modify or amend the Trust Agreement or the governing documents of Altimar II; |
(b) | other than in connection with the Domestication, any redemption by the stockholders of Altimar II or as otherwise required in order to consummate the Business Combination, (A) declare, make or pay any dividend, other distribution or return of capital (whether in cash or in kind), (B) split, combine or reclassify any capital stock of, or other equity interests in, Altimar II; or (C) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, Altimar II; |
(c) | take any action, or knowingly fail to take any action, which action or failure to act would reasonably be expected to prevent, impair or impede the Business Combination from qualifying for the tax treatment intended by the Business Combination Agreement; |
(d) | make, revoke or change any material tax election, adopt or change any annual tax accounting period or any material accounting method with respect to taxes, file any amended material tax return, settle, compromise or abandon any claim, investigation, audit or controversy relating to a material tax liability, enter into any closing agreement with respect to any material amount of taxes, surrender any right to claim a material refund of taxes or consent to any extension or waiver of the limitations period applicable to any material tax claim or assessment, or enter into any tax sharing or similar agreement (excluding any commercial contract not primarily related to taxes); |
(e) | (A) enter into, renew or amend in any material respect, any transaction or contract relating to certain transaction expenses if such entry, renewal or amendment would result in additional transaction expenses that, individually or in the aggregate, exceed $5,000,000, (B) cause or permit certain types of transaction expenses to be incurred if Altimar II’s aggregate transaction expenses are in excess of $27,000,000 (subject to certain exceptions), or (C) incur certain types of material transaction expenses without the prior written consent of Fathom OpCo (not to be unreasonably withheld); |
(f) | waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened legal action) or compromise or settle any liability; |
(g) | except as contemplated by the 2021 Omnibus Plan, enter into any employment contract or collective bargaining agreement, pay any special bonus or special remuneration to any director, officer, employee or contractor, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or independent contractors; |
(h) | acquire by merging or consolidating with, or by purchasing the assets of, or by any other manner, any business or division thereof or otherwise acquire any assets; |
(i) | adopt a plan of complete or partial liquidation, dissolution, merger, division transaction, consolidation or recapitalization; |
(j) | incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness; |
(k) | (A) offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, other equity interests, equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in, Altimar II or any of its subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests, other than the issuance of Altimar II Class A common stock in connection with the PIPE Investment as contemplated in the Business Combination Agreement or (B) amend, modify or waive any of the terms or rights set forth in any warrant, including any amendment, modification or reduction of the warrant price set forth therein; |
(l) | authorize any of, or commit or agree to take, whether in writing or otherwise, any of, the foregoing actions; or |
(m) | except in respect of certain transaction expenses, voluntarily incur any liabilities in excess of $100,000 individually or $500,000 in the aggregate without the prior written consent of Fathom OpCo. |
(a) | change, modify or amend the Trust Agreement or the governing documents of Altimar II; |
(b) | other than in connection with the Domestication, any redemption by the stockholders of Altimar II or as otherwise required in order to consummate the Business Combination, (A) declare, make or pay any dividend, other distribution or return of capital (whether in cash or in kind), (B) split, combine or reclassify any capital stock of, or other equity interests in, Altimar II; or (C) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, Altimar II; |
(c) | take any action, or knowingly fail to take any action, which action or failure to act would reasonably be expected to prevent, impair or impede the Business Combination from qualifying for the tax treatment intended by the Business Combination Agreement; |
(d) | make, revoke or change any material tax election, adopt or change any annual tax accounting period or any material accounting method with respect to taxes, file any amended material tax return, settle, compromise or abandon any claim, investigation, audit or controversy relating to a material tax liability, enter into any closing agreement with respect to any material amount of taxes, surrender any right to claim a material refund of taxes or consent to any extension or waiver of the limitations period applicable to any material tax claim or assessment, or enter into any tax sharing or similar agreement (excluding any commercial contract not primarily related to taxes); |
(e) | (A) enter into, renew or amend in any material respect, any transaction or contract relating to certain transaction expenses if such entry, renewal or amendment would result in additional transaction expenses that, individually or in the aggregate, exceed $5,000,000, (B) cause or permit certain types of transaction expenses to be incurred if Altimar II’s aggregate transaction expenses are in excess of $27,000,000 (subject to certain exceptions), or (C) incur certain types of material transaction expenses without the prior written consent of Fathom OpCo (not to be unreasonably withheld); |
(f) | waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened legal action) or compromise or settle any liability; |
(g) | except as contemplated by the 2021 Omnibus Plan, enter into any employment contract or collective bargaining agreement, pay any special bonus or special remuneration to any director, officer, employee or contractor, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or independent contractors; |
(h) | acquire by merging or consolidating with, or by purchasing the assets of, or by any other manner, any business or division thereof or otherwise acquire any assets; |
(i) | adopt a plan of complete or partial liquidation, dissolution, merger, division transaction, consolidation or recapitalization; |
(j) | incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness; |
(k) | (A) offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, other equity interests, equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in, Altimar II or any of its subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests, other than the issuance of Altimar Class A Common Stock in connection with the PIPE Investment as contemplated in the Business Combination Agreement or (B) amend, modify or waive any of the terms or rights set forth in any warrant, including any amendment, modification or reduction of the warrant price set forth therein; |
(l) | authorize any of, or commit or agree to take, whether in writing or otherwise, any of, the foregoing actions; or |
(m) | except in respect of certain transaction expenses, voluntarily incur any liabilities in excess of $100,000 individually or $500,000 in the aggregate without the prior written consent of Fathom OpCo. |
• | consider and vote upon a proposal to approve and adopt by ordinary resolution the Business Combination Agreement (a copy of which is attached to this proxy statement/prospectus as Annex C ) and to approve the transactions contemplated by the Business Combination Agreement (we refer to this proposal as the “Business Combination Proposal”); |
• | consider and vote upon a proposal to approve by special resolution, assuming the Business Combination Proposal is approved and adopted, the change of Altimar II’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (we refer to this proposal as the “Domestication Proposal”); |
• | consider and vote upon a proposal to approve by special resolution, assuming the Business Combination Proposal and the Domestication Proposal are approved and adopted, the approval of the amendment and restatement of the Memorandum and Articles of Association buy their deletion and replacement in their entirety with the Proposed Charter and the Proposed Bylaws (copies of which are attached to this proxy statement/prospectus as Annex A and Annex B, respectively) as the certificate of incorporation and bylaws of Fathom from and after the Domestication is effective (we refer to this proposal as the “Organizational Documents Proposal”); |
• | consider and vote upon eight separate proposals (which we refer to, collectively, as the “Advisory Charter Proposals”) to approve, on a non-binding advisory basis, the following material differences between the current amended and restated memorandum and articles of association of Altimar II and the Proposed Charter and Proposed Bylaws of Fathom: |
• | to decrease the authorized share capital from 555,000,000 shares divided into 500,000,000 Class A ordinary shares, par value $0.0001 per share (“Class A ordinary shares”), 50,000,000 Class B ordinary shares, par value $0.0001 per share (“Class B ordinary shares”), and 5,000,000 preferred shares, par value $0.0001 per share (“preferred shares”), to authorized capital stock of 500,000,000 shares, consisting of (i) 300,000,000 shares of Class A common stock, par value $0.0001 per share (“Class A common stock”), (ii) 180,000,000 shares of Class B common stock, par value $0.0001 per share (“Class B common stock”), (iii) 10,000,000 shares of Class C |
common stock, par value $0.0001 per share (“Class C common stock” and together with the Class A common stock and the Class B common stock, the “common stock”) and (iv) 10,000,000 shares of preferred stock; |
• | to provide that the Proposed Charter may be amended, altered, repealed or adopted by (i) in the case of Articles 5, 6,7, 10 and 11 of the Proposed Charter, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of all the then outstanding shares of stock entitled to vote, voting together as a single class, at a meeting of the stockholders of Fathom called for that purpose and (ii) in the case of Article 9 of the Proposed Charter, the affirmative vote of the holders of at least eighty percent (80%) of all the then outstanding shares of stock entitled to vote, voting together as a single class, at a meeting of the stockholders of Fathom called for that purpose; |
• | to provide for (i) the election of directors by a plurality of the votes cast in respect of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors, (ii) the filling of newly-created directorships or any vacancy on the board of directors by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director and (iii) the removal of directors only for cause and only upon (a) prior to the first date on which CORE and its Affiliated Companies (each as defined in the Proposed Charter) first cease to own at least 50% of the Original Amount (as defined in the Investor Rights Agreement), the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of all the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class and (b) after the first date on which CORE and its Affiliated Companies cease to own at least 50% of the Original Amount, the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock entitled to vote; |
• | to elect not to be governed by Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”); |
• | to provide that the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, shall be the exclusive forum for certain actions and claims; |
• | to provide that each holder of record of Class A common stock, Class B common stock and Class C common stock (solely prior to the automatic conversion thereof to shares of Class A common stock as a result of the Business Combination) shall be entitled to one vote per share on all matters which stockholders generally are entitled to vote; |
• | subject to the rights of the holders of Preferred Stock and to the other provisions of applicable law and the Proposed Charter, to provide that the holders of shares of Class A common stock and, solely prior to the automatic conversion thereof upon and as a result of the Business Combination, holders of Class C common stock, in each case shall be entitled to receive ratably in proportion to the number of shares of Class A common stock and Class C common stock (as applicable) held by them such dividends and distributions (payable in cash, stock or otherwise), if any, as may be declared thereon by the Board of Directors at any time and from time to time out of any funds of Fathom legally available therefor. There will be no disparate consideration or treatment with respect to dividends and distributions, if any, declared or payable in respect of each share of the Class A common stock and Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination), on the one hand, and a New Fathom Unit, on the other hand. Dividends and other distributions shall not be declared or paid on the Class B common stock unless (i) the dividend consists of shares of Class B common stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B common stock paid proportionally with respect to each outstanding share of Class B common stock and (ii) a dividend consisting of shares of Class A common stock, Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the |
Business Combination) or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class A common stock (to the extent a similar or contemptuous dividend or distribution is not paid on the New Fathom Units) or Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination) on equivalent terms is simultaneously paid to the holders of Class A common stock and Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination). If dividends are declared on the Class A common stock, the Class B common stock or the Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination) that are payable in shares of common stock, or securities convertible into, or exercisable or exchangeable for common stock, the dividends payable to the holders of Class A common stock shall be paid only in shares of Class A common stock (or securities convertible into, or exercisable or exchangeable for Class A common stock), the dividends payable to the holders of Class B common stock shall be paid only in shares of Class B common stock (or securities convertible into, or exercisable or exchangeable for Class B common stock), the dividends payable to the holders of Class C common stock shall be paid only in shares of Class C common stock (or securities convertible into, or exercisable or exchangeable for Class C common stock), and such dividends shall be paid in the same number of shares (or fraction thereof) on a per share basis of the Class A common stock, Class B common stock and Class C common stock, respectively (or securities convertible into, or exercisable or exchangeable for the same number of shares (or fraction thereof) on a per share basis of the Class A common stock, Class B common stock and Class C common stock, respectively); and |
• | consider and vote upon a proposal to approve by ordinary resolution under Cayman Islands law, assuming the Organizational Documents Proposal and the Stock Issuance Proposal are approved and adopted, for the purposes of complying with the applicable NYSE listing rules, the issuance of shares of Class A common stock, Class B common stock and Class C common stock (i) pursuant to the terms of the Business Combination Agreement, (ii) upon the exchange of New Fathom Units pursuant to the Fathom Operating Agreement and (iii) upon the conversion, in accordance with our Proposed Charter, of any such common stock issued pursuant to (i) or (ii) (we refer to this proposal as the “Business Combination Issuance Proposal”); |
• | consider and vote upon a proposal to approve by ordinary resolution, assuming the Stock Issuance Proposal and the Business Combination Issuance Proposal are approved and adopted, the 2021 Omnibus Plan, a copy of which is attached to this proxy statement/prospectus as Annex H (we refer to this proposal as the “Equity Incentive Plan Proposal”); |
• | consider and vote upon a proposal to approve by ordinary resolution, assuming the Stock Issuance Proposal and the Business Combination Issuance Proposal are approved and adopted, the ESPP, a copy of which is attached to this proxy statement/prospectus as Annex I (we refer to this proposal as the “ESPP Proposal”); and |
• | consider and vote upon a proposal to approve by ordinary resolution the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the general meeting, any of the Condition Precedent Proposals would not be duly approved and adopted by our shareholders or we determine that one or more of the |
closing conditions under the Business Combination Agreement is not satisfied or waived (we refer to this proposal as the “Adjournment Proposal”). |
• | You Can Vote By Signing and Returning the Enclosed Proxy Card |
• | You Can Attend the Special Meeting and Vote in Person |
• | you may send another proxy card with a later date; |
• | you may notify Innisfree M&A Incorporated, Altimar II’s proxy solicitor , in writing before the Special Meeting that you have revoked your proxy; or |
• | you may attend the Special Meeting, revoke your proxy, and vote in person or virtually, as indicated above. |
(i) | (a) hold public shares or (b) hold public shares through units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and |
(ii) | prior to 5:00 p.m., Eastern Time, on , 2021, (a) submit a written request to the transfer agent that Altimar II redeem your public shares for cash and (b) deliver your share certificates for your public shares (if any) to the transfer agent, physically or electronically through DTC. |
• | If Altimar II does not consummate a business combination by February 9, 2023 (unless such date is extended in accordance with the Amended and Restated Memorandum and Articles of Association), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding Class A ordinary shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the 8,625,000 Class B ordinary shares would be worthless because following the redemption of the Class A ordinary shares, Altimar II would likely have few, if any, net assets and because the holders of our Class B ordinary shares have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Class B ordinary shares if we fail to complete a Business Combination within the required period. Sponsor purchased the Class B ordinary shares prior to our initial public offering for approximately $0.003 per share. The shares of Class A common stock that the existing holders of Class B ordinary shares will hold following the Business Combination, if unrestricted and freely tradable, would have had aggregate market value of $ based upon the closing price of $ per share of public share on the NYSE on , the record date. Given such shares will be subject to lock-up restrictions, we believe such shares have less value. |
• | Sponsor purchased 9,900,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant, and such Private Placement Warrants will expire and be worthless if a business combination is not consummated within 24 months of the consummation of the IPO (unless such date is extended in accordance with the Existing Organizational Documents). |
• | Altimar II’s existing directors and officers will be eligible for continued indemnification and continued coverage under Altimar II’s directors’ and officers’ liability insurance after the Business Combination. |
• | In order to protect the amounts held in the Trust Account, Sponsor has agreed that it will be liable to Altimar II if and to the extent any claims by a vendor for services rendered or products sold to Altimar II, or a prospective target business with which Altimar II has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. 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 our indemnity of the underwriters of Altimar II’s initial public offering against certain liabilities, including liabilities under the Securities Act. |
• | Following consummation of the Business Combination, Sponsor, our officers and directors and their respective affiliates would be entitled to reimbursement for certain reasonable out-of-pocket |
• | Under the terms of the Registration Rights Agreement, Fathom grants the Legacy Fathom Owners and Altimar II Founders certain customary demand, shelf and piggyback registration rights with respect to their shares of Fathom Class A common stock, other than the Backstop Shares. |
Delaware |
Cayman Islands | |||
Stockholder/Shareholder Approval of Business Combinations |
Mergers generally require approval of a majority of all outstanding shares. | Mergers require a special resolution, and any other authorization as may be specified in the relevant articles of association. Parties holding certain security interests in the constituent companies must also consent. | ||
Mergers in which less than 20% of the acquirer’s stock is issued generally do not require acquirer stockholder approval. | All mergers (other than parent/subsidiary mergers) require shareholder approval — there is no exception for smaller mergers. | |||
Mergers in which one corporation owns 90% or more of a second corporation may be completed without the vote of the second corporation’s board of directors or stockholders. | Where a bidder has acquired 90% or more of the shares in a Cayman Islands company, it can compel the acquisition of the shares of the remaining shareholders and thereby become the sole shareholder. A Cayman Islands company may also be acquired through a “scheme of arrangement” sanctioned by a Cayman Islands court and approved by 50% + 1 in number and 75% in value of shareholders in attendance and voting at a general meeting. | |||
Stockholder/Shareholder Votes for Routine Matters |
Generally, approval of routine corporate matters that are put to a stockholder vote require the affirmative vote of the majority of shares present in person or represented by proxy at the | Under the Cayman Islands Companies Act the Existing Organizational Documents, routine corporate matters may be approved by an ordinary resolution (being a resolution |
Delaware |
Cayman Islands | |||
meeting and entitled to vote on the subject matter. | passed by a simple majority of the shareholders as being entitled to do so). | |||
Appraisal Rights |
Generally a stockholder of a publicly traded corporation does not have appraisal rights in connection with a merger, except in certain circumstances. | Minority shareholders that dissent from a merger are entitled to be paid the fair market value of their shares, which if necessary may ultimately be determined by the court. | ||
Inspection of Books and Records |
Any stockholder may inspect the corporation’s books and records for a proper purpose during the usual hours for business. | Shareholders generally do not have any rights to inspect or obtain copies of the register of shareholders or other corporate records of a company. | ||
Stockholder/Shareholder Lawsuits |
A stockholder may bring a derivative suit subject to procedural requirements (including adopting Delaware as the exclusive forum as per Organizational Documents Proposal 3E). |
In the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company’s board of directors. A shareholder may be entitled to bring a derivative action on behalf of the company, but only in certain limited circumstances. | ||
Fiduciary Duties of Directors |
Directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. | A director owes fiduciary duties to a company, including to exercise loyalty, honesty and good faith to the company as a whole. | ||
In addition to fiduciary duties, directors owe a duty of care, diligence and skill. Such duties are owed to the company but may be owed direct to creditors or shareholders in certain limited circumstances | ||||
Indemnification of Directors and Officers |
A corporation is generally permitted to indemnify its directors and officers acting in good faith | A Cayman Islands company generally may indemnify its directors or officers except with regard to fraud or willful default. | ||
Limited Liability of Directors |
Permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. | Liability of directors may be eliminated, except with regard to their own fraud or willful default. |
Existing Organizational Documents |
Proposed Organizational Documents | |||
Authorized Shares (Proposal 4A) |
Our Existing Organizational Documents authorized 555,000,000 shares, consisting of (a) 500,000,000 Class A ordinary shares, (b) 50,000,000 Class B ordinary shares and (c) 5,000,000 preference shares. | The Proposed Organizational documents authorize 500,000,000 shares, consisting of (i) 300,000,000 shares of Class A common stock, par value $0.0001 per share, (ii) 180,000,000 shares of Class B common stock, par value $0.0001 per share, (iii) 10,000,000 shares of Class C common stock, par value $0.0001 per share and (iv) 10,000,000 shares of preferred stock. | ||
Amendments (Proposal 4B) |
Our Existing Organizational Documents provide that the provisions of the Existing Organizational Documents may be amended to change Altimar II’s name, alter or add to the articles of association, alter or add to the memorandum with respect to any objects, power or other matters specified therein, and reduce Altimar II’s share capital or any capital redemption reserve fund. | The Proposed Organizational Documents would provide that the Proposed Charter may be amended, altered, repealed or any provision of the Proposed Charter inconsistent therewith may be adopted by (i) in the case of Articles 5, 6,7, 10 and 11 of the Proposed Charter, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of all the then outstanding shares of stock entitled to vote, voting together as a single class, at a meeting of the stockholders of Fathom called for that purpose and (ii) in the case of Articles 8 and 9 of the Proposed Charter, by the affirmative vote of |
Existing Organizational Documents |
Proposed Organizational Documents | |||
the holders of at least eighty percent (80%) of all the then outstanding shares of stock entitled to vote, voting together as a single class, at a meeting of the stockholders of Fathom called for that purpose, in each case, in addition to any other vote required by the Proposed Charter or otherwise required by law. | ||||
Director Election, Vacancies and Removal (Proposal 4C) |
Our Existing Organizational Documents provide that, prior to the closing of a business combination, holders of the Class B ordinary shares have the exclusive right to elect any director and holders of Class A ordinary shares have no right to vote on the election or removal of any director. Following the closing of a business combination, directors may be elected by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock. Our Existing Organizational Documents provide that newly-created directorships or any vacancy on the board of directors may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum, or by the sole remaining director. Prior to the closing of a business combination, holders of the Class B ordinary shares have the exclusive right to remove any director and holders of Class A ordinary shares have no right to vote on the election or removal of any director. Following the closing of a business combination, directors may be removed by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock. | Our Proposed Organizational Documents provide that the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, voting together as a single class or, in the event that holders of any class or series of capital stock are entitled to elect one or more directors, a plurality of the votes cast by such holders. Our Proposed Charter provides that newly-created directorships or any vacancy on the board of directors may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum, or by the sole remaining director. Our Proposed Organizational Documents provide for the removal of directors only for cause and only upon (a) prior to the first date on which CORE and its Affiliated Companies first cease to own at least 50% of the Original Amount, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of all the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class and (b) after the first date on which CORE and its Affiliated Companies cease to own at least 50% of the Original Amount, the |
Existing Organizational Documents |
Proposed Organizational Documents | |||
affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock entitled to vote generally in the election of Directors. | ||||
DGCL Section 203 and Business Combinations (Proposal 4D) |
Our Proposed Organizational Documents provide that we are not subject to Section 203 of the DGCL. | |||
Forum Selection (Proposal 4E) |
Our Existing Organizational Documents do not contain an exclusive forum provision. | The Proposed Charter provides that the Delaware Court of Chancery, or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, will be the exclusive forum for certain actions and claims. | ||
Voting Rights (Proposal 4F) |
Our Existing Organizational Documents provide that each holder of record of Class A ordinary shares and Class B ordinary shares shall be entitled to one vote per share on all matters which shareholders are entitled to vote. | The Proposed Charter provides that each holder of record of Class A common stock, Class B common stock and Class C common stock (solely prior to the automatic conversion thereof to shares of Class A common stock as a result of the Business Combination) shall be entitled to one vote per share on all matters which stockholders generally are entitled to vote. | ||
Dividends and Distributions (Proposal 4G) |
Our Existing Organizational Documents provide that all dividends and other distributions shall be paid according to the par value of the shares held be each shareholder. | The Proposed Organizational Documents provide that subject to the rights of the holders of Preferred Stock and to the other provisions of applicable law and the Proposed Charter, the holders of shares of Class A common stock and, solely prior to the automatic conversion thereof upon and as a result of the Business Combination, holders of Class C common stock, in each case shall be entitled to receive ratably in proportion to the number of shares of Class A common stock and Class C common stock (as applicable) held by them such dividends and distributions (payable in cash, stock or |
Existing Organizational Documents |
Proposed Organizational Documents | |||
otherwise), if any, as may be declared thereon by the Board of Directors at any time and from time to time out of any funds of Fathom legally available therefor. There will be no disparate consideration or treatment with respect to dividends and distributions, if any, declared or payable in respect of each share of the Class A common stock and Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination), on the one hand, and a New Fathom Unit, on the other hand. Dividends and other distributions shall not be declared or paid on the Class B common stock unless (i) the dividend consists of shares of Class B common stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B common stock paid proportionally with respect to each outstanding share of Class B common stock and (ii) a dividend consisting of shares of Class A common stock, Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination) or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class A common stock (to the extent a similar or contemptuous dividend or distribution is not paid on the New Fathom Units) or Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination) on equivalent terms is simultaneously paid to the holders of Class A common stock and Class C common stock (solely prior to the automatic conversion thereof upon |
Existing Organizational Documents |
Proposed Organizational Documents | |||
and as a result of the Business Combination). If dividends are declared on the Class A common stock, the Class B common stock or the Class C common stock (solely prior to the automatic conversion thereof upon and as a result of the Business Combination) that are payable in shares of common stock, or securities convertible into, or exercisable or exchangeable for common stock, the dividends payable to the holders of Class A common stock shall be paid only in shares of Class A common stock (or securities convertible into, or exercisable or exchangeable for Class A common stock), the dividends payable to the holders of Class B common stock shall be paid only in shares of Class B common stock (or securities convertible into, or exercisable or exchangeable for Class B common stock), the dividends payable to the holders of Class C common stock shall be paid only in shares of Class C common stock (or securities convertible into, or exercisable or exchangeable for Class C common stock), and such dividends shall be paid in the same number of shares (or fraction thereof) on a per share basis of the Class A common stock, Class B common stock and Class C common stock, respectively (or securities convertible into, or exercisable or exchangeable for the same number of shares (or fraction thereof) on a per share basis of the Class A common stock, Class B common stock and Class C common stock, respectively). | ||||
Removal of Blank Check Company Provisions (Proposal 4H) |
Our Existing Organizational Documents contain various | The Proposed Organizational Documents will not include these provisions applicable only to |
Existing Organizational Documents |
Proposed Organizational Documents | |||
provisions applicable only to blank check companies. | blank check companies, including the provisions requiring that Altimar II have net tangible assets of at least $5,000,001 immediately prior to, or upon such consummation of, a business combination. |
(i) | Authorized Shares (Proposal 4A) |
(ii) | Amendments to the Organizational Documents (Proposal 4B) |
(iii ) |
Director Election, Director Vacancies and Removal (Proposal 4C) |
(iv) | DGCL Section 203 and Business Combinations (Proposal 4D) |
(v) | Forum Selection (Proposal 4E) |
(vi) | Voting Rights (Proposal 4F) |
(vii) | Dividends and Distributions (Proposal 4G) |
(viii) | Removal of Blank Check Company Provisions (Proposal 4H) |
• | financial institutions; |
• | governments or agencies or instrumentalities thereof; |
• | insurance companies; |
• | dealers or traders subject to a mark-to-market |
• | persons holding Altimar II ordinary shares or warrants or Fathom common stock or warrants as part of a “straddle,” hedge, integrated transaction or similar transaction, or persons deemed to sell the Altimar II ordinary shares or warrants or Fathom common stock or warrants under constructive sale provisions of the Code; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | partnerships or other pass-through entities for U.S. federal income tax purposes or investors in such entities; |
• | holders who are controlled foreign corporations or passive foreign investment companies; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | persons who acquired Altimar II ordinary shares or warrants or Fathom common stock or warrants through the exercise or cancellation of employee stock options or otherwise as compensation for their services; |
• | U.S. holders (as defined below) owning (actually or constructively) 10% or more of the total combined voting power of all classes of stock entitled to vote of, or 10% or more of the total value of all classes of shares of, Altimar II or Fathom; |
• | U.S. holders (as defined below) that hold their Altimar II ordinary shares or warrants and Fathom common stock or warrants through a non-U.S. broker or other non-U.S. intermediary; |
• | persons who are, or may become, subject to the expatriation provisions of the Code; |
• | persons that are subject to “applicable financial statement rules” under Section 451(b); or |
• | tax-exempt entities. |
• | an individual who is a citizen or resident of the United States as determined for U.S. federal income tax purposes; |
• | a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of such trust and one or more “United States persons” (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or (ii) the trust has validly elected to be treated as a United States person for U.S. federal income tax purposes. |
• | a statement that the Domestication is a Section 367(b) exchange; |
• | a complete description of the Domestication; |
• | a description of any stock, securities or other consideration transferred or received in the Domestication; |
• | a statement describing the amounts required to be taken into account for U.S. federal income tax purposes as income or as an adjustment to basis, earnings and profits or other tax attributes; |
• | a statement that the U.S. holder is making the election that includes (A) a copy of the information that the U.S. holder received from Altimar II (or Fathom) establishing and substantiating the U.S. holder’s “all earnings and profits amount” with respect to the U.S. holder’s Altimar II ordinary shares, and (B) a representation that the U.S. holder has notified Altimar II (or Fathom) that the U.S. holder is making the election; and |
• | certain other information required to be furnished with the U.S. holder’s tax return or otherwise furnished pursuant to the Code or the Treasury Regulations. |
• | at least 75% of its gross income in such taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income; or |
• | at least 50% of its assets in such taxable year, ordinarily determined based on fair market value and averaged quarterly over the year, including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. |
• | the U.S. holder’s gain or excess distribution will be allocated ratably over the U.S. holder’s holding period for the Altimar II ordinary shares or warrants; |
• | the amount of gain allocated to the U.S. holder’s taxable year in which the U.S. holder recognized the gain or received the excess distribution, or to the period in the U.S. holder’s holding period before the first day of the first taxable year in which Altimar II is a PFIC, will be taxed as ordinary income; |
• | the amount of gain allocated to other taxable years (or portions thereof) of the U.S. holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. holder; and |
• | the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. holder. |
• | a non-resident alien individual; |
• | a foreign corporation; or |
• | an estate or trust that is not a U.S. holder. |
• | the gain is effectively connected with the conduct of a trade or business by the non-U.S. holder within the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment or fixed base of the non-U.S. holder); |
• | the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition (subject to certain exceptions as a result of the COVID pandemic) and certain other conditions are met; or |
• | Fathom is or has been a “United States real property holding corporation” (“USRPHC”) for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the non-U.S. holder’s holding period, and either (i) Fathom’s common stock has ceased to be regularly traded on an established securities market or (ii) the non-U.S. holder has owned or is deemed to have owned under constructive ownership rules, at any time within the five-year period preceding the disposition or the non-U.S. holder’s holding period, whichever period is shorter, more than 5% of Fathom’s Class A common stock. |
• | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
• | the historical audited financial statements of Altimar II for the period from December 7, 2020 (inception) through December 31, 2020 and unaudited financial statements for the nine months ended September 30, 2021, found elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of Fathom OpCo for the year ended December 31, 2020 and unaudited financial statements for the nine months ended September 30, 2021, found elsewhere in this proxy statement/prospectus; |
• | the historical audited combined financial statements of Incodema and Newchem for the year ended December 31, 2019, found elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of Dahlquist for the nine months ended September 30, 2020, found elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of Majestic Metals for the nine months ended September 30, 2020, found elsewhere in this proxy statement/prospectus; and |
• | other information relating to Altimar II and Fathom OpCo contained in this proxy statement/prospectus, including the Business Combination Agreement and the description of certain terms thereof set forth in the section entitled “The Business Combination.” |
• | Fathom OpCo is a variable interest entity (“VIE”). Fathom will be the sole managing member and primary beneficiary which has full and complete charge of all affairs of Fathom OpCo, and the New Fathom Units of Fathom OpCo do not have substantive participating or kick out rights; and |
• | No single party controls Fathom pre and post transaction, hence, the Business Combination is not considered a common control transaction. |
• | Assuming No Redemptions: |
• | Assuming Maximum Redemptions: |
• | Existing Fathom Owner Consideration: |
• | Forfeited Shares: |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||||||||||
($ in thousands) | Altimar Acquisition Corp II |
Fathom OpCo |
Total Pro Forma Adjustments |
Pro Forma Combined |
Total Pro Forma Adjustments |
Pro Forma Combined |
||||||||||||||||||
Assets |
||||||||||||||||||||||||
Cash and cash equivalents |
$ | 331 | $ | 10,531 | $ | 80,000 | (a) |
$ | 20,031 | $ | 80,000 | (a) |
20,031 | |||||||||||
152,000 | (b) |
152,000 | (b) |
|||||||||||||||||||||
(172,860 | ) (b) |
(172,860 | ) (b) |
|||||||||||||||||||||
(59,983 | ) (c) |
(59,983 | ) (c) |
|||||||||||||||||||||
345,012 | (d) |
345,012 | (d) |
|||||||||||||||||||||
(335,000 | ) (e) |
10,000 | (e) |
|||||||||||||||||||||
— | (345,000 | ) (i) |
||||||||||||||||||||||
Account receivable, net |
— | 24,512 | — | 24,512 | — | 24,512 | ||||||||||||||||||
Inventory |
— | 9,173 | 2,441 | (e) |
11,614 | 2,441 | (e) |
11,614 | ||||||||||||||||
Prepaid expenses |
745 | 3,267 | — | 4,012 | — | 4,012 | ||||||||||||||||||
Other current assets |
— | — | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Current Assets |
1,076 | 47,483 | 11,610 | 60,169 | 11,610 | 60,169 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
— | — | — | — | |||||||||||||||||||||
Investments held in trust account |
345,012 | — | (345,012 | ) (d) |
— | (345,012 | ) (d) |
— | ||||||||||||||||
Property and equipment, net |
— | 41,031 | (2,921 | ) (e) |
38,110 | (2,921 | ) (e) |
38,110 | ||||||||||||||||
Intangible & other |
— | 111,573 | 138,427 | (e) |
250,000 | 138,427 | (e) |
250,000 | ||||||||||||||||
Goodwill |
— | 83,113 | 1,253,317 | (e) |
1,336,430 | 1,241,734 | 1,324,847 | |||||||||||||||||
Other non-current assets |
— | 145 | — | 145 | — | 145 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
346,088 | 283,345 | 1,055,421 | 1,684,854 | 1,043,838 | 1,673,271 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities and Stockholders’ Equity |
||||||||||||||||||||||||
Account Payable |
— | 7,475 | — | 7,475 | — | 7,475 | ||||||||||||||||||
Accrued expenses |
260 | 5,821 | (860 | ) (b) |
5,221 | (860 | ) (b) |
5,221 | ||||||||||||||||
Other current liabilities |
— | 4,497 | — | 4,497 | — | 4,497 | ||||||||||||||||||
Contingent consideration |
— | 6,330 | — | 6,330 | 6,330 | |||||||||||||||||||
Current portion of debt |
— | 170,257 | (168,757 | ) (b) |
1,500 | (168,757 | ) (b) |
1,500 | ||||||||||||||||
Accrued offering costs |
4 | — | — | 4 | — | 4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Current Liabilities |
264 | 194,380 | (169,617 | ) | 25,027 | (169,617 | ) | 25,027 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Long-term debt, net |
— | — | 148,120 | (b) |
148,120 | 148,120 | (b) |
148,120 | ||||||||||||||||
Long-term contingent consideration |
— | 2,300 | — | 2,300 | — | 2,300 | ||||||||||||||||||
Deferred Tax Liability |
— | 3,009 | (3,009 | ) (j) |
— | 2,768 | (j) |
5,777 | ||||||||||||||||
Other Non-current Liabilities |
— | 1,463 | — | 1,463 | — | 1,463 | ||||||||||||||||||
Warrant Liability |
19,643 | — | — | 19,643 | — | 19,643 | ||||||||||||||||||
Deferred underwriting fee payable |
12,075 | — | (12,075 | ) (f) |
— | (12,075 | ) (f) |
— | ||||||||||||||||
Payable to related parties pursuant to tax receivable agreement |
— | — | 21,822 | (j) |
21,822 | 4,462 | (j) |
4,462 | ||||||||||||||||
— | — | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
31,982 | 201,152 | (14,759 | ) | 218,375 | (26,342 | ) | 206,792 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commitments and contingencies: |
||||||||||||||||||||||||
Class A Ordinary Shares subject to possible redemption |
345,000 | — | (345,000 | ) (g) |
— | (345,000 | ) (g) |
— | ||||||||||||||||
Class A Contingently Redeemable Preferred Units |
— | 54,105 | (54,105 | ) (e) |
— | (54,105 | ) (e) |
— | ||||||||||||||||
Equity: |
||||||||||||||||||||||||
Preference shares |
— | — | — | — | — | — | ||||||||||||||||||
Class A common stock |
— | — | 15 | (e) |
11 | 15 | (e) |
9 | ||||||||||||||||
1 | (a) |
1 | (a) |
|||||||||||||||||||||
(3 | ) (g) |
|||||||||||||||||||||||
(3 | ) (e) |
(8 | ) (e) |
|||||||||||||||||||||
1 | (e) |
1 | (e) |
|||||||||||||||||||||
Class B common stock |
6 | (e) |
6 | 8 | (e) |
8 | ||||||||||||||||||
Class A Ordinary Shares |
— | — | — | (g) |
— | — | (g) |
— | ||||||||||||||||
Class B Ordinary Shares |
1 | — | (1 | ) (g) |
— | (1 | ) (g) |
— | ||||||||||||||||
Class A Common units; $100 part value, authorized 5,480,611 units, issued and outstanding 5,480,611 units as of September 30, 2021 |
35,869 | (35,869 | ) (e) |
— | (35,869 | ) (e) |
— | |||||||||||||||||
Class B Common units; $100 par value, authorized 2,242,981 units, issued and outstanding 2,242,981 units as of September 30, 2021 |
14,481 | (14,481 | ) (e) |
— | (14,481 | ) (e) |
— | |||||||||||||||||
Additional paid-in-capital |
— | — | — | 917,375 | — | 684,226 | ||||||||||||||||||
1,454,629 | (e) |
1,454,629 | (e) |
|||||||||||||||||||||
79,999 | (a) |
79,999 | (a) |
|||||||||||||||||||||
(16,075 | ) (c) |
(16,075 | ) (c) |
|||||||||||||||||||||
(334,997 | ) (e) |
10,000 | (e) |
|||||||||||||||||||||
344,997 | (h) |
— | (h) |
|||||||||||||||||||||
(612,143 | ) (h) |
(845,292 | ) (h) |
|||||||||||||||||||||
965 | (k) |
965 | (k) |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||||||||||
($ in thousands) | Altimar Acquisition Corp II |
Fathom OpCo |
Total Pro Forma Adjustments |
Pro Forma Combined |
Total Pro Forma Adjustments |
Pro Forma Combined |
||||||||||||||||||
Accumulated other comprehensive income |
$ | — | $ | 28 | $ | (28 | ) (e) |
$ | — | $ | (28 | ) (e) |
$ | — | ||||||||||
Retained earnings (accumulated deficit) |
(30,895 | ) | (22,290 | ) | 22,290 | (e) |
(63,056 | ) | 22,290 | (e) |
(63,056 | ) | ||||||||||||
(1,743 | ) (e) |
(1,743 | ) (e) |
|||||||||||||||||||||
(29,453 | ) (c) |
(29,453 | ) (c) |
|||||||||||||||||||||
(965 | ) (k) |
(965 | ) (k) |
|||||||||||||||||||||
Non-controlling interest in subsidiaries |
612,143 | (h) |
612,143 | 845,292 | (h) |
845,292 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total stockholders’ equity |
(30,894 | ) | 28,088 | 1,469,285 | 1,466,479 | 1,469,285 | 1,466,479 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities and stockholders’ equity |
$ | 346,088 | $ | 283,345 | 1,055,421 | 1,684,854 | 1,043,838 | $ | 1,673,271 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Altimar Acquisition Corp II Period Ended September 30, 2021 (1) |
Pro Forma Fathom Opco |
Total Pro Forma Adjustments (3) |
Pro Forma Combined |
Total Pro Forma Adjustments |
Maximum Redemptions Pro Forma Combined |
|||||||||||||||||||
Revenue |
— | 118,254 | — | 118,254 | — | 118,254 | ||||||||||||||||||
Cost of Revenue |
— | 66,186 | 1,325 | 67,511 | 1,325 | 67,511 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross Profit |
— | 52,068 | (1,325 | ) | 50,743 | (1,325 | ) | 50,743 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses |
||||||||||||||||||||||||
Selling, general, and administrative |
1,692 | 32,880 | (1,431 | ) | 33,141 | (1,431 | ) | 33,141 | ||||||||||||||||
Depreciation and amortization |
— | 10,495 | 6,397 | 16,892 | 6,397 | 16,892 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
1,692 | 43,375 | 4,966 | 50,033 | 4,966 | 50,033 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss) |
(1,692 | ) | 8,693 | (6,291 | ) | 710 | (6,291 | ) | 710 | |||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||
Interest expense/(income) |
(12 | ) | — | 4,530 | 4,518 | 4,530 | 4,518 | |||||||||||||||||
Other expense |
755 | 9,438 | — | 10,193 | — | 10,193 | ||||||||||||||||||
Other (income) |
(3,191 | ) | (3,874 | ) | — | (7,065 | ) | — | (7,065 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total other expenses, net |
(2,448 | ) | 5,564 | 4,530 | 7,646 | 4,530 | 7,646 | |||||||||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES |
756 | 3,129 | (10,821 | ) | (6,936 | ) | (10,821 | ) | (6,936 | ) | ||||||||||||||
Provision for income taxes |
868 | (868 | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) |
756 | 2,261 | (9,953 | ) | (6,936 | ) | (10,821 | ) | (6,936 | ) | ||||||||||||||
Net loss attributable to noncontrolling interest |
(3,481 | ) | (2,129 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net loss attributable to Fathom Digital Manufacturing Corporation |
(3,455 | ) | (4,807 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Basic and diluted weighted average shares outstanding |
73,849,425 | 50,534,508 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Basic and diluted (loss) Per Share: |
$ | (0.05 | ) | $ | (0.07 | ) | ||||||||||||||||||
|
|
|
|
(1) | Refers to the historical audited financial statements of Altimar II. |
(2) | Refers to the Pro Forma Fathom OpCo Condensed Combined Statement of Operations for the nine months ended September 30, 2021 adjusted to give effect to the 2021 Acquisitions, as detailed in Note 2. |
($ in thousands) | Altimar Acquisition Corp II (1) |
Pro Forma Fathom OpCo (2) |
Pro Forma Adjustments |
No Redemptions Pro Forma Combined |
Pro Forma Adjustments |
Maximum Redemptions Pro Forma Combined |
||||||||||||||||||
Revenue |
— | 149,405 | — | 149,405 | — | 149,405 | ||||||||||||||||||
Cost of Revenue |
— | 76,471 | 5,206 | (a) |
81,677 | 5,206 | (a) |
81,677 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross Profit |
— | 72,934 | (5,206 | ) | 67,728 | (5,206 | ) | 67,728 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses |
||||||||||||||||||||||||
Selling, general, and administrative |
— | 49,018 | 41,751 | (b) |
90,769 | 41,751 | (b) |
90,769 | ||||||||||||||||
Depreciation and amortization |
— | 16,328 | 6,195 | (c) |
22,523 | 6,195 | (c) |
22,523 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
— | 65,346 | 47,946 | 113,292 | 47,946 | 113,292 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss) |
— | 7,588 | (53,152 | ) | (45,564 | ) | (53,152 | ) | (45,564 | ) | ||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||
Interest expense/(income) |
— | 9,294 | (3,163 | ) (d) |
6,131 | (3,163 | ) (d) |
6,131 | ||||||||||||||||
Other expense |
5 | 8,465 | — | 8,470 | — | 8,470 | ||||||||||||||||||
Other (income) |
(2,818 | ) | — | (2,818 | ) | — | (2,818 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total other expenses (income), net |
5 | 14,941 | (3,163 | ) | 11,783 | (3,163 | ) | 11,783 | ||||||||||||||||
NET LOSS BEFORE INCOME TAXES |
(5 | ) | (7,353 | ) | (49,989 | ) | (57,347 | ) | (49,989 | ) | (57,347 | ) | ||||||||||||
Provision for income taxes |
— | 375 | (375 | ) (e) |
— | (375 | ) (e) |
— | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET LOSS |
(5 | ) | (7,728 | ) | (49,614 | ) | (57,347 | ) | (49,614 | ) | (57,347 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss attributable to noncontrolling interest |
(25,989 | ) (g) |
(35,887 | ) (g) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net loss attributable to Fathom Digital Manufacturing Corporation |
(31,358 | ) | (21,460 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Basic and diluted weighted average shares outstanding |
73,849,425 | 50,534,508 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Basic and diluted net (loss) Per Share: |
$ | (0.42 | ) (f) |
$ | (0.42 | ) (f) | ||||||||||||||||||
|
|
|
|
(1) | Refers to the historical audited financial statements of Altimar II. |
(2) | Refers to the Pro Forma Fathom OpCo Condensed Combined Statement of Operations for the year ended December 31, 2020 adjusted to give effect to the 2021 Acquisitions, as detailed in Note 2. |
(a) | Altimar II will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation under the laws of the State of Delaware (the “Domestication”), upon which Altimar II will change its name to “Fathom Digital Manufacturing Corporation.” |
(b) | Fathom OpCo will issue managing member interests in Fathom OpCo to Altimar II in exchange for a nominal cash payment; |
(c) | Following step (b) above, each of CORE Fund I Blocker-5 LLC, a Delaware limited liability company (“Fathom Blocker 1”), CORE Fund I Blocker-2 LLC, a Delaware limited liability company (“Fathom Blocker 2”), and SG (MCT) Blocker, LLC, a Delaware limited liability company (Fathom Blocker 3” and, together with Fathom Blocker 1 and Fathom Blocker 2, the “Fathom Blockers”), will merge with and into Rapid Blocker 1 Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Altimar II (“Blocker Merger Sub 1”), Rapid Blocker 2 Merger Sub, LLC , a Delaware limited liability company and a direct, wholly owned subsidiary of Altimar II (“Blocker Merger Sub 2”), and Rapid Blocker 3 Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Altimar II (“Blocker Merger Sub 3” and, together with Blocker Merger Sub 1 and Blocker Merger Sub 2, the “Blocker Merger Subs”), respectively, in each case, with the Fathom Blockers surviving as the surviving companies and wholly owned subsidiaries of Altimar II (collectively, the “Surviving Fathom Blockers”); |
(d) | Immediately following step (c) above, the Surviving Fathom Blockers will each merge with and into Altimar II (the “Blocker Altimar Mergers”), in each case, with Altimar II as the surviving company; and |
(e) | Immediately following the Blocker Altimar Mergers, Rapid Merger Sub will merge with and into Fathom OpCo (the “Fathom Merger”), with Fathom OpCo as the surviving entity of the Fathom Merger (Fathom, in its capacity as the surviving entity of the Fathom Merger, is sometimes referred to as the “Fathom Surviving Entity”). Following the Fathom Merger, the Fathom Surviving Entity will be owned by Altimar II and all other holders of Fathom OpCo units outstanding as of immediately prior to the Fathom Merger (such other holders, excluding Altimar II, are referred to as the “Continuing Fathom Unitholders”). |
(in millions $) |
Assuming no Redemptions |
Assuming Maximum Redemptions |
||||||
Cash Consideration |
$ | 335 | $ | — | ||||
Repayment of non-extended long-term debt, net |
160 | 160 | ||||||
|
|
|
|
|||||
Total cash consideration |
495 |
160 |
||||||
Closing Seller Equity Consideration |
878 | 1,213 | ||||||
Contingent consideration |
82 | 82 | ||||||
|
|
|
|
|||||
Total consideration transferred |
1,445 |
1,455 |
||||||
Cash and cash equivalents |
11 | 11 | ||||||
Accounts receivable |
25 | 25 | ||||||
Inventory |
11 | 11 | ||||||
Other current assets |
3 | 3 | ||||||
Property and equipment, net |
38 | 38 | ||||||
Intangible assets, net |
250 | 250 | ||||||
Goodwill |
1,336 | 1,324 | ||||||
|
|
|
|
|||||
Total assets acquired |
1,674 | 1,662 | ||||||
Accounts payable |
(7 | ) | (7 | ) | ||||
Accrued expenses and other current liabilities |
(10 | ) | (10 | ) | ||||
Contingent consideration from prior acquisitions |
(6 | ) | (6 | ) | ||||
Long-term debt, net |
(170 | ) | (170 | ) | ||||
Tax receivable agreement |
(22 | ) | (4 | ) | ||||
Deferred tax liability |
— | (6 | ) | |||||
Other non-current liabilities |
(4 | ) | (4 | ) | ||||
|
|
|
|
|||||
Total liabilities assumed |
(219 | ) | (207 | ) | ||||
Net assets acquired |
$ |
1,445 |
$ |
1,445 |
Identifiable intangible assets |
Fair Value (in millions) |
Useful Life (in years) |
||||||
Trade Name |
$ | 80 | 15 | |||||
Customer Relationships |
150 | 19 | ||||||
Developed Technology |
20 | 5 | ||||||
|
|
|||||||
$ | 250 |
Fathom OpCo (1) |
Incodema (2) |
NewCut (2) |
GPI (2) |
Dahlquist (2) |
Majestic Metals (2) |
Mark Two (2) |
Summit (2) |
Centex & Laser (2) |
Precision Process (2) |
Micropulse West (2) |
Pro Forma Adjustments |
Pro Forma Fathom OpCo |
||||||||||||||||||||||||||||||||||||||||
Revenue |
61,289 | 8,161 | 3,432 | 674 | 7,853 | 23,573 | 5,601 | 6,659 | 13,223 | 9,998 | 8,942 | — | 149,405 | |||||||||||||||||||||||||||||||||||||||
Cost of Revenue |
32,815 | 2,762 | 1,926 | 288 | 2,126 | 15,359 | 2,878 | 1,518 | 7,523 | 2,965 | 5,348 | 963 | (a) |
76,471 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Gross Profit |
28,474 | 5,399 | 1,506 | 386 | 5,727 | 8,214 | 2,723 | 5,141 | 5,700 | 7,033 | 3,594 | (963 | ) | 72,934 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative |
22,197 | 4,211 | 1,323 | 355 | 2,183 | 4,216 | 2,092 | 4,804 | 2,655 | 3,705 | 1,277 | — | 49,018 | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
4,825 | 174 | 75 | 219 | 34 | 124 | — | — | 589 | 46 | 437 | 9,805 | (b) |
16,328 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total operating expenses |
27,022 | 4,385 | 1,398 | 574 | 2,217 | 4,340 | 2,092 | 4,804 | 3,244 | 3,751 | 1,714 | 9,805 | 65,346 | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Operating income (loss) |
1,452 | 1,014 | 108 | (188 | ) | 3,510 | 3,874 | 631 | 337 | 2,456 | 3,282 | 1,880 | (10,768 | ) | 7,588 | |||||||||||||||||||||||||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense/ (income) |
3,665 | 118 | 34 | — | (35 | ) | (19 | ) | 48 | 80 | 362 | — | 22 | 5,019 | (c) |
9,294 | ||||||||||||||||||||||||||||||||||||
Other expense |
6,335 | 388 | 64 | — | — | 2 | 971 | 114 | 591 | — | — | — | 8,465 | |||||||||||||||||||||||||||||||||||||||
Other (income) |
(585 | ) | (16 | ) | — | — | (542 | ) | (1,699 | ) | — | — | — | 28 | (4 | ) | — | (2,818 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total other expenses (income), net |
9,415 | 490 | 98 | — | (577 | ) | (1,716 | ) | 1,019 | 194 | 953 | 28 | 18 | 5,019 | 14,941 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
NET (LOSS) INCOME BEFORE INCOME TAXES |
(7,963 | ) | 524 | 10 | (188 | ) | 4,087 | 5,590 | (388 | ) | 143 | 1,503 | 3,254 | 1,862 | (15,787 | ) | (7,353 | ) | ||||||||||||||||||||||||||||||||||
Provision for income taxes |
— | — | — | — | — | — | — | — | 338 | 37 | — | 375 | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
NET (LOSS) INCOME |
(7,963 | ) | 524 | 10 | (188 | ) | 4,087 | 5,590 | (388 | ) | 143 | 1,165 | 3,217 | 1,862 | (15,787 | ) | (7,728 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Refers to the historical audited financial statements of Fathom OpCo. |
(2) | Refers to the historical results of Incodema, Dahlquist, Majestic Metals, Mark Two, Newchem, GPI, Summit, Centex, Laser, Precision Process, and Micropoulse West prior to their respective acquisitions. Note that each of the Mark Two, GPI, Summit, Centex, Laser, Micropulse West and PPC acquisitions is individually insignificant under S-X Rule 3-05. |
a) | Cost of revenue |
b) | Depreciation and amortization |
c) | Interest Expense |
Fathom OpCo (1) |
Summit (2) |
Centex & Laser (2) |
Precision Process (2) |
Micropulse West (2) |
Pro Forma Adjustments |
Pro Forma Fathom OpCo |
||||||||||||||||||||||
Revenue |
107,887 | 404 | 4,062 | 3,771 | 2,130 | — | 118,254 | |||||||||||||||||||||
Cost of Revenue |
61,749 | 78 | 2,351 | 840 | 1,168 | — | 66,186 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Gross Profit |
46,138 | 326 | 1,711 | 2,931 | 962 | — | 52,068 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||
Selling, general, and administrative |
29,470 | 391 | 1,220 | 1,299 | 500 | — | 32,880 | |||||||||||||||||||||
Depreciation and amortization |
9,327 | — | 24 | — | 65 | 1,079 | (a) |
10,495 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating expenses |
38,797 | 391 | 1,244 | 1,299 | 565 | 1,079 | 43,375 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating income (loss) |
7,341 | (65 | ) | 467 | 1,632 | 397 | (1,079 | ) | 8,693 | |||||||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||||||
Interest expense/(income) |
8,800 | 1 | 102 | — | (1 | ) | (8,902 | ) (b) |
— | |||||||||||||||||||
Other expense |
9,007 | 419 | — | 1 | 11 | — | 9,438 | |||||||||||||||||||||
Other (income) |
(3,215 | ) | — | (1,389 | ) | (11 | ) | 741 | — | (3,874 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total other expenses, net |
14,592 | 420 | (1,287 | ) | (10 | ) | 751 | (8,902 | ) | 5,564 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
NET (LOSS) INCOME BEFORE INCOME TAXES |
(7,251 | ) | (485 | ) | 1,754 | 1,642 | (354 | ) | 7,823 | 3,129 | ||||||||||||||||||
Provision for income taxes |
807 | — | 22 | 39 | — | — | 868 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
NET (LOSS) INCOME |
(8,058 | ) | (485 | ) | 1,732 | 1,603 | (354 | ) | 7,823 | 2,261 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Refers to the historical audited financial statements of Fathom OpCo. |
(2) | Refers to the historical results of Summit, Centex, Laser, Precision Process, and Micropulse West prior to their respective acquisitions. |
a) | Depreciation and Amortization |
b) | Interest expense/(income) |
a) | Cost of Revenue |
b) | Selling, general, and administrative |
c) | Depreciation and Amortization |
d) | Interest Expense |
e) | Income Taxes |
f) | Net (loss) income per share |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||
For the year ended December 31, 2020 |
For the year ended December 31, 2020 |
|||||||
(in thousands, except share-related amounts) |
||||||||
Pro Forma net loss attributable to holders of Class A Common Stock |
(31,358 | ) | (21,460 | ) | ||||
Weighted average shares of Class A Common Stock outstanding — basic and diluted |
73,849,425 | 50,534,508 | ||||||
|
|
|
|
|||||
Net loss per share — basic and diluted |
$ | (0.42 | ) | $ | (0.42 | ) | ||
|
|
|
|
g) | Noncontrolling Interest |
a) | Cost of Revenue |
b) | Selling, general, and administrative |
c) | Depreciation and Amortization |
d) | Interest Expense |
e) | Income Taxes |
f) | Net (loss) income per share |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||
For the period ended September 30, 2021 |
For the period ended September 30, 2021 |
|||||||
(in thousands, except share-related amounts) |
||||||||
Pro Forma net loss attributable to holders of Class A Common Stock |
(3,455 | ) | (4,807 | ) | ||||
Weighted average shares of Class A Common Stock outstanding – basic and diluted |
73,849,425 | 50,534,508 | ||||||
|
|
|
|
|||||
Net income per share – basic and diluted |
$ | (0.05 | ) | $ | (0.07 | ) | ||
|
|
|
|
g) | Noncontrolling Interest |
a) | Reflects the proceeds of $80.0 million from the issuance of 8,000,000 shares of Class A common stock with a par value of $0.0001 from the PIPE Investment based on estimated commitments received. |
b) | Reflects the entry into a $125.0 million term loan and a $27.0 million revolver, net of deferred financing fees of $2.4 million, payment of the historical debt of $170.3 million, and payment of accrued interest of $0.9 million. |
c) | A total of $60.0 million of expected transaction costs are to be incurred with the Business Combination, including $2.4 million of deferred financing costs. Of the total costs, $12.1 million relate to deferred IPO fees described in (f). |
d) | Reflects the reclassification of $345.0 million of cash and cash equivalents held in the Trust Account of Altimar that will become available for transaction consideration, transaction expenses, and the operating activities in conjunction with the Business Combination. |
e) | Represents the adjustment for the estimated preliminary purchase price allocation for the acquisition of Fathom OpCo resulting from the Business Combination. The preliminary calculation of total consideration is presented above in Note 1 above. |
f) | Reflects the payment of deferred IPO fees which includes $12.1 million of deferred underwriters’ and professional fees in connection with Altimar’s IPO. |
g) | Represents the pro forma adjustments to reclassify Altimar Class B common stock, which will be converted to Altimar Class C common stock as a required step for the Domestication of Altimar and subsequently and immediately converted to Altimar Class A common stock and Altimar redeemable Class A common stock that will be converted to Class A common stock following the Business Combination. |
h) | Represents the pro forma adjustments to record a non-controlling interest related to the interest held by the Continuing Fathom Unitholders. |
Assuming No Redemptions |
Assuming Interim Low Redemptions |
Assuming Maximum Redemptions |
||||||||||||||||||||||
Shares |
Ownership % |
Shares |
Ownership % |
Shares |
Ownership % |
|||||||||||||||||||
Altimar II Public Shareholders |
34,500,000 | 46.7 | % | 17,250,000 | 27.9 | % | — | 0.0 | % | |||||||||||||||
PIPE Investors |
8,000,000 | 10.8 | % | 8,000,000 | 12.9 | % | 9,000,000 | 17.8 | % | |||||||||||||||
Altimar II Founders |
4,770,000 | 6.5 | % | 4,770,000 | 7.7 | % | 4,770,000 | 9.4 | % | |||||||||||||||
Legacy Fathom Equity Holders |
26,579,425 | 36.0 | % | 31,801,837 | 51.4 | % | 36,764,508 | 72.8 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Class A Common Shares |
73,849,425 | 100 | % | 61,821,837 | 100 | % | 50,534,508 | 100 | % |
i) | Represents the impact of the maximum redemption scenario at an estimated per share redemption price. Upon the maximum redemption scenario, $345.0 million in cash will be paid to redeemable shareholders with the offset to additional paid-in capital. In addition, a decrease in cash consideration used in the Business Combination was offset with an increase in equity consideration. In addition, under the maximum redemption scenario, Fathom will own 37.4% of the economic interest of Fathom OpCo, and the Continuing Fathom Unitholders will own the remaining 62.6%, and therefore, this adjustments reflects changes to non-controlling interest as a result of this change. |
j) | Upon completion of the Business Combination, Fathom will be party to a Tax Receivable Agreement (“TRA”). As described under “ Certain Relationships and Related-Party Transactions — Tax Receivable Agreement |
• | Assuming No Redemptions |
• | Assuming Interim Redemptions: |
• | Assuming Maximum Redemptions |
Altimar II (1) |
Pro Forma Fathom OpCo (2) |
Pro Forma Combined (Assuming No Redemptions) |
Pro Forma Combined (Assuming Interim Redemptions) |
Pro Forma Combined (Assuming Maximum Redemptions) |
||||||||||||||||
Period Ended September 30, 2021 |
||||||||||||||||||||
(in thousands except share and per share amounts) |
||||||||||||||||||||
Book Value per share |
$ | (0.81 | ) | $ | N/A | $ | 19.86 | $ | 23.72 | $ | 29.02 | |||||||||
Net income (loss) |
756 | 2,261 | (6,936 | ) | (6,936 | ) | (6,936 | ) | ||||||||||||
Altimar II Public Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class A ordinary shares |
29,571,429 | |||||||||||||||||||
Basic and diluted income per share, Class A ordinary shares |
0.02 | |||||||||||||||||||
Founder Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class B ordinary shares |
8,460,165 | |||||||||||||||||||
Basic and diluted net loss per common share |
0.02 | |||||||||||||||||||
Fathom Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted |
73,849,425 | 61,821,837 | 50,534,508 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Basic and diluted net loss per common share |
$ | (0.05 | ) | $ | (0.05 | ) | $ | (0.07 | ) | |||||||||||
Cash distributions per common share |
N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Year Ended December 31, 2020 |
||||||||||||||||||||
(in thousands except share and per share amounts) |
||||||||||||||||||||
Net income (loss) |
$ | (5 | ) | $ | (7,728 | ) | $ | (57,347 | ) $ | (57,347 | ) | $ | (57,347 | ) | ||||||
Altimar II Public Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class A ordinary shares |
N/A | |||||||||||||||||||
Basic and diluted income per share, Class A ordinary shares |
N/A | |||||||||||||||||||
Founder Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted—Class B ordinary shares |
7,500,000 | |||||||||||||||||||
Basic and diluted net loss per common share |
$ | — | ||||||||||||||||||
Fathom Shares |
||||||||||||||||||||
Weighted average shares outstanding, basic and diluted |
73,849,425 | 61,821,837 | 50,354,508 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Basic and diluted net loss per common share |
$ | (0.42 | ) | $ | (0.42 | ) | $ | (0.42 | ) | |||||||||||
Cash distributions per common share |
N/A | N/A | N/A | N/A | N/A |
Name |
Age |
Position | ||
Tom Wasserman | 46 | Chief Executive Officer and Chairman of the Board of Directors | ||
Wendy Lai | 45 | Chief Financial Officer | ||
Kevin L. Beebe | 61 | Director | ||
Payne D. Brown | 58 | Director | ||
Richard M. Jelinek | 55 | Director | ||
Roma Khanna | 51 | Director | ||
Michael Rubenstein | 47 | Director | ||
Vijay K. Sondhi | 56 | Director | ||
Michael Vorhaus | 63 | Director |
• | Additive manufacturing can produce highly complex parts using printed materials which would otherwise be extremely difficult to produce via traditional methods. |
• | CNC machining is a subtractive manufacturing process that utilizes a variety of precision computer guided tools. This process yields products with precision and repeatability, while offering high-quality surface finish optionality. |
• | Injection molding offers the ability to rapidly produce complex parts using molten material, formed in molds. This process delivers consistency, quality, and cost-effectiveness for larger-scale production. |
• | Precision sheet metal fabrication involves cutting and bending of metal sheets, resulting in parts which are highly durable. Lower production expenses make this a highly attractive fabrication process for low-volume jobs with fewer timing constraints. |
• | As advances in additive manufacturing make it better suited for higher-volume applications, it is expected to take share from traditional manufacturing processes. Additive manufacturing offers the benefits of speed, part consolidation, weight reduction, and the ability to create complex geometries. |
• | CNC machining has exhibited rapid technological advances over the past five to ten years and has gained significant share as a result. CNC workflow improvements have streamlined the process, reducing costs. |
• | While injection molding production serves a mature market, advances in fast-turnaround applications are driving growth which should not be overlooked. |
• | Precision sheet metal fabrication is projected to grow at an accelerated rate between 2020 and 2025. |
• | Adaptable, scalable platform with nationwide reach. |
• | Broad suite of manufacturing processes, deep technical expertise, and proprietary software platform. |
• | Strong customer relationships across diverse end-markets. on-demand manufacturing partner of choice. |
• | Highly experienced management team and Board of Directors. |
• | Increased penetration of our existing enterprise-level corporate customer base and expansion through new enterprise-level corporate customers. hands-on, quick-turn prototyping of low-to-mid |
• | Expanded offering of additive manufacturing capabilities. |
• | Capitalizing on outsourcing trends in prototyping and low- to mid-volume manufacturing. in-house capabilities. Based on current industry trends, we expect companies to further rely on outsourced providers for their prototyping and low- to mid-volume manufacturing. We believe we are well-positioned to capture market share as a result of this trend due to our comprehensive capabilities and corporate focus. |
• | Further enhancement of our software and digital capabilities. internet-of-things |
production efficiency achieved by leveraging our data analytics and artificial intelligence capabilities, (iii) enhancing the customer experience through greater integration of our platform into our customers’ PLM, MES and ERP systems, and (iv) reduction of our customers’ need for on-site inventory through the establishment of digitized supply chain management systems. |
• | Continued pursuit of strategic add-on acquisitions. on-demand digital manufacturing company with a highly scalable breadth of manufacturing capabilities. We have optimized our platform to streamline the integration of new companies into the Fathom OpCo ecosystem, allowing us to deploy our proprietary playbook and realize synergies. |
• | Engineering and design support. in-house engineers and technical professionals as they tackle complex application challenges in the early stages of product development. This consultation service aims to further compress development timelines and costs, while enhancing design for manufacturability and facilitating greater innovation. |
• | Technical responsiveness. |
• | Material expertise. |
• | Additive manufacturing. |
• | CNC machining. +/-0.001” to 0.005”. |
• | Injection molding. low- to high-volume molding needs. |
• | Precision sheet metal fabrication. |
• | Ancillary technologies. |
• | ISO 9001:2015 Certification: |
• | AS9100:2016 Certification: |
• | ISO 13485 Certification: |
• | ITAR-Registration: |
• | NIST 800-171 + NIST 800-53 Compliant: |
• | WISP Compliant: |
• | Quoting. low-volume production and prototyping. This offering allows users to customize items across dimensions, materials, manufacturing processes, finishes, and quantities. Our software allows users to receive quick access to quotes and industry leading expertise to then place an order leading to increased efficiency and expedited turnarounds. |
• | Project management. |
• | Design for manufacturability. |
• | Additive technology expertise and material guidance |
• | Mechanical concept development and industrial design support |
• | Design for additive manufacturing (DFAM) |
• | Design for manufacturing |
• | Proven advanced prototyping methodologies |
• | Bundled support with manufacturing services |
• | Production. |
• | We believe Fathom OpCo owns the widest breadth of advanced manufacturing processes, including additive 2.0 and emerging technologies |
• | We have a proven track record of serving blue-chip, enterprise-level corporate customers |
• | Our unified digital customer experience supplemented with embedded engineering driven support teams offer customers unique access to our expertise |
• | With our twelve manufacturing facilities spread across all U.S. timezones, we offer our clients turnaround times in as little as 24-hours, nationwide |
• | Fathom OpCo provides one of the industry’s only team of dedicated customer-facing engineers, unlocking the broadest parts envelope and providing customers with high-value customized parts |
• | We have earned key manufacturing industry certifications which validate our capabilities and precision (tight tolerances, handling of sensitive client data, etc.) |
• | We possess a wealth of material expertise, technical design capabilities, and engineering resources which we leverage to deliver superior customer results regardless of manufacturing process and production material |
• | 12,000 square-foot facility leased in Holland, OH |
• | 20,500 combined square feet across 4 leased facilities leased in Oakland, CA |
• | 27,000 square-foot facility leased in Ithaca, NY |
• | 17,500 square-foot facility leased in Newark, NY |
• | 23,000 square-foot facility leased in Miami Lakes, FL |
• | 32,000 square-foot facility leased in Tempe, AZ |
• | 87,000 square-foot facility leased in Denver, CO |
• | 7,500 square-foot facility leased in Pflugerville, TX |
• | 34,000 square-foot facility leased in Round Rock, TX |
• | 27,000 square-foot facility owned in McHenry, IL |
• | 28,000 square-foot facility owned in Ham Lake, MN |
• | 19,000 square-foot facility owned in Elk Grove, IL |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk. |
• | Fathom OpCo owns a wide breadth of advanced manufacturing processes, including additive 2.0 and emerging technologies |
• | We have a proven track record of serving blue-chip, enterprise-level corporate customers |
• | We offer our clients turnaround times in as little as 24-hours, nationwide |
• | Our unified digital customer experience supplemented by with embedded support teams |
• | Fathom OpCo provides the industry’s only team of dedicated customer-facing engineers, unlocking the broadest parts envelope and providing customers with high-value customized parts |
• | Our list of certifications validates our capabilities and precision (tight tolerances, handling of sensitive client data, etc.) |
• | We possess a wealth of material expertise, technical design capabilities, and engineering resources which we leverage to deliver superior customer results regardless of manufacturing process and production material |
• | Our successful and proven acquisition integration playbook for strategic growth opportunities |
Nine Months Ended September 30, |
Year Ended December 31, |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
Net loss |
$ | (8,058 | ) | $ | (1,105 | ) | $ | (7,963 | ) | $ | (4,771 | ) | ||||
Adjusted for: |
||||||||||||||||
Depreciation and amortization |
12,006 | 4,993 | 7,392 | 2,659 | ||||||||||||
Interest expense, net |
8,800 | 2,335 | 3,665 | 1,616 | ||||||||||||
Income tax expense |
807 | — | — | — | ||||||||||||
Contingent consideration |
(1,120 | ) | — | 1,055 | 1,181 | |||||||||||
Acquisition expenses |
4,045 | 1,925 | 3,765 | 2,059 | ||||||||||||
Loss on extinguishment of debt |
2,031 | — | — | — | ||||||||||||
Non-recurring and non-cash costs (1) |
5,309 | 1,536 | 3,280 | 1,404 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ |
23,820 |
$ |
9,684 |
$ |
11,194 |
$ |
4,148 |
||||||||
|
|
|
|
|
|
|
|
(1) | Includes adjustments for other non-recurring, non-operating, and non-cash costs related primarily to integration costs for new acquisitions, severance, and charges for the increase of fair value of inventory related to acquisitions, and management fees paid to Fathom OpCo’s previous owners. |
Nine Months Ended September 30, |
Year Ended December 31, |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
Pro forma net income (loss) |
$ | 2,261 | $ | (1,203 | ) | $ | (7,728 | ) | $ | (11,223 | ) | |||||
Adjusted for: |
||||||||||||||||
Depreciation and amortization |
13,306 | 14,774 | 20,098 | 15,709 | ||||||||||||
Interest expense, net |
— | 6,971 | 9,294 | 6,863 | ||||||||||||
Income tax expense |
868 | 371 | 375 | 16 | ||||||||||||
Contingent consideration |
(1,120 | ) | 392 | 1,055 | 1,181 | |||||||||||
Acquisition expenses |
4,050 | 6,259 | 12,900 | 5,480 | ||||||||||||
Loss on extinguishment of debt |
2,031 | — | — | — | ||||||||||||
Non-recurring and non-cash costs (1) |
5,718 | 3,085 | 3,896 | 3,949 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pro Forma Adjusted EBITDA |
$ |
27,114 |
$ |
30,649 |
$ |
39,890 |
$ |
21,975 |
||||||||
|
|
|
|
|
|
|
|
(1) | Includes adjustments for other non-recurring, non-operating, and non-cash costs related primarily to integration costs for new acquisitions, severance, and charges for the increase of fair value of inventory related to acquisitions, and management fees paid to Fathom OpCo’s previous owners. |
• | Capitalizing on outsourcing trends in prototyping and low-to-medium |
• | Increased penetration of our existing customer base and expansion through new enterprise-level corporate customers |
• | Further expansion of our “land and expand” customer relationship model |
• | Expanded offering of additive manufacturing services |
• | Further expansion of our software and digital capabilities |
• | Promotion of customer supply chain consolidation synergies with quality and rapid turnaround times |
• | Completion of eight strategic acquisitions to expand capabilities and expertise, add scale, and increase our customer-base |
• | Continued pursuit of strategic acquisitions |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||
($ in thousands) |
2021 |
2020 |
||||||||||||||||||||||
$ | % of Total Revenue |
$ | % of Total Revenue |
$ | % | |||||||||||||||||||
Revenue |
$ | 107,887 | 100 | % | $ | 42,249 | 100 | % | $ | 65,638 | 155 | % | ||||||||||||
Cost of revenue |
61,749 | 57 | 22,637 | 54 | 39,112 | 173 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
46,138 | 43 | 19,612 | 46 | 26,526 | 135 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Selling, general and administrative |
29,470 | 27 | 13,484 | 32 | 15,986 | 119 | ||||||||||||||||||
Depreciation and amortization |
9,327 | 9 | 2,797 | 7 | 6,530 | 233 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
38,797 | 36 | 16,281 | 39 | 22,516 | 138 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income |
7,341 | 7 | 3,331 | 8 | 4,010 | 120 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||
Interest expense |
8,800 | 8 | 2,335 | 6 | 6,465 | 277 | ||||||||||||||||||
Other expense |
9,007 | 8 | 2,524 | 6 | 6,483 | 257 | ||||||||||||||||||
Other income |
(3,215 | ) | (3 | ) | (423 | ) | (1 | ) | (2,792 | ) | 660 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total other expense, net |
14,592 | 14 | 4,436 | 10 | 10,156 | 229 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss before income taxes |
(7,251 | ) | (7 | ) | (1,105 | ) | (3 | ) | (6,146 | ) | 556 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Provision for income taxes |
807 | 1 | — | 0 | 807 | 100 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
$ (8,058 | ) | (7% | ) | $(1,105 | ) | (3 | %) | $(6,953 | ) | 629 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
||||||||||||||||||||||
($ in thousands) |
2021 |
2020 |
Change |
|||||||||||||||||||||
$ | % of Total Revenue |
$ | % of Total Revenue |
$ | % | |||||||||||||||||||
Revenue |
||||||||||||||||||||||||
Additive manufacturing |
$ | 13,322 | 12 | % | $ | 12,755 | 30 | % | $ | 567 | 4 | % | ||||||||||||
Injection molding |
20,941 | 18 | % | 13,338 | 32 | % | 7,603 | 57 | % | |||||||||||||||
CNC machining |
30,063 | 28 | % | 8,093 | 19 | % | 21,970 | 271 | % | |||||||||||||||
Precision sheet metal |
38,494 | 36 | % | 4,150 | 10 | % | 34,344 | 828 | % | |||||||||||||||
Other revenue |
5,067 | 5 | % | 3,913 | 9 | % | 1,154 | 29 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenue |
$ | 107,887 | 100 | % | $ | 42,249 | 100 | % | $ | 65,638 | 155 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||||||||||
($ in thousands) |
2020 |
2019 |
||||||||||||||||||||||
$ | % of Total Revenue |
$ | % of Total Revenue |
$ | % | |||||||||||||||||||
Revenue |
$ | 61,289 | 100 | % | $ | 20,618 | 100 | % | $ | 40,671 | 197 | % | ||||||||||||
Cost of revenue |
32,815 | 54 | 10,696 | 52 | 22,119 | 207 | % | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Gross profit |
28,474 | 46 | 9,922 | 48 | 18,552 | 187 | % | |||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Selling, general and administrative |
22,197 | 36 | 8,474 | 41 | 13,723 | 162 | % | |||||||||||||||||
Depreciation and amortization |
4,825 | 8 | 1,605 | 8 | 3,220 | 201 | % | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total operating expenses |
27,022 | 44 | 10,079 | 49 | 16,943 | 168 | % | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Operating income (loss) |
1,452 | 2 | (157 | ) | (1 | ) | 1,609 | (1,025 | )% | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||
Interest expense |
3,665 | 6 | 1,616 | 8 | 2,049 | 127 | % | |||||||||||||||||
Other expense |
6,335 | 10 | 3,187 | 15 | 3,148 | 99 | % | |||||||||||||||||
Other income |
(585 | ) | (1 | ) | (189 | ) | (1 | ) | (396 | ) | 210 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total other expense, net |
9,415 | 15 | 4,614 | 22 | 4,801 | 104 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss |
$ | (7,963 | ) | (13 | %) | $ | (4,771 | ) | (23 | %) | $ | (3,192 | ) | 67 | % | |||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
($ in thousands) |
2020 |
2019 |
Change |
|||||||||||||||||||||
$ | % of Total Revenue |
$ | % of Total Revenue |
$ | % | |||||||||||||||||||
Revenue |
||||||||||||||||||||||||
Additive manufacturing |
$ | 19,032 | 31 | % | $ | 11,461 | 56 | % | $ | 7,571 | 66 | % | ||||||||||||
Injection molding |
17,093 | 28 | 2,056 | 10 | 15,037 | 731 | ||||||||||||||||||
CNC machining |
9,173 | 15 | 3,833 | 19 | 5,340 | 139 | ||||||||||||||||||
Precision sheet metal |
9,811 | 16 | — | 0 | 9,811 | 0 | ||||||||||||||||||
Other revenue |
6,180 | 10 | 3,268 | 15 | 2,912 | 89 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenue |
$ | 61,289 | 100 | % | $ | 20,618 | 100 | % | $ | 40,671 | 197 | % | ||||||||||||
|
|
|
|
|
|
Nine months Ended September 30, |
Year Ended December 31, |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
Cash provided by (used in): |
||||||||||||||||
Operating activities |
$ | 1,737 | $ | 2,789 | $ | 1,870 | $ | (591 | ) | |||||||
Investing activities |
(74,076 | ) | (41,693 | ) | (96,038 | ) | (44,368 | ) | ||||||||
Financing activities |
74,682 | 44,335 | 101,330 | 43,766 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash |
$ |
2,343 |
$ |
5,431 |
$ |
7,162 |
$ |
(1,193 |
) | |||||||
|
|
|
|
|
|
|
|
($ in thousands) |
Total |
Less than 1 Year |
2 to 3 Years |
4 to 5 Years |
Thereafter |
|||||||||||||||
Operating leases |
$ | 14,659 | $ | 3,683 | $ | 6,201 | $ | 2,738 | $ | 2,037 | ||||||||||
Contingent consideration |
8,630 | 6,330 | 2,300 | — | — | |||||||||||||||
Debt — principal |
172,000 | 172,000 | — | — | — | |||||||||||||||
Interest on debt |
8,338 | 8,338 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total contractual obligations |
$ | 203,627 | $ | 190,351 | $ | 8,501 | $ | 2,738 | $ | 2,037 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2020 |
2019 |
|||||||
Risk-free interest rate |
0.28 | % | 2.24 | % | ||||
Expected term |
4.65 | 4.47 | ||||||
Expected volatility |
76.67 | % | 73.55 | % | ||||
Expected dividend yield |
0.00 | % | 0.00 | % | ||||
Weighted average grant date fair value, time-vested units |
$ | 57.69 | $ | 98.37 | ||||
Weighted average grant date fair value, performance-vested units |
$ | 49.96 | $ | 87.51 |
• | recent valuation analysis furnished by either an independent third-party valuation specialist or a professional investor in our company; |
• | our stage of development; |
• | actual and forecasted operating and financial performance; |
• | our capital resources or financial condition; |
• | trends and risks in our industry; |
• | U.S. and global capital market conditions; |
• | the preferences of our preferred and common units relative to those of common stock; |
• | the lack of a public market for our equity units; and |
• | the prospects for increased liquidity in our equity units through an initial public offering, sale of our company or otherwise. |
Grant Date |
Valuation Date |
Number of Performance- Vested Units |
Grant Date Fair Value per Performance- Vested Unit |
Number of Time-Vested Units |
Grant Date Fair Value per Time-Vested Unit |
|||||||||||||||
1/18/19 and 4/8/19 |
1/1/2019 | 2,625 | $ | 101.21 | 875 | $ | 111.46 | |||||||||||||
12/23/19 and 1/1/20 |
10/1/2019 | 938 | 49.14 | 312 | 61.72 | |||||||||||||||
8/15/20 and 12/1/20 |
10/1/2020 | 750 | 64.28 | 250 | 79.73 | |||||||||||||||
10/27/20 and 11/24/20 |
7/27/2020 | 3,750 | 47.09 | 1,250 | 53.28 |
($ in thousands) |
Fathom OpCo (1) |
Summit (2) |
Centex & Laser (2) |
Precision Process (2) |
Micropulse West (2) |
Pro Forma Adjustments |
Pro Forma Fathom OpCo |
|||||||||||||||||||||
Revenue |
$ | 107,887 | $ | 404 | $ | 4,062 | $ | 3,771 | $ | 2,130 | $ | — | $ | 118,254 | ||||||||||||||
Cost of revenue |
61,749 | 78 | 2,351 | 840 | 1,168 | — | 66,186 | |||||||||||||||||||||
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Gross profit |
46,138 | 326 | 1,711 | 2,931 | 962 | — | 52,068 | |||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||
Selling, general, and administrative |
29,470 | 391 | 1,220 | 1,299 | 500 | — | 32,880 | |||||||||||||||||||||
Depreciation and amortization |
9,327 | — | 24 | — | 65 | 1,079 | (a) |
10,495 | ||||||||||||||||||||
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Total operating expenses |
38,797 | 391 | 1,244 | 1,299 | 565 | 1,079 | 43,375 | |||||||||||||||||||||
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Operating income (loss) |
7,341 | (65 | ) | 467 | 1,632 | 397 | (1,079 | ) | 8,693 | |||||||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||||||
Interest expense/(income) |
8,800 | 1 | 102 | — | (1 | ) | (8,902 | ) (b) |
— | |||||||||||||||||||
Other expense |
9,007 | 419 | — | 1 | 11 | — | 9,438 | |||||||||||||||||||||
Other (income) |
(3,215 | ) | — | (1,389 | ) | (11 | ) | 741 | — | (3,874 | ) | |||||||||||||||||
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Total other expenses, net |
14,592 | 420 | (1,287 | ) | (10 | ) | 751 | (8,902 | ) | 5,564 | ||||||||||||||||||
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|||||||||||||||
NET (LOSS) INCOME BEFORE INCOME TAXES |
(7,251 | ) | (485 | ) | 1,754 | 1,642 | (354 | ) | 7,823 | 3,129 | ||||||||||||||||||
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Provision for income taxes |
807 | — | 22 | 39 | — | — | 868 | |||||||||||||||||||||
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NET (LOSS) INCOME |
$ | (8,058 | ) | $ | (485 | ) | $ | 1,732 | $ | 1,603 | $ | (354 | ) | $ | 7,823 | $ | 2,261 | |||||||||||
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(1) | Refers to the historical audited financial statements of Fathom OpCo. |
(2) | Refers to the historical results of Summit, Centex, Laser, Precision Process, and Micropulse West prior to their respective acquisitions. |
a) | Depreciation and Amortization |
b) | Interest expense/(income) |
($ in thousands) |
Fathom OpCo (1) |
Incodema (2) |
NewCut (2) |
GPI (2) |
Dahlquist (2) |
Majestic Metals (2) |
Mark Two (2) |
Summit (2) |
Centex & Laser (2) |
Precision Process (2) |
Micropulse West (2) |
Pro Forma Adjustments |
Pro Forma Fathom OpCo |
|||||||||||||||||||||||||||||||||||||||
Revenue |
$ | 42,249 | $ | 8,161 | $ | 3,432 | $ | 674 | $ | 6,043 | $ | 17,234 | $ | 4,422 | $ | 5,035 | $ | 10,170 | $ | 7,481 | $ | 7,044 | $ | — | $ | 111,945 | ||||||||||||||||||||||||||
Cost of goods sold |
22,637 | 2,762 | 1,926 | 288 | 3,026 | 11,046 | 2,273 | 1,118 | 5,815 | 2,199 | 4,075 | 1,063 | 58,228 | |||||||||||||||||||||||||||||||||||||||
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Gross profit |
19,612 | 5,399 | 1,506 | 386 | 3,017 | 6,188 | 2,149 | 3,917 | 4,355 | 5,282 | 2,969 | (1,063 | ) | 53,717 | ||||||||||||||||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative |
13,484 | 4,211 | 1,323 | 355 | 1,064 | 2,304 | 1,889 | 3,093 | 1,978 | 2,718 | 918 | — | 33,337 | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
2,797 | 174 | 75 | 219 | 27 | 107 | — | — | 441 | — | — | 7,394 | 11,234 | |||||||||||||||||||||||||||||||||||||||
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Total operating expenses |
16,281 | 4,385 | 1,398 | 574 | 1,091 | 2,411 | 1,889 | 3,093 | 2,419 | 2,718 | 918 | 7,394 | 44,571 | |||||||||||||||||||||||||||||||||||||||
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Operating income (loss) |
3,331 | 1,014 | 108 | (188 | ) | 1,926 | 3,777 | 260 | 824 | 1,936 | 2,564 | 2,051 | (8,457 | ) | 9,146 | |||||||||||||||||||||||||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense |
2,335 | 118 | 34 | — | (29 | ) | (19 | ) | 39 | 68 | 277 | — | 19 | 4,129 | 6,971 | |||||||||||||||||||||||||||||||||||||
Other expense |
2,524 | 388 | 64 | — | — | 3 | — | — | 448 | — | — | — | 3,427 | |||||||||||||||||||||||||||||||||||||||
Other income |
(423 | ) | (16 | ) | — | — | — | — | — | — | — | 21 | (2 | ) | — | (420 | ) | |||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
Total other expense, net |
4,436 | 490 | 98 | — | (29 | ) | (16 | ) | 39 | 68 | 725 | 21 | 17 | 4,129 | 9,978 | |||||||||||||||||||||||||||||||||||||
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Net (loss) income before income taxes |
(1,105 | ) | 524 | 10 | (188 | ) | 1,955 | 3,793 | 221 | 756 | 1,211 | 2,543 | 2,034 | (12,586 | ) | (832 | ) | |||||||||||||||||||||||||||||||||||
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Provision for income taxes |
— | — | — | — | — | — | — | — | 334 | 37 | — | — | 371 | |||||||||||||||||||||||||||||||||||||||
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Net income |
$ | (1,105 | ) | $ | 524 | $ | 10 | $ | (188 | ) | $ | 1,955 | $ | 3,793 | $ | 221 | $ | 756 | $ | 877 | $ | 2,506 | $ | 2,034 | $ | (12,586 | ) | $ | (1,203 | ) | ||||||||||||||||||||||
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|
(1) | Refers to the historical audited financial statements of Fathom OpCo. |
(2) | Refers to the historical results of Incodema, NewCut, Dahlquist, Majestic Metals, Mark Two, GPI, Summit, Centex, Laser, Precision Process, and Micropulse West prior to their respective acquisitions. See table below for further information. Refer to Note 3 – Business Combination |
(3) | Refer to Adjustments to Unaudited Pro Forma Consolidated Combined Financial Information. |
Pro Forma (unaudited) Nine months Ended September 30, |
||||||||||||||||
($ in thousands) |
2021 |
2020 |
$ Change |
% Change |
||||||||||||
Revenue |
$ | 118,254 | $ | 111,945 | $ | 6,309 | 6 | % | ||||||||
Cost of revenue |
66,186 | 58,228 | 7,958 | 14 | ||||||||||||
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|||||||||
Gross profit |
52,068 | 53,717 | (1,649 | ) | (3 | ) | ||||||||||
Operating expenses |
||||||||||||||||
Selling, general, and administrative |
32,880 | 33,337 | (457 | ) | (1 | ) | ||||||||||
Depreciation and amortization |
10,495 | 11,234 | (739 | ) | (7 | ) | ||||||||||
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Total operating expenses |
43,375 | 44,571 | (1,196 | ) | (3 | ) | ||||||||||
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|
|||||||||
Operating income (loss) |
8,693 | 9,146 | (453 | ) | (5 | ) | ||||||||||
Interest expense and other expense (income) |
||||||||||||||||
Interest expense/(income) |
— | 6,971 | (6,971 | ) | (100 | ) | ||||||||||
Other expense |
9,438 | 3,427 | 6,011 | 175 | ||||||||||||
Other (income) |
(3,874 | ) | (420 | ) | (3,454 | ) | 822 | |||||||||
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Total other expenses, net |
5,564 | 9,978 | (4,414 | ) | (44 | ) | ||||||||||
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Net income (loss) before income taxes |
3,129 | (832 | ) | 3,961 | (476 | ) | ||||||||||
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Provision for income taxes |
868 | 371 | 497 | 134 | ||||||||||||
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|||||||||
Net income (loss) |
$ | 2,261 | $ | (1,203 | ) | $ | 3,464 | (288 | )% | |||||||
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Pro Forma (unaudited) Nine months Ended September 30, |
||||||||||||||||||||||||
($ in thousands) |
2021 |
2020 |
Change |
|||||||||||||||||||||
$ | % of Total Revenue |
$ | % of Total Revenue |
$ | % | |||||||||||||||||||
Revenue |
||||||||||||||||||||||||
Additive manufacturing |
13,316 | 11 | % | 12,827 | 11 | % | 489 | 4% | ||||||||||||||||
Injection molding |
21,353 | 18 | % | 17,962 | 16 | % | 3,391 | 19% | ||||||||||||||||
CNC machining |
40,331 | 34 | % | 44,674 | 40 | % | (4,343 | ) | (10%) | |||||||||||||||
Precision sheet metal |
38,189 | 32 | % | 31,613 | 28 | % | 6,576 | 21% | ||||||||||||||||
Other revenue |
5,065 | 4 | % | 4,869 | 4 | % | 196 | 4% | ||||||||||||||||
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|||||||||||||
Total revenue |
118,254 | 100 | % | 111,945 | 100 | % | 6,309 | 6% | ||||||||||||||||
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($ in thousands) |
Fathom OpCo (1) |
Incodema (2) |
NewCut (2) |
GPI (2) |
Dahlquist (2) |
Majestic Metals (2) |
Mark Two (2) |
Pro Forma Adjustments |
Fathom OpCo Pro Forma |
|||||||||||||||||||||||||||
Revenue |
$ | 61,289 | $ | 8,161 | $ | 3,432 | $ | 674 | $ | 7,853 | $ | 23,573 | $ | 5,601 | — | $ | 110,583 | |||||||||||||||||||
Cost of revenue |
32,815 | 2,762 | 1,926 | 288 | 2,126 | 15,359 | 2,878 | (649 | ) | 57,505 | ||||||||||||||||||||||||||
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|||||||||||||||||||
Gross profit |
28,474 | 5,399 | 1,506 | 386 | 5,727 | 8,214 | 2,723 | 649 | 53,078 | |||||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||||||
Selling, general, and administrative |
22,197 | 4,211 | 1,323 | 355 | 2,183 | 4,216 | 2,092 | — | 36,577 | |||||||||||||||||||||||||||
Depreciation and amortization |
4,825 | 174 | 75 | 219 | 34 | 124 | — | 6,103 | 11,554 | |||||||||||||||||||||||||||
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Total operating expenses |
27,022 | 4,385 | 1,398 | 574 | 2,217 | 4,340 | 2,092 | 6,103 | 48,131 | |||||||||||||||||||||||||||
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|||||||||||||||||||
Operating income (loss) |
1,452 | 1,014 | 108 | (188 | ) | 3,510 | 3,874 | 631 | (5,454 | ) | 4,947 | |||||||||||||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||||||||||||||
Interest expense/(income) |
3,665 | 118 | 34 | — | (35 | ) | (19 | ) | 48 | 3,659 | 7,470 | |||||||||||||||||||||||||
Other expense |
6,335 | 388 | 64 | — | — | 2 | 971 | — | 7,760 | |||||||||||||||||||||||||||
Other (income) |
(585 | ) | (16 | ) | — | — | (542 | ) | (1,699 | ) | — | — | (2,842 | ) | ||||||||||||||||||||||
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Total other expenses, net |
9,415 | 490 | 98 | — | (577 | ) | (1,716 | ) | 1,019 | 3,659 | 12,388 | |||||||||||||||||||||||||
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NET (LOSS) INCOME BEFORE INCOME TAXES |
(7,963 | ) | 524 | 10 | (188 | ) | 4,087 | 5,590 | (388 | ) | (9,113 | ) | (7,441 | ) | ||||||||||||||||||||||
Provision for income taxes |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
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NET (LOSS) INCOME |
$ | (7,963 | ) | $ | 524 | $ | 10 | $ | (188 | ) | $ | 4,087 | $ | 5,590 | $ | (388 | ) | $ | (9,113 | ) | $ | (7,441 | ) | |||||||||||||
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(1) | Refers to the historical audited financial statements of Fathom OpCo. |
(2) | Refers to the historical results of Incodema, Dahlquist, Majestic Metals, Mark Two, NewCut, and GPI prior to their respective acquisitions. See table below for further information. |
(3) | Refer to Adjustments to Unaudited Pro Forma Consolidated Combined Financial Information. |
($ in thousands) |
Fathom OpCo (1) |
FATHOM (2) |
ICOMold (2) |
Incodema (2) |
NewCut (2) |
GPI (2) |
Dahlquist (2) |
Majestic Metals (2) |
Mark Two (2) |
Pro Forma Adjustments (3) |
Fathom OpCo Pro Forma |
|||||||||||||||||||||||||||||||||
Revenue |
$ | 20,618 | $ | 13,444 | $ | 7,830 | $ | 9,810 | $ | 5,709 | $ | 2,007 | $ | 7,845 | $ | 26,046 | $ | 3,711 | — | $ | 97,020 | |||||||||||||||||||||||
Cost of revenue |
10,696 | 7,508 | 3,162 | 4,179 | 2,919 | 687 | 3,075 | 18,073 | 2,192 | 1,302 | 53,793 | |||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Gross profit |
9,922 | 5,936 | 4,668 | 5,631 | 2,790 | 1,320 | 4,770 | 7,973 | 1,519 | (1,302 | ) | 43,227 | ||||||||||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative |
8,474 | 6,737 | 2,206 | 2,286 | 1,481 | 216 | 1,708 | 3,267 | 2,023 | — | 28,398 | |||||||||||||||||||||||||||||||||
Depreciation and amortization |
1,605 | 31 | 55 | 321 | 173 | 331 | 785 | 149 | 139 | 8,709 | 12,298 | |||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total operating expenses |
10,079 | 6,768 | 2,261 | 2,607 | 1,654 | 547 | 2,493 | 3,416 | 8,709 | 40,696 | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Operating income (loss) |
(157 | ) | (832 | ) | 2,407 | 3,024 | 1,136 | 773 | 2,277 | 4,557 | (10,011 | ) | 2,531 | |||||||||||||||||||||||||||||||
Interest expense and other expense (income) |
||||||||||||||||||||||||||||||||||||||||||||
Interest expense/(income) |
1,616 | 126 | — | 126 | 80 | — | (23 | ) | (33 | ) | 48 | 4,923 | 6,863 | |||||||||||||||||||||||||||||||
Other expense |
3,187 | 1,244 | 1,185 | 1,582 | — | — | — | — | (61 | ) | — | 7,137 | ||||||||||||||||||||||||||||||||
Other (income) |
(189 | ) | (8 | ) | (23 | ) | (42 | ) | — | — | — | — | — | — | (262 | ) | ||||||||||||||||||||||||||||
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Total other expenses, net |
4,614 | 1,362 | 1,162 | 1,666 | 80 | — | (23 | ) | (33 | ) | (13 | ) | 4,923 | 13,738 | ||||||||||||||||||||||||||||||
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NET (LOSS) INCOME BEFORE INCOME TAXES |
(4,771 | ) | (2,194 | ) | 1,245 | 1,358 | 1,056 | 773 | 2,300 | 4,590 | (630 | ) | (14,934 | ) | (11,207 | ) | ||||||||||||||||||||||||||||
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Provision for income taxes |
— | 16 | — | — | — | — | — | — | — | — | 16 | |||||||||||||||||||||||||||||||||
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NET (LOSS) INCOME |
$ | (4,771 | ) | $ | (2,210 | ) | $ | 1,245 | $ | 1,358 | $ | 1,056 | $ | 773 | $ | 2,300 | $ | 4,590 | $ | (630 | ) | $ | (14,934 | ) | $ | (11,223 | ) | |||||||||||||||||
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(1) | Refers to the historical audited financial statements of Fathom OpCo. |
(2) | Refers to the historical results of FATHOM, ICOMold, Incodema, Newchem, GPI, Dahlquist, Majestic Metals and Mark Two prior to their respective acquisitions. See table below for further information. |
(3) | Adjustments are prepared under the same basis as the Unaudited Pro Forma Consolidated Combined Financial Information section. |
2020 |
2019 |
$Change |
% Change |
|||||||||||||
Revenue |
$ | 110,583 | $ | 97,020 | $ | 13,563 | 14 | % | ||||||||
Cost of revenue |
57,505 | 53,793 | 3,712 | 7 | ||||||||||||
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Gross profit |
53,078 | 43,227 | 9,851 | 23 | ||||||||||||
Operating Expenses |
||||||||||||||||
Selling, general, and administrative |
36,577 | 28,398 | 8,179 | 29 | ||||||||||||
Depreciation and amortization |
11,554 | 12,298 | (744 | ) | (6 | ) | ||||||||||
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Total operating expenses |
48,131 | 40,696 | 7,435 | 18 | ||||||||||||
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Operating income (loss) |
4,947 | 2,531 | 2,416 | 95 | ||||||||||||
Interest expense (income) |
||||||||||||||||
Interest expense |
7,470 | 6,863 | 607 | 9 | ||||||||||||
Other expense |
7,760 | 7,137 | 623 | 9 | ||||||||||||
Other income |
(2,842 | ) | (262 | ) | (2,580 | ) | n/m | |||||||||
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Total other expense, net |
12,388 | 13,738 | (1,350 | ) | (10 | ) | ||||||||||
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Net (loss) income before income taxes |
(7,441 | ) | (11,207 | ) | 3,766 | (34 | ) | |||||||||
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Provision for income taxes |
— | 16 | (16 | ) | (100 | ) | ||||||||||
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Net (loss) Income |
$ | (7,441 | ) | $ | (11,223 | ) | $ | 3,782 | (34 | )% | ||||||
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Pro Forma (unaudited) Year Ended December 31, |
||||||||||||||||||||||||
($ in thousands) |
2020 |
2019 |
Change |
|||||||||||||||||||||
$ | % of Total Revenue |
$ | % of Total Revenue |
$ | % | |||||||||||||||||||
Revenue |
||||||||||||||||||||||||
Additive manufacturing |
$ | 19,228 | 17 | % | $ | 19,048 | 20 | % | $ | 180 | 1 | % | ||||||||||||
Injection molding |
17,269 | 16 | 12,074 | 12 | 5,195 | 43 | ||||||||||||||||||
CNC machining |
22,739 | 21 | 18,076 | 19 | 4,663 | 26 | ||||||||||||||||||
Precision sheet metal |
45,103 | 41 | 41,597 | 43 | 3,506 | 8 | ||||||||||||||||||
Other revenue |
6,244 | 5 | 6,225 | 6 | 19 | 0 | ||||||||||||||||||
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Total revenue |
$ | 110,583 | 100 | % | $ | 97,020 | 100 | % | $ | 13,563 | 14 | % | ||||||||||||
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Name |
Age |
Position | ||
Ryan Martin | 42 | Chief Executive Officer | ||
Richard Stump | 40 | Chief Commercial Officer | ||
Mark Frost | 56 | Chief Financial Officer |
• | Ryan Martin, Chief Executive Officer of MCT Group; |
• | Richard Stump, Chief Commercial Officer of MCT Group; and |
• | Brian Freeburg, Chief Financial Officer of MCT Group. |
• | Base Salary. |
• | Short-Term Cash Incentives. |
• | Long-Term Equity Incentives. |
Phantom equity awarded to the NEOs under the MCT Phantom Plan was subject to the following vesting conditions: (i) 25% would vest subject to the NEO’s continued service with the MCT Group on each of the first four anniversaries of the NEO’s employment commencement date, and would be accelerated in connection with a change in control of MCT Holdings; and (ii) 75% would vest if MCT Holdings’ investors realized a multiple on invested capital equal to at least 2.0x in connection with a change in control of MCT Holdings. In connection with the Reorganization, the Prior Phantom Plans and all awards thereunder were terminated and replaced by a single phantom equity plan sponsored by Fathom OpCo and new awards thereunder, all of which contain terms and conditions that are substantially similar to the Prior Phantom Plans (the “Combined Phantom Plan”) and awards. The Combined Phantom Plan has a pool of phantom units equal to up to 10% of the total value receivable by common unit holders of Fathom OpCo on a sale of Fathom OpCo. Only 62.5% of the pool, or 6.25% of the total value receivable by common unit holders of Fathom OpCo on a sale of Fathom OpCo, has been granted. |
Name and Position |
Year |
Salary ($) |
Non-Equity IncentivePlan Compensation ($) (1) |
All Other Compensation ($) (2) |
Total ($) |
|||||||||||||||
Ryan Martin Chief Executive Officer of MCT Group |
2020 | $ | 311,539 | $ | 124,875 | $ | 23,275 | $ | 459,689 | |||||||||||
Richard Stump Chief Commercial Officer of MCT Group |
2020 | $ | 247,436 | $ | 842,500 | $ | 6,154 | $ | 1,096,090 | |||||||||||
Brian Freeburg Chief Financial Officer of MCT Group |
2020 | $ | 216,923 | $ | 81,400 | $ | 5,986 | $ | 304,309 |
(1) | The amounts in this column represent cash bonus payments to the Fathom OpCo NEOs under MCT’s 2020 annual cash incentive plan, which are based on MCT’s and each individual NEO’s performance. |
(2) | The amounts in this column represent 401(k) plan matching contributions made to each NEO as well as an annual amount representing Mr. Martin’s $1,000 per month auto allowance. |
Stock Awards (1) |
||||||||||||||||
Name |
Number of Shares or Units of Stock that have not Vested (#) (2) |
Market Value of Shares or Units of Stock that have not Vested ($) (3) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or other Rights that have not Vested (#) (4) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights that have not Vested ($) (5) |
||||||||||||
Ryan Martin(6) |
563 | $ | 31,405 | 2,250 | $ | 99,765 | ||||||||||
Richard Stump(7) |
93 | $ | 5,188 | 375 | $ | 16,628 | ||||||||||
Brian Freeburg(8) |
62 | $ | 3,459 | 375 | $ | 16,628 |
(1) | All awards reflected in this table were granted under the MCT Phantom Plan. |
(2) | The figures in this column represent outstanding awards of time-vested phantom units that vest subject to each NEO’s continued service with the MCT Group on each of the first four anniversaries of the NEO’s employment commencement date. The awards accelerate in connection with a change in control of MCT Holdings. |
(3) | The amounts reflected in this column represent the market value of MCT Holdings units on December 31, 2020, which was $55.78 per unit. |
(4) | The figures in this column represent outstanding performance-based phantom units, which vest if MCT Holdings investors realize a multiple of invested capital equal to at least 2.0x in connection with a change in control of MCT Holdings. |
(5) | The amounts reflected in this column represent the market value of MCT Holdings units on December 31, 2020, which was $44.34 per unit. |
(6) | Granted on April 8, 2019; vesting commenced on Mr. Martin’s first day of employment, January 7, 2019. |
(7) | Granted on December 23, 2019; vesting commenced on Mr. Stump’s first day of employment, September 23, 2019. |
(8) | Granted on January 18, 2019; vesting commenced on Mr. Freeburg’s first day of employment, September 26, 2018. |
• | An annual cash retainer, the amount of which is based on the manager’s past experience, with Mr. Nardelli receiving $50,000 per year and Mr. Chen receiving $40,000 per year; and |
• | An initial phantom unit award consisting of units of MCT Holdings, subject to the following vesting conditions: (i) 25% would vest subject to the non-employee manager’s continued service with MCT Holdings or Incodema Holdings on each of the first four anniversaries of the non-employee manager’s board commencement date, and would be accelerated in connection with a change in control of MCT Holdings; and (ii) 75% would vest if MCT Holdings investors realized a multiple on invested capital equal to at least 2.0x in connection with a change in control of MCT Holdings. Messrs. Nardelli and Chen received initial grants of 500 phantom units and 250 phantom units of MCT Holdings, respectively, on January 1, 2020. Like the NEOs, members of the MCT Holdings and Incodema Holdings boards of managers with phantom awards under the Prior Phantom Plans had their awards terminated in connection with the Reorganization and received new awards under the Combined Phantom Plan. |
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) (1) |
All Other Compensation ($) (2) |
Total ($) |
||||||||||||
TJ Chung (3)(4)(5) |
— | — | — | — | ||||||||||||
John May (3)(4)(5) |
— | — | — | — | ||||||||||||
Robert Nardelli (3) |
$ | 50,000 | $ | 26,144 | $ | 4,185 | $ | 80,329 | ||||||||
Carey Chen (3) |
$ | 40,000 | $ | 13,072 | $ | 11,375 | $ | 64,447 | ||||||||
Matt Puglisi (3)(4)(5) |
— | — | — | — | ||||||||||||
Frank Papa (3)(5) |
— | — | — | — | ||||||||||||
Ronald Rascia (4)(5) |
— | — | — | — |
(1) | The amount reported in the “Stock Awards” column for Messrs. Nardelli and Chen reflects the grant date fair value of awards of 500 phantom units and 250 phantom units of MCT Holdings, respectively, granted on January 1, 2020, calculated in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718. See Note 16, Share Based Compensation, to the consolidated financial statements for the year ended December 31, 2020, filed with the SEC hereinwith, for the assumptions made in determining this value. As of December 31, 2020, the following non-employee directors had outstanding phantom unit equity awarded in connection with their service on the MCT Holdings board of managers: Mr. Nardelli – 469 phantom units and Mr. Chen — 234 phantom units. |
(2) | The amount reported in the “All Other Compensation” column for Mr. Chen includes $10,000 of consulting fees paid pursuant to the Chen Consulting Agreement. |
(3) | Served on the MCT Holdings board of managers. |
(4) | Served on the Incodema Holdings board of managers. |
(5) | Messrs. Chung, May, Puglisi, Papa and Rascia were not eligible for director compensation in 2020. |
Name |
Position with Fathom |
Age as of Special Meeting | ||
Carey Chen |
Director | 48 | ||
TJ Chung |
Director | 58 | ||
Dr. Caralynn Nowinski Collens |
Director | 43 | ||
Adam DeWitt |
Director | 49 | ||
David Fisher |
Director | 52 | ||
Maria Green |
Director | 68 | ||
Peter Leemputtee |
Director | 64 | ||
Ryan Martin |
Director and Chief Executive Officer | 42 | ||
John May |
Director | 50 | ||
Robert Nardelli |
Director | 73 |
Name |
Position with Fathom |
Age as of Special Meeting | ||
Ryan Martin |
Chief Executive Officer | 42 | ||
Richard Stump |
Chief Commercial Officer | 41 | ||
Mark Frost |
Chief Financial Officer | 58 |
• | the presumption that directors are acting in good faith, on an informed basis, and with a view to the best interests of Fathom and its stockholders has been rebutted; and |
• | it is proven that the director’s act or failure to act constituted a breach of his or her fiduciary duties as a director and such breach involved intentional misconduct, a knowing violation of law or receipt of an improper personal benefit. |
• | attract, retain and motivate senior management leaders who are capable of advancing our mission and strategy and ultimately, creating and maintaining our long-term equity value. Such leaders must engage in a collaborative approach and possess the ability to execute our business strategy in an industry characterized by competitiveness and growth; |
• | reward senior management in a manner aligned with our financial performance; and |
• | align senior management’s interests with our equity owners’ long-term interests through equity participation and ownership. |
• | each person who is, or is expected to be, the beneficial owner of more than 5% of issued and outstanding shares of our common stock or of Fathom Class A common stock or Class B common stock; |
• | each of our current executive officers and directors; |
• | each person who will become an executive officer or director of Fathom post-Business Combination; and |
• | all executive officers and directors of Altimar II as a group pre-Business Combination and all executive officers and directors of Fathom as a group post-Business Combination. |
Before the Business Combination |
After the Business Combination |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Name and Address of Beneficial Owners |
Number of shares of Altimar II ordinary shares |
% |
% of Total Voting Power** |
Number of shares of Fathom Class A Common Stock |
% |
Number of shares of Fathom Class B Common Stock |
% |
% of Total Voting Power** |
Number of shares of Fathom Class A Common Stock |
% |
Number of shares of Fathom Class B common Stock |
% |
% of Total Voting Power** |
|||||||||||||||||||||||||||||||||||||||
Directors and Executive Officers of Altimar II |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Beebe (1) |
25,000 |
* |
* |
17,500 |
* |
— |
— |
* |
17,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Payne Brown (1) |
25,000 |
* |
* |
17,500 |
* |
— |
— |
* |
17,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Rick Jelinek (1) |
25,000 |
* |
* |
17,500 |
* |
— |
— |
* |
17,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Roma Khanna (1) |
25,000 |
* |
* |
17,500 |
* |
— |
— |
* |
17,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Wendy Lai (1) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Michael Rubenstein (1) |
25,000 |
* |
* |
17,500 |
* |
— |
— |
* |
17,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Vijay Sondhi (1) |
25,000 |
* |
* |
17,500 |
* |
— |
— |
* |
17,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Michael Vorhaus (1) |
25,000 |
* |
* |
17,500 |
* |
— |
— |
* |
17,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Tom Wasserman (1) |
— |
— |
— |
— |
— |
— |
— |
* |
— |
— |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Directors and Executive Officers of Altimar II as a Group (9 Individuals) |
175,000 |
* |
* |
122,500 |
* |
— |
— |
* |
122,500 |
* |
— |
— |
* |
|||||||||||||||||||||||||||||||||||||||
Directors and Executive Officers of Fathom After Consummation of the Business Combination |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Carey Chen (2) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
TJ Chung (2) |
— | — | |
— |
|
— | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Dr. Caralyn Nowinski Collens (2) |
— | — | |
— |
|
— | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Adam DeWitt (2) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
David Fisher (2) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Mark Frost (2) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
David Fisher (2) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Maria Green (2) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Peter Leemputtee (2) |
— | — | |
— |
|
|
— |
|
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Ryan Martin (2) |
— | — | — | |
— |
|
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
John May (2) |
— | — | — | 62,297,874 | 51.9 | 46,018,627 | 75.2 | 46.1 | 87,036,769 | 75.7 | 64,424,239 | 76.2 | 64.4 | |||||||||||||||||||||||||||||||||||||||
Robert Nardelli (2) |
|
— |
|
— | — | 105,410 | * | 105,410 | * | * | 145,596 | * | 145,596 | * | * | |||||||||||||||||||||||||||||||||||||
Richard Stump (2) |
— | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
All Directors and Executive Officers of Fathom as a Group (11 Individuals) |
— | — | — | 62,403,284 | 51.9 | 46,127,037 | 75.4 | 46.2 | 87,182,365 | 75.7 | 64,569,835 | 76.4 | 64.5 | |||||||||||||||||||||||||||||||||||||||
Five Percent Holders |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Altimar Sponsor II, LLC (1)(4) |
8,450,000 | 19.6 | 19.6 | 4,647,500 | 6.3 | — | — | 3.4 | 4,647,500 | 9.2 | — | — | 3.4 | |||||||||||||||||||||||||||||||||||||||
CORE Funds (3) |
— | — | — | 62,297,874 | 51.9 | 46,018,627 | 75.2 | 46.1 | 87,036,769 | 75.7 | 64,424,239 | 76.2 | 64.4 | |||||||||||||||||||||||||||||||||||||||
Citadel Advisors LLC, Citadel Advisors Holdings LP and Citadel GP LLC (5) |
1,924,686 | 5.6 | 5.6 | 1,924,686 | 2.6 | — | — | 1.4 | 1,924,686 | 3.8 | |
— |
|
— | 1.4 | |||||||||||||||||||||||||||||||||||||
Kenneth Griffin (6) |
1,976,483 | 5.7 | 5.7 | 1,976,483 | 2.7 | — | — | 1.5 | 1,976,483 | 3.9 | — | — | 1.5 | |||||||||||||||||||||||||||||||||||||||
BlueCrest Capital Management Limited (7) |
1,765,421 | 5.1 | 5.1 | 1,765,421 | 2.4 | — | — | 1.3 | 1,765,421 | 3.5 | — | — | 1.3 | |||||||||||||||||||||||||||||||||||||||
Siguler Guff Funds (8) |
— | — | — | 11,962,708 | 15.8 | 1,662,529 | 2.7 | 8.9 | 16,589,678 | 31.4 | 2,307,700 | — | 17.1 |
* | Less than one percent |
** | Percentage of total voting power before the Business Combination represents the voting power with respect to all Class A ordinary shares and Class B ordinary shares, as a single class. Percentage of total voting power after the Business Combination represents voting power with respect to all shares of Class A common stock and Class B common stock, as a single class. For information about the voting rights of Fathom common stock after the Business Combination, see “ Description of Fathom’s Capital Stock |
(1) | The business address of the holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(2) | The business address of the holder is 1050 Walnut Ridge Drive, Hartland, WI 53209. |
(3) | Represents shares held directly by CORE Industrial Partners Fund I, LP (“CORE Fund I”) and CORE Industrial Partners Fund I Parallel, LP (“CORE Parallel Fund I” and, collectively with CORE Fund I, the “CORE Funds”). CORE Industrial Fund Partners GP I, LLC (“ CORE Fund I GP”) is the sole general partner of each of the CORE Funds. John May is the sole managing member of CORE Fund I GP. Consequently, Mr. May and CORE Fund I GP may be deemed the beneficial owners of the shares held by the CORE Funds. The principal business address of each of the CORE Funds and CORE Fund I GP is 150 North Riverside Drive, Suite 2050, Chicago, IL 60606. The principal business address of Mr. May is 80 SW 8th Street, Suite 2750, Miami, FL 33130. 6,386,341 shares of Class A common stock and New Fathom Units held by the CORE Funds that constitute Earnout Shares (as defined herein) are not reflected in the above table. |
(4) | Interests shown before the Business Combination consist solely of founder shares, classified as Class B ordinary shares. Such shares will automatically convert into shares of Class C common stock, which shares will then convert into shares of Class A common stock in connection with the Closing of the Business Combination prior to pro rata forfeiture of the Forfeited Shares by the Altimar II Founders. 1,267,500 shares of Class A common stock held by Sponsor that constitute Sponsor Earnout Shares (as defined herein) are not reflected in the above table. |
(5) | Based solely upon information contained in the Schedule 13G filed with the SEC on August 16, 2021 and represents shares beneficially owned by each of Citadel Advisors LLC (“Citadel Advisors”), Citadel Advisors Holdings LP (“CAH”) and Citadel GP LLC (“CGP”). CAH is the sole member of Citadel Advisors. CGP is the general partner of CAH. Mr. Kenneth Griffin, a U.S. citizen, is the President and Chief Executive Officer of CGP, and owns a controlling interest in CGP. The business address of the holder is 131 S. Dearborn Street, 32nd Floor, Chicago, Illinois 60603. |
(6) | Based solely upon information contained in the Schedule 13G filed with the SEC on August 16, 2021. Mr. Griffin is a U.S. citizen. The business address of the holder is 131 S. Dearborn Street, 32nd Floor, Chicago, Illinois 60603. |
(7) | Based solely upon information contained in the Schedule 13G filed jointly with the SEC on October 12, 2021 by BlueCrest Capital Management Limited (the “Investment Manager”) which serves as investment manager to Millais Limited, a Cayman Islands exempted company and Michael Platt (“Mr. Platt”) who serves as principal, director, and control person of the Investment Manager. The address of the business office of the Investment Manager and Mr. Platt is Ground Floor Harbour Reach, La Rue de Carteret St Helier Jersey Channel Islands JE2 4HR. The Investment Manager is a company organized under the laws of Jersey, Channel Islands, operating solely out of Jersey, Channel Islands. Mr. Platt is a citizen of the United Kingdom. |
(8) | Represents shares held directly by Siguler Guff Small Buyout Opportunities Fund III, LP (“SBOF III”), Siguler Guff Small Buyout Opportunities Fund III (F), LP (“SBOF III (F)”), Siguler Guff Small Buyout Opportunities Fund III (C), LP (“SBOF III (C)”), Siguler Guff Small Buyout Opportunities III (UK), LP (“SBOF III(UK)”), Siguler Guff HP Opportunities Fund II, LP (“SG HP”), and Siguler Guff Americas Opportunities Fund, LP (“SG Americas” and, together with SBOF III, SBOF III(F), SBOF III(C), SBOF III (UK) and SG HP the “SG Funds”). SBOF III, SBOF III(F) and SBOF III (C) are each controlled by Siguler Guff SBOF III GP, LLC (“SBOF III GP”). SBOF III(UK) is controlled by Siguler Guff SBOF III (UK) GP, LLP (“SBOF III(UK) GP”). SG HP is controlled by Siguler Guff HP II GP, LLC (“SG HP GP”). SG Americas is controlled by Siguler Guff Americas GP, LLC (“SG Americas GP” and together with SBOF III GP, SBOF III(UK) GP and SG HP GP, the “SG GPs”). Each of the SG GPs is controlled by its sole member, Siguler Guff Capital, LP, which is controlled by Andrew Guff and George Siguler. Consequently, the SG GPs, Siguler Guff Capital, LP, Andrew Guff and George Siguler may be deemed the beneficial owners of the shares held by the SG Funds. The principal business address of SBOF III(UK) and SBOF III(UK) GP is 3rd Floor North Side Dukes Court, 32 Duke Street, St James’s, London SW1Y 6DF. The principal business address of the SG Funds (except for SBOF III(UK)), the SG GPs (except for SBOF III(UK) GP), Siguler Guff Capital, LP, Andrew Guff and George Siguler is 200 Park Ave, 23rd Floor, New York, NY 10166. |
• | any person who is, or at any time during the applicable period was, one of the Fathom’s officers or one of Fathom’s directors; |
• | any person who is known by Fathom to be the beneficial owner of more than five percent (5%) of its voting stock; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a ten percent (10%) or greater beneficial ownership interest. |
• | 300,000,000 shares of Class A common stock, |
• | 180,000,000 shares of Class B common stock, |
• | 10,000,000 shares of Class C common stock, and |
• | 10,000,000 shares of preferred stock. |
• | the provision requiring a 66-2/3% supermajority vote for stockholders to amend the Proposed Bylaws; |
• | the provisions providing for the manner of establishing the size of the board and for a classified board (the election and term of our directors); |
• | the provisions regarding resignation and removal of directors; |
• | the provisions regarding entering into business combinations with interested stockholders (requiring at least an 80% supermajority vote); |
• | the provisions precluding stockholder action by written consent; |
• | the provisions regarding calling special meetings of stockholders; |
• | the provisions regarding filling vacancies on our Board and newly created directorships; |
• | the provisions regarding the establishment of Delaware as the exclusive forum for certain types of legal proceedings against Fathom, its directors, officers and employees; |
• | the provisions eliminating monetary damages for breaches of fiduciary duty by a director; and |
• | the amendment provision requiring that the above provisions be amended only with a 66-2/3% supermajority vote. |
• | make nominations in the election of directors; |
• | propose that a director be removed; or |
• | propose any other business to be brought before an annual or special meeting of stockholders. |
• | the stockholder’s name and address; |
• | the number of shares beneficially owned by the stockholder and evidence of such ownership; |
• | the names of all persons with whom the stockholder is acting in concert and a description of all arrangements and understandings with those persons; |
• | a description of any agreement, arrangement or understanding reached with respect to shares of our stock, such as borrowed or loaned shares, short positions, hedging or similar transactions; |
• | a description of the business or nomination to be brought before the meeting and the reasons for conducting such business at the meeting; and |
• | any material interest of the stockholder in such business. |
• | any breach of his duty of loyalty to us or our stockholders; |
• | acts or omissions not in good faith, or which involve intentional misconduct or a knowing violation of law; |
• | unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or |
• | any transaction from which the director derived an improper personal benefit. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “ —Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A ordinary shares (as defined below) except as otherwise described below; and |
• | if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “ — Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments |
Redemption Date |
Fair Market Value of Class A Ordinary Shares |
|||||||||||||||||||||||||||||||||||
(period to expiration of warrants) |
£ $10.00 |
$11.00 |
$12.00 |
$13.00 |
$14.00 |
$15.00 |
$16.00 |
$17.00 |
³ $18.00 |
|||||||||||||||||||||||||||
60 months |
0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• | 1% of the total number of shares of Fathom common stock then outstanding (as of the date of this proxy statement/prospectus, Altimar II has ordinary shares outstanding); or |
• | the average weekly reported trading volume of Fathom common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | 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 material 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 Form 8-K reports; 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. |
ALTIMAR ACQUISITION CORP. II FINANCIAL STATEMENTS |
||||
Financial Statements of Altimar Acquisition Corp. II as of and for the Three and Nine Months ended September 30, 2021 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
||||
Financial Statements of Altimar Acquisition Corp. II as of December 31, 2020 and for the period from December 7, 2020 (inception) through December 31, 2020 |
||||
F-25 |
||||
F-26 |
||||
F-27 |
||||
F-28 |
||||
F-29 |
||||
F-30 |
||||
FATHOM HOLDCO, LLC FINANCIAL STATEMENTS |
||||
Unaudited Condensed Consolidated Financial Statements of Fathom Holdco, LLC as of and for the Nine Months ended September 30, 2021 and 2020 |
||||
F-41 |
||||
F-42 |
||||
F-43 |
||||
F-44 |
||||
F-45 |
||||
Audited Consolidated Financial Statement of Fathom HoldCo, LLC as of and for the Twelve Months ended December 31, 2020 and 2019 |
||||
F-64 |
||||
F-66 |
||||
F-67 |
||||
F-68 |
||||
F-69 |
||||
F-70 |
INCODEMA HOLDINGS, INC. AND NEWCHEM, INC. FINANCIAL STATEMENTS |
||||
Combined Financial Statements of Incodema Holdings, Inc. and NewChem, Inc. as of and for the Six Months ended June 30, 2020 and 2019 |
||||
F-99 |
||||
F-100 |
||||
F-101 |
||||
F-102 |
||||
F-103 |
||||
Audited Combined Financial Statements of Incodema, Inc. and NewChem, Inc. as of and for the Twelve Months ended December 31, 2019 and 2018 |
||||
F-113 |
||||
F-114 |
||||
F-115 |
||||
F-116 |
||||
F-117 |
||||
F-118 |
||||
MAJESTIC METALS, LLC FINANCIAL STATEMENTS |
||||
Audited Financial Statements of Majestic Metals, LLC as of and for the Nine Months ended September 30, 2020 and the Twelve Months ended December 31, 2019 |
||||
F-128 |
||||
F-129 |
||||
F-130 |
||||
F-131 |
||||
F-132 |
||||
F-133 |
||||
DAHLQUIST MACHINE, INC. FINANCIAL STATEMENTS |
||||
Audited Financial Statements of Dahlquist Machine, Inc. as of and for the Nine Months ended September 30, 2020 |
||||
F-140 |
||||
F-141 |
||||
F-142 |
||||
F-143 |
||||
F-144 |
||||
F-145 |
September 30, 2021 |
December 31, 2020 |
|||||||
( Unaudited ) |
||||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash |
$ | $ | ||||||
Prepaid expenses |
||||||||
Total current assets |
||||||||
Deferred offering costs |
||||||||
Investments held in the Trust Account |
||||||||
TOTAL ASSETS |
$ |
$ |
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Current liabilities |
||||||||
Accrued expenses |
$ | $ | ||||||
Accrued offering costs |
||||||||
Promissory Note — related party |
||||||||
Total current liabilities |
||||||||
Warrant liability |
||||||||
Deferred underwriting fee payable |
||||||||
Total liabilities |
||||||||
Commitments and Contingencies |
||||||||
Class A Ordinary Shares subject to possible redemption — September 30, 2021 and December 31, 2020, respectively |
||||||||
Shareholders’ Equity |
||||||||
Preference shares, $ |
||||||||
Class A Ordinary Shares, $ shares authorized; none issued and outstanding as of September 30, 2021 and December 31, 2020 |
||||||||
Class B Ordinary Shares, $ shares issued and outstanding as of September 30, 2021 and December 31, 2020 |
||||||||
Additional paid-in capital |
||||||||
Accumulated surplus (deficit) |
( |
) | ( |
) | ||||
Total shareholders’ equity (deficit) |
( |
) | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
$ |
||||||
For the Three Months Ended September 30, 202 1 |
For the Nine Months Ended September 30, 2021 |
|||||||
Operating (income) costs |
$ | $ | ||||||
|
|
|
|
|||||
(Income) loss from operations |
||||||||
Other income (expense) |
||||||||
Interest earned on investments held in the Trust Account |
||||||||
Transaction costs allocated to the Warrants |
( |
) | ||||||
Change in fair value of warrant liability |
||||||||
|
|
|
|
|||||
Other income (expense), net |
||||||||
|
|
|
|
|
|
|||
Net income (loss) |
$ |
$ |
||||||
|
|
|
|
|||||
Weighted average shares outstanding, redeemable Class A Ordinary Shares |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, redeemable Class A Ordinary Shares |
$ |
$ |
||||||
|
|
|
|
|||||
Weighted average shares outstanding, Class B Ordinary Shares |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, Class B Ordinary Shares |
$ |
$ |
||||||
|
|
|
|
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-In Capital |
Accumulated Surplus (Deficit) |
Total Shareholders’ Equity |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance — January 1, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||
Accretion for Class A Ordinary Shares to redemption amount |
— |
— |
— | — | ( |
) | ( |
) |
( |
) | ||||||||||||||||||
Net income (loss) |
— |
— |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance — March 31, 2021 (restated) |
— |
( |
) |
( |
) | |||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | |||||||||||||||||||||||
Balance — June 30, 2021 (restated) |
( |
) |
( |
) | ||||||||||||||||||||||||
Net income (loss) |
— |
— |
— | — | — | |||||||||||||||||||||||
Balance — September 30, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Cash flows from operating activities |
||||
Net income (loss) |
$ | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities |
||||
Interest income on investments held in the Trust Account |
( |
) | ||
Transaction costs allocated to the Warrants |
||||
Change in fair value of warrant liability |
( |
) | ||
Changes in operating assets and liabilities |
||||
Prepaid expenses |
( |
) | ||
Accrued expenses |
||||
|
|
|||
Net cash used in operating activities |
( |
) | ||
|
|
|||
Cash flows from investing activities |
||||
Investment of cash in the Trust Account |
( |
) | ||
|
|
|||
Net cash used in investing activities |
( |
) | ||
|
|
|||
Cash flows from financing activities |
||||
Proceeds from sale of the Units, net of underwriting discounts paid |
||||
Proceeds from sale of the Private Placement Warrants |
||||
Repayment of the Promissory Note — related party |
( |
) | ||
Payment of offering costs |
( |
) | ||
|
|
|||
Net cash provided by financing activities |
||||
|
|
|||
Net change in cash |
||||
Cash — beginning of period |
— | |||
|
|
|||
Cash — end of period |
$ |
|||
|
|
|||
Non-cash investing and financing activities |
||||
Offering costs included in accrued offering costs |
$ | |||
|
|
|||
Offering costs paid through the Promissory Note |
$ | |||
|
|
|||
Deferred underwriting fee payable |
$ | |||
|
|
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Balance Sheet as of February 9, 2021 (audited) |
||||||||||||
Class A Ordinary Shares subject to possible redemption |
$ |
$ |
$ |
|||||||||
Class A Ordinary Shares |
( |
) |
||||||||||
Additional paid-in capital |
( |
) |
||||||||||
Accumulated deficit |
( |
) |
( |
) |
( |
) | ||||||
Total shareholders’ equity (deficit) |
( |
) |
( |
) |
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Balance Sheet as of March 31, 2021 (unaudited) |
||||||||||||
Class A Ordinary Shares subject to possible redemption |
$ |
$ |
$ |
|||||||||
Class A Ordinary Shares |
( |
) |
— |
|||||||||
Additional paid-in capital |
( |
) |
— |
|||||||||
Accumulated deficit |
( |
) |
( |
) |
( |
) | ||||||
Total shareholders’ equity (deficit) |
( |
) |
( |
) |
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Three Months ended March 31, 2021 (unaudited) |
||||||||||||
Non-cash investing and financing activities |
||||||||||||
Initial classification of Class A Ordinary Shares subject to possible redemption |
( |
) |
||||||||||
Change in value of Class A Ordinary Shares subject to possible redemption |
( |
) |
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Balance Sheet as of June 30, 2021 (unaudited) |
||||||||||||
Class A Ordinary Shares subject to possible redemption |
$ |
$ |
$ |
|||||||||
Class A Ordinary Shares |
( |
) |
— |
|||||||||
Additional paid-in capital |
( |
) |
— |
|||||||||
Accumulated deficit |
( |
) |
( |
) |
( |
) | ||||||
Total shareholders’ equity (deficit) |
( |
) |
( |
) |
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Six Months ended June 30, 2021 (unaudited) |
||||||||||||
Non-cash investing and financing activities |
||||||||||||
Initial classification of Class A Ordinary Shares subject to possible redemption |
( |
) |
||||||||||
Change in value of Class A Ordinary Shares subject to possible redemption |
( |
) |
Net Income (Loss) Per Share |
||||||||||||
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Three Months Ended March 31, 2021 (unaudited) |
||||||||||||
Weighted average shares outstanding — Class A Ordinary Shares |
( |
) |
||||||||||
Basic and diluted net income (loss) per share — Class A Ordinary Shares |
$ |
$ |
( |
) $ |
( |
) | ||||||
Weighted average shares outstanding — Class B Ordinary Shares |
||||||||||||
Basic and diluted net income (loss) per share — Class B Ordinary Shares |
$ |
( |
) |
$ |
$ |
( |
) | |||||
Net Income (Loss) Per Share |
||||||||||||
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Three Months Ended June 30, 2021 (unaudited) |
||||||||||||
Weighted average shares outstanding — Class A Ordinary Shares |
||||||||||||
Basic and diluted net income (loss) per share — Class A Ordinary Shares |
$ |
$ |
$ |
|||||||||
Weighted average shares outstanding — Class B Ordinary Shares |
||||||||||||
Basic and diluted net income (loss) per share — Class B Ordinary Shares |
$ |
$ |
( |
) $ |
Net Income (Loss) Per Share |
||||||||||||
As Previously Reported |
Adjustment |
As Revised |
||||||||||
Six Months Ended June 30, 2021 (unaudited) |
||||||||||||
Weighted average shares outstanding — Class A Ordinary Shares |
( |
) |
||||||||||
Basic and diluted net income (loss) per share — Class A Ordinary Shares |
$ |
$ |
( |
) $ |
( |
) | ||||||
Weighted average shares outstanding — Class B Ordinary Shares |
||||||||||||
Basic and diluted net income (loss) per share — Class B Ordinary Shares |
$ |
( |
) |
$ |
$ |
( |
) |
Gross proceeds |
$ |
|||
Plus / (less) adjustments to carrying value: |
||||
Proceeds allocated to the Public Warrants |
( |
) | ||
Class A Ordinary Shares issuance costs |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
|
|
|||
Class A Ordinary Shares subject to possible redemption |
$ |
|||
|
|
Three Months Ended September 30, 2021 |
Nine Months Ended September 30, 2021 |
|||||||
Redeemable Class A Ordinary Shares |
||||||||
Numerator: |
||||||||
Allocation of net income (loss) |
$ | $ | ||||||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net income (loss) per share |
$ | $ | ||||||
Class B Ordinary Shares |
||||||||
Numerator: |
||||||||
Allocation of net income (loss) |
$ | $ | ||||||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net income (loss) per share |
$ | $ |
• | in whole and not in part; |
• | at a price of $ |
• |
upon a minimum of d |
• | if, and only if, the closing price of the Class A Ordinary Shares equals or exceeds $ |
• | in whole and not in part; |
• | at a price of $ provided, however |
• | if, and only if, the closing price of the Class A Ordinary Shares equal or exceeds $ |
• |
Level 1 — Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
• |
Level 2 — Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
• |
Level 3 — Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description |
Level |
September 30, 2021 |
||||||
Assets: |
||||||||
Investments held in the Trust Account |
1 | |||||||
Liabilities: |
||||||||
Warrant liability — Public Warrants |
1 | $ | ||||||
Warrant liability — Private Placement Warrants |
3 | $ |
As of September 30, 2021 |
||||
Stock price |
$ | |||
Strike price |
$ | |||
Term (in years) |
||||
Volatility |
% | |||
Risk-free rate |
% | |||
Dividend yield |
% |
Private Placement Warrants |
Public Warrants |
Warrant Liabilities |
||||||||||
Fair value as of February 9, 2021 |
$ | $ | $ | |||||||||
Change in valuation inputs or other assumptions |
( |
) | ( |
) | ( |
) | ||||||
Fair value of Warrants transferred out of Level 3 |
( |
) | ( |
) | ||||||||
Fair value of Level 3 warrant liabilities as of June 30, 2021 |
$ | $ | $ | |||||||||
Change in valuation inputs or other assumptions |
$ | ( |
) | $ | $ | ( |
) | |||||
Fair value of Level 3 Warrant Liabilities as of September 30, 2021 |
$ | $ | $ | |||||||||
ASSETS |
||||
Deferred offering costs |
$ | |||
TOTAL ASSETS |
$ |
|||
LIABILITIES AND SHAREHOLDER’S EQUITY |
||||
Accrued offering costs |
$ | |||
Promissory note — related party |
$ | |||
Total Current Liabilities |
||||
Commitments and Contingencies |
||||
Shareholder’s Equity |
||||
Preference shares, $ |
||||
Class A ordinary shares, $ |
||||
Class B ordinary shares, $ (1) |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
Total Shareholder’s Equity |
||||
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY |
$ |
|||
(1) | Includes an aggregate of up to |
Formation and operating costs |
$ | |||
|
|
|||
Net loss |
$ |
( |
) | |
|
|
|||
Weighted average shares outstanding, basic and diluted (1) |
||||
|
|
|||
Basic and diluted net loss per ordinary share |
$ |
( |
) | |
|
|
(1) | Excludes an aggregate of up to |
Class B Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholder’s Equity |
|||||||||||||||||
Shares |
Amount |
|||||||||||||||||||
Balance, December 7, 2020 (inception) |
$ |
$ |
$ |
$ |
||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (1) |
— | |||||||||||||||||||
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, December 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Includes an aggregate of up to |
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
||||
Payment of formation and operating costs through issuance of Class B ordinary shares |
||||
|
|
|||
Net cash used in operating activities |
||||
|
|
|||
Net Change in Cash |
— |
|||
Cash — Beginning of period |
||||
|
|
|||
Cash — End of period |
$ |
|||
|
|
|||
Non-cash investing and financing activities: |
||||
Deferred offering costs included in accrued offering costs |
$ | |||
|
|
|||
Deferred offering costs paid through promissory note |
$ | |||
|
|
|||
Deferred offering costs paid by Sponsor in exchange for the issuance of Class B ordinary shares |
$ | |||
|
|
• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of |
• | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ |
• | in whole and not in part; |
• | at $ |
• | if, and only if, the closing price of the Class A ordinary shares equal or exceeds $ |
September 30, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash |
$ | 10,531 | $ | 8,188 | ||||
Accounts receivable, net |
24,512 | 15,563 | ||||||
Inventory |
9,173 | 6,325 | ||||||
Prepaid expenses and other current assets |
3,267 | 2,598 | ||||||
|
|
|
|
|||||
Total current assets |
47,483 | 32,674 | ||||||
Property and equipment, net |
41,031 | 26,386 | ||||||
Intangible assets, net |
111,573 | 83,466 | ||||||
Goodwill |
83,113 | 63,215 | ||||||
Other non-current assets |
145 | 1,038 | ||||||
|
|
|
|
|||||
Total assets |
$ | 283,345 | $ | 206,779 | ||||
|
|
|
|
|||||
Liabilities, contingently redeemable preferred equity, and members’ equity |
||||||||
Current liabilities |
||||||||
Accounts payable (1) |
$ | 7,475 | $ | 4,404 | ||||
Accrued expenses |
5,821 | 4,181 | ||||||
Other current liabilities |
4,497 | 2,778 | ||||||
Contingent consideration |
6,330 | 4,066 | ||||||
Current portion of debt, net |
170,257 | 2,853 | ||||||
|
|
|
|
|||||
Total current liabilities |
194,380 | 18,282 | ||||||
Long-term debt, net |
— | 90,486 | ||||||
Long-term contingent consideration |
2,300 | 7,373 | ||||||
Deferred tax liabilities, net |
3,009 | — | ||||||
Other noncurrent liabilities |
1,463 | 514 | ||||||
|
|
|
|
|||||
Total liabilities |
201,152 | 116,655 | ||||||
Contingently Redeemable Preferred Equity |
||||||||
Class A Contingently Redeemable Preferred Units; $100 par value, authorized 1,167,418 units, issued and outstanding 1,167,418 units as of September 30, 2021 and December 31, 2020 |
54,105 | 54,105 | ||||||
|
|
|
|
|||||
Members’ equity |
||||||||
Class A Common Units; $100 par value, authorized 5,480,611 units, issued and outstanding 5,480,611 units as of September 30, 2021 and December 31, 2020 |
35,869 | 35,869 | ||||||
Class B Common Units; $100 par value, authorized 2,242,981 units, issued and outstanding 2,242,981 units as of September 30, 2021 and December 31, 2020 |
14,481 | 14,450 | ||||||
Accumulated other comprehensive loss |
28 | (68 | ) | |||||
Accumulated deficit |
(22,290 | ) | (14,232 | ) | ||||
|
|
|
|
|||||
Total members’ equity |
28,088 | 36,019 | ||||||
|
|
|
|
|||||
Total liabilities, contingently redeemable preferred equity, and members’ equity |
$ | 283,345 | $ | 206,779 | ||||
|
|
|
|
(1) | Inclusive of accounts payable to related parties of $1,332 and $541 as of September 30, 2021 and December 31, 2020, respectively. |
Nine Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
Revenue |
$ | 107,887 | $ | 42,249 | ||||
Cost of revenue (1)(2) |
61,749 | 22,637 | ||||||
|
|
|
|
|||||
Gross profit |
46,138 | 19,612 | ||||||
Operating expenses |
||||||||
Selling, general, and administrative (3) |
29,470 | 13,484 | ||||||
Depreciation and amortization |
9,327 | 2,797 | ||||||
|
|
|
|
|||||
Total operating expenses |
38,797 | 16,281 | ||||||
|
|
|
|
|||||
Operating income |
7,341 | 3,331 | ||||||
|
|
|
|
|||||
Interest expense and other expense (income) |
||||||||
Interest expense |
8,800 | 2,335 | ||||||
Other expense |
9,007 | 2,524 | ||||||
Other income |
(3,215 | ) | (423 | ) | ||||
|
|
|
|
|||||
Total other expense, net |
14,592 | 4,436 | ||||||
|
|
|
|
|||||
Net loss before income taxes |
(7,251 | ) | (1,105 | ) | ||||
|
|
|
|
|||||
Provision for income taxes |
807 | — | ||||||
|
|
|
|
|||||
Net loss |
$ | (8,058 | ) | $ | (1,105 | ) | ||
|
|
|
|
|||||
Other comprehensive loss, net of tax |
||||||||
Foreign currency translation adjustments |
96 | 6 | ||||||
|
|
|
|
|||||
Comprehensive loss . |
$ | (7,962 | ) | $ | (1,099 | ) | ||
|
|
|
|
|||||
Net loss per unit attributable to Class A and Class B common unitholders (4) : |
||||||||
Basic |
(2.63 | ) | (1.09 | ) | ||||
Diluted |
(2.63 | ) | (1.09 | ) | ||||
Weighted average units outstanding: |
||||||||
Basic |
7,723,592 | 4,858,808 | ||||||
Diluted |
7,723,592 | 4,858,808 |
(1) | Inclusive of $2,679 and $2,196 of depreciation and amortization for the nine months ended September 30, 2021 and September 30, 2020, respectively. |
(2) | Inclusive of $6,200 and $4,434 of cost of revenue related to inventory purchases from a related party in the nine months ended September 30, 2021 and September 30, 2020, respectively. See Note 3 and Note 11. |
(3) | Inclusive of $1,431 and $355 of management fees incurred to a related party for the nine months ended September 30, 2021 and September 30, 2020, respectively. See Note 11. |
(4) | Basic and diluted net loss per unit amounts are the same for both Class A and Class B common units, see |
Class A Contingently Redeemable Preferred Units |
Class A Common Units |
Class B Common Units |
Accumulated Other Comprehensive (Loss) Income |
|||||||||||||||||||||||||||||||||
Number of Units |
Amount |
Number of Units |
Amount |
Number of Units |
Amount |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total |
||||||||||||||||||||||||||||
Balance at January 1, 2021 |
1,167,418 | $ | 54,105 | 5,480,611 | $ | 35,869 | $ | 2,242,981 | $ | 14,450 | $ | (14,232 | ) | $ | (68 | ) | $ | 36,019 | ||||||||||||||||||
Share based compensation |
31 | 31 | ||||||||||||||||||||||||||||||||||
Net loss |
(8,058 | ) | (8,058 | ) | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
96 | 96 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at September 30, 2021 |
1,167,418 | $ | 54,105 | 5,480,611 | $ | 35,869 | $ | 2,242,981 | $ | 14,481 | $ | (22,290 | ) | $ | 28 | $ | 28,088 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at January 1, 2020 |
702,493 | $ | 31,836 | 2,883,452 | $ | 18,701 | $ | 1,567,546 | $ | 10,467 | $ | (6,269 | ) | $ | $ | 22,899 | ||||||||||||||||||||
Members’ contributions |
214,444 | 10,522 | 1,362,200 | 9,005 | 147,265 | 973 | 9,978 | |||||||||||||||||||||||||||||
Units issued |
15,691 | 566 | 110,449 | 537 | 537 | |||||||||||||||||||||||||||||||
Share based compensation |
22 | 22 | ||||||||||||||||||||||||||||||||||
Net loss |
(1,105 | ) | (1,105 | ) | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
6 | 6 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at September 30, 2020 |
932,628 | $ | 42,924 | 4,245,652 | $ | 27,706 | $ | 1,825,259 | $ | 11,999 | (7,374 | ) | $ | 6 | $ | 32,337 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
Cash Flows from Operating Activities |
||||||||
Net loss |
$ | (8,058 | ) | $ | (1,105 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||
Depreciation included in operating expenses |
2,110 | 105 | ||||||
Depreciation and amortization included in cost of revenue |
2,679 | 2,196 | ||||||
Amortization of intangible assets |
7,217 | 2,692 | ||||||
Loss (gain) on disposal of property and equipment |
84 | (393 | ) | |||||
Loss on extinguishment of debt |
2,031 | — | ||||||
Gain on PPP forgiveness |
(1,624 | ) | — | |||||
Foreign currency translation adjustment |
96 | 6 | ||||||
Bad debt expense |
239 | 49 | ||||||
Share-based compensation |
31 | 22 | ||||||
Change in fair value of contingent consideration |
(1,120 | ) | — | |||||
Amortization of debt financing costs |
1,342 | 153 | ||||||
Changes in operating assets and liabilities that provided cash: |
||||||||
Accounts receivable |
(4,772 | ) | 852 | |||||
Inventory |
(551 | ) | (172 | ) | ||||
Prepaid expenses and other assets |
(26 | ) | (341 | ) | ||||
Accounts payable |
866 | (1,716 | ) | |||||
Accrued liabilities and other |
1,193 | 441 | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
1,737 | 2,789 | ||||||
Cash Flows from Investing Activities |
||||||||
Purchase of property and equipment |
(6,648 | ) | (701 | ) | ||||
Cash used for acquisitions, net of cash acquired |
(67,428 | ) | (40,992 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(74,076 | ) | (41,693 | ) | ||||
Cash Flows from Financing Activities |
||||||||
Proceeds from debt |
183,500 | 22,732 | ||||||
Payments on debt |
(104,091 | ) | — | |||||
Payment of debt issuance costs |
(1,743 | ) | — | |||||
Proceeds from issuance of members’ units |
— | 21,603 | ||||||
Cash paid for contingent consideration |
(2,984 | ) | — | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
74,682 | 44,335 | ||||||
|
|
|
|
|||||
Net increase in cash |
2,343 | 5,431 | ||||||
Cash, beginning of period |
8,188 | 1,026 | ||||||
|
|
|
|
|||||
Cash, end of period |
$ | 10,531 | $ | 6,457 | ||||
|
|
|
|
|||||
Supplemental Cash Flows Information: |
||||||||
Cash paid for interest |
$ | 5,154 | $ | 2,008 | ||||
Cash paid for taxes |
62 | — | ||||||
Cash paid to related parties per Note 3 and Note 11 |
8,254 | 5,165 | ||||||
Property and equipment noncash transactions. |
911 | — | ||||||
Initial recognition of contingent consideration for acquisitions |
1,295 | 8,696 | ||||||
Issuance of member interests for acquisitions. |
— | 21,603 |
Cash |
$ | 10,875 | ||
|
|
|||
Fair value of total consideration transferred |
$ | 10,875 |
Recognized amounts of identifiable assets acquired and liabilities assumed |
| |||
Cash |
$ | 40 | ||
Accounts receivable |
627 | |||
Inventory |
339 | |||
Fixed assets |
4,371 | |||
Intangible assets |
5,000 | |||
|
|
|||
Total assets acquired |
10,377 | |||
|
|
|||
Accounts payable |
40 | |||
Deferred revenue |
776 | |||
Other current liabilities |
95 | |||
Other noncurrent liabilities |
1,323 | |||
|
|
|||
Total liabilities assumed |
2,234 | |||
|
|
|||
Total identifiable net assets |
8,143 | |||
|
|
|||
Goodwill |
$ | 2,732 | ||
|
|
Acquisition Date Fair Value |
Estimated Life (Years) |
|||||||
Trade name |
$ | 400 | 5 | |||||
Customer relationships |
4,600 | 11 | ||||||
|
|
|||||||
Total Intangible assets |
$ | 5,000 |
Revenue |
$ | 4,496 | ||
Net loss |
(1,029 | ) |
Cash |
$ | 25,721 | ||
|
|
|||
Fair value of total consideration transferred |
$ | 25,721 |
Recognized amounts of identifiable assets acquired and liabilities assumed |
| |||
Cash |
$ | 162 | ||
Accounts receivable |
899 | |||
Inventory |
480 | |||
Fixed assets |
2,413 | |||
Intangible assets |
14,200 | |||
|
|
|||
Total assets acquired |
18,154 | |||
|
|
|||
Accounts payable |
148 | |||
Accrued expenses |
79 | |||
|
|
|||
Total liabilities assumed |
227 | |||
|
|
|||
Total identifiable net assets |
17,927 | |||
|
|
|||
Goodwill |
$ | 7,794 | ||
|
|
Acquisition Date Fair Value |
Estimated Life (Years) |
|||||||
Trade name |
$ | 1,100 | 5 | |||||
Customer relationships |
13,100 | 17 | ||||||
|
|
|||||||
Total intangible assets |
$ | 14,200 |
Revenue |
$ | 4,571 | ||
Net loss |
(262 | ) |
Centex |
Laser |
Total |
||||||||||
Cash |
$ | 11,774 | $ | 6,946 | $ | 18,720 | ||||||
|
|
|
|
|
|
|||||||
Fair value of total consideration transferred |
$ | 11,774 | $ | 6,946 | $ | 18,720 | ||||||
|
|
|
|
|
|
Acquisition Date Fair Value |
||||||||
Centex |
Laser |
|||||||
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||||||
Cash |
$ | — | $ | 68 | ||||
Accounts receivable |
1,775 | 900 | ||||||
Inventory |
524 | 622 | ||||||
Prepaid expenses |
108 | 1 | ||||||
Fixed assets |
1,787 | 760 | ||||||
Intangible assets |
6,243 | 3,557 | ||||||
Other assets |
1 | 2 | ||||||
|
|
|
|
|||||
Total assets acquired |
10,438 | 5,910 | ||||||
|
|
|
|
|||||
Accounts payable |
252 | 568 | ||||||
Paycheck Protection Program (PPP) loan |
649 | — | ||||||
Accrued expenses |
271 | 27 | ||||||
Other current liabilities |
23 | 44 | ||||||
Other noncurrent liabilities |
1,234 | 703 | ||||||
|
|
|
|
|||||
Total liabilities assumed |
2,429 | 1,342 | ||||||
|
|
|
|
|||||
Total identifiable net assets |
$ | 8,009 | $ | 4,568 | ||||
|
|
|
|
|||||
Goodwill |
3,765 | 2,378 | ||||||
|
|
|
|
Acquisition Date Fair Value – Centex |
Estimated Life (Years) |
|||||||
Trade name |
$ | 510 | 5 | |||||
Customer relationships |
5,733 | 17 | ||||||
|
|
|||||||
Total intangible assets |
$ | 6,243 | ||||||
Acquisition Date Fair Value – Laser |
Estimated Life (Years) |
|||||||
Trade name |
$ | 290 | 5 | |||||
Customer relationships |
3,267 | 17 | ||||||
|
|
|||||||
Total intangible assets |
$ | 3,557 |
Revenue |
$ | 3,049 | ||
Net loss |
(1,102 | ) |
Revenue |
$ | 2,707 | ||
Net income |
425 |
Cash |
$ | 12,452 | ||
Contingent consideration |
1,295 | |||
|
|
|||
Fair value of total consideration transferred |
$ | 13,747 | ||
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||
Cash |
$ | 70 | ||
Accounts receivable |
866 | |||
Inventory |
333 | |||
Other current assets |
10 | |||
Fixed assets |
2,490 | |||
Intangible assets |
7,000 | |||
|
|
|||
Total assets acquired |
10,769 | |||
|
|
|||
Accounts payable |
139 | |||
Accrued expenses |
13 | |||
Other current liabilities |
99 | |||
|
|
|||
Total liabilities assumed |
251 | |||
|
|
|||
Total identifiable net assets |
10,518 | |||
|
|
|||
Goodwill |
$ | 3,229 | ||
|
|
Acquisition Date Fair Value |
Estimated Life (Years) |
|||||||
Trade name |
$ | 600 | 5 | |||||
Customer relationships |
6,400 | 17 | ||||||
|
|
|||||||
Total intangible assets |
$ | 7,000 |
Revenue |
$ | 3,022 | ||
Net loss |
(187 | ) |
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Revenue |
$ | 118,254 | $ | 111,945 | ||||
|
|
|
|
|||||
Net income |
$ | 2,261 | $ | (1,203 | ) | |||
|
|
|
|
• | Adjustments to fair value write-up of inventory sold for the nine months ended September 30, 2021 and September 30, 2020 of $0 and $1,063, respectively. |
• | Adjustments to property and equipment for the nine months ended September 30, 2021 and September 30, 2020 of $306 and $2,045, respectively. |
• | Adjustments to intangible amortization for the nine months ended September 30, 2021 and September 30, 2020 of $773 and $5,349, respectively. |
• | Adjustments to interest expense for the nine months ended September 30, 2021 and September 30, 2020 of $(8,902) and $4,129, respectively. |
Nine months ended September 30, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Revenue: |
||||||||
Additive manufacturing |
$ | 13,322 | $ | 12,755 | ||||
Injection molding |
20,941 | 12,999 | ||||||
CNC machining |
30,063 | 8,093 | ||||||
Precision sheet metal |
38,494 | 4,150 | ||||||
Other revenue |
5,067 | 4,252 | ||||||
|
|
|
|
|||||
Total revenue |
$ | 107,887 | $ | 42,249 | ||||
|
|
|
|
September 30, 2021 |
December 31, 2020 |
|||||||
Finished goods |
$ | 3,338 | $ | 1,351 | ||||
Raw materials |
2,788 | 2,277 | ||||||
Work in process |
2,684 | 2,359 | ||||||
Tooling |
363 | 338 | ||||||
|
|
|
|
|||||
Total |
$ | 9,173 | $ | 6,325 | ||||
|
|
|
|
September 30, 2021 |
December 31, 2020 |
|||||||
Machinery & equipment |
$ | 37,695 | $ | 25,214 | ||||
Furniture & fixtures |
930 | 812 | ||||||
Property and leasehold Improvements |
6,556 | 2,838 | ||||||
Construction in progress |
2,656 | 576 | ||||||
|
|
|
|
|||||
47,837 | 29,440 | |||||||
Accumulated depreciation and amortization |
(6,806 | ) | (3,054 | ) | ||||
|
|
|
|
|||||
Total |
$ | 41,031 | $ | 26,386 | ||||
|
|
|
|
Dec. 31, 2020 | Goodwill acquired during 2021 |
September 30, 2021 |
||||||||||
Goodwill |
$ | 63,215 | $ | 19,898 | $ | 83,113 |
September 30, 2021 | December 31, 2020 | Useful Life (in years) |
Weighted Average Useful Life Remaining (in years) |
|||||||||||||||||||||||||||||
(in thousands) | Gross | Accumulated Amortization |
Net | Gross | Accumulated Amortization |
Net | ||||||||||||||||||||||||||
Trade name |
$ | 15,100 | $ | 2,133 | $ | 12,967 | $ | 12,200 | $ | 919 | $ | 11,281 | 5-15 |
11.4 | ||||||||||||||||||
Customer relationships |
100,700 | 9,492 | 91,208 | 67,600 | 4,448 | 63,152 | 5-17 |
14.3 | ||||||||||||||||||||||||
Developed software |
6,400 | 1,680 | 4,720 | 6,400 | 720 | 5,680 | 5 | 7.4 | ||||||||||||||||||||||||
Developed technology |
4,500 | 1,822 | 2,678 | 4,500 | 1,147 | 3,353 | 5 | 8.0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total intangible assets |
$ | 126,700 | $ | 15,127 | $ | 111,573 | $ | 90,700 | $ | 7,234 | $ | 83,466 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Remaining 2021 |
$ | 2,887 | ||
2022 |
11,533 | |||
2023 |
11,533 | |||
2024 |
11,278 | |||
2025 |
9,706 | |||
Thereafter |
64,637 | |||
|
|
|||
Total |
$ | 111,574 |
As of September 30, 2021 | As of December 31, 2020 | |||||||||||||||
Debt Description |
Interest Rate | Amount | Interest Rate | Amount | ||||||||||||
2018 Term Loan, as amended |
$ | — | 7.75% | $ | 29,700 | |||||||||||
2018 DDTL |
— | 7.75% | 2,990 | |||||||||||||
2020 Term Loan |
— | |
3 month LIBOR + 7.50% |
|
19,401 | |||||||||||
2020 DDTL |
— | |
3 month LIBOR + 7.50% |
|
40,500 | |||||||||||
2021 Term Loan |
|
3 month LIBOR + 3.5% |
|
172,000 | — | |||||||||||
|
|
|
|
|||||||||||||
Total principal debt |
172,000 | 92,591 | ||||||||||||||
Debt issuance costs |
(1,743 | ) | (1,867 | ) | ||||||||||||
PPP and other loans |
— | 2,615 | ||||||||||||||
|
|
|
|
|||||||||||||
Total debt, net |
170,257 | 93,339 | ||||||||||||||
Less: current portion of long-term debt |
— | 2,853 | ||||||||||||||
Less: current 2021 Term Loan |
172,000 | — | ||||||||||||||
Less: current portion of debt issuance costs |
(1,743 | ) | — | |||||||||||||
|
|
|
|
|||||||||||||
Long-term debt, net of current portion |
$ | — | $ | 90,486 |
2021 |
$ | — | ||
2022 |
172,000 | |||
Thereafter |
— | |||
|
|
|||
Total |
$ | 172,000 |
September 30, 2021 | September 30, 2020 | |||||||
Acquisition expenses |
$ | 4,045 | $ | 1,925 | ||||
Loss on debt extinguishment |
2,031 | — | ||||||
Loan prepayment fees |
1,463 | — | ||||||
Other |
1,384 | 599 | ||||||
Loss on sale of assets |
84 | — | ||||||
|
|
|
|
|||||
Other expense |
$ | 9,007 | $ | 2,524 | ||||
|
|
|
|
|||||
Gain on sale of assets |
$ | — | $ | (393 | ) | |||
Gain on PPP forgiveness |
(1,624 | ) | — | |||||
Change in FV of contingent consideration |
(1,120 | ) | — | |||||
Other |
(471 | ) | (30 | ) | ||||
|
|
|
|
|||||
Other (income) |
(3,215 | ) | (423 | ) | ||||
|
|
|
|
|||||
Other expense and (income), net |
$ | 5,792 | $ | 2,101 | ||||
|
|
|
|
September 30, 2021 |
September 30, 2020 |
|||||||||||||||
(in thousands, except for unit and per unit amounts) | Class A |
Class B |
Class A |
Class B |
||||||||||||
Basic Earnings Per Unit: |
||||||||||||||||
Numerator |
||||||||||||||||
Net loss |
$ | (5,718 | ) | $ | (2,340 | ) | $ | (734 | ) | $ | (371 | ) | ||||
Less: annual dividends on redeemable preferred units |
(8,692 | ) | (3,557 | ) | (2,781 | ) | (1,405 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to common unitholders |
(14,410 | ) | (5,897 | ) | (3,515 | ) | (1,776 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Denominator |
||||||||||||||||
Weighted-average units used to compute basic earnings per unit |
5,480,611 | 2,242,981 | 3,227,744 | 1,631,064 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and Diluted Earnings Per Unit |
$ | (2.63 | ) $ | (2.63 | ) | $ | (1.09) | $ | (1.09) | |||||||
|
|
|
|
|
|
|
|
Fair Value Measurement at September 30, 2021 Using: | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total | |||||||||||||
Contingent consideration |
$ | — | $ | — | $ | 8,630 | $ | 8,630 |
Fair Value Measurement at December 31, 2020 Using: | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total | |||||||||||||
Contingent consideration |
$ | — | $ | — | $ | 11,439 | $ | 11,439 |
Contingent Consideration | ||||||||
September 30, 2021 |
December 31, 2020 |
|||||||
Balance of recurring Level 3 liabilities at January 1 |
$ | 11,439 | $ | — | ||||
Total gains or losses for the period: |
||||||||
Included in earnings |
(1,120 | ) | 1,055 | |||||
Included in other comprehensive loss |
— | — | ||||||
Issuances |
1,295 | 11,737 | ||||||
Payments |
(2,984 | ) | (1,353 | ) | ||||
Transfers into Level 3 |
— | — | ||||||
Transfers out of Level 3 |
— | — | ||||||
|
|
|
|
|||||
Balance of recurring Level 3 liabilities at end of period |
$ | 8,630 | $ | 11,439 | ||||
|
|
|
|
Nine Months Ended September 30 |
||||||||
2021 |
2020 |
|||||||
Current expense |
||||||||
State |
14 | — | ||||||
Federal |
1,044 | — | ||||||
|
|
|
|
|||||
Subtotal |
1,058 |
— | ||||||
Deferred tax benefit |
||||||||
State |
(18 | ) | — | |||||
Federal |
(233 | ) | — | |||||
|
|
|
|
|||||
Subtotal |
(251 |
) |
— | |||||
|
|
|
|
|||||
Total |
807 |
— | ||||||
|
|
|
|
September 30, 2021 |
December 31, 2020 |
|||||||
Deferred tax assets |
||||||||
Net operating losses |
68 | — | ||||||
Allowance for bad debts |
17 | — | ||||||
Inventory reserves |
116 | — | ||||||
Other accruals |
8 | — | ||||||
Interest expense limitation |
38 | — | ||||||
|
|
|
|
|||||
Total deferred tax assets |
247 |
— | ||||||
Deferred tax liabilities |
||||||||
Fixed assets |
(487 | ) | — | |||||
Intangibles |
(2,647 | ) | — | |||||
Cash-to-accrual |
(122 | ) | — | |||||
|
|
|
|
|||||
Total deferred tax liabilities |
(3,256 |
) |
— | |||||
|
|
|
|
|||||
Total net deferred tax liabilities |
(3,009 |
) |
— | |||||
|
|
|
|
• | The minimum cash condition required to close the transaction was reduced from $313,000 to $90,000 |
• | The amount of cash to be contributed to the Company’s balance sheet upon closing of the transactions was reduced from $25,000 to $10,000 |
• | The minimum amount of Company debt to be paid down upon closing of the transaction was reduced from $22,000 to $20,000 |
• | Provisions relating to the forfeiture of certain shares in the surviving company by Altimar’s founders based on the level of redemptions were amended and restated to provide for a forfeiture of by such founders of 2,587,500 shares |
• | The equity consideration payable to the owners of the Company was increased by 1,293,750 shares |
• | Provisions were added to reflect the backstop commitment by affiliates of the majority member of the Company to purchase up to 1,000 shares of Altimar at an aggregate price of up to $10,000 to the extent necessary to satisfy the revised minimum cash condition |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Managers and Members Fathom Holdco, LLC Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Fathom Holdco, LLC (a Delaware limited liability company) and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of comprehensive loss, Class A contingently redeemable preferred units and members’ equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. Going concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, as of December 31, 2020, the Company does not have sufficient cash on hand and cash flows from operations to repay debt maturing during April 2022. On July 9, 2021 the Company entered into a new credit facility with its existing creditors. The new credit facility includes a $50,000,000 revolver and $125,000,000 term loan, both of which will mature in 2026. The proceeds from these loans will be used to repay existing debt maturing April 2022. Funding under the new credit facility is contingent on the Company closing a definitive business combination with a publicly traded Special Purpose Acquisition Company (“SPAC”), which is subject to customary conditions including, among others, the approval of the SPAC stockholders and the SPAC having a minimum level of available cash, which are outside of the Company’s control. There is no guarantee that the business combination contemplated in the new credit facility will be completed and therefore the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern. Basis for opinion These 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 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 and in accordance with auditing standards generally accepted in the United States of America. 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’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 include 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/ GRANT THORNTON LLP We have served as the Company’s auditor since 2021. Milwaukee, Wisconsin August 3, 2021 (except Note 19, Segments, and the effects of reorganization described in Note 1, as to which the date is September 20, 2021) |
December 31, |
||||||||
2020 |
2019 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 8,188 | $ | 1,026 | ||||
Accounts receivable, net |
15,563 | 9,065 | ||||||
Inventory |
6,325 | 1,697 | ||||||
Prepaid expenses |
1,853 | 538 | ||||||
Other current assets |
745 | — | ||||||
|
|
|
|
|||||
Total current assets |
32,674 | 12,326 | ||||||
Property and equipment, net |
26,386 | 10,809 | ||||||
Intangible assets, net |
83,466 | 36,095 | ||||||
Goodwill |
63,215 | 33,007 | ||||||
Other non-current assets |
1,038 | — | ||||||
|
|
|
|
|||||
Total assets |
$ |
206,779 |
$ |
92,237 |
||||
|
|
|
|
|||||
Liabilities, contingently redeemable preferred equity, and members’ equity |
||||||||
Current liabilities |
||||||||
Accounts payable (1) |
$ | 4,404 | $ | 5,058 | ||||
Accrued expenses |
4,181 | 2,054 | ||||||
Other current liabilities |
2,778 | 425 | ||||||
Contingent consideration |
4,066 | — | ||||||
Current portion of debt |
2,853 | 309 | ||||||
|
|
|
|
|||||
Total current liabilities |
18,282 | 7,846 | ||||||
Long-term debt, net |
90,486 | 29,597 | ||||||
Long-term contingent consideration |
7,373 | — | ||||||
Other non-current liabilities |
514 | 59 | ||||||
|
|
|
|
|||||
Total liabilities |
$ | 116,655 | 37,502 | |||||
Contingently Redeemable Preferred Equity |
||||||||
Class A Contingently Redeemable Preferred Units; $100 par value, authorized 1,167,418 units, issued and outstanding 1,167,418 and 702,493 units as of December 31, 2020 and 2019, respectively |
54,105 | 31,836 | ||||||
|
|
|
|
|||||
Members’ equity |
||||||||
Class A Common units; $100 par value, authorized 5,480,611 units, issued and outstanding 5,480,611 and 2,883,452 units as of December 31, 2020 and 2019, respectively |
35,869 | 18,701 | ||||||
Class B Common units; $100 par value, authorized 2,242,981 units, issued and outstanding 2,242,981 and 1,567,546 units as of December 31, 2020 and 2019, respectively |
14,450 | 10,467 | ||||||
Accumulated other comprehensive loss |
(68 | ) | — | |||||
Accumulated deficit |
(14,232 | ) | (6,269 | ) | ||||
|
|
|
|
|||||
Total members’ equity |
36,019 | 22,899 | ||||||
|
|
|
|
|||||
Total liabilities, contingently redeemable preferred equity, and members’ equity |
$ | 206,779 | $ | 92,237 | ||||
|
|
|
|
(1) | - Inclusive of accounts payable to related parties of $541 and $359 for 2020 and 2019, respectively. |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Revenue |
$ | 61,289 | $ | 20,618 | ||||
Cost of revenue (1)(2) |
32,815 | 10,696 | ||||||
|
|
|
|
|||||
Gross profit |
28,474 | 9,922 | ||||||
Operating expenses |
||||||||
Selling, general, and administrative (3) |
22,197 | 8,474 | ||||||
Depreciation and amortization |
4,825 | 1,605 | ||||||
|
|
|
|
|||||
Total operating expenses |
27,022 | 10,079 | ||||||
|
|
|
|
|||||
Operating income (loss) |
1,452 | (157 | ) | |||||
|
|
|
|
|||||
Interest expense and other expense (income) |
||||||||
Interest expense |
3,665 | 1,616 | ||||||
Other expense |
6,335 | 3,187 | ||||||
Other income |
(585 | ) | (189 | ) | ||||
|
|
|
|
|||||
Total other expense, net |
9,415 | 4,614 | ||||||
|
|
|
|
|||||
Net loss |
$ | (7,963 | ) | $ | (4,771 | ) | ||
|
|
|
|
|||||
Other comprehensive loss, net of tax |
||||||||
Foreign currency translation adjustments |
$ | (68 | ) | $ | — | |||
|
|
|
|
|||||
Comprehensive loss |
$ | (8,031 | ) | $ | (4,771 | ) | ||
|
|
|
|
|||||
Net loss per unit attributable to Class A and Class B common unitholders (4) : |
||||||||
Basic |
(2.68 | ) | (3.14 | ) | ||||
Diluted |
(2.68 | ) | (3.14 | ) | ||||
Weighted average units outstanding: |
||||||||
Basic |
5,227,816 | 2,352,664 | ||||||
Diluted |
5,227,816 | 2,352,664 |
(1) |
Inclusive of $2,567 and $1,054 of depreciation and amortization in 2020 and 2019, respectively |
(2) |
Inclusive of $6,318 and $1,255 of cost of revenue related to inventory purchases from a related party in 2020 and 2019, respectively. See Note 3 and Note 15. |
(3) |
Inclusive of $742 and $308 of management fees incurred to a related party in 2020 and 2019, respectively. See Note 15. |
(4) |
Basic and diluted net loss per unit amounts are the same for each class of common units, see Note 14. |
Class A Contingently Redeemable Preferred Units |
Class A Common Units |
Class B Common Units |
Accumulated Other Comprehensive Loss |
|||||||||||||||||||||||||||||||||||||
Number of Units |
Amount |
Number of Units |
Amount |
Number of Units |
Amount |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total |
||||||||||||||||||||||||||||||||
Balance at January 1, 2019 |
260,196 | $ | 9,175 | 1,112,807 | $ | 8,995 | 535,796 | $ | 4,749 | $ | (1,498 | ) | $ | — | $ | 12,246 | ||||||||||||||||||||||||
Members’ contributions |
375,267 | 19,017 | 1,770,645 | 9,706 | 607,051 | 3,327 | — | — | 13,033 | |||||||||||||||||||||||||||||||
Units issued for acquisitions |
67,030 | 3,644 | — | — | 424,699 | 2,498 | — | — | 2,498 | |||||||||||||||||||||||||||||||
Share based compensation |
— | — | — | — | — | 21 | — | — | 21 | |||||||||||||||||||||||||||||||
Distributions to members |
— | — | — | — | — | (128 | ) | — | — | (128 | ) | |||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (4,771 | ) | — | (4,771 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at December 31, 2019 |
702,493 | $ | 31,836 | 2,883,452 | $ | 18,701 | 1,567,546 | $ | 10,467 | $ | (6,269 | ) | $ | — | $ | 22,899 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Members’ contributions |
423,083 | 20,759 | 2,597,159 | 17,168 | 380,906 | 2,518 | — | — | 19,686 | |||||||||||||||||||||||||||||||
Units issued for acquisitions |
41,842 | 1,510 | — | — | 294,529 | 1,431 | — | — | 1,431 | |||||||||||||||||||||||||||||||
Share based compensation |
— | — | — | — | — | 34 | — | — | 34 | |||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (7,963 | ) | — | (7,963 | ) | |||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | — | — | (68 | ) | (68 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at December 31, 2020 |
1,167,418 | $ | 54,105 | 5,480,611 | $ | 35,869 | 2,242,981 | $ | 14,450 | $ | (14,232 | ) | $ | (68 | ) | $ | 36,019 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Cash Flows from Operating Activities |
||||||||
Net loss |
$ | (7,963 | ) | $ | (4,771 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||
Depreciation included in operating expenses |
598 | 135 | ||||||
Depreciation and amortization included in cost of revenue |
2,567 | 1,054 | ||||||
Amortization of intangible assets |
4,227 | 1,470 | ||||||
Loss on disposal of property and equipment |
214 | — | ||||||
Foreign currency translation adjustment |
(68 | ) | — | |||||
Bad debt expense |
223 | 48 | ||||||
Share-based compensation |
34 | 21 | ||||||
Change in fair value of contingent consideration |
1,055 | 1,181 | ||||||
Amortization of debt financing costs |
205 | 56 | ||||||
Changes in operating assets and liabilities that provided cash: |
||||||||
Accounts receivable |
1,063 | (4,061 | ) | |||||
Inventory |
(356 | ) | 216 | |||||
Prepaid expenses and other assets |
(653 | ) | 1,409 | |||||
Accounts payable |
442 | 1,886 | ||||||
Accrued liabilities and other |
282 | 765 | ||||||
|
|
|
|
|||||
Net cash provided by (used in) operating activities |
1,870 | (591 | ) | |||||
Cash Flows from Investing Activities |
||||||||
Purchase of property and equipment |
(1,626 | ) | (729 | ) | ||||
Cash used for acquisitions, net of cash acquired |
(94,412 | ) | (43,639 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(96,038 | ) | (44,368 | ) | ||||
Cash Flows from Financing Activities |
||||||||
Proceeds from debt |
65,124 | 16,000 | ||||||
Payments on debt |
(1,679 | ) | (195 | ) | ||||
Distributions to unitholders |
— | (128 | ) | |||||
Payment of debt issuance costs |
(1,207 | ) | (461 | ) | ||||
Proceeds from issuance of members’ units |
40,445 | 32,050 | ||||||
Cash paid for contingent consideration |
(1,353 | ) | (3,500 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
101,330 | 43,766 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash |
7,162 | (1,193 | ) | |||||
Cash, beginning of year |
1,026 | 2,219 | ||||||
|
|
|
|
|||||
Cash, end of year |
$ | 8,188 | $ | 1,026 | ||||
|
|
|
|
|||||
Supplemental Cash Flows Information |
||||||||
Cash paid for interest |
3,491 | 1,441 | ||||||
Cash paid for taxes |
11 | 40 | ||||||
Cash paid to related parties per Note 3 and Note 15 |
6,879 | 1,419 | ||||||
Significant noncash transactions: |
||||||||
Issuance of member interests for acquisitions |
2,941 | 6,142 | ||||||
Initial recognition of contingent consideration for acquisitions |
11,737 | — |
Asset |
Useful Lives (In Years) | |
Property and leasehold Improvements |
4-20 | |
Machinery & equipment |
1-6 | |
Furniture & fixtures |
1-7 | |
Vehicles and equipment |
1-4 | |
Capitalized software |
1-2 |
Consideration (in thousands) |
||||
Cash |
$ | 26,912 | ||
Equity instruments |
2,923 | |||
|
|
|||
Fair value of total consideration transferred |
$ | 29,835 | ||
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||
Cash and cash equivalents |
$ | 125 | ||
Accounts receivable |
2,298 | |||
Inventory |
333 | |||
Prepaid expenses |
351 | |||
Fixed assets |
4,627 | |||
Intangible assets |
14,100 | |||
|
|
|||
Total assets acquired |
21,834 | |||
|
|
|||
Accounts payable |
1,852 | |||
Accrued expenses |
491 | |||
Other current liabilities |
141 | |||
Taxes payable |
158 | |||
Long-term debt |
63 | |||
|
|
|||
Total liabilities assumed |
2,705 | |||
|
|
|||
Total identifiable net assets |
19,129 | |||
|
|
|||
Goodwill |
$ | 10,706 | ||
|
|
Acquisition Date Fair Value |
Estimated Life (Years) |
|||||||
Trade name |
$ | 4,300 | 15 | |||||
Customer relationships |
5,300 | 10 | ||||||
Developed technology |
4,500 | 5 | ||||||
|
|
|||||||
Total Intangible assets |
$ | 14,100 |
(in thousands) | 2020 |
2019 |
||||||
Revenue |
$ | 20,899 | $ | 6,569 | ||||
|
|
|
|
|||||
Net income (loss) |
$ | 370 | $ | (1,488 | ) | |||
|
|
|
|
Consideration (in thousands) |
||||
Cash |
$ | 15,998 | ||
Equity instruments |
3,219 | |||
|
|
|||
Fair value of total consideration transferred |
$ | 19,217 | ||
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||
Cash and cash equivalents |
$ | 105 | ||
Accounts receivable |
800 | |||
Inventory |
88 | |||
Prepaid expenses |
20 | |||
Fixed assets |
62 | |||
Intangible assets |
5,500 | |||
|
|
|||
Total assets acquired |
6,575 | |||
|
|
|||
Accounts payable |
678 | |||
Accrued expenses |
194 | |||
Taxes payable |
12 | |||
|
|
|||
Total liabilities assumed |
884 | |||
|
|
|||
Total identifiable net assets |
5,691 | |||
|
|
|||
Goodwill |
$ | 13,526 | ||
|
|
Acquisition Date Fair Value |
Estimated Life (Years) |
|||||||
Trade name |
$ | 700 | 5 | |||||
Customer relationships |
3,500 | 6 | ||||||
Developed software |
1,300 | 5 | ||||||
|
|
|||||||
Total intangible assets |
$ | 5,500 |
(in thousands) | 2020 |
2019 |
||||||
Revenue |
$ | 10,884 | $ | 672 | ||||
|
|
|
|
|||||
Net income (loss) |
$ | 641 | $ | (982 | ) | |||
|
|
|
|
Consideration (in thousands) | Incodema |
Newchem |
Total |
|||||||||
Cash |
$ | 30,948 | $ | 6,320 | $ | 37,268 | ||||||
Equity instruments |
$ | 920 | $ | 183 | $ | 1,103 | ||||||
Contingent consideration |
$ | 8,696 | $ | — | $ | 8,696 | ||||||
|
|
|
|
|
|
|||||||
Fair value of total consideration transferred |
$ | 40,564 | $ | 6,503 | $ | 47,067 | ||||||
|
|
|
|
|
|
Acquisition Date Fair Value |
||||||||
Incodema |
Newchem |
|||||||
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||||||
Cash and cash equivalents |
$ | 63 | $ | 69 | ||||
Accounts receivable |
2,370 | 741 | ||||||
Inventory |
735 | 487 | ||||||
Other current assets |
3 | 1 | ||||||
Prepaid expenses |
77 | 8 | ||||||
Fixed assets |
2,277 | 1,949 | ||||||
Intangible assets |
19,300 | 2,800 | ||||||
|
|
|
|
|||||
Total assets acquired |
24,825 | 6,055 | ||||||
|
|
|
|
|||||
Accounts payable |
324 | 223 | ||||||
Accrued expenses |
110 | 35 | ||||||
Other current liabilities |
286 | 61 | ||||||
|
|
|
|
|||||
Total liabilities assumed |
720 | 319 | ||||||
|
|
|
|
|||||
Total identifiable net assets |
$ | 24,105 | $ | 5,736 | ||||
|
|
|
|
|||||
Goodwill |
16,459 | 767 | ||||||
|
|
|
|
Acquisition Date Fair Value - Incodema |
Estimated Life (Years) |
|||||||
Trade name |
$ | 2,700 | 15 | |||||
Customer relationships |
11,500 | 9 | ||||||
Developed software |
5,100 | 5 | ||||||
|
|
|||||||
Total intangible assets |
$ | 19,300 |
Acquisition Date Fair Value - Newchem |
Estimated Life (Years) |
|||||||
Trade name |
$ | 300 | 5 | |||||
Customer relationships |
2,500 | 16 | ||||||
|
|
|||||||
Total intangible assets |
$ | 2,800 |
(in thousands) | 2020 |
|||
Revenue |
$ | 6,900 | ||
|
|
|||
Net loss |
$ | (1,085 | ) | |
|
|
(in thousands) | 2020 |
|||
Revenue |
$ | 2,369 | ||
|
|
|||
Net income |
$ | 184 | ||
|
|
Consideration (in thousands) |
||||
Cash |
$ | 16,098 | ||
Equity instruments |
368 | |||
Contingent consideration |
1,166 | |||
|
|
|||
Fair value of total consideration transferred |
$ | 17,632 | ||
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||
Cash and cash equivalents |
$ | 357 | ||
Accounts receivable |
1,215 | |||
Inventory |
1,597 | |||
Indemnification asset - PPP Loan |
518 | |||
Prepaid expenses |
8 | |||
Fixed assets |
3,753 | |||
Intangible assets |
8,300 | |||
|
|
|||
Total assets acquired |
15,748 | |||
|
|
|||
Accounts payable |
68 | |||
Paycheck Protection Program (PPP) loan |
518 | |||
Accrued expenses |
475 | |||
|
|
|||
Total liabilities assumed |
1,061 | |||
|
|
|||
Total identifiable net assets |
14,687 | |||
|
|
|||
Goodwill |
$ | 2,945 | ||
|
|
Acquisition Date Fair Value |
Estimated Life (Years) |
|||||||
Trade name |
$ | 500 | 5 | |||||
Customer relationships |
7,800 | 14 | ||||||
|
|
|||||||
Total intangible assets |
$ | 8,300 |
(in thousands) | 2020 |
|||
Revenue |
$ | 310 | ||
|
|
|||
Net loss |
$ | (940 | ) | |
|
|
Consideration (in thousands) |
||||
Cash |
$ | 33,557 | ||
Equity instruments |
1,471 | |||
|
|
|||
Fair value of total consideration transferred |
$ | 35,028 | ||
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||
Cash and cash equivalents |
$ | — | ||
Accounts receivable |
2,645 | |||
Inventory |
1,184 | |||
Other current assets |
30 | |||
Prepaid expenses |
201 | |||
Fixed assets |
4,229 | |||
Intangible assets |
20,100 | |||
|
|
|||
Total assets acquired |
28,389 | |||
|
|
|||
Accounts payable |
244 | |||
Accrued expenses |
231 | |||
Other current liabilities |
644 | |||
|
|
|||
Total liabilities assumed |
1,119 | |||
|
|
|||
Total identifiable net assets |
27,270 | |||
|
|
|||
Goodwill |
$ | 7,758 | ||
|
|
Acquisition Date Fair Value |
Estimated Life (Years) |
|||||||
Trade name |
$ | 1,500 | 5 | |||||
Customer relationships |
18,600 | 16 | ||||||
|
|
|||||||
Total intangible assets |
$ | 20,100 |
(in thousands) | 2020 |
|||
Revenue |
$ | 911 | ||
|
|
|||
Net loss |
$ | (1,129 | ) | |
|
|
• | January 1, 2018 for the FATHOM and ICO Mold transactions. |
• | January 1, 2019 for the Incodema, Newchem, GPI, Dahlquist, Majestic, and Mark Two transactions. |
2020 |
2019 |
|||||||
Revenue |
$ | 110,583 | $ | 97,020 | ||||
|
|
|
|
|||||
Net income (loss) |
$ | (7,441 | ) | $ | (11,223 | ) | ||
|
|
|
|
• | Adjustment to fair value write-up of inventory sold for the years ended December 31, 2020 and 2019 of $649 and $(649), respectively. |
• | Adjustment to PPE depreciation for the years ended December 31, 2020 and 2019 of $2,282 and $2,139, respectively. |
• | Adjustment to amortization of intangible assets for the years ended December 31, 2020 and 2019 of $3,821 and $7,223, respectively. |
• | Adjustment to interest expense for the years ended December 31, 2020 and 2019 of $3,659 and $4,923, respectively. |
Year ended December 31, |
||||||||
(in thousands) |
2020 |
2019 |
||||||
Revenue: |
||||||||
Additive manufacturing |
$ | 19,032 | $ | 11,461 | ||||
Injection molding |
17,093 | 2,056 | ||||||
CNC machining |
9,173 | 3,833 | ||||||
Precision sheet metal |
9,811 | — | ||||||
Other revenue |
6,180 | 3,268 | ||||||
|
|
|
|
|||||
Total revenue |
$ | 61,289 | $ | 20,618 | ||||
|
|
|
|
December 31, 2020 | December 31, 2019 | |||||||
Finished goods |
$ | 1,351 | $ | 352 | ||||
Raw materials |
2,277 | 1,272 | ||||||
Work in process |
2,359 | 73 | ||||||
Tooling |
338 | — | ||||||
|
|
|
|
|||||
Total |
$ | 6,325 | $ | 1,697 | ||||
|
|
|
|
December 31, 2020 | December 31, 2019 | |||||||
Machinery & equipment |
$ | 25,214 | $ | 10,600 | ||||
Furniture & fixtures |
812 | 397 | ||||||
Property and leasehold Improvements |
2,838 | 720 | ||||||
Construction in progress |
576 | 256 | ||||||
|
|
|
|
|||||
$ | 29,440 | 11,973 | ||||||
Accumulated depreciation and amortization |
(3,054 | ) | (1,164 | ) | ||||
|
|
|
|
|||||
Total |
$ | 26,386 | $ | 10,809 | ||||
|
|
|
|
(in thousands) | Dec. 31, 2018 | Goodwill acquired during 2019 |
Dec. 31, 2019 | Goodwill acquired during 2020 |
Dec. 31, 2020 | |||||||||||||||
Goodwill |
$ | 8,775 | $ | 24,232 | $ | 33,007 | $ | 30,208 | $ | 63,215 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||
(in thousands) | Gross | Accumulated Amortization |
Net | Gross | Accumulated Amortization |
Net | Useful Life (in years) |
Weighted Average Useful Life Remaining (in years) |
||||||||||||||||||||||||
Trade name |
$ | 12,200 | $ | 919 | $ | 11,281 | $ | 6,800 | $ | 249 | $ | 6,551 | 5-15 |
12.7 | ||||||||||||||||||
Customer relationships |
67,600 | 4,448 | 63,152 | 25,600 | 1,591 | 24,009 | 5-16 |
13.3 | ||||||||||||||||||||||||
Developed software |
6,400 | 720 | 5,680 | 1,300 | 21 | 1,279 | 5 | 4.5 | ||||||||||||||||||||||||
Developed technology |
4,500 | 1,147 | 3,353 | 4,500 | 244 | 4,256 | 5 | 3.7 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total intangible assets |
$ | 90,700 | $ | 7,234 | $ | 83,466 | $ | 38,200 | $ | 2,105 | $ | 36,095 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
$ | 8,864 | ||
2022 |
$ | 8,864 | ||
2023 |
$ | 8,864 | ||
2024 |
$ | 8,605 | ||
2025 |
$ | 7,027 | ||
Thereafter |
$ | 41,242 | ||
|
|
|||
Total |
$ | 83,466 |
(in thousands) | As of December 31, 2020 | As of December 31, 2019 | ||||||||||||||
Debt Description |
Interest Rate | Amount | Interest Rate |
Amount | ||||||||||||
2018 Term Loan, as amended |
7.75% | $ | 29,700 | 8.30 | % | $ | 29,775 | |||||||||
2018 DDTL |
7.75% | 2,990 | 8.30 | % | 993 | |||||||||||
2020 Term Loan |
|
3 month LIBOR + 7.50% |
|
19,401 | — | |||||||||||
2020 DDTL |
|
3 month LIBOR + 7.50% |
|
40,500 | — | |||||||||||
|
|
|
|
|||||||||||||
Total principal long-term debt |
92,591 | 30,768 | ||||||||||||||
Debt issuance costs |
(1,867 | ) | (862 | ) | ||||||||||||
PPP and other loans |
$ | 2,615 | — | |||||||||||||
|
|
|
|
|||||||||||||
Total debt |
93,339 | 29,906 | ||||||||||||||
Less: current portion of long-term debt |
2,853 | 309 | ||||||||||||||
|
|
|
|
|||||||||||||
Long-term debt, net of current portion |
$ | 90,486 | $ | 29,597 |
2021 |
$ | 2,853 | ||
2022 |
2,699 | |||
2023 |
31,614 | |||
2024 |
603 | |||
2025 |
603 | |||
Thereafter |
56,834 | |||
|
|
|||
Total |
95,206 |
Year ended |
Total |
|||
2021 |
$ | 2,585 | ||
2022 |
2,179 | |||
2023 |
1,834 | |||
2024 |
1,030 | |||
2025 |
589 | |||
Thereafter |
465 | |||
|
|
|||
Total lease payments |
$ | 8,682 |
December 31, 2020 |
December 31, 2019 |
|||||||
Acquisition expenses |
$ | 3,765 | $ | 2,006 | ||||
Change in fair value of contingent consideration |
1,055 | 1,181 | ||||||
Other |
1,515 | — | ||||||
|
|
|
|
|||||
Other expense |
6,335 | 3,187 | ||||||
Gain on sale of assets |
(214 | ) | — | |||||
Other income |
(371 | ) | (189 | ) | ||||
|
|
|
|
|||||
Other (income) and expense, net |
5,750 | 2,998 |
Shares Authorized |
Shares Issued and Outstanding |
Original Issuance Price |
Carrying value |
Accumulated Unpaid Dividends |
Amount contingently redeemable |
|||||||||||||||||||
Class A Preferred Units |
1,167,418 | 1,167,418 | $ | 46.35 | $ | 54,105 | $ | 9,253 | $ | 63,358 |
Shares Authorized |
Shares Issued and Outstanding |
Original Issuance Price |
Carrying value |
Accumulated Unpaid Dividends |
Amount contingently redeemable |
|||||||||||||||||||
Class A Preferred Units |
702,493 | 702,493 | $ | 45.32 | $ | 31,836 | $ | 3,209 | $ | 35,045 |
December 31, 2020 |
December 31, 2019 |
|||||||
Class A Common Units |
5,480,611 | 2,883,452 | ||||||
Class B Common Units |
2,242,981 | 1,567,546 | ||||||
December 31, 2020 |
December 31, 2019 |
|||||||
Class A Common Units |
$ | 35,869 | $ | 18,701 | ||||
Class B Common Units |
14,450 | 10,467 | ||||||
|
|
|
|
|||||
$ | 50,319 | $ | 29,168 |
December 31, 2020 |
December 31, 2019 |
|||||||||||||||
(in thousands, except for unit and per unit amounts) | Class A |
Class B |
Class A |
Class B |
||||||||||||
Basic Earnings Per Unit: |
||||||||||||||||
Numerator |
||||||||||||||||
Net income (loss) |
$ | (5,380 | ) | $ | (2,584 | ) | $ | (3,201 | ) | $ | (1,571 | ) | ||||
Less: annual dividends on redeemable preferred units |
(4,083 | ) | (1,961 | ) | (1,753 | ) | (860 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) attributable to common unitholders |
(9,463 | ) | (4,545 | ) | (4,954 | ) | (2,431 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Denominator |
||||||||||||||||
Weighted-average units used to compute basic earnings per unit |
3,531,681 | 1,696,135 | 1,578,164 | 774,500 | ||||||||||||
Basic Earnings Per Unit |
$ | (2.68 | ) | $ | (2.68 | ) | $ | (3.14 | ) | $ | (3.14 | ) | ||||
|
|
|
|
|
|
|
|
2020 |
2019 |
|||||||
Risk-free interest rate |
0.28 | % | 2.24 | % | ||||
Expected Term |
4.65 | 4.47 | ||||||
Expected Volatility |
76.67 | % | 73.55 | % | ||||
Expected dividend yield |
0.00 | % | 0.00 | % |
Shares |
Weighted-Average Grant-Date Fair Value |
|||||||
Nonvested at January 1, 2020 |
3,814 | $ | 96.74 | |||||
Granted |
5,250 | 51.02 | ||||||
Vested |
380 | 90.07 | ||||||
Forfeited |
— | — | ||||||
|
|
|
|
|||||
Nonvested at December 31, 2020 |
8,684 | $ | 63.74 | |||||
|
|
|
|
Shares |
Weighted-Average Grant-Date Fair Value |
|||||||
Nonvested at January 1, 2019 |
— | $ | — | |||||
Granted |
4,000 | 97.34 | ||||||
Vested |
186 | 109.59 | ||||||
Forfeited |
— | — | ||||||
|
|
|
|
|||||
Nonvested at December 31, 2019 |
3,814 | $ | 96.74 | |||||
|
|
|
|
Fair Value Measurement at December 31, 2020 Using: |
||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Contingent consideration |
$ | — | $ | — | $ | 11,439 | $ | 11,439 |
Contingent Consideration |
||||||||
2020 |
2019 |
|||||||
Balance of recurring Level 3 liabilities at January 1 |
$ | — | $ | 2,319 | ||||
Total gains or losses for the period: |
||||||||
Included in earnings |
1,055 | 1,181 | ||||||
Included in other comprehensive loss |
— | — | ||||||
Issuances |
11,737 | — | ||||||
Payments |
(1,353 | ) | (3,500 | ) | ||||
Transfers into Level 3 |
— | — | ||||||
Transfers out of Level 3 |
— | — | ||||||
|
|
|
|
|||||
Balance of recurring Level 3 liabilities at December 31 |
$ | 11,439 | $ | — | ||||
|
|
|
|
Fair Value |
||||
December 31, 2020 |
||||
Contingent consideration |
$ | 11,439 |
◾ | Mark Two — $473 PPP Loan received on April 17, 2020. |
◾ | Dahlquist — $518 PPP loan received on April 21, 2020. |
2020 |
||||||||
(unaudited) |
2019 |
|||||||
Assets |
| |||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 2,004,417 | $ | 628,037 | ||||
Accounts receivable: |
||||||||
Trade |
3,178,078 | 2,277,078 | ||||||
Affiliates (Note 11) |
4,246 | — | ||||||
Inventory (Note 3) |
885,412 | 790,989 | ||||||
Due from stockholder |
31,046 | 1,008 | ||||||
Prepaid expenses and other current assets |
42,623 | 30,394 | ||||||
|
|
|
|
|||||
Total current assets |
6,145,822 | 3,727,506 | ||||||
Property and Equipment |
5,417,017 | 5,638,520 | ||||||
Goodwill |
1,722,483 | 1,722,483 | ||||||
|
|
|
|
|||||
Total assets |
$ |
13,285,322 |
$ |
11,088,509 |
||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 446,460 | $ | 498,462 | ||||
Current portion of long-term debt (Note 7) |
1,182,991 | 1,179,713 | ||||||
Current portion of build-to-suit |
100,835 | 99,415 | ||||||
Paycheck Protection Program loan (Note 5) |
81,314 | — | ||||||
Current portion of deferred compensation |
534,151 | 534,151 | ||||||
Accrued and other current liabilities |
300,490 | 49,945 | ||||||
|
|
|
|
|||||
Total current liabilities |
2,646,241 | 2,361,686 | ||||||
Paycheck Protection Program Loan |
203,286 | — | ||||||
Build -to -Suit Lease Obligation |
2,718,137 | 2,783,226 | ||||||
Long -Term Debt |
3,223,614 | 4,225,622 | ||||||
Deferred Compensation |
615,831 | 615,831 | ||||||
|
|
|
|
|||||
Total liabilities |
9,407,109 | 9,986,365 | ||||||
Stockholders’ Equity |
3,878,213 | 1,102,144 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ |
13,285,322 |
$ |
11,088,509 |
||||
|
|
|
|
2020 |
2019 |
|||||||
Sales |
$ | 9,954,911 | $ | 7,562,253 | ||||
Cost of Goods Sold |
4,247,765 | 3,802,630 | ||||||
|
|
|
|
|||||
Gross Profit |
5,707,146 | 3,759,623 | ||||||
Operating Expenses |
3,131,954 | 3,269,450 | ||||||
|
|
|
|
|||||
Operating Income |
2,575,192 | 490,173 | ||||||
Nonoperating Income (Expense) |
||||||||
Interest income |
272 | 366 | ||||||
Other income |
29,801 | 31,840 | ||||||
Interest expense |
(164,753 | ) | (185,585 | ) | ||||
|
|
|
|
|||||
Total nonoperating expense |
(134,680 | ) | (153,379 | ) | ||||
|
|
|
|
|||||
Combined Net Income |
$ |
2,440,512 |
$ |
336,794 |
||||
|
|
|
|
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Unearned ESOP Shares |
Total Equity (Deficit) |
||||||||||||||||
Balance |
$ |
255,172 |
$ |
— |
$ |
2,915,798 |
$ |
(3,322,466 |
) |
$ |
(151,496 |
) | ||||||||
Combined net income |
— | — | 336,794 | — | 336,794 | |||||||||||||||
Distributions |
— | — | (377,085 | ) | — | (377,085 | ) | |||||||||||||
Release of ESOP Shares |
— | 491,286 | — | 247,000 | 738,286 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance |
$ |
255,172 |
$ |
491,286 |
$ |
2,875,507 |
$ |
(3,075,466 |
) |
$ |
546,499 |
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance |
$ |
255,172 |
$ |
1,109,733 |
$ |
2,563,740 |
$ |
(2,826,501 |
) |
$ |
1,102,144 |
|||||||||
Combined net income |
— | — | 2,440,512 | — | 2,440,512 | |||||||||||||||
Distributions |
— | — | (202,443 | ) | — | (202,443 | ) | |||||||||||||
Release of ESOP Shares |
— | 386,000 | 152,000 | 538,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance |
$ |
255,172 |
$ |
1,495,733 |
$ |
4,801,809 |
$ |
(2,674,501 |
) |
$ |
3,878,213 |
|||||||||
|
|
|
|
|
|
|
|
|
|
2020 |
2019 |
|||||||
Cash Flows from Operating Activities |
||||||||
Net income |
$ | 2,440,512 | $ | 336,794 | ||||
Adjustments to reconcile net income to net cash and cash equivalents from operating activities: |
||||||||
Depreciation |
397,420 | 346,996 | ||||||
Bad debt expense |
68,913 | 1,889 | ||||||
Deferred compensation expense |
— | 456,914 | ||||||
ESOP compensation expense |
538,000 | 738,286 | ||||||
Changes in operating assets and liabilities that used (provided) cash and cash equivalents: |
||||||||
Accounts receivable |
(974,159 | ) | (330,434 | ) | ||||
Inventory |
(94,423 | ) | — | |||||
Prepaid expenses and other assets |
(12,229 | ) | 1,739 | |||||
Accounts payable |
(52,002 | ) | (221,715 | ) | ||||
Accrued and other liabilities |
250,545 | 430,558 | ||||||
|
|
|
|
|||||
Net cash and cash equivalents provided by operating activities |
2,562,577 | 1,761,027 | ||||||
Cash Flows from Investing Activities |
||||||||
Purchase of property and equipment |
(175,917 | ) | (444,307 | ) | ||||
Issuance of shareholder loan |
(30,038 | ) | — | |||||
|
|
|
|
|||||
Net cash and cash equivalents used in investing activities |
(205,955 | ) | (444,307 | ) | ||||
Cash Flows from Financing Activities |
||||||||
Proceeds on Paycheck Protection Program loan |
284,600 | — | ||||||
Payments on line of credit |
— | (265,000 | ) | |||||
Payments on debt |
(998,730 | ) | (552,640 | ) | ||||
Payments on build-to-suit |
(63,669 | ) | (56,483 | ) | ||||
Distributions paid |
(202,443 | ) | (377,085 | ) | ||||
|
|
|
|
|||||
Net cash and cash equivalents used in financing activities |
(980,242 | ) | (1,251,208 | ) | ||||
|
|
|
|
|||||
Net Increase in Cash and Cash Equivalents |
1,376,380 | 65,512 | ||||||
Cash and Cash Equivalents |
628,037 | 618,943 | ||||||
|
|
|
|
|||||
Cash and Cash Equivalents |
$ |
2,004,417 |
$ |
684,455 |
||||
|
|
|
|
|||||
Supplemental Cash Flow Information |
$ | 164,753 | $ | 185,585 | ||||
Significant Noncash Transactions build-to-suit |
$ | — | $ | 3,093,907 |
2020 |
2019 |
|||||||
Raw materials |
$ | 372,976 | $ | 348,584 | ||||
Work in process |
394,686 | 373,606 | ||||||
Finished goods |
117,750 | 68,799 | ||||||
|
|
|
|
|||||
Total |
$ | 885,412 | $ | 790,989 | ||||
|
|
|
|
2020 |
2019 |
Depreciable Life - Years |
||||||||||
Buildings |
$ | 2,882,641 | $ | 3,073,207 | 3-7 |
|||||||
Machinery and equipment |
9,071,753 | 9,336,232 | 2-10 |
|||||||||
Transportation equipment |
35,667 | 35,667 | 5 | |||||||||
Furniture and fixtures |
18,604 | 18,604 | 3-5 |
|||||||||
Computer equipment and software |
264,101 | 403,598 | 3-5 |
|||||||||
Leasehold improvements |
703,730 | 284,651 | 5-20 |
|||||||||
|
|
|
|
|||||||||
Total cost |
12,976,496 | 13,151,959 | ||||||||||
Accumulated depreciation |
7,559,479 | 7,513,439 | ||||||||||
|
|
|
|
|||||||||
Net property and equipment |
$ | 5,417,017 | $ | 5,638,520 | ||||||||
|
|
|
|
2020 |
2019 |
|||||||
Loans payable to a bank with monthly principal and interest payments ranging from $385 to $10,831 with interest rates ranging from 3.80 to 5.57 percent, maturing from April 2020 through November 2024. The notes are secured by all business assets, the equipment purchased by the note, and a personal guarantee by the sole shareholder |
$ | 1,724,534 | $ | 2,457,825 | ||||
Loan payable to a bank with monthly principal and interest payments of $56,661 with interest at 4.99% with a maturity date in April 2025. |
2,704,546 | 2,972,310 | ||||||
Less unamortized defined financing fees |
(22,475 | ) | (24,800 | ) | ||||
|
|
|
|
|||||
Long-term debt less unamortized ESOP costs |
4,406,605 | 5,405,335 | ||||||
Less current portion |
1,182,991 | 1,179,713 | ||||||
|
|
|
|
|||||
Long-term portion |
$ | 3,223,614 | $ | 4,225,622 | ||||
|
|
|
|
Years Ending |
Amount |
|||
2021 |
$ | 1,182,991 | ||
2022 |
1,179,142 | |||
2023 |
1,134,699 | |||
2024 |
932,248 | |||
2025 |
— | |||
|
|
|||
Total |
$ | 4,429,080 | ||
|
|
Years Ending June 30 |
Amount |
|||
2021 |
$ | 180,000 | ||
2022 |
180,000 | |||
2023 |
180,000 | |||
2024 |
180,000 | |||
2025 |
2,431,811 | |||
|
|
|||
Total |
3,151,811 | |||
Less amount representing interest |
332,839 | |||
|
|
|||
Present value of net minimum lease payments |
2,818,972 | |||
Less current obligations |
100,835 | |||
|
|
|||
Long-term obligations under capital leases |
$ | 2,718,137 | ||
|
|
Years Ending June 30 |
Amount |
|||
2021 |
$ | 251,130 | ||
2022 |
240,000 | |||
2023 |
120,000 | |||
|
|
|||
Total |
$ | 611,130 | ||
|
|
2020 |
2019 |
|||||||
Allocated shares |
12,618 | 7,285 | ||||||
Unreleased shares |
30,393 | 35,726 | ||||||
|
|
|
|
|||||
Total ESOP shares |
43,011 | 43,011 | ||||||
|
|
|
|
|||||
Fair value of unreleased shares at June 30 |
$ | 9,999,297 | $ | 2,393,642 | ||||
|
|
|
|
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors Incodema, Inc. and NewChem, Inc. We have audited the accompanying combined financial statements of Incodema, Inc. and New Chem Inc., which comprise the combined balance sheets as of December 31, 2019 and 2018, and the related combined statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements. Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error. | ||
Auditor’s responsibility Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. |
Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Incodema, Inc. and NewChem, Inc. as of December 31, 2019 and 2018, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. /s/ GRANT THORNTON LLP Boston, Massachusetts July 28, 2021 |
2019 |
2018 |
|||||||
Assets |
| |||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 628,037 | $ | 618,943 | ||||
Accounts receivable — Net |
2,277,078 | 2,197,370 | ||||||
Inventory (Note 4) |
790,989 | 54,777 | ||||||
Due from stockholder |
1,008 | 148 | ||||||
Due from affiliate |
— | 515,000 | ||||||
Prepaid expenses and other current assets |
30,394 | 64,961 | ||||||
|
|
|
|
|||||
Total current assets |
3,727,506 | 3,451,199 | ||||||
Property and Equipment |
5,638,520 | 5,583,540 | ||||||
Goodwill |
1,722,483 | 1,722,483 | ||||||
|
|
|
|
|||||
Total assets |
$ |
11,088,509 |
$ |
10,757,222 |
||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity (Deficit) |
| |||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 498,462 | $ | 622,004 | ||||
Line of credit (Note 7) |
— | 877,224 | ||||||
Current portion of long-term debt (Note 8) |
1,179,713 | 1,063,222 | ||||||
Current portion of build-to-suit |
99,415 | 96,634 | ||||||
Current portion of deferred compensation (Note 14) |
534,151 | — | ||||||
Due to affiliate |
— | 257,097 | ||||||
Accrued and other current liabilities |
49,945 | 23,225 | ||||||
|
|
|
|
|||||
Total current liabilities |
2,361,686 | 2,939,406 | ||||||
Build -to -Suit Lease Obligation |
2,783,226 | 2,882,642 | ||||||
Long -Term Debt |
4,225,622 | 4,968,593 | ||||||
Deferred Compensation |
615,831 | 118,077 | ||||||
|
|
|
|
|||||
Total liabilities |
9,986,365 | 10,908,718 | ||||||
Stockholders’ Equity (Deficit) |
1,102,144 | (151,496 | ) | |||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity (deficit) |
$ |
11,088,509 |
$ |
10,757,222 |
||||
|
|
|
|
2019 |
2018 |
|||||||
Sales |
$ | 15,135,876 | $ | 12,694,259 | ||||
Cost of Goods Sold |
7,486,781 | 7,485,643 | ||||||
|
|
|
|
|||||
Gross Profit |
7,649,095 | 5,208,616 | ||||||
Operating Expenses |
6,259,464 | 4,805,092 | ||||||
|
|
|
|
|||||
Operating Income |
1,389,631 | 403,524 | ||||||
Nonoperating Income (Expense) |
||||||||
Interest income |
103,375 | 78,725 | ||||||
Other income |
417,335 | 47,083 | ||||||
Interest expense |
(393,060 | ) | (393,588 | ) | ||||
|
|
|
|
|||||
Total nonoperating income (expense) |
127,650 | (267,780 | ) | |||||
|
|
|
|
|||||
Combined Net Income |
$ |
1,517,281 |
$ |
135,744 |
||||
|
|
|
|
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Unearned ESOP Shares |
Total |
||||||||||||||||
Balance |
$ | 255,172 | $ | 20,286 | $ | 3,124,702 | $ | — | $ | 3,400,160 | ||||||||||
Combined net income |
— | — | 135,744 | — | 135,744 | |||||||||||||||
Distributions |
— | — | (175,516 | ) | — | (175,516 | ) | |||||||||||||
Release of ESOP shares |
— | (20,286 | ) | (169,132 | ) | 677,534 | 488,116 | |||||||||||||
Purchase of ESOP shares |
— | — | — | (4,000,000 | ) | (4,000,000 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance |
255,172 | — | 2,915,798 | (3,322,466 | ) | (151,496 | ) | |||||||||||||
Combined net income |
— | — | 1,517,281 | — | 1,517,281 | |||||||||||||||
Distributions |
— | — | (2,038,471 | ) | — | (2,038,471 | ) | |||||||||||||
Release of ESOP shares |
— | 1,109,733 | 169,132 | 495,965 | 1,774,830 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance |
$ |
255,172 |
$ |
1,109,733 |
$ |
2,563,740 |
$ |
(2,826,501 |
) |
$ |
1,102,144 |
|||||||||
|
|
|
|
|
|
|
|
|
|
2019 |
2018 |
|||||||
Cash Flows from Operating Activities |
||||||||
Net income |
$ | 1,517,281 | $ | 135,744 | ||||
Adjustments to reconcile net income to net cash and cash equivalents from operating activities: |
||||||||
Depreciation |
734,064 | 779,673 | ||||||
Bad debt expense |
5,845 | 28,244 | ||||||
Deferred compensation expense |
1,031,905 | 118,077 | ||||||
ESOP compensation expense |
1,754,544 | 488,116 | ||||||
Changes in operating assets and liabilities that (used) provided cash and cash equivalents: |
||||||||
Accounts receivable |
(64,437 | ) | 224,004 | |||||
Inventory |
(736,212 | ) | 208,815 | |||||
Prepaid expenses and other assets |
32,255 | 9,505 | ||||||
Accounts payable |
(144,658 | ) | (414,671 | ) | ||||
Accrued and other liabilities |
26,746 | (13,407 | ) | |||||
|
|
|
|
|||||
Net cash and cash equivalents provided by operating activities |
4,157,333 | 1,564,100 | ||||||
Cash Flows from Investing Activities |
||||||||
Purchase of property and equipment |
(298,700 | ) | (139,519 | ) | ||||
Proceeds from disposition of property and equipment |
— | 20,000 | ||||||
|
|
|
|
|||||
Net cash and cash equivalents used in investing activities |
(298,700 | ) | (119,519 | ) | ||||
Cash Flows from Financing Activities |
||||||||
Payments on line of credit |
(1,017,197 | ) | (620,000 | ) | ||||
Payments on debt |
(1,095,112 | ) | (1,213,267 | ) | ||||
Debt issuance costs |
— | (32,550 | ) | |||||
Proceeds from line of credit |
139,973 | 812,224 | ||||||
Proceeds from ESOP loan |
— | 4,000,000 | ||||||
ESOP share purchase |
— | (4,000,000 | ) | |||||
Advances on long term debt |
— | 98,770 | ||||||
Payments on build-to-suit |
(96,635 | ) | (93,931 | ) | ||||
Distributions paid |
(1,523,471 | ) | (175,516 | ) | ||||
Stockholder advance |
— | 500,000 | ||||||
Repayment of affiliate advance |
(257,097 | ) | (242,903 | ) | ||||
|
|
|
|
|||||
Net cash and cash equivalents used in financing activities |
(3,849,539 | ) | (967,173 | ) | ||||
|
|
|
|
|||||
Net Increase in Cash and Cash Equivalents |
9,094 | 477,408 | ||||||
Cash and Cash Equivalents |
618,943 | 141,535 | ||||||
|
|
|
|
|||||
Cash and Cash Equivalents |
$ |
628,037 |
$ |
618,943 |
||||
|
|
|
|
|||||
Supplemental Cash Flow Information |
||||||||
Interest |
$ | 309,695 | $ | 305,247 | ||||
Income tax |
1,596 | 1,596 | ||||||
Significant Noncash Transactions |
||||||||
Fixed asset addition as a result of the build-to-suit |
$ | — | $ | 3,093,907 | ||||
Distribution of receivable due from affiliate |
515,000 | — | ||||||
Financed equipment purchase |
468,632 | — |
2019 |
2018 |
|||||||
Raw materials |
$ | 348,584 | $ | 54,777 | ||||
Work in process |
373,606 | — | ||||||
Finished goods |
68,799 | — | ||||||
|
|
|
|
|||||
Total |
$ | 790,989 | $ | 54,777 | ||||
|
|
|
|
2019 |
2018 |
Depreciable Life - Years |
||||||||||
Buildings |
$ | 3,073,207 | $ | 3,073,207 | 3-7 |
|||||||
Machinery and equipment |
9,336,232 | 8,692,821 | 2-10 |
|||||||||
Transportation equipment |
35,667 | 66,066 | 5 | |||||||||
Furniture and fixtures |
18,604 | 29,425 | 3-5 |
|||||||||
Computer equipment and software |
403,598 | 369,761 | 3-5 |
|||||||||
Leasehold improvements |
284,651 | 284,651 | 5-20 |
|||||||||
Construction in progress |
— | 2,995 | — | |||||||||
|
|
|
|
|||||||||
Total cost |
13,151,959 | 12,518,926 | ||||||||||
Accumulated depreciation |
7,513,439 | 6,935,386 | ||||||||||
|
|
|
|
|||||||||
Net property and equipment |
$ | 5,638,520 | $ | 5,583,540 | ||||||||
|
|
|
|
2019 |
2018 |
|||||||
Loans payable to a bank with monthly principal and interest payments ranging from $385 to $10,831 with interest rates ranging from 3.80 to 5.57 percent, maturing from April 2020 through November 2024. The notes are secured by all business assets, the equipment purchased by the note, and a personal guarantee by the sole shareholder |
$ | 2,433,025 | $ | 2,353,998 | ||||
Loan payable to a bank with monthly principal and interest payments of $56,661 with interest at 4.99 percent with a maturity date in April 2025. |
2,997,110 | 3,707,267 | ||||||
Less unamortized deferred financing fees |
(24,800 | ) | (29,450 | ) | ||||
|
|
|
|
|||||
Long-term debt less unamortized ESOP costs |
5,405,335 | 6,031,815 | ||||||
Less current portion |
1,179,713 | 1,063,222 | ||||||
|
|
|
|
|||||
Long-term portion |
$ | 4,225,622 | $ | 4,968,593 | ||||
|
|
|
|
Years Ending |
Amount |
|||
2020 |
$ | 1,179,713 | ||
2021 |
1,186,267 | |||
2022 |
1,172,018 | |||
2023 |
1,097,381 | |||
2024 |
769,956 | |||
|
|
|||
Total |
$ | 5,405,335 | ||
|
|
Years Ending December 31 |
Amount |
|||
2020 |
$ | 180,000 | ||
2021 |
180,000 | |||
2022 |
180,000 | |||
2023 |
180,000 | |||
2024 |
180,000 | |||
Thereafter |
2,356,125 | |||
|
|
|||
Total |
3,256,125 | |||
Less amount representing interest |
373,484 | |||
|
|
|||
Present value of net minimum lease payments |
2,882,641 | |||
Less current obligations |
99,415 | |||
|
|
|||
Long-term obligations under capital leases |
$ | 2,783,226 | ||
|
|
Years Ending December 31 |
Amount |
|||
2020 |
$ | 262,260 | ||
2021 |
240,000 | |||
2022 |
240,000 | |||
|
|
|||
Total |
$ | 742,260 | ||
|
|
2019 |
2018 |
|||||||
Allocated shares |
12,618 | 7,285 | ||||||
Unreleased shares |
30,393 | 35,726 | ||||||
|
|
|
|
|||||
Total ESOP shares |
43,011 | 43,011 | ||||||
|
|
|
|
|||||
Fair value of unreleased shares at December 31 |
$ | 9,999,297 | $ | 2,393,642 | ||||
|
|
|
|
September 30, 2020 |
December 31, 2019 |
|||||||
Assets |
| |||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 4,395,477 | $ | 5,684,664 | ||||
Accounts receivable — Net |
3,015,310 | 2,647,238 | ||||||
Inventory |
1,031,745 | 911,464 | ||||||
Prepaid expenses and other current assets |
223,115 | 228,025 | ||||||
|
|
|
|
|||||
Total current assets |
8,665,647 | 9,471,391 | ||||||
Property and Equipment |
2,630,906 | 3,229,258 | ||||||
Company-Owned Life Insurance (Cash Surrender Value) |
345,135 | 325,135 | ||||||
|
|
|
|
|||||
Total assets |
$ |
11,641,688 |
$ |
13,025,784 |
||||
|
|
|
|
|||||
Liabilities and Members’ Equity |
| |||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 256,834 | $ | 198,921 | ||||
Paycheck Protection Program loan |
804,800 | — | ||||||
Accrued and other current liabilities: |
||||||||
Accrued compensation |
471,980 | 378,815 | ||||||
Other accrued liabilities |
189,856 | 250,951 | ||||||
|
|
|
|
|||||
Total current liabilities |
1,723,470 | 828,687 | ||||||
Long-Term Debt |
1,075,070 | 955,668 | ||||||
Deferred Compensation |
804,800 | — | ||||||
|
|
|
|
|||||
Total liabilities |
3,603,340 | 1,784,355 | ||||||
Members’ Equity |
8,038,348 | 11,241,429 | ||||||
|
|
|
|
|||||
Total liabilities and members’ equity |
$ |
11,641,688 |
$ |
13,025,784 |
||||
|
|
|
|
Nine-Months Ended September 30, 2020 |
Year Ended December 31, 2019 |
|||||||
Sales |
$ | 17,233,964 | $ | 25,733,700 | ||||
Cost of Goods Sold |
||||||||
Direct production costs |
7,514,463 | 12,337,101 | ||||||
Indirect production costs |
3,531,288 | 5,423,193 | ||||||
|
|
|
|
|||||
Total cost of goods sold |
11,045,751 | 17,760,294 | ||||||
|
|
|
|
|||||
Gross Profit |
6,188,213 | 7,973,406 | ||||||
Operating Expenses |
||||||||
General and administrative expenses |
1,863,063 | 2,561,575 | ||||||
Selling expenses |
548,534 | 854,589 | ||||||
|
|
|
|
|||||
Total operating expenses |
2,411,597 | 3,416,164 | ||||||
Operating Income |
3,776,616 | 4,557,242 | ||||||
Nonoperating Income (Expense) |
||||||||
Interest income |
18,683 | 32,602 | ||||||
Loss on disposal of asset |
(2,788 | ) | — | |||||
|
|
|
|
|||||
Total nonoperating income |
15,895 | 32,602 | ||||||
|
|
|
|
|||||
Income |
3,792,511 | 4,589,844 | ||||||
Income Tax Expense |
— | — | ||||||
|
|
|
|
|||||
Net Income |
$ |
3,792,511 |
$ |
4,589,844 |
||||
|
|
|
|
Balance |
$ | 10,262,424 | ||
Net income |
4,589,844 | |||
Member distributions |
(3,610,839 | ) | ||
|
|
|||
Balance |
11,241,429 | |||
Net income |
3,792,511 | |||
Member distributions |
(6,995,592 | ) | ||
|
|
|||
Balance |
$ |
8,038,348 |
||
|
|
Nine-Months Ended September 30, 2020 |
Year Ended December 31, 2019 |
|||||||
Cash Flows from Operating Activities |
||||||||
Net income |
$ | 3,792,511 | $ | 4,589,844 | ||||
Adjustments to reconcile net income to net cash from operating activities: |
||||||||
Depreciation |
601,307 | 963,160 | ||||||
Loss on disposal of property and equipment |
2,788 | — | ||||||
Life insurance premiums |
(20,000 | ) | (20,000 | ) | ||||
Gain on the life insurance policy |
— | (53,000 | ) | |||||
Changes in operating assets and liabilities that (used) provided cash: |
||||||||
Accounts receivable |
(368,072 | ) | 185,276 | |||||
Inventory |
(120,281 | ) | (38,355 | ) | ||||
Prepaid expenses and other assets |
4,910 | (43,975 | ) | |||||
Accounts payable |
57,913 | (314,204 | ) | |||||
Accrued and other liabilities |
32,070 | 68,412 | ||||||
Accrued retirement benefits |
119,402 | 208,402 | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
4,102,548 | 5,545,560 | ||||||
Cash Flows from Investing Activities |
||||||||
Purchase of property and equipment |
(24,743 | ) | (272,170 | ) | ||||
Proceeds from disposition of property and equipment |
19,000 | — | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(5,743 | ) | (272,170 | ) | ||||
Cash Flows from Financing Activities |
||||||||
Proceeds from debt |
1,609,600 | — | ||||||
Distributions to members |
(6,995,592 | ) | (3,610,839 | ) | ||||
|
|
|
|
|||||
Net cash used in financing activities |
(5,385,992 | ) | (3,610,839 | ) | ||||
|
|
|
|
|||||
Net (Decrease) Increase in Cash |
(1,289,187 | ) | 1,662,551 | |||||
Cash |
5,684,664 | 4,022,113 | ||||||
|
|
|
|
|||||
Cash |
$ |
4,395,477 |
$ |
5,684,664 |
||||
|
|
|
|
September 30, 2020 |
December 31, 2019 |
|||||||
Raw materials |
$ | 213,017 | $ | 173,620 | ||||
Work in progress |
818,728 | 737,844 | ||||||
|
|
|
|
|||||
Total |
$ | 1,031,745 | $ | 911,464 | ||||
|
|
|
|
September 30, 2020 |
December 31, 2019 |
Depreciable Life - Years | ||||||||
Machinery and equipment |
$ | 11,028,442 | $ | 11,009,497 | 3-10 | |||||
Transportation equipment |
552,490 | 598,246 | 5-7 | |||||||
Furniture and fixtures |
155,838 | 150,038 | 7-10 | |||||||
Computer equipment and software |
281,477 | 281,477 | 3-5 | |||||||
Leasehold improvements |
487,014 | 487,014 | 19 | |||||||
|
|
|
|
|||||||
Total cost |
12,505,261 | 12,526,272 | ||||||||
Accumulated depreciation |
9,874,355 | 9,297,014 | ||||||||
|
|
|
|
|||||||
Net property and equipment |
$ | 2,630,906 | $ | 3,229,258 | ||||||
|
|
|
|
For the Period |
Amount |
|||
October 1, 2020 - December 31, 2020 |
$ | 138,750 | ||
January 1, 2021 - December 31, 2021 |
560,550 | |||
January 1, 2022 - December 31, 2022 |
571,764 | |||
January 1, 2023 - December 31, 2023 |
583,200 | |||
January 1, 2024 - December 31, 2024 |
594,864 | |||
January 1, 2025 - June 30, 2025 |
300,378 | |||
|
|
|||
Total |
$ | 2,749,506 | ||
|
|
Period ending September 30 |
Amount |
|||
2021 |
$ | 804,800 | ||
2022 |
804,800 | |||
|
|
|||
Total |
$ | 1,609,600 | ||
|
|
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors Dahlquist Machine, Inc. We have audited the accompanying financial statements of Dahlquist Machine, Inc. (a Minnesota corporation), which comprise the balance sheet as of September 30, 2020, and the related statements of operations, stockholder’s equity, and cash flows for the nine-month period ended September 30, 2020, and the related notes to the financial statements. Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. | ||
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. |
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Dahlquist Machine, Inc. as of September 30, 2020, and the results of its operations and its cash flows for the nine-month period ended September 30, 2020 in accordance with accounting principles generally accepted in the United States of America. /s/ GRANT THORNTON LLP Minneapolis, Minnesota July 20, 2021 |
Assets |
| |||
Current Assets |
||||
Cash and cash equivalents |
$ | 5,640,918 | ||
Accounts receivable — Net |
1,204,535 | |||
Inventory (Note 3) |
880,284 | |||
Prepaid expenses and other current assets |
1,530 | |||
|
|
|||
Total current assets |
7,727,267 | |||
Property and Equipment |
1,501,884 | |||
|
|
|||
Total assets |
$ |
9,229,151 |
||
|
|
|||
Liabilities and Stockholder’s Equity |
| |||
Current Liabilities |
||||
Accounts payable |
$ | 88,171 | ||
Current portion of long-term debt |
403,015 | |||
Accrued and other current liabilities |
245,424 | |||
|
|
|||
Total current liabilities |
736,610 | |||
Long -term Debt |
269,091 | |||
Paycheck Protection Program Loan |
168,215 | |||
|
|
|||
Total liabilities |
1,173,916 | |||
Stockholder’s Equity |
8,055,235 | |||
|
|
|||
Total liabilities and stockholder’s equity |
$ |
9,229,151 |
||
|
|
Amount |
Percent of Net Sales |
|||||||
Sales |
$ | 6,043,145 | 100.0 | |||||
Cost of Goods Sold |
3,025,748 | 50.0 | ||||||
|
|
|
|
|||||
Gross Profit |
3,017,397 | 50.0 | ||||||
Operating Expenses |
1,090,514 | 18.0 | ||||||
|
|
|
|
|||||
Operating Income |
1,926,883 | 32.0 | ||||||
Nonoperating Income (Expense) |
||||||||
Interest income |
41,633 | 0.7 | ||||||
Interest expense |
(13,062 | ) | (0.2 | ) | ||||
|
|
|
|
|||||
Total nonoperating income |
28,571 | 0.5 | ||||||
|
|
|
|
|||||
Net Income |
$ |
1,955,454 |
32.5 |
|||||
|
|
|
|
Common Stock |
Retained Earnings |
Total |
||||||||||
Balance |
$ | 100 | $ | 7,088,681 | $ | 7,088,781 | ||||||
Net income |
— | 1,955,454 | 1,955,454 | |||||||||
Stockholder distribution |
— | (989,000 | ) | (989,000 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance |
$ |
100 |
$ |
8,055,135 |
$ |
8,055,235 |
||||||
|
|
|
|
|
|
Cash Flows from Operating Activities |
||||
Net income |
$ | 1,955,454 | ||
Adjustments to reconcile net income to net cash and cash equivalents from operating activities: |
||||
Depreciation |
387,678 | |||
Changes in operating assets and liabilities that provided cash and cash equivalents: |
||||
Accounts receivable |
(342,576 | ) | ||
Inventory |
82,129 | |||
Prepaid expenses and other assets |
(1,530 | ) | ||
Accounts payable |
(15,263 | ) | ||
Accrued and other current liabilities |
147,325 | |||
|
|
|||
Net cash and cash equivalents provided by operating activities |
2,213,217 | |||
Cash Flows from Financing Activities |
||||
Paycheck Protection Program loan proceeds |
518,100 | |||
Payments on long-term debt |
(38,073 | ) | ||
Stockholder distribution |
(989,000 | ) | ||
|
|
|||
Net cash and cash equivalents used in financing activities |
(508,973 | ) | ||
|
|
|||
Net Increase in Cash and Cash Equivalents |
1,704,244 | |||
Cash and Cash Equivalents |
3,936,674 | |||
|
|
|||
Cash and Cash Equivalents |
$ |
5,640,918 |
||
Supplemental Cash Flow Information |
$ | 13,062 | ||
|
|
Raw materials |
$ | 56,366 | ||
Work in progress |
107,879 | |||
Finished goods |
942,696 | |||
Inventory Reserve |
(226,657 | ) | ||
|
|
|||
Total |
$ | 880,284 | ||
|
|
Amount |
Depreciable Life - Years | |||||
Machinery and equipment |
$ | 5,164,133 | 5-7 | |||
Transportation equipment |
153,960 | 5 | ||||
Furniture and fixtures |
75,344 | 3-5 | ||||
Computer equipment and software |
70,277 | 3-5 | ||||
Leasehold improvements |
1,172,129 | 14 | ||||
|
|
|||||
Total cost |
6,635,843 | |||||
Accumulated depreciation |
5,133,959 | |||||
|
|
|||||
Net property and equipment |
$ | 1,501,884 | ||||
|
|
Note payable to a bank in monthly installments of $5,682, including interest at .5% percent above the prime rate (an effective rate of 5.25 percent at September 30, 2020). The note is collateralized by the related party lease and is due on February 25, 2026. |
$ | 322,221 | ||
|
|
|||
Total |
322,221 | |||
Less current portion |
53,130 | |||
|
|
|||
Long-term portion |
$ | 269,091 | ||
|
|
Years Ending |
Amount |
|||
2021 |
$ | 53,130 | ||
2022 |
56,981 | |||
2023 |
59,896 | |||
2024 |
62,960 | |||
Thereafter |
89,254 | |||
|
|
|||
Total |
$ | 322,221 | ||
|
|
/s/ Tom Wasserman |
Tom Wasserman |
Sole Incorporator |
Page |
||||||
ARTICLE I CERTAIN DEFINITIONS |
C-10 |
|||||
Section 1.01 |
Definitions |
C-10 | ||||
Section 1.02 |
Construction |
C-25 | ||||
Section 1.03 |
Knowledge |
C-26 | ||||
Section 1.04 |
Equitable Adjustments |
C-26 | ||||
ARTICLE II PRE-CLOSING REORGANIZATION; RECAPITALIZATION; MERGERS; CONTRIBUTIONS |
C-26 |
|||||
Section 2.01 |
Pre-Closing Reorganization |
C-26 | ||||
Section 2.02 |
Domestication; Altimar Recapitalization |
C-27 | ||||
Section 2.03 |
PIPE Investment |
C-27 | ||||
Section 2.04 |
Issuance of Fathom Managing Member Interest and the Blocker Mergers |
C-27 | ||||
Section 2.05 |
The Blocker Altimar Mergers |
C-28 | ||||
Section 2.06 |
The Fathom Merger |
C-28 | ||||
Section 2.07 |
Effects of the Mergers |
C-28 | ||||
Section 2.08 |
Governing Documents; Directors and Officers |
C-29 | ||||
Section 2.09 |
Altimar Cash Contribution |
C-29 | ||||
Section 2.10 |
Further Assurances |
C-30 | ||||
ARTICLE III CONSIDERATION; EFFECTS OF THE TRANSACTIONS |
C-30 |
|||||
Section 3.01 |
Fathom Consideration; Effects of the Fathom Merger and Blocker Mergers. Blocker Altimar Mergers |
C-30 | ||||
Section 3.02 |
Issuance of Altimar Common Stock |
C-31 | ||||
Section 3.03 |
Earnout Shares |
C-31 | ||||
Section 3.04 |
Award Issuances under the Omnibus Incentive Plan |
C-32 | ||||
Section 3.05 |
Withholding Rights |
C-32 | ||||
ARTICLE IV CLOSING TRANSACTIONS; ADJUSTMENT TO MERGER CONSIDERATION |
C-32 |
|||||
Section 4.01 |
Closing |
C-32 | ||||
Section 4.02 |
Payments at the Closing |
C-33 | ||||
Section 4.03 |
Expense Amounts |
C-33 | ||||
Section 4.04 |
Closing Statement; Allocation Schedule |
C-34 | ||||
Section 4.05 |
Exchange Procedures |
C-35 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF FATHOM |
C-35 |
|||||
Section 5.01 |
Organization |
C-35 | ||||
Section 5.02 |
Subsidiaries |
C-36 |
Page |
||||||
Section 5.03 |
Due Authorization |
C-36 | ||||
Section 5.04 |
No Conflict |
C-36 | ||||
Section 5.05 |
Governmental Authorities; Consents |
C-37 | ||||
Section 5.06 |
Capitalization |
C-37 | ||||
Section 5.07 |
Capitalization of Subsidiaries |
C-38 | ||||
Section 5.08 |
Financial Statements |
C-39 | ||||
Section 5.09 |
Outstanding Indebtedness |
C-39 | ||||
Section 5.10 |
Undisclosed Liabilities and Indebtedness |
C-40 | ||||
Section 5.11 |
Litigation and Proceedings |
C-40 | ||||
Section 5.12 |
Compliance with Laws |
C-40 | ||||
Section 5.13 |
Contracts; No Defaults |
C-42 | ||||
Section 5.14 |
Fathom Benefit Plans |
C-43 | ||||
Section 5.15 |
Labor Matters |
C-45 | ||||
Section 5.16 |
Taxes |
C-46 | ||||
Section 5.17 |
Insurance |
C-47 | ||||
Section 5.18 |
Real Property |
C-48 | ||||
Section 5.19 |
Intellectual Property and IT Security |
C-49 | ||||
Section 5.20 |
Data Privacy |
C-50 | ||||
Section 5.21 |
Environmental Matters |
C-51 | ||||
Section 5.22 |
Absence of Changes |
C-51 | ||||
Section 5.23 |
Brokers’ Fees |
C-52 | ||||
Section 5.24 |
Related Party Transactions |
C-52 | ||||
Section 5.25 |
Proxy Statement |
C-52 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE ALTIMAR PARTIES |
C-53 |
|||||
Section 6.01 |
Corporate Organization |
C-53 | ||||
Section 6.02 |
Due Authorization |
C-54 | ||||
Section 6.03 |
No Conflict |
C-55 | ||||
Section 6.04 |
Litigation and Proceedings |
C-55 | ||||
Section 6.05 |
Governmental Authorities; Consents |
C-55 | ||||
Section 6.06 |
Compliance with Laws |
C-56 | ||||
Section 6.07 |
Financial Ability; Trust Account |
C-57 | ||||
Section 6.08 |
Brokers’ Fees |
C-57 | ||||
Section 6.09 |
SEC Reports; Financial Statements; Sarbanes-Oxley Act; Undisclosed Liabilities |
C-57 | ||||
Section 6.10 |
Business Activities |
C-58 |
Page |
||||||
Section 6.11 |
Employee Benefit Plans; Employees |
C-59 | ||||
Section 6.12 |
Tax Matters |
C-59 | ||||
Section 6.13 |
Capitalization |
C-60 | ||||
Section 6.14 |
Status of Other Altimar Parties |
C-60 | ||||
Section 6.15 |
NYSE Stock Market Listing |
C-61 | ||||
Section 6.16 |
PIPE Investment |
C-61 | ||||
Section 6.17 |
Sponsor Agreement |
C-62 | ||||
Section 6.18 |
Contracts; No Defaults; Affiliate Agreements |
C-62 | ||||
Section 6.19 |
Title to Property |
C-62 | ||||
Section 6.20 |
Investment Company Act |
C-62 | ||||
Section 6.21 |
Altimar Stockholders |
C-62 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE FATHOM BLOCKERS |
C-63 |
|||||
Section 7.01 |
Organization |
C-63 | ||||
Section 7.02 |
Authorization |
C-63 | ||||
Section 7.03 |
No Conflict |
C-63 | ||||
Section 7.04 |
Governmental Authorities; Consents |
C-64 | ||||
Section 7.05 |
Capitalization |
C-64 | ||||
Section 7.06 |
Holding Company; Ownership |
C-64 | ||||
Section 7.07 |
Litigation and Proceedings |
C-65 | ||||
Section 7.08 |
Brokers’ Fees |
C-65 | ||||
Section 7.09 |
Related Party Transactions |
C-65 | ||||
Section 7.10 |
Proxy Statement |
C-65 | ||||
Section 7.11 |
Taxes |
C-65 | ||||
ARTICLE VIII COVENANTS OF FATHOM AND ITS SUBSIDIARIES AND THE FATHOM BLOCKERS |
C-67 |
|||||
Section 8.01 |
Conduct of Business |
C-67 | ||||
Section 8.02 |
Inspection |
C-70 | ||||
Section 8.03 |
No Claim Against the Trust Account |
C-70 | ||||
Section 8.04 |
Proxy Solicitation; Consent Solicitation; Other Actions |
C-71 | ||||
Section 8.05 |
Equityholder Notices; Information Statement |
C-71 | ||||
Section 8.06 |
Termination of Affiliate Transactions |
C-71 | ||||
Section 8.07 |
Non-Solicitation by Fathom |
C-72 | ||||
Section 8.08 |
PCAOB Audited Financials and Interim Financials |
C-72 |
Page |
||||||
ARTICLE IX COVENANTS OF ALTIMAR |
C-72 |
|||||
Section 9.01 |
Indemnification and Insurance |
C-72 | ||||
Section 9.02 |
Conduct of Altimar During the Interim Period |
C-73 | ||||
Section 9.03 |
PIPE Investment |
C-75 | ||||
Section 9.04 |
[Intentionally Omitted] |
C-76 | ||||
Section 9.05 |
Inspection |
C-76 | ||||
Section 9.06 |
Altimar NYSE Listing |
C-76 | ||||
Section 9.07 |
Altimar Public Filings |
C-76 | ||||
Section 9.08 |
Section 16 Matters |
C-76 | ||||
Section 9.09 |
Omnibus Incentive Plan |
C-76 | ||||
Section 9.10 |
Qualification as an Emerging Growth Company |
C-76 | ||||
Section 9.11 |
Non-Solicitation by Altimar |
C-76 | ||||
Section 9.12 |
Altimar Change in Recommendation |
C-77 | ||||
Section 9.13 |
Acquiror Name |
C-77 | ||||
ARTICLE X JOINT COVENANTS |
C-77 |
|||||
Section 10.01 |
Regulatory Approvals |
C-77 | ||||
Section 10.02 |
Support of Transaction |
C-81 | ||||
Section 10.03 |
Preparation of Form S-4 and Proxy Statement/Consent Solicitation Statement/Prospectus; Altimar Special Meeting |
C-81 | ||||
Section 10.04 |
Tax Matters |
C-83 | ||||
Section 10.05 |
Confidentiality; Publicity |
C-85 | ||||
Section 10.06 |
Transaction Agreements |
C-86 | ||||
Section 10.07 |
Company Board of Directors; Post-Closing Officers |
C-86 | ||||
Section 10.08 |
Financing Cooperation |
C-87 | ||||
Section 10.09 |
Transaction Litigation |
C-87 | ||||
ARTICLE XI CONDITIONS TO OBLIGATIONS |
C-88 |
|||||
Section 11.01 |
Conditions to Obligations of All Parties |
C-88 | ||||
Section 11.02 |
Additional Conditions to Obligations of the Altimar Parties |
C-88 | ||||
Section 11.03 |
Additional Conditions to the Obligations of Fathom and the Fathom Blockers |
C-89 | ||||
Section 11.04 |
Frustration of Conditions |
C-90 | ||||
ARTICLE XII TERMINATION/EFFECTIVENESS |
C-91 |
|||||
Section 12.01 |
Termination |
C-91 | ||||
Section 12.02 |
Effect of Termination |
C-91 |
Page |
||||||
ARTICLE XIII MISCELLANEOUS |
C-92 |
|||||
Section 13.01 |
Waiver |
C-92 | ||||
Section 13.02 |
Notices |
C-92 | ||||
Section 13.03 |
Assignment |
C-93 | ||||
Section 13.04 |
Rights of Third Parties |
C-93 | ||||
Section 13.05 |
Expenses |
C-94 | ||||
Section 13.06 |
Governing Law |
C-94 | ||||
Section 13.07 |
Captions; Counterparts |
C-94 | ||||
Section 13.08 |
Schedules and Exhibits |
C-94 | ||||
Section 13.09 |
Entire Agreement |
C-94 | ||||
Section 13.10 |
Amendments |
C-95 | ||||
Section 13.11 |
Severability |
C-95 | ||||
Section 13.12 |
Jurisdiction; WAIVER OF TRIAL BY JURY |
C-95 | ||||
Section 13.13 |
Enforcement |
C-95 | ||||
Section 13.14 |
Non-Recourse |
C-96 | ||||
Section 13.15 |
Nonsurvival of Representations, Warranties and Covenants |
C-96 | ||||
Section 13.16 |
Acknowledgements |
C-96 |
EXHIBITS | ||
Exhibit A | – Form of Altimar Charter | |
Exhibit B | – Form of Altimar Bylaws | |
Exhibit C | – Form of Investor Rights Agreement | |
Exhibit D | – Form of Registration Rights Agreement | |
Exhibit E | – Form of Tax Receivable Agreement | |
Exhibit F | – Allocation Schedule | |
Exhibit G | – Form of Fathom Operating Agreement | |
Exhibit H | – Form of Omnibus Incentive Plan |
ALTIMAR ACQUISITION CORP. II | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer | |
RAPID MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer | |
RAPID BLOCKER 1 MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer |
RAPID BLOCKER 2 MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer | |
RAPID BLOCKER 3 MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer |
FATHOM HOLDCO, LLC | ||
By: | /s/ John May | |
Name: | John May | |
Title: | President |
CORE FUND I BLOCKER-5 LLC | ||
By: | /s/ John May | |
Name: | John May | |
Title: | Managing Partner | |
CORE FUND I BLOCKER-2 LLC | ||
By: | /s/ John May | |
Name: | John May | |
Title: | Managing Partner |
SG (MCT) BLOCKER, LLC | ||
By: | /s/ Joshua Posner | |
Name: | Joshua Posner | |
Title: | Authorized Signatory |
/s/ Tom Wasserman |
Tom Wasserman |
Sole Incorporator |
ARTICLE I. INTRODUCTORY MATTERS | C-142 | |||||
1.1 | Defined Terms |
C-142 | ||||
1.2 | Construction |
C-146 | ||||
ARTICLE II. CORPORATE GOVERNANCE MATTERS | C-146 | |||||
2.1 | Initial Board Composition; Classified Board |
C-146 | ||||
2.2 | Election of Directors |
C-146 | ||||
2.3 | Company Obligations |
C-148 | ||||
2.4 | Compensation |
C-149 | ||||
2.5 | Other Rights of CORE Nominees |
C-149 | ||||
2.6 | Director Independence |
C-149 | ||||
ARTICLE III. ADDITIONAL COVENANTS | C-149 | |||||
3.1 | Pledges or Transfers |
C-149 | ||||
3.2 | Reserved |
C-150 | ||||
3.3 | Lock-Up; Vesting; Transfer Restrictions and Requirements |
C-150 | ||||
ARTICLE IV. GENERAL PROVISIONS | C-151 | |||||
4.1 | Notices |
C-151 | ||||
4.2 | Amendment; Waiver |
C-151 | ||||
4.3 | Further Assurances |
C-152 | ||||
4.4 | Assignment; Affiliated Transferees |
C-152 | ||||
4.5 | Third Parties |
C-152 | ||||
4.6 | Governing Law |
C-152 | ||||
4.7 | Jurisdiction; Waiver of Jury Trial |
C-152 | ||||
4.8 | Specific Performance |
C-153 | ||||
4.9 | Entire Agreement |
C-153 | ||||
4.10 | Severability |
C-153 | ||||
4.11 | Table of Contents, Headings and Captions |
C-153 | ||||
4.12 | Grant of Consent |
C-153 | ||||
4.13 | Counterparts |
C-153 | ||||
4.14 | Effectiveness |
C-153 | ||||
4.15 | No Recourse |
C-153 | ||||
4.16 | Obligations are Several |
C-154 | ||||
4.17 | Provisions Respecting Representation of Fathom |
C-154 |
COMPANY: | ||
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: | ||
Name: | ||
Title: |
EXISTING INVESTORS: | ||
CORE INDUSTRIAL PARTNERS FUND I, L.P. | ||
By: | ||
Name: | ||
Title: |
CORE INDUSTRIAL PARTNERS FUND I PARALLEL, L.P. | ||
By: | ||
Name: | ||
Title: |
EXISTING INVESTORS (continued): | ||
[ ] | ||
By: | ||
Name: | ||
Title: |
[ ] | ||
By: | ||
Name: | ||
Title: |
COMPANY: | ||
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: | ||
Name: | ||
Title: |
EXISTING INVESTORS: | ||
CORE INDUSTRIAL PARTNERS FUND I, L.P. | ||
By: | ||
Name: | ||
Title: |
CORE INDUSTRIAL PARTNERS FUND I PARALLEL, L.P. | ||
By: | ||
Name: | ||
Title: |
EXISTING INVESTORS (continued): | ||
[ ] | ||
By: | ||
Name: | ||
Title: |
[ ] | ||
By: | ||
Name: | ||
Title: |
SPONSOR INVESTORS: | ||
[ ] | ||
By: | ||
Name: | ||
Title: |
[ ] | ||
By: | ||
Name: | ||
Title: |
ARTICLE I. DEFINITIONS |
C-186 |
|||||
Section 1.1. |
Definitions | C-186 | ||||
Section 1.2. |
Rules of Construction | C-194 | ||||
ARTICLE II. DETERMINATION OF REALIZED TAX BENEFIT |
C-195 | |||||
Section 2.1. |
Attribute Schedule | C-195 | ||||
Section 2.2. |
Tax Benefit Schedule | C-195 | ||||
Section 2.3. |
Procedures, Amendments | C-196 | ||||
ARTICLE III. TAX BENEFIT PAYMENTS |
C-197 | |||||
Section 3.1. |
Timing and Amount of Tax Benefit Payments | C-197 | ||||
Section 3.2. |
No Duplicative Payments | C-197 | ||||
Section 3.3. |
Pro Rata Payments | C-198 | ||||
Section 3.4. |
Withholding | C-198 | ||||
ARTICLE IV. TERMINATION |
C-199 | |||||
Section 4.1. |
Early Termination of Agreement; Breach of Agreement | C-199 | ||||
Section 4.2. |
Early Termination Notice | C-199 | ||||
Section 4.3. |
Payment upon Early Termination | C-200 | ||||
ARTICLE V. SUBORDINATION; CERTAIN TAX COVENANTS; LATE PAYMENTS |
C-200 | |||||
Section 5.1. |
Subordination | C-200 | ||||
Section 5.2. |
Certain Tax Covenants | C-201 | ||||
Section 5.3. |
Late Payments by the Corporation | C-201 | ||||
ARTICLE VI. TAX MATTERS; CONSISTENCY; COOPERATION |
C-201 | |||||
Section 6.1. |
Participation in the Corporation’s and the Company’s Tax Matters | C-201 | ||||
Section 6.2. |
Reconciliation | C-202 | ||||
Section 6.3. |
Consistency | C-202 | ||||
Section 6.4. |
Cooperation | C-202 | ||||
Section 6.5. |
Tax Characterization and Elections | C-203 | ||||
Section 6.6. |
Change in Tax Law | C-203 | ||||
ARTICLE VII. MISCELLANEOUS |
C-203 | |||||
Section 7.1. |
Notices | C-203 | ||||
Section 7.2. |
Counterparts | C-204 | ||||
Section 7.3. |
Entire Agreement; No Third Party Beneficiaries | C-204 | ||||
Section 7.4. |
Governing Law | C-204 | ||||
Section 7.5. |
Severability | C-204 |
Section 7.6. |
Assignments; Amendments; Successors; No Waiver | C-204 |
||||
Section 7.7. |
Titles and Subtitles | C-205 | ||||
Section 7.8. |
Resolution of Disputes | C-205 | ||||
Section 7.9. |
Waiver of Jury Trial | C-206 | ||||
Section 7.10. |
Confidentiality | C-206 | ||||
Section 7.11. |
Interest Rate Limitation | C-207 | ||||
Section 7.12. |
Independent Nature of Rights and Obligations | C-207 |
Annex A |
— | Exchange TRA Parties | ||||
Annex B |
— | Blocker TRA Parties | ||||
Exhibit A |
— | Form of Joinder Agreement 1 |
1 |
Form of Joinder Agreement to come. |
(i) | any net operating loss, capital loss, disallowed interest expense under Section 163(j) of the Code, or tax credit of any Blocker that has accrued or otherwise relates to taxable periods (or portions thereof) beginning prior to the Closing Date (including, for the avoidance of doubt, any transaction tax deductions to the extent resulting in a net operating loss), provided, that, in the case of a taxable period of a Blocker beginning on or prior to the Closing Date and ending after the Closing Date (a “ Blocker Straddle Period ”), the attributes of such Blocker that are treated as accruing or otherwise relating to a taxable period (or portion thereof) beginning prior to the Closing Date shall for purposes of this Agreement be calculated based on an interim closing of the books as of the close of the Closing Date (and for such purpose, the taxable period of any partnership or other passthrough entity in which such Blocker owns a beneficial interest shall be deemed to terminate at such time), except that the amount of exemptions, allowances or deductions that are calculated on an annual basis, such as the deduction for depreciation, with respect to such Blocker Straddle Period for property placed into service prior to the Closing Date shall be treated as apportioned on a daily basis; |
(ii) | BCA Basis attributable to a Blocker TRA Party; |
(iii) | Blocker Party Basis Adjustments; and |
(iv) | Imputed Interest reasonably determined to be allocable to payments pursuant to this Agreement arising from the items described in clause (i), (ii) and (iii) of this definition. |
(i) | any Person, or group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act (as defined in the Company LLC Agreement), or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing more than 50% of the combined voting power of the Corporation’s then-outstanding voting securities (other than a group formed pursuant to the Investor Rights Agreement); |
(ii) | there is consummated a merger, consolidation or similar business transaction involving the Corporation with any other Person or Persons, and, either (a) the Board immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (b) immediately after the consummation of such transaction, the voting securities of the Corporation immediately prior to such transaction do not continue to represent or are not converted into more than 50% of the combined voting power of the then- outstanding voting securities of the Person resulting from such transaction or, if the surviving company is a subsidiary, the ultimate parent thereof; or |
(iii) | the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporation of all or substantially all of the Corporation’s assets (including a sale of assets of the Company), other than such sale or other disposition by the Corporation of all or substantially all of the Corporation’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale. |
(i) | BCA Basis attributable to an Exchange TRA Party and Exchange Basis; |
(ii) | Exchange Party Basis Adjustments; and |
(iii) | Imputed Interest reasonably determined to be allocable to payments pursuant to this Agreement arising from the items described in clause (i) and (ii) of this definition. |
2 |
Note to Draft : To include non-Blocker TRA parties. |
(i) | in each Taxable Year ending on or after such Early Termination Date, the Corporation will have taxable income sufficient to fully use the Blocker Pre-BCA Covered Tax Assets and the Exchange Covered Tax Assets (other than any such Blocker Pre-BCA Covered Tax Assets or Exchange Covered Tax Assets that constitute or have resulted in net operating losses, disallowed interest expense carryforwards, or credit carryforwards or carryovers (determined as of the Early Termination Date), which shall be governed by paragraph (iv) below) during such Taxable Year or future Taxable Years in which such deductions or other attributes would become available; |
(ii) | the U.S. federal income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code as in effect on the Early Termination Date, except to the extent any change to such tax rates for such Taxable Year have already been enacted into law; |
(iii) | all taxable income of the Corporation will be subject to the maximum applicable Tax rate for U.S. federal income Tax purposes throughout the relevant period, and the Tax rate for U.S. state and local income Taxes shall be the Assumed State and Local Tax Rate as in effect for the Taxable Year of the Early Termination Date; |
(iv) | any net operating loss, excess interest deduction, or credit carryovers or carrybacks (or similar items with respect to carryovers or carrybacks) generated by any Blocker Pre-BCA Covered Tax Asset or Exchange Covered Tax Asset and available as of the Early Termination Date will be used by the Corporation on a pro rata |
(v) | any non-amortizable, non-depreciable assets (including the stock in any Subsidiary treated as a corporation for Tax purposes) will be disposed of in a fully taxable transaction for an amount sufficient to fully utilize the adjusted basis for such assets, including any adjustments attributable to such assets under Sections 734 and 743 of the Code (and, in each case, the comparable sections of U.S. state and local Tax law), and for the avoidance of doubt including Exchange Party Basis Adjustments and Blocker Party Basis Adjustments, on the fifteenth anniversary of the later of (i) the applicable Exchange giving rise to an Exchange Party Basis Adjustment with respect to such assets and (ii) the Early Termination Date; provided, that in the event of a Change of Control that includes the sale of such asset (or the sale of equity interests in a partnership or disregarded entity for U.S. federal income tax purposes that directly or indirectly owns such asset), such non- amortizable, non-depreciable assets shall be disposed of at the time of the direct or indirect sale of the relevant asset in such Change of Control (if earlier than such fifteenth anniversary) for such price; |
(vi) | if, on the Early Termination Date, any Exchange TRA Party has Company Units that have not been Exchanged, then such Company Units shall be deemed to be Exchanged for the Market Value that would be received by such Exchange TRA Party if such Units had been Exchanged on the Early Termination Date, and such Exchange TRA Party shall be deemed to receive the amount of cash such Exchange TRA Party would have been entitled to pursuant to Section 4.3(a) had such Company Units actually been Exchanged on the Early Termination Date; and |
(vii) | any payment obligations pursuant to this Agreement will be satisfied on the date that any Tax Return to which such payment obligation relates is required to be filed excluding any extensions. |
CORPORATION: | ||||
FATHOM DIGITAL MANUFACTURING CORPORATION | ||||
By: | ||||
Name: |
||||
Title: |
||||
COMPANY: | ||||
FATHOM HOLDCO, LLC | ||||
By: | ||||
Name: |
||||
Title: |
||||
[[BLOCKER TRA PARTIES] | ||||
By: | ||||
Name: |
||||
Title: |
||||
[[EXCHANGE TRA PARTIES] | ||||
By: | ||||
Name: |
||||
Title: |
||||
TRA PARTY REPRESENTATIVE | ||||
CORE INDUSTRIAL PARTNERS MANAGEMENT LP | ||||
By: | ||||
Name: |
||||
Title: |
Page |
||||||
Article I DEFINITIONS |
C-213 |
|||||
Section 1.01. |
Definitions | C-213 | ||||
Article II FORMATION, TERM, PURPOSE AND POWERS |
C-222 | |||||
Section 2.01. |
Formation | C-222 | ||||
Section 2.02. |
Name | C-222 | ||||
Section 2.03. |
Term | C-223 | ||||
Section 2.04. |
Offices | C-223 | ||||
Section 2.05. |
Agent for Service of Process; Existence and Good Standing; Foreign Qualification | C-223 | ||||
Section 2.06. |
Business Purpose | C-223 | ||||
Section 2.07. |
Powers of the Company | C-223 | ||||
Section 2.08. |
Members; Reclassification; Admission of New Members | C-223 | ||||
Section 2.09. |
Resignation | C-224 | ||||
Section 2.10. |
Investment Representations of Members | C-224 | ||||
Section 2.11. |
Intent | C-224 | ||||
Article III MANAGEMENT |
C-224 | |||||
Section 3.01. |
Managing Member | C-224 | ||||
Section 3.02. |
Compensation | C-225 | ||||
Section 3.03. |
Expenses | C-225 | ||||
Section 3.04. |
Officers | C-225 | ||||
Section 3.05. |
Authority of Members | C-226 | ||||
Section 3.06. |
Fiduciary Duties | C-226 | ||||
Article IV DISTRIBUTIONS |
C-226 | |||||
Section 4.01. |
Distributions | C-226 | ||||
Section 4.02. |
Liquidation Distribution | C-228 | ||||
Section 4.03. |
Limitations on Distribution | C-228 | ||||
Article V CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; TAX ALLOCATIONS; TAX MATTERS |
C-228 | |||||
Section 5.01. |
Initial Capital Contributions | C-228 | ||||
Section 5.02. |
No Additional Capital Contributions | C-228 | ||||
Section 5.03. |
Capital Accounts | C-228 | ||||
Section 5.04. |
Allocations of Profits and Losses | C-228 | ||||
Section 5.05. |
Special Allocations | C-229 | ||||
Section 5.06. |
Tax Allocations | C-230 | ||||
Section 5.07. |
Tax Advances | C-230 | ||||
Section 5.08. |
Tax Matters | C-230 | ||||
Section 5.09. |
Other Allocation Provisions | C-230 | ||||
Article VI BOOKS AND RECORDS; REPORTS |
C-231 | |||||
Section 6.01. |
Books and Records | C-231 | ||||
Article VII COMPANY UNITS |
C-232 | |||||
Section 7.01. |
Units | C-232 | ||||
Section 7.02. |
Register; Certificates; Legends | C-236 | ||||
Section 7.03. |
Registered Members | C-236 | ||||
Section 7.04. |
Reclassification Events of Pubco | C-236 | ||||
Article VIII FORFEITURE OF UNITS; EXCHANGES; TRANSFER RESTRICTIONS |
C-237 | |||||
Section 8.01. |
[Reserved.] | C-237 | ||||
Section 8.02. |
[Reserved.] | C-237 |
Page |
||||||
Section 8.03. |
Member Transfers | C-237 | ||||
Section 8.04. |
Class A Exchanges | C-237 | ||||
Section 8.05. |
[Reserved] | C-241 | ||||
Section 8.06. |
Further Restrictions | C-241 | ||||
Section 8.07. |
Rights of Assignees | C-241 | ||||
Section 8.08. |
Admissions, Resignations and Removals | C-242 | ||||
Section 8.09. |
Admission of Assignees as Substitute Members | C-242 | ||||
Section 8.10. |
Resignation and Removal of Members | C-242 | ||||
Article IX DISSOLUTION, LIQUIDATION AND TERMINATION |
C-242 | |||||
Section 9.01. |
No Dissolution | C-242 | ||||
Section 9.02. |
Events Causing Dissolution | C-243 | ||||
Section 9.03. |
Distribution upon Dissolution | C-243 | ||||
Section 9.04. |
Time for Liquidation | C-243 | ||||
Section 9.05. |
Termination | C-244 | ||||
Section 9.06. |
Claims of the Members | C-244 | ||||
Section 9.07. |
Survival of Certain Provisions | C-244 | ||||
Article X LIABILITY AND INDEMNIFICATION |
C-244 | |||||
Section 10.01. |
Liability of Members | C-244 | ||||
Section 10.02. |
Indemnification | C-245 | ||||
Article XI MISCELLANEOUS |
C-247 | |||||
Section 11.01. |
Severability | C-247 | ||||
Section 11.02. |
Notices | C-247 | ||||
Section 11.03. |
Cumulative Remedies | C-248 | ||||
Section 11.04. |
Binding Effect | C-248 | ||||
Section 11.05. |
Interpretation | C-248 | ||||
Section 11.06. |
Counterparts | C-248 | ||||
Section 11.07. |
Further Assurances | C-248 | ||||
Section 11.08. |
Entire Agreement | C-248 | ||||
Section 11.09. |
Governing Law | C-249 | ||||
Section 11.10. |
Submission to Jurisdiction; Waiver of Jury Trial | C-249 | ||||
Section 11.11. |
Expenses | C-250 | ||||
Section 11.12. |
Amendments and Waivers | C-250 | ||||
Section 11.13. |
No Third Party Beneficiaries | C-251 | ||||
Section 11.14. |
Headings | C-251 | ||||
Section 11.15. |
Power of Attorney | C-251 | ||||
Section 11.16. |
Partnership Status | C-251 | ||||
Section 11.17. |
Delivery by Facsimile or Email | C-252 |
2 |
Note to Draft: The aggregate number of Tier 1 Earnout Units and Tier 1 Earnout Shares (as defined in the Investor Rights Agreement) will be 3,000,000, the aggregate number of Tier 2 Earnout Units and Tier 2 Earnout Shares (as defined in the Investor Rights Agreement) will be 3,000,000 and the aggregate number of Tier 3 Earnout Units and Tier 3 Earnout Shares (as defined in the Investor Rights Agreement) will be 3,000,000. |
(g) |
COMPANY: | ||
FATHOM HOLDCO, LLC | ||
By: | ||
Name: |
||
Title: |
MANAGING MEMBER: | ||
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: | ||
Name: |
||
Title: |
||
CONTINUING MEMBERS: | ||
[ ] [ ] |
ALTIMAR ACQUISITION CORP. II | ||
By: | /s/ Tom Wasserman | |
Name: |
Tom Wasserman | |
Title: | Chief Executive Officer | |
RAPID MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II | ||
Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: |
Tom Wasserman | |
Title: | Chief Executive Officer | |
RAPID BLOCKER 1 MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II | ||
Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer |
RAPID BLOCKER 2 MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II | ||
Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer | |
RAPID BLOCKER 3 MERGER SUB, LLC | ||
By: ALTIMAR ACQUISITION CORP. II | ||
Its Sole Member | ||
By: | /s/ Tom Wasserman | |
Name: | Tom Wasserman | |
Title: | Chief Executive Officer |
FATHOM HOLDCO, LLC | ||
By: | /s/ John May | |
Name: | John May | |
Title: | President |
CORE FUND I BLOCKER-5 LLC | ||
By: | /s/ John May | |
Name: | John May | |
Title: | Managing Partner | |
CORE FUND I BLOCKER-2 LLC | ||
By: | /s/ John May | |
Name: | John May | |
Title: | Managing Partner |
SG (MCT) BLOCKER, LLC | ||
By: | /s/ Joshua Posner | |
Name: |
Joshua Posner | |
Title: | Authorized Signatory |
1. | TJ Chung (Chair) |
2. | Ryan Martin |
3. | John May |
4. | Carey Chen |
5. | Bob Nardelli |
6. | Peter Leemputte |
7. | Caralynn Collens |
8. | Maria Green |
9. | David Fisher |
10. | Adam DeWitt |
ARTICLE I. INTRODUCTORY MATTERS |
C-289 | |||||||
1.1 | Defined Terms | C-289 | ||||||
1.2 | Construction | C-293 | ||||||
ARTICLE II. CORPORATE GOVERNANCE MATTERS |
C-293 | |||||||
2.1 | Initial Board Composition; Classified Board | C-293 | ||||||
2.2 | Election of Directors | C-293 | ||||||
2.3 | Company Obligations | C-295 | ||||||
2.4 | Compensation | C-296 | ||||||
2.5 | Other Rights of CORE Nominees | C-296 | ||||||
2.6 | Director Independence | C-296 | ||||||
ARTICLE III. ADDITIONAL COVENANTS |
C-296 | |||||||
3.1 | Pledges or Transfers | C-296 | ||||||
3.2 | Reserved | C-297 | ||||||
3.3 | Lock-Up; Vesting; Transfer Restrictions and Requirements |
C-297 | ||||||
ARTICLE IV. GENERAL PROVISIONS |
C-298 | |||||||
4.1 | Notices | C-298 | ||||||
4.2 | Amendment; Waiver | C-298 | ||||||
4.3 | Further Assurances | C-299 | ||||||
4.4 | Assignment; Affiliated Transferees | C-299 | ||||||
4.5 | Third Parties | C-299 | ||||||
4.6 | Governing Law | C-299 | ||||||
4.7 | Jurisdiction; Waiver of Jury Trial | C-299 | ||||||
4.8 | Specific Performance | C-300 | ||||||
4.9 | Entire Agreement | C-300 | ||||||
4.10 | Severability | C-300 | ||||||
4.11 | Table of Contents, Headings and Captions | C-300 | ||||||
4.12 | Grant of Consent | C-300 | ||||||
4.13 | Counterparts | C-300 | ||||||
4.14 | Effectiveness | C-300 | ||||||
4.15 | No Recourse | C-300 | ||||||
4.16 | Obligations are Several | C-301 | ||||||
4.17 | Provisions Respecting Representation of Fathom | C-301 |
COMPANY: | ||
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: |
||
Name: |
||
Title: |
EXISTING INVESTORS: | ||
CORE INDUSTRIAL PARTNERS FUND I, L.P. | ||
By: |
||
Name: |
||
Title: |
CORE INDUSTRIAL PARTNERS FUND I PARALLEL, L.P. | ||
By: |
||
Name: |
||
Title: |
EXISTING INVESTORS (continued): | ||
[ ] | ||
By: |
||
Name: |
||
Title: |
[ ] | ||
By: |
||
Name: |
||
Title: |
COMPANY: | ||
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: |
||
Name: | ||
Title: | ||
EXISTING INVESTORS: | ||
CORE INDUSTRIAL PARTNERS FUND I, L.P. | ||
By: |
||
Name: | ||
Title: | ||
CORE INDUSTRIAL PARTNERS FUND I PARALLEL, L.P. | ||
By: |
||
Name: | ||
Title: |
EXISTING INVESTORS (continued): | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
SPONSOR INVESTORS | ||
ALTIMAR SPONSOR II, LLC | ||
By: | ||
Name: | ||
Title: | ||
EQUITYHOLDER | ||
By: | ||
Name: Kevin Beebe | ||
EQUITYHOLDER | ||
By: | ||
Name: Payne Brown | ||
EQUITYHOLDER | ||
By: | ||
Name: Rick Jelinek | ||
EQUITYHOLDER | ||
By: | ||
Name: Roma Khanna | ||
EQUITYHOLDER | ||
By: | ||
Name: Michael Rubenstein | ||
EQUITYHOLDER | ||
By: | ||
Name: Vijay Sondhi | ||
EQUITYHOLDER | ||
By: | ||
Name: Michael Vorhaus |
ARTICLE I. DEFINITIONS |
C-334 | |||||
Section 1.1. |
Definitions |
C-334 | ||||
Section 1.2. |
Rules of Construction |
C-342 | ||||
ARTICLE II. DETERMINATION OF REALIZED TAX BENEFIT |
C-343 | |||||
Section 2.1. |
Attribute Schedule |
C-343 | ||||
Section 2.2. |
Tax Benefit Schedule |
C-344 | ||||
Section 2.3. |
Procedures, Amendments |
C-344 | ||||
ARTICLE III. TAX BENEFIT PAYMENTS |
C-345 | |||||
Section 3.1. |
Timing and Amount of Tax Benefit Payments |
C-345 | ||||
Section 3.2. |
No Duplicative Payments |
C-346 | ||||
Section 3.3. |
Pro Rata Payments |
C-346 | ||||
Section 3.4. |
Withholding |
C-346 | ||||
ARTICLE IV. TERMINATION |
C-347 | |||||
Section 4.1. |
Early Termination of Agreement; Breach of Agreement |
C-347 | ||||
Section 4.2. |
Early Termination Notice |
C-348 | ||||
Section 4.3. |
Payment upon Early Termination |
C-348 | ||||
ARTICLE V. SUBORDINATION; CERTAIN TAX COVENANTS; LATE PAYMENTS |
C-348 | |||||
Section 5.1. |
Subordination |
C-348 | ||||
Section 5.2. |
Certain Tax Covenants |
C-349 | ||||
Section 5.3. |
Late Payments by the Corporation |
C-349 | ||||
ARTICLE VI. TAX MATTERS; CONSISTENCY; COOPERATION | C-350 | |||||
Section 6.1. |
Participation in the Corporation’s and the Company’s Tax Matters |
C-350 | ||||
Section 6.2. |
Reconciliation |
C-350 | ||||
Section 6.3. |
Consistency |
C-350 | ||||
Section 6.4. |
Cooperation |
C-351 | ||||
Section 6.5. |
Tax Characterization and Elections |
C-351 | ||||
Section 6.6. |
Change in Tax Law |
C-351 | ||||
ARTICLE VII. MISCELLANEOUS |
C-351 | |||||
Section 7.1. |
Notices |
C-351 | ||||
Section 7.2. |
Counterparts |
C-352 | ||||
Section 7.3. |
Entire Agreement; No Third Party Beneficiaries |
C-352 | ||||
Section 7.4. |
Governing Law |
C-352 | ||||
Section 7.5. |
Severability |
C-352 | ||||
Section 7.6. |
Assignments; Amendments; Successors; No Waiver |
C-353 | ||||
Section 7.7. |
Titles and Subtitles |
C-353 | ||||
Section 7.8. |
Resolution of Disputes |
C-353 | ||||
Section 7.9. |
Waiver of Jury Trial |
C-354 | ||||
Section 7.10. |
Confidentiality |
C-354 | ||||
Section 7.11. |
Interest Rate Limitation |
C-355 | ||||
Section 7.12. |
Independent Nature of Rights and Obligations |
C-355 |
1 |
Form of Joinder Agreement to come. |
(i) | any net operating loss, capital loss, disallowed interest expense under Section 163(j) of the Code, or tax credit of any Blocker that has accrued or otherwise relates to taxable periods (or portions thereof) beginning prior to the Closing Date (including, for the avoidance of doubt, any transaction tax deductions to the extent resulting in a net operating loss), provided, that, in the case of a taxable period of a Blocker beginning on or prior to the Closing Date and ending after the Closing Date (a “ Blocker Straddle Period ”), the attributes of such Blocker that are treated as accruing or otherwise relating to a taxable period (or portion thereof) beginning prior to the Closing Date shall for purposes of this Agreement be calculated based on an interim closing of the books as of the close of the Closing Date (and for such purpose, the taxable period of any partnership or other passthrough entity in which such Blocker owns a beneficial interest shall be deemed to terminate at such time), except that the amount of exemptions, allowances or deductions that are calculated on an annual basis, such as the deduction for depreciation, with respect to such Blocker Straddle Period for property placed into service prior to the Closing Date shall be treated as apportioned on a daily basis; |
(ii) | BCA Basis attributable to a Blocker TRA Party; |
(iii) | Blocker Party Basis Adjustments; and |
(iv) | Imputed Interest reasonably determined to be allocable to payments pursuant to this Agreement arising from the items described in clause (i), (ii) and (iii) of this definition. |
(i) | any Person, or group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act (as defined in the Company LLC Agreement), or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing more than 50% of the combined voting power of the Corporation’s then-outstanding voting securities (other than a group formed pursuant to the Investor Rights Agreement); |
(ii) | there is consummated a merger, consolidation or similar business transaction involving the Corporation with any other Person or Persons, and, either (a) the Board immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (b) immediately after the consummation of such transaction, the voting securities of the Corporation immediately prior to such transaction do not continue to represent or are not converted into more than 50% of the combined voting power of the then-outstanding voting securities of the Person resulting from such transaction or, if the surviving company is a subsidiary, the ultimate parent thereof; or |
(iii) | the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporation of all or substantially all of the Corporation’s assets (including a sale of assets of the Company), other than such sale or other disposition by the Corporation of all or substantially all of the Corporation’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale. |
(i) | BCA Basis attributable to an Exchange TRA Party and Exchange Basis; |
(ii) | Exchange Party Basis Adjustments; and |
(iii) | Imputed Interest reasonably determined to be allocable to payments pursuant to this Agreement arising from the items described in clause (i) and (ii) of this definition. |
2 |
Note to Draft : To include non-Blocker TRA parties. |
(i) | in each Taxable Year ending on or after such Early Termination Date, the Corporation will have taxable income sufficient to fully use the Blocker Pre-BCA Covered Tax Assets and the Exchange Covered Tax Assets (other than any such Blocker Pre-BCA Covered Tax Assets or Exchange Covered Tax Assets that constitute or have resulted in net operating losses, disallowed interest expense carryforwards, or credit carryforwards or carryovers (determined as of the Early Termination Date), which shall be governed by paragraph (iv) below) during such Taxable Year or future Taxable Years in which such deductions or other attributes would become available; |
(ii) | the U.S. federal income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code as in effect on the Early Termination Date, except to the extent any change to such tax rates for such Taxable Year have already been enacted into law; |
(iii) | all taxable income of the Corporation will be subject to the maximum applicable Tax rate for U.S. federal income Tax purposes throughout the relevant period, and the Tax rate for U.S. state and local income Taxes shall be the Assumed State and Local Tax Rate as in effect for the Taxable Year of the Early Termination Date; |
(iv) | any net operating loss, excess interest deduction, or credit carryovers or carrybacks (or similar items with respect to carryovers or carrybacks) generated by any Blocker Pre-BCA Covered Tax Asset or Exchange Covered Tax Asset and available as of the Early Termination Date will be used by the Corporation on a pro rata |
(v) | any non-amortizable, non-depreciable assets (including the stock in any Subsidiary treated as a corporation for Tax purposes) will be disposed of in a fully taxable transaction for an amount sufficient to fully utilize the adjusted basis for such assets, including any adjustments attributable to such assets under Sections 734 and 743 of the Code (and, in each case, the comparable sections of U.S. state and local Tax law), and for the avoidance of doubt including Exchange Party Basis Adjustments and Blocker Party Basis Adjustments, on the fifteenth anniversary of the later of (i) the applicable Exchange giving rise to an Exchange Party Basis Adjustment with respect to such assets and (ii) the Early Termination Date; provided, that in the event of a Change of Control that includes the sale of such asset (or the sale of equity interests in a partnership or disregarded entity for U.S. federal income tax purposes that directly or indirectly owns such asset), such non-amortizable, non-depreciable assets shall be disposed of at the time of the direct or indirect sale of the relevant asset in such Change of Control (if earlier than such fifteenth anniversary) for such price; |
(vi) | if, on the Early Termination Date, any Exchange TRA Party has Company Units that have not been Exchanged, then such Company Units shall be deemed to be Exchanged for the Market Value that would be received by such Exchange TRA Party if such Units had been Exchanged on the Early Termination Date, and such Exchange TRA Party shall be deemed to receive the amount of cash such Exchange TRA Party would have been entitled to pursuant to Section 4.3(a) had such Company Units actually been Exchanged on the Early Termination Date; and |
(vii) | any payment obligations pursuant to this Agreement will be satisfied on the date that any Tax Return to which such payment obligation relates is required to be filed excluding any extensions. |
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: | | |
Name: | ||
Title: |
FATHOM HOLDCO, LLC | ||
By: | | |
Name: | ||
Title: |
By: | | |
Name: | ||
Title: |
By: | | |
Name: | ||
Title: |
CORE INDUSTRIAL PARTNERS MANAGEMENT LP | ||
By: | | |
Name: | ||
Title: |
ARTICLE I. DEFINITIONS |
D-4 | |||||
Section 1.1. |
Definitions | D-4 | ||||
Section 1.2. |
Rules of Construction | D-12 | ||||
ARTICLE II. DETERMINATION OF REALIZED TAX BENEFIT |
D-13 | |||||
Section 2.1. |
Attribute Schedule | D-13 | ||||
Section 2.2. |
Tax Benefit Schedule | D-14 | ||||
Section 2.3. |
Procedures, Amendments | D-14 | ||||
ARTICLE III. TAX BENEFIT PAYMENTS |
D-15 | |||||
Section 3.1. |
Timing and Amount of Tax Benefit Payments | D-15 | ||||
Section 3.2. |
No Duplicative Payments | D-16 | ||||
Section 3.3. |
Pro Rata Payments | D-16 | ||||
Section 3.4. |
Withholding | D-16 | ||||
ARTICLE IV. TERMINATION |
D-17 | |||||
Section 4.1. |
Early Termination of Agreement; Breach of Agreement | D-17 | ||||
Section 4.2. |
Early Termination Notice | D-18 | ||||
Section 4.3. |
Payment upon Early Termination | D-18 | ||||
ARTICLE V. SUBORDINATION; CERTAIN TAX COVENANTS; LATE PAYMENTS |
D-18 | |||||
Section 5.1. |
Subordination | D-18 | ||||
Section 5.2. |
Certain Tax Covenants | D-19 | ||||
Section 5.3. |
Late Payments by the Corporation | D-19 | ||||
ARTICLE VI. TAX MATTERS; CONSISTENCY; COOPERATION |
D-20 | |||||
Section 6.1. |
Participation in the Corporation’s and the Company’s Tax Matters | D-20 | ||||
Section 6.2. |
Reconciliation | D-20 | ||||
Section 6.3. |
Consistency | D-20 | ||||
Section 6.4. |
Cooperation | D-21 | ||||
Section 6.5. |
Tax Characterization and Elections | D-21 | ||||
Section 6.6. |
Change in Tax Law | D-21 | ||||
ARTICLE VII. MISCELLANEOUS |
D-21 | |||||
Section 7.1. |
Notices | D-21 | ||||
Section 7.2. |
Counterparts | D-22 | ||||
Section 7.3. |
Entire Agreement; No Third Party Beneficiaries | D-22 | ||||
Section 7.4. |
Governing Law | D-22 | ||||
Section 7.5. |
Severability | D-22 | ||||
Section 7.6. |
Assignments; Amendments; Successors; No Waiver | D-23 | ||||
Section 7.7. |
Titles and Subtitles | D-23 | ||||
Section 7.8. |
Resolution of Disputes | D-23 | ||||
Section 7.9. |
Waiver of Jury Trial | D-24 | ||||
Section 7.10. |
Confidentiality | D-24 | ||||
Section 7.11. |
Interest Rate Limitation | D-25 | ||||
Section 7.12. |
Independent Nature of Rights and Obligations | D-25 |
Annex A | - | Exchange TRA Parties | ||
Annex B | - | Blocker TRA Parties | ||
Exhibit A | - | Form of Joinder Agreement 1 |
1 |
Form of Joinder Agreement to come. |
(i) | any net operating loss, capital loss, disallowed interest expense under Section 163(j) of the Code, or tax credit of any Blocker that has accrued or otherwise relates to taxable periods (or portions thereof) beginning prior to the Closing Date (including, for the avoidance of doubt, any transaction tax deductions to the extent resulting in a net operating loss), provided, that, in the case of a taxable period of a Blocker beginning on or prior to the Closing Date and ending after the Closing Date (a “ Blocker Straddle Period ”), the attributes of such Blocker that are treated as accruing or otherwise relating to a taxable period (or portion thereof) beginning prior to the Closing Date shall for purposes of this Agreement be calculated based on an interim closing of the books as of the close of the Closing Date (and for such purpose, the taxable period of any partnership or other passthrough entity in which such Blocker owns a beneficial interest shall be deemed to terminate at such time), except that the amount of exemptions, allowances or deductions that are calculated on an annual basis, such as the deduction for depreciation, with respect to such Blocker Straddle Period for property placed into service prior to the Closing Date shall be treated as apportioned on a daily basis; |
(ii) | BCA Basis attributable to a Blocker TRA Party; |
(iii) | Blocker Party Basis Adjustments; and |
(iv) | Imputed Interest reasonably determined to be allocable to payments pursuant to this Agreement arising from the items described in clause (i), (ii) and (iii) of this definition. |
(i) | any Person, or group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act (as defined in the Company LLC Agreement), or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing more than 50% of the combined voting power of the Corporation’s then-outstanding voting securities (other than a group formed pursuant to the Investor Rights Agreement); |
(ii) | there is consummated a merger, consolidation or similar business transaction involving the Corporation with any other Person or Persons, and, either (a) the Board immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (b) immediately after the consummation of such transaction, the voting securities of the Corporation immediately prior to such transaction do not continue to represent or are not converted into more than 50% of the combined voting power of the then-outstanding voting securities of the Person resulting from such transaction or, if the surviving company is a subsidiary, the ultimate parent thereof; or |
(iii) | the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporation of all or substantially all of the Corporation’s assets (including a sale of assets of the Company), other than such sale or other disposition by the Corporation of all or substantially all of the Corporation’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale. |
(i) | BCA Basis attributable to an Exchange TRA Party and Exchange Basis; |
(ii) | Exchange Party Basis Adjustments; and |
(iii) | Imputed Interest reasonably determined to be allocable to payments pursuant to this Agreement arising from the items described in clause (i) and (ii) of this definition. |
2 |
Note to Draft : To include non-Blocker TRA parties. |
(i) | in each Taxable Year ending on or after such Early Termination Date, the Corporation will have taxable income sufficient to fully use the Blocker Pre-BCA Covered Tax Assets and the Exchange Covered Tax Assets (other than any such Blocker Pre-BCA Covered Tax Assets or Exchange Covered Tax Assets that constitute or have resulted in net operating losses, disallowed interest expense carryforwards, or credit carryforwards or carryovers (determined as of the Early Termination Date), which shall be governed by paragraph (iv) below) during such Taxable Year or future Taxable Years in which such deductions or other attributes would become available; |
(ii) | the U.S. federal income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code as in effect on the Early Termination Date, except to the extent any change to such tax rates for such Taxable Year have already been enacted into law; |
(iii) | all taxable income of the Corporation will be subject to the maximum applicable Tax rate for U.S. federal income Tax purposes throughout the relevant period, and the Tax rate for U.S. state and local income Taxes shall be the Assumed State and Local Tax Rate as in effect for the Taxable Year of the Early Termination Date; |
(iv) | any net operating loss, excess interest deduction, or credit carryovers or carrybacks (or similar items with respect to carryovers or carrybacks) generated by any Blocker Pre-BCA Covered Tax Asset or Exchange Covered Tax Asset and available as of the Early Termination Date will be used by the Corporation on a pro rata |
(v) | any non-amortizable, non-depreciable assets (including the stock in any Subsidiary treated as a corporation for Tax purposes) will be disposed of in a fully taxable transaction for an amount sufficient to fully utilize the adjusted basis for such assets, including any adjustments attributable to such assets under Sections 734 and 743 of the Code (and, in each case, the comparable sections of U.S. state and local Tax law), and for the avoidance of doubt including Exchange Party Basis Adjustments and Blocker Party Basis Adjustments, on the fifteenth anniversary of the later of (i) the applicable Exchange giving rise to an Exchange Party Basis Adjustment with respect to such assets and (ii) the Early Termination Date; provided, that in the event of a Change of Control that includes the sale of such asset (or the sale of equity interests in a partnership or disregarded entity for U.S. federal income tax purposes that directly or indirectly owns such asset), such non-amortizable, non-depreciable assets shall be disposed of at the time of the direct or indirect sale of the relevant asset in such Change of Control (if earlier than such fifteenth anniversary) for such price; |
(vi) | if, on the Early Termination Date, any Exchange TRA Party has Company Units that have not been Exchanged, then such Company Units shall be deemed to be Exchanged for the Market Value that would be received by such Exchange TRA Party if such Units had been Exchanged on the Early Termination Date, and such Exchange TRA Party shall be deemed to receive the amount of cash such Exchange TRA Party would have been entitled to pursuant to Section 4.3(a) had such Company Units actually been Exchanged on the Early Termination Date; and |
(vii) | any payment obligations pursuant to this Agreement will be satisfied on the date that any Tax Return to which such payment obligation relates is required to be filed excluding any extensions. |
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: |
| |
Name: |
||
Title: |
FATHOM HOLDCO, LLC | ||
By: |
| |
Name: | ||
Title: |
By: | | |
Name: | ||
Title: |
By: | | |
Name: | ||
Title: |
CORE INDUSTRIAL PARTNERS MANAGEMENT LP | ||
By: | | |
Name: | ||
Title: |
ARTICLE I. INTRODUCTORY MATTERS |
E-3 | |||||
1.1 |
Defined Terms | E-3 | ||||
1.2 |
Construction | E-7 | ||||
ARTICLE II. CORPORATE GOVERNANCE MATTERS |
E-7 | |||||
2.1 |
Initial Board Composition; Classified Board | E-7 | ||||
2.2 |
Election of Directors | E-7 | ||||
2.3 |
Company Obligations | E-9 | ||||
2.4 |
Compensation | E-10 | ||||
2.5 |
Other Rights of CORE Nominees | E-10 | ||||
2.6 |
Director Independence | E-10 | ||||
ARTICLE III. ADDITIONAL COVENANTS |
E-10 | |||||
3.1 |
Pledges or Transfers | E-10 | ||||
3.2 |
Reserved | E-11 | ||||
3.3 |
Lock-Up; Vesting; Transfer Restrictions and Requirements |
E-11 | ||||
ARTICLE IV. GENERAL PROVISIONS |
E-12 | |||||
4.1 |
Notices | E-12 | ||||
4.2 |
Amendment; Waiver | E-12 | ||||
4.3 |
Further Assurances | E-13 | ||||
4.4 |
Assignment; Affiliated Transferees | E-13 | ||||
4.5 |
Third Parties | E-13 | ||||
4.6 |
Governing Law | E-13 | ||||
4.7 |
Jurisdiction; Waiver of Jury Trial | E-13 | ||||
4.8 |
Specific Performance | E-14 | ||||
4.9 |
Entire Agreement | E-14 | ||||
4.10 |
Severability | E-14 | ||||
4.11 |
Table of Contents, Headings and Captions | E-14 | ||||
4.12 |
Grant of Consent | E-14 | ||||
4.13 |
Counterparts | E-14 | ||||
4.14 |
Effectiveness | E-14 | ||||
4.15 |
No Recourse | E-14 | ||||
4.16 |
Obligations are Several | E-15 | ||||
4.17 |
Provisions Respecting Representation of Fathom | E-15 |
COMPANY: |
FATHOM DIGITAL MANUFACTURING CORPORATION |
By: |
Name: |
Title: |
EXISTING INVESTORS: | ||
CORE INDUSTRIAL PARTNERS FUND I, L.P. |
By: Name: Title: |
|
CORE INDUSTRIAL PARTNERS FUND I PARALLEL, L.P. |
By: Name: Title: |
|
EXISTING INVESTORS (continued): | ||
[ |
By: | | |
Name: | ||
Title: |
[ |
By: | | |
Name: | ||
Title: |
COMPANY: |
FATHOM DIGITAL MANUFACTURING CORPORATION |
By: Name: Title: |
EXISTING INVESTORS: |
CORE INDUSTRIAL PARTNERS FUND I, L.P. |
By: Name: Title: |
CORE INDUSTRIAL PARTNERS FUND I PARALLEL, L.P. |
By: Name: Title: |
EXISTING INVESTORS (continued): |
By: Name: Title: |
By: Name: Title: |
SPONSOR INVESTORS | ||
ALTIMAR SPONSOR II, LLC | ||
By: | | |
Name: | ||
Title: | ||
EQUITYHOLDER | ||
By: | | |
Name: Kevin Beebe | ||
EQUITYHOLDER | ||
By: | | |
Name: Payne Brown | ||
EQUITYHOLDER | ||
By: | | |
Name: Rick Jelinek | ||
EQUITYHOLDER | ||
By: | | |
Name: Roma Khanna | ||
EQUITYHOLDER | ||
By: | | |
Name: Michael Rubenstein | ||
EQUITYHOLDER | ||
By: | | |
Name: Vijay Sondhi | ||
EQUITYHOLDER | ||
By: | | |
Name: Michael Vorhaus |
Page |
||||||
Article I DEFINITIONS |
G-5 | |||||
Section 1.01. |
Definitions | G-5 | ||||
Article II FORMATION, TERM, PURPOSE AND POWERS |
G-14 | |||||
Section 2.01. |
Formation | G-14 | ||||
Section 2.02. |
Name | G-14 | ||||
Section 2.03. |
Term | G-15 | ||||
Section 2.04. |
Offices | G-15 | ||||
Section 2.05. |
Agent for Service of Process; Existence and Good Standing; Foreign Qualification | G-15 | ||||
Section 2.06. |
Business Purpose | G-15 | ||||
Section 2.07. |
Powers of the Company | G-15 | ||||
Section 2.08. |
Members; Reclassification; Admission of New Members | G-15 | ||||
Section 2.09. |
Resignation | G-16 | ||||
Section 2.10. |
Investment Representations of Members | G-16 | ||||
Section 2.11. |
Intent | G-16 | ||||
Article III MANAGEMENT |
G-16 | |||||
Section 3.01. |
Managing Member | G-16 | ||||
Section 3.02. |
Compensation | G-17 | ||||
Section 3.03. |
Expenses | G-17 | ||||
Section 3.04. |
Officers | G-17 | ||||
Section 3.05. |
Authority of Members | G-17 | ||||
Section 3.06. |
Fiduciary Duties | G-18 | ||||
Article IV DISTRIBUTIONS |
G-18 | |||||
Section 4.01. |
Distributions | G-18 | ||||
Section 4.02. |
Liquidation Distribution | G-20 | ||||
Section 4.03. |
Limitations on Distribution | G-20 | ||||
Article V CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; TAX ALLOCATIONS; TAX MATTERS |
G-20 | |||||
Section 5.01. |
Initial Capital Contributions | G-20 | ||||
Section 5.02. |
No Additional Capital Contributions | G-20 | ||||
Section 5.03. |
Capital Accounts | G-20 | ||||
Section 5.04. |
Allocations of Profits and Losses | G-20 | ||||
Section 5.05. |
Special Allocations | G-21 | ||||
Section 5.06. |
Tax Allocations | G-22 | ||||
Section 5.07. |
Tax Advances | G-22 | ||||
Section 5.08. |
Tax Matters | G-22 | ||||
Section 5.09. |
Other Allocation Provisions | G-22 | ||||
Article VI BOOKS AND RECORDS; REPORTS |
G-23 | |||||
Section 6.01. |
Books and Records | G-23 | ||||
Article VII COMPANY UNITS |
G-24 | |||||
Section 7.01. |
Units | G-24 | ||||
Section 7.02. |
Register; Certificates; Legends | G-28 | ||||
Section 7.03. |
Registered Members | G-28 | ||||
Section 7.04. |
Reclassification Events of Pubco | G-28 | ||||
Article VIII FORFEITURE OF UNITS; EXCHANGES; TRANSFER RESTRICTIONS |
G-29 | |||||
Section 8.01. |
[Reserved.] | G-29 |
Page |
||||||
Section 8.02. |
[Reserved.] | G-29 | ||||
Section 8.03. |
Member Transfers | G-29 | ||||
Section 8.04. |
Class A Exchanges | G-29 | ||||
Section 8.05. |
[Reserved] | G-33 | ||||
Section 8.06. |
Further Restrictions | G-33 | ||||
Section 8.07. |
Rights of Assignees | G-33 | ||||
Section 8.08. |
Admissions, Resignations and Removals | G-34 | ||||
Section 8.09. |
Admission of Assignees as Substitute Members | G-34 | ||||
Section 8.10. |
Resignation and Removal of Members | G-34 | ||||
Article IX DISSOLUTION, LIQUIDATION AND TERMINATION |
G-34 | |||||
Section 9.01. |
No Dissolution | G-34 | ||||
Section 9.02. |
Events Causing Dissolution | G-35 | ||||
Section 9.03. |
Distribution upon Dissolution | G-35 | ||||
Section 9.04. |
Time for Liquidation | G-35 | ||||
Section 9.05. |
Termination | G-36 | ||||
Section 9.06. |
Claims of the Members | G-36 | ||||
Section 9.07. |
Survival of Certain Provisions | G-36 | ||||
Article X LIABILITY AND INDEMNIFICATION |
G-36 | |||||
Section 10.01. |
Liability of Members | G-36 | ||||
Section 10.02. |
Indemnification | G-37 | ||||
Article XI MISCELLANEOUS |
G-39 | |||||
Section 11.01. |
Severability | G-39 | ||||
Section 11.02. |
Notices | G-39 | ||||
Section 11.03. |
Cumulative Remedies | G-40 | ||||
Section 11.04. |
Binding Effect | G-40 | ||||
Section 11.05. |
Interpretation | G-40 | ||||
Section 11.06. |
Counterparts | G-40 | ||||
Section 11.07. |
Further Assurances | G-40 | ||||
Section 11.08. |
Entire Agreement | G-40 | ||||
Section 11.09. |
Governing Law | G-41 | ||||
Section 11.10. |
Submission to Jurisdiction; Waiver of Jury Trial | G-41 | ||||
Section 11.11. |
Expenses | G-42 | ||||
Section 11.12. |
Amendments and Waivers | G-42 | ||||
Section 11.13. |
No Third Party Beneficiaries | G-43 | ||||
Section 11.14. |
Headings | G-43 | ||||
Section 11.15. |
Power of Attorney | G-43 | ||||
Section 11.16. |
Partnership Status | G-43 | ||||
Section 11.17. |
Delivery by Facsimile or Email | G-44 |
2 |
Note to Draft: The aggregate number of Tier 1 Earnout Units and Tier 1 Earnout Shares (as defined in the Investor Rights Agreement) will be 3,000,000, the aggregate number of Tier 2 Earnout Units and Tier 2 Earnout Shares (as defined in the Investor Rights Agreement) will be 3,000,000 and the aggregate number of Tier 3 Earnout Units and Tier 3 Earnout Shares (as defined in the Investor Rights Agreement) will be 3,000,000. |
(g) |
COMPANY: | ||
FATHOM HOLDCO, LLC | ||
By: | ||
Name: |
||
Title: |
MANAGING MEMBER: | ||
FATHOM DIGITAL MANUFACTURING CORPORATION | ||
By: | ||
Name: |
||
Title: |
||
CONTINUING MEMBERS: | ||
[ ] [ ] |
1 |
Note to Draft: Initial share reserve to equal 1% of total Shares. |
(i) | no suspension of the qualification of the Subscribed Shares for offering or sale or trading in any jurisdiction, or any proceedings for any of such purposes, shall be ongoing; |
(ii) | all conditions precedent to the closing of the Transactions set forth in the Transaction Agreement shall have been satisfied (as determined by the parties to the Transaction Agreement) or waived (other than those conditions which, by their nature, are to be satisfied at the closing of the Transactions pursuant to the Transaction Agreement or by the Closing itself, but subject to their |
satisfaction or valid waiver at the closing of the Transactions), and the closing of the Transactions shall be scheduled to occur substantially concurrently with or immediately following the Closing; and |
(iii) | no 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 the consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions or the Subscription contemplated hereby and no such governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition. |
(i) | all representations and warranties of 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 Subscriber Material Adverse Effect (as defined below), which representations and warranties shall be true and correct in all respects) at and as of the Closing Date; and |
(ii) | Subscriber shall not be in material breach of any covenant, agreement or condition required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing. |
(i) | Each of the respective representations and warranties of each of the Company and Fathom 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 Company Material Adverse Effect and Fathom Material Adverse Effect (each as defined below), which such respective representations and warranties shall be true and correct in all respects) at and as of the Closing Date; |
(ii) | the Company shall not be in material breach of any covenant, agreement or condition required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and |
(iii) | the terms of the Transaction Agreement shall not have been amended or modified in a manner that would materially and adversely affect Subscriber (in its capacity as such) without Subscriber’s prior written consent. |
(ii) | use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable; |
(iii) | upon the occurrence of any event contemplated in Section 6(b)(i)(iv) above, except for such times as the Company is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement, the Company shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Subscribed Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; |
(iv) | use its commercially reasonable efforts to allow Subscriber to review disclosure regarding Subscriber in the Registration Statement; and |
(v) | otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by Subscriber, consistent with the terms of this Subscription Agreement, in connection with the registration of the Subscribed Shares. |
ALTIMAR ACQUISITION CORP. II | ||
By: | | |
Name: Tom Wasserman | ||
Title: Chief Executive Officer | ||
Address for Notices: | ||
Altimar Acquisition Corp. II | ||
40 West 57th Street | ||
33rd Floor | ||
New York, NY 10019 | ||
ATTN: Tom Wasserman EMAIL: tom.wasserman@hpspartners.com with a copy (not to constitute notice) to: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019 Attn: Raphael M. Russo, Esq. rrusso@paulweiss.com |
FATHOM HOLDCO, LLC | ||
By: | | |
Name: John May | ||
Title: President | ||
Address for Notices: | ||
c/o CORE Industrial Partners, LLC 150 N. Riverside Plaza, Suite #2050 Chicago, Illinois 60606 ATTN: John May EMAIL: john@coreipfund.com | ||
with a copy (not to constitute notice) to: Winston & Strawn LLP 35 W. Wacker Drive Chicago, IL 60601 ATTN: Steven J. Gavin, Matthew F. Bergmann and Jason D. Osborn EMAIL: SGavin@winston.com, MBergmann@winston.com and JOsborn@winston.com |
SUBSCRIBER: | ||
By: | | |
Name: | ||
Title: | ||
Address for Notices: | ||
| ||
| ||
Name in which shares are to be registered: | ||
|
Number of Subscribed Shares subscribed for: |
||||
|
|
|||
Price Per Subscribed Share: |
$ | 10.00 | ||
Aggregate Purchase Price: |
$ | ____________________ |
A. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the applicable subparagraphs) |
☐ | Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB. |
☐ | We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs) |
☐ | Subscriber is an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13) under the Securities Act) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an “accredited investor.” We are not a natural person. |
☐ | We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is an institutional “accredited investor.” |
C. | AFFILIATE STATUS |
☐ | is: |
☐ | is not: |
☐ | is any institutional accredited investor, as defined in rule 501(a) under the Act (17 CFR 230.501(a)), of a type not listed in paragraphs (a)(1)(i)(A) through (I) or paragraphs (a)(1)(ii) through (vi) of Rule 501. |
1 |
“ Family of investment companies Rule 18f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor) |
☐ | Any 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; |
☐ | Any broker or dealer registered pursuant to section 15 of the Exchange Act; |
☐ | Any insurance company as defined in section 2(a)(13) of the Securities Act; |
☐ | Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a)(48) of the Investment Company Act; |
☐ | Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act; |
☐ | Any Rural Business Investment Company as defined in section 384A of the Consolidated Farm and Rural Development Act; |
☐ | Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act; |
☐ | Any investment adviser registered pursuant to section 203 of the Investment Advisers Act or registered pursuant to the laws of a state; |
☐ | Any investment adviser relying on the exemption from registering with the Commission under section 203(l) or (m) of the Investment Advisers Act; |
☐ | Any 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; |
☐ | Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”; |
☐ | Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act; |
☐ | Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000; or |
☐ | Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D under the Securities Act; |
☐ | Any entity, other than an entity described in the categories of “accredited investors” above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; |
☐ | Any “family office,” as defined under the Investment Advisers Act that satisfies all of the following conditions: (i) with assets under management in excess of $5,000,000, (ii) that is not formed for the specific purpose of acquiring the securities offered, and (iii) 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; |
☐ | Any “family client,” as defined under the Investment Advisers Act, of a family office meeting the requirements in the previous paragraph and whose prospective investment in the Company is directed by such family office pursuant to the previous paragraph; or |
☐ | Any entity in which all of the equity owners are institutional “accredited investors.” |
SUBSCRIBER: | ||
Print Name: | ||
By: | | |
Name: | ||
Title: |
(i) | no suspension of the qualification of the Subscribed Shares for offering or sale or trading in any jurisdiction, or any proceedings for any of such purposes, shall be ongoing; |
(ii) | all conditions precedent to the closing of the Transactions set forth in the Transaction Agreement shall have been satisfied (as determined by the parties to the Transaction Agreement) or waived (other than those conditions which, by their nature, are to be satisfied at the closing of the Transactions pursuant to the Transaction Agreement or by the Closing itself, but subject to their satisfaction or valid waiver at the closing of the Transactions), and the closing of the Transactions shall be scheduled to occur substantially concurrently with or immediately following the Closing; and |
(iii) | no 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 the consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions or the Subscription contemplated hereby and no such governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition. |
(i) | all representations and warranties of 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 Subscriber Material Adverse Effect (as defined below), which representations and warranties shall be true and correct in all respects) at and as of the Closing Date; and |
(ii) | Subscriber shall not be in material breach of any covenant, agreement or condition required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing. |
(i) | Each of the respective representations and warranties of each of the Company and Fathom 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 Company Material Adverse Effect and Fathom Material Adverse Effect (each as defined below), which such respective representations and warranties shall be true and correct in all respects) at and as of the Closing Date; |
(ii) | the Company shall not be in material breach of any covenant, agreement or condition required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and |
(iii) | the terms of the Transaction Agreement shall not have been amended or modified in a manner that would materially and adversely affect Subscriber (in its capacity as such) without Subscriber’s prior written consent. |
(ii) | use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable; |
(iii) | upon the occurrence of any event contemplated in Section 6(b)(i)(iv) above, except for such times as the Company is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement, the Company shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Subscribed Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; |
(iv) | use its commercially reasonable efforts to allow Subscriber to review disclosure regarding Subscriber in the Registration Statement; and |
(v) | otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by Subscriber, consistent with the terms of this Subscription Agreement, in connection with the registration of the Subscribed Shares. |
ALTIMAR ACQUISITION CORP. II | ||
By: | | |
Name: Tom Wasserman | ||
Title: Chief Executive Officer | ||
Address for Notices: | ||
Altimar Acquisition Corp. II 40 West 57th Street 33rd Floor New York, NY 10019 ATTN: Tom Wasserman EMAIL: tom.wasserman@hpspartners.com | ||
with a copy (not to constitute notice) to: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019 Attn: Raphael M. Russo, Esq. rrusso@paulweiss.com |
FATHOM HOLDCO, LLC | ||
By: | | |
Name: John May | ||
Title: President | ||
Address for Notices: | ||
c/o CORE Industrial Partners, LLC 150 N. Riverside Plaza, Suite #2050 Chicago, Illinois 60606 ATTN: John May EMAIL: john@coreipfund.com | ||
with a copy (not to constitute notice) to: Winston & Strawn LLP 35 W. Wacker Drive Chicago, IL 60601 ATTN: Steven J. Gavin, Matthew F. Bergmann and Jason D. Osborn EMAIL: SGavin@winston.com, MBergmann@winston.com and JOsborn@winston.com |
SUBSCRIBER: | ||
By: | | |
Name: | ||
Title: | ||
Address for Notices: | ||
| ||
| ||
Name in which shares are to be registered: | ||
|
Number of Subscribed Shares subscribed for: |
____________________ | |||
Price Per Subscribed Share: |
$ | 10.00 | ||
Aggregate Purchase Price: |
$ | ____________________ |
1 | The name of the Company is Altimar Acquisition Corp. II |
2 | The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors may decide. |
3 | The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the laws of the Cayman Islands. |
4 | The liability of each Member is limited to the amount unpaid on such Member’s shares. |
5 | The share capital of the Company is US$55,500 divided into 500,000,000 Class A ordinary shares of a par value of US$0.0001 each, 50,000,000 Class B ordinary shares of a par value of US$0.0001 each and 5,000,000 preference shares of a par value of US$0.0001 each. |
6 | The Company has power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. |
7 | Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear the respective meanings given to them in the Amended and Restated Articles of Association of the Company. |
1 |
Interpretation |
1.1 | In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith: |
“Affiliate” |
in respect of a person, means any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person, and (a) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law father-in-law sisters-in-law, | |||
“Applicable Law” |
means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person. | |||
“Articles” |
means these amended and restated articles of association of the Company. | |||
“Audit Committee” |
means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. | |||
“Auditor” |
means the person for the time being performing the duties of auditor of the Company (if any). | |||
“Business Combination” |
means a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses or entities (the “ target business | |||
“business day” |
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City. | |||
“Clearing House” |
means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction. | |||
“Class A Share” |
means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company. |
“Class B Share” |
means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company. | |||
“Company” |
means the above named company. | |||
“Company’s Website” |
means the website of the Company and/or its web-address or domain name (if any). | |||
“Compensation Committee” |
means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. | |||
“Designated Stock Exchange” |
means any United States national securities exchange on which the securities of the Company are listed for trading, including the New York Stock Exchange. | |||
“Directors” |
means the directors for the time being of the Company. | |||
“Dividend” |
means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles. | |||
“Electronic Communication” |
means a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors. | |||
“Electronic Record” |
has the same meaning as in the Electronic Transactions Act. | |||
“Electronic Transactions Act” |
means the Electronic Transactions Act (As Revised) of the Cayman Islands. | |||
“Equity-linked Securities” |
means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt. | |||
“Exchange Act” |
means the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time. | |||
“Founders” |
means all Members immediately prior to the consummation of the IPO. | |||
“Independent Director” |
has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, as the case may be. | |||
“IPO” |
means the Company’s initial public offering of securities. | |||
“Member” |
has the same meaning as in the Statute. | |||
“Memorandum” |
means the amended and restated memorandum of association of the Company. | |||
“Minimum Member” |
means a Member meeting the minimum requirements set forth for eligible members to submit proposals under Rule 14a-8 of the Exchange Act or any applicable rules thereunder as may be amended or promulgated thereunder from time to time. | |||
“Nominating Committee” |
means the nominating committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
“Officer” |
means a person appointed to hold an office in the Company. | |||
“Ordinary Resolution” |
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles. | |||
“Over-Allotment Option” |
means the option of the Underwriters to purchase up to an additional 15 per cent of the firm units (as described in the Articles) issued in the IPO at a price equal to US$10 per unit, less underwriting discounts and commissions. | |||
“Preference Share” |
means a preference share of a par value of US$0.0001 in the share capital of the Company. | |||
“Public Share” |
means a Class A Share issued as part of the units (as described in the Articles) issued in the IPO. | |||
“Redemption Notice” |
means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein. | |||
“Register of Members” |
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members. | |||
“Registered Office” |
means the registered office for the time being of the Company. | |||
“Representative” |
means a representative of the Underwriters. | |||
“Seal” |
means the common seal of the Company and includes every duplicate seal. | |||
“Securities and Exchange Commission” |
means the United States Securities and Exchange Commission. | |||
“Share” |
means a Class A Share, a Class B Share or a Preference Share and includes a fraction of a share in the Company. | |||
“Special Resolution” |
subject to Article 31.4, has the same meaning as in the Statute, and includes a unanimous written resolution. | |||
“Sponsor” |
means Altimar Sponsor II, LLC, a Delaware limited liability company, and its successors or assigns. | |||
“Statute” |
means the Companies Act (As Revised) of the Cayman Islands. | |||
“Tax Filing Authorised Person” |
means such person as any Director shall designate from time to time, acting severally. | |||
“Treasury Share” |
means a Share held in the name of the Company as a treasury share in accordance with the Statute. | |||
“Trust Account” |
means the trust account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of a private placement of warrants or units simultaneously with the closing date of the IPO, will be deposited. | |||
“Underwriter” |
means an underwriter of the IPO from time to time and any successor underwriter. |
1.2 | In the Articles: |
(a) | words importing the singular number include the plural number and vice versa; |
(b) | words importing the masculine gender include the feminine gender; |
(c) | words importing persons include corporations as well as any other legal or natural person; |
(d) | “written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record; |
(e) | “shall” shall be construed as imperative and “may” shall be construed as permissive; |
(f) | references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced; |
(g) | any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; |
(h) | the term “and/or” is used herein to mean both “and” as well as “or.” The use of “and/or” in certain contexts in no respects qualifies or modifies the use of the terms “and” or “or” in others. The term “or” shall not be interpreted to be exclusive and the term “and” shall not be interpreted to require the conjunctive (in each case, unless the context otherwise requires); |
(i) | headings are inserted for reference only and shall be ignored in construing the Articles; |
(j) | any requirements as to delivery under the Articles include delivery in the form of an Electronic Record; |
(k) | any requirements as to execution or signature under the Articles including the execution of the Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act; |
(l) | sections 8 and 19(3) of the Electronic Transactions Act shall not apply; |
(m) | the term “clear days” in relation to the period of a notice means that period excluding the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect; and |
(n) | the term “holder” in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share. |
2 |
Commencement of Business |
2.1 | The business of the Company may be commenced as soon after incorporation of the Company as the Directors shall see fit. |
2.2 | The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company, including the expenses of registration. |
3 |
Issue of Shares and other Securities |
3.1 | Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividends or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such |
other terms as they think proper, and may also (subject to the Statute and the Articles) vary such rights, save that the Directors shall not allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) to the extent that it may affect the ability of the Company to carry out a Class B Ordinary Share Conversion set out in the Articles. |
3.2 | The Company may issue rights, options, warrants, units or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company on such terms as the Directors may from time to time determine. |
3.3 | The Company may issue units of securities in the Company, which may be comprised of whole or fractional Shares, rights, options, warrants, units or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company, upon such terms as the Directors may from time to time determine. |
3.4 | The Company shall not issue Shares to bearer. |
4 |
Register of Members |
4.1 | The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute. |
4.2 | The Directors may determine that the Company shall maintain one or more branch registers of Members in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register and which shall constitute the branch register or registers, and to vary such determination from time to time. |
5 |
Closing Register of Members or Fixing Record Date |
5.1 | For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed newspaper or any other newspaper or by any other means in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed forty days. |
5.2 | In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose. |
5.3 | If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof. |
6 |
Certificates for Shares |
6.1 | A Member shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. |
Share certificates shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled and, subject to the Articles, no new certificate shall be issued until the former certificate representing a like number of relevant Shares shall have been surrendered and cancelled. |
6.2 | The Company shall not be bound to issue more than one certificate for Shares held jointly by more than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them. |
6.3 | If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate. |
6.4 | Every share certificate sent in accordance with the Articles will be sent at the risk of the Member or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the course of delivery. |
6.5 | Share certificates shall be issued within the relevant time limit as prescribed by the Statute, if applicable, or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter, after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgement of a Share transfer with the Company. |
7 |
Transfer of Shares |
7.1 | Subject to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. If the Shares in question were issued in conjunction with rights, options, warrants or units issued pursuant to the Articles on terms that one cannot be transferred without the other, the Directors shall refuse to register the transfer of any such Share without evidence satisfactory to them of the like transfer of such right, option, warrant or unit. |
7.2 | The instrument of transfer of any Share shall be in writing in the usual or common form or in a form prescribed by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members. |
8 |
Redemption, Repurchase and Surrender of Shares |
8.1 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares, except Public Shares, shall be effected in such manner and upon such other terms as the Company may, by Special Resolution, determine before the issue of such Shares. With respect to redeeming or repurchasing the Shares: |
(a) | Members who hold Public Shares are entitled to request the redemption of such Shares in the circumstances described in the Business Combination Article hereof; |
(b) | Class B Shares held by the Founders shall be surrendered by the Founders for no consideration to the extent that the Over-Allotment Option is not exercised in full so that the Founders will own 20 per cent of the Company’s issued Shares after the IPO (exclusive of any securities purchased in a private placement simultaneously with the IPO); and |
(c) | Public Shares shall be repurchased by way of tender offer in the circumstances set out in the Business Combination Article hereof. |
8.2 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and surrenders of Shares in the circumstances described in the Article above shall not require further approval of the Members. |
8.3 | The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Statute, including out of capital. |
8.4 | The Directors may accept the surrender for no consideration of any fully paid Share. |
9 |
Treasury Shares |
9.1 | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share. |
9.2 | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration). |
10 |
Variation of Rights of Shares |
10.1 | Subject to Article 3.1, if at any time the share capital of the Company is divided into different classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class (other than with respect to a waiver of the provisions of the Class B Ordinary Share Conversion Article hereof, which as stated therein shall only require the consent in writing of the holders of a majority of the issued Shares of that class), or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis |
10.2 | For the purposes of a separate class meeting, the Directors may treat two or more or all the classes of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate classes of Shares. |
10.3 | The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied: (i) by the creation or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights; or (ii) where the constitutional documents of the Company are amended or new constitutional documents of the Company are adopted, in each case, as a result of the Company undertaking a transfer by way of continuation in a jurisdiction outside the Cayman Islands. |
11 |
Commission on Sale of Shares |
12 |
Non Recognition of Trusts |
13 |
Lien on Shares |
13.1 | The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company’s lien thereon. The Company’s lien on a Share shall also extend to any amount payable in respect of that Share. |
13.2 | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold. |
13.3 | To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company’s power of sale under the Articles. |
13.4 | The net proceeds of such sale after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale. |
14 |
Call on Shares |
14.1 | Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall (subject to receiving at least fourteen clear days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made. |
14.2 | A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed. |
14.3 | The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof. |
14.4 | If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine (and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive payment of the interest or expenses wholly or in part. |
14.5 | An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions of the Articles shall apply as if that amount had become due and payable by virtue of a call. |
14.6 | The Directors may issue Shares with different terms as to the amount and times of payment of calls, or the interest to be paid. |
14.7 | The Directors may, if they think fit, receive an amount from any Member willing to advance all or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable) pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance. |
14.8 | No such amount paid in advance of calls shall entitle the Member paying such amount to any portion of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such payment, become payable. |
15 |
Forfeiture of Shares |
15.1 | If a call or instalment of a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than fourteen clear days’ notice requiring payment of the amount unpaid together with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited. |
15.2 | If the notice is not complied with, any Share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture. |
15.3 | A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favour of that person. |
15.4 | A person any of whose Shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received payment in full of all monies due and payable by him in respect of those Shares. |
15.5 | A certificate in writing under the hand of one Director or Officer that a Share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share. |
15.6 | The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by way of premium as if it had been payable by virtue of a call duly made and notified. |
16 |
Transmission of Shares |
16.1 | If a Member dies, the survivor or survivors (where he was a joint holder), or his legal personal representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or sole holder. |
16.2 | Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution, as the case may be. |
16.3 | A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles), the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. |
17 |
Class B Ordinary Share Conversion |
17.1 | The rights attaching to the Class A Shares and Class B Shares shall rank pari passu |
17.2 | Class B Shares shall automatically convert into Class A Shares on a one-for-one Initial Conversion Ratio |
17.3 | Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares or any other Equity-linked Securities are issued or deemed issued, by the Company in excess of the amounts offered in the IPO and related to the closing of a Business Combination, all Class B Shares in issue shall automatically convert into Class A Shares at the time of the closing of a Business Combination at an adjusted ratio so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, in the aggregate, 20 per cent of the sum of: (a) the total number of Class A Shares and Class B Shares issued and outstanding upon completion of the IPO, plus (b) the total number of Class A Shares issued or deemed issued or issuable upon conversion or exercise of any Equity-linked Securities or rights issued, or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A Shares or Equity-linked Securities exercisable for or convertible into Class A Shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any private placement warrants or units issued to the Sponsor, its Affiliates or any Director or Officer upon conversion of working capital loans made to the Company. |
17.4 | Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or Equity-linked Securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting or agreeing separately as a separate class in the manner provided in the Variation of Rights of Shares Article hereof. |
17.5 | The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the Class A Shares in issue into a greater or lesser number of shares occurring after the original filing of the Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class B Shares in issue. |
17.6 | Each Class B Share shall convert into its pro rata number of Class A Shares pursuant to this Article. The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share shall convert into such number of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of which shall be the total number of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant to this Article and the denominator of which shall be the total number of Class B Shares in issue at the time of conversion. |
17.7 | References in this Article to “ converted conversion exchange |
17.8 | Notwithstanding anything to the contrary in this Article, in no event may any Class B Share convert into Class A Shares at a ratio that is less than one-for-one. |
18 |
Amendments of Memorandum and Articles of Association and Alteration of Capital |
18.1 | The Company may by Ordinary Resolution: |
(a) | increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine; |
(b) | consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares; |
(c) | convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares of any denomination; |
(d) | by subdivision of its existing Shares or any of them divide the whole or any part of its share capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and |
(e) | cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
18.2 | All new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. |
18.3 | Subject to the provisions of the Statute, the provisions of the Articles as regards the matters to be dealt with by Ordinary Resolution and Article 31.4, the Company may by Special Resolution: |
(a) | change its name; |
(b) | alter or add to the Articles; |
(c) | alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and |
(d) | reduce its share capital or any capital redemption reserve fund. |
19 |
Offices and Places of Business |
20 |
General Meetings |
20.1 | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
20.2 | The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general meeting shall be held at such time and place as the Directors shall appoint. At these meetings the report of the Directors (if any) shall be presented. |
20.3 | The Directors, the chief executive officer or the chairman of the board of Directors may call general meetings and, for the avoidance of doubt, Members shall not have the ability to call general meetings. |
21 |
Notice of General Meetings |
21.1 | At least five clear days’ notice shall be given of any general meeting. Every notice shall specify the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: |
(a) | in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat; and |
(b) | in the case of an extraordinary general meeting, by a majority in number of the Members having a right to attend and vote at the meeting, together holding not less than ninety-five per cent in par value of the Shares giving that right. |
21.2 | The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting. |
22 |
Advance Notice for Business |
22.1 | At each annual general meeting, the Members shall appoint the Directors then subject to appointment in accordance with the procedures set forth in the Articles and subject to the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. At any such annual general meeting any other business properly brought before the annual general meeting may be transacted. |
22.2 | To be properly brought before an annual general meeting, business (other than nominations of Directors, which must be made in compliance with, and shall be exclusively governed by, Article 29) must be: |
(a) | specified in the notice of the annual general meeting (or any supplement thereto) given to Members by or at the direction of the Directors in accordance with the Articles; |
(b) | otherwise properly brought before the annual general meeting by or at the direction of the Directors; or |
(c) | otherwise properly brought before the annual general meeting by a Member who: |
(i) | is a Minimum Member at the time of giving of the notice provided for in this Article and at the time of the annual general meeting; |
(ii) | is entitled to vote at such annual general meeting; and |
(iii) | complies with the notice procedures set forth in this Article. |
22.3 | For any such business to be properly brought before any annual general meeting pursuant to Article 22.2(c), the Member must have given timely notice thereof in writing, either by personal delivery or express or registered mail (postage prepaid), to the Company not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the one-year anniversary of the date of the annual general meeting for the immediately preceding year. However, in the event that the date of the annual general meeting is more than 30 days before or after such anniversary date, in order to be timely, a Member’s notice must be received by the Company not later than the later of: (x) the close of business 90 days prior to the date of such annual general meeting; and (y) if the first public announcement of the date of such advanced or delayed annual general meeting is less than 100 days prior to such date, 10 days following the date of the first public announcement of the annual general meeting date. In no event shall the public announcement of an adjournment or postponement of an annual general meeting, or such adjournment or postponement, commence a new time period or otherwise extend any time period for the giving of a Member’s notice as described herein. |
22.4 | Any such notice of other business shall set forth as to each matter the Member proposes to bring before the annual general meeting: |
(a) | a brief description of the business desired to be brought before the annual general meeting, the reasons for conducting such business at the annual general meeting and the text of any proposal regarding such business (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the Articles, the text of the proposed amendment), which shall not exceed 1,000 words; |
(b) | as to the Member giving notice and any beneficial owner on whose behalf the proposal is made: |
(i) | the name and address of such Member (as it appears in the Register of Members) and such beneficial owner on whose behalf the proposal is made; |
(ii) | the class and number of Shares which are, directly or indirectly, owned beneficially or of record by any such Member and by such beneficial owner, respectively, or their respective Affiliates (naming such Affiliates), as at the date of such notice; |
(iii) | a description of any agreement, arrangement or understanding (including, without limitation, any swap or other derivative or short positions, profit interests, options, hedging transactions, and securities lending or borrowing arrangement) to which such Member or any such beneficial owner or their respective Affiliates is, directly or indirectly, a party as at the date of such notice: (x) with respect to any Shares; or (y) the effect or intent of which is to mitigate loss to, manage the potential risk or benefit of share price changes (increases or decreases) for, or increase or decrease the voting power of such Member or beneficial owner or any of their Affiliates with respect to Shares or which may have payments based in whole or in part, |
directly or indirectly, on the value (or change in value) of any Shares (any agreement, arrangement or understanding of a type described in this Article 22.4(b)(iii), a “ Covered Arrangement |
(iv) | a representation that the Member is a holder of record of Shares entitled to vote at such annual general meeting and intends to appear in person or by proxy at the annual general meeting to propose such business; |
(c) | a description of any direct or indirect material interest by security holdings or otherwise of the Member and of any beneficial owner on whose behalf the proposal is made, or their respective Affiliates, in such business (whether by holdings of securities, or by virtue of being a creditor or contractual counterparty of the Company or of a third party, or otherwise) and all agreements, arrangements and understandings between such Member or any such beneficial owner or their respective Affiliates and any other person or persons (naming such person or persons) in connection with the proposal of such business by such Member; |
(d) | a representation whether the Member or the beneficial owner intends or is part of a Group which intends: |
(i) | to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Ordinary Shares (or other Shares) required to approve or adopt the proposal; and/or |
(ii) | otherwise to solicit proxies from Members in support of such proposal; |
(e) | an undertaking by the Member and any beneficial owner on whose behalf the proposal is made to: |
(i) | notify the Company in writing of the information set forth in Articles 22.4(b)(ii), (b)(iii) and (c) above as at the record date for the annual general meeting promptly (and, in any event, within five business days) following the later of the record date or the date notice of the record date is first disclosed by public announcement; and |
(ii) | update such information thereafter within two business days of any change in such information and, in any event, as at close of business on the day preceding the meeting date; and |
(f) | any other information relating to such Member, any such beneficial owner and their respective Affiliates that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, such proposal pursuant to section 14 of the Exchange Act, to the same extent as if the Shares were registered under the Exchange Act. |
22.5 | Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to the proposal of any business pursuant to this Article, other than nominations for Directors which must be made in compliance with, and shall be exclusively governed by Article 29, shall be deemed satisfied by a Member if such Member has submitted a proposal to the Company in compliance with Rule 14a-8 of the Exchange Act and such Member’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for the annual general meeting; provided, that such Member shall have provided the information required by Article 22.4; provided, further, that the information required by Article 22.4(b) may be satisfied by providing the information to the Company required pursuant to Rule 14a-8(b) of the Exchange Act. |
22.6 | Notwithstanding anything in the Articles to the contrary: |
(a) | no other business brought by a Member (other than the nominations of Directors, which must be made in compliance with, and shall be exclusively governed by Article 29) shall be conducted at any annual general meeting except in accordance with the procedures set forth in this Article; and |
(b) | unless otherwise required by Applicable Law and the rules of any applicable stock exchange or quotation system on which Shares may be then listed or quoted, if a Member intending to bring |
business before an annual general meeting in accordance with this Article does not: (x) timely provide the notifications contemplated by Article 22.4(e) above; or (y) timely appear in person or by proxy at the annual general meeting to present the proposed business, such business shall not be transacted, notwithstanding that proxies in respect of such business may have been received by the Company or any other person or entity. |
22.7 | Except as otherwise provided by Applicable Law or the Articles, the chairman or co-chairman of any annual general meeting shall have the power and duty to determine whether any business proposed to be brought before an annual general meeting was proposed in accordance with the foregoing procedures (including whether the Member solicited or did not so solicit, as the case may be, proxies in support of such Member’s proposal in compliance with such Member’s representation as required by Article 22.4(d)) and if any business is not proposed in compliance with this Article, to declare that such defective proposal shall be disregarded. The requirements of this Article shall apply to any business to be brought before an annual general meeting by a Member other than nominations of Directors (which must be made in compliance with, and shall be exclusively governed by Article 29) and other than matters properly brought under Rule 14a-8 of the Exchange Act. For purposes of the Articles, “public announcement |
(a) | prior to the IPO, notice of the annual general meeting given to Members by or at the direction of the Directors in accordance with the procedures set forth in the Articles; and |
(b) | on and after the IPO, disclosure in a press release of the Company reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed or furnished by the Company with or to the Securities and Exchange Commission pursuant to section 13, 14 or 15(b) of the Exchange Act. |
22.8 | Nothing in this Article shall be deemed to affect any rights of: |
(a) | Members to request inclusion of proposals in the Company’s proxy statement pursuant to applicable rules and regulations under the Exchange Act; or |
(b) | the holders of any class of Preference Shares, or any other class of Shares authorised to be issued by the Company, to make proposals pursuant to any applicable provisions thereof. |
22.9 | Notwithstanding the foregoing provisions of this Article, a Member shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Article, if applicable. |
23 |
Proceedings at General Meetings |
23.1 | No business shall be transacted at any general meeting unless a quorum is present. The holders of a majority of the Shares being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorised representative or proxy shall be a quorum. |
23.2 | A person may participate at a general meeting by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting. |
23.3 | A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings (or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective as if the resolution had been passed at a general meeting of the Company duly convened and held. |
23.4 | If a quorum is not present within half an hour from the time appointed for the meeting to commence, the meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting to commence, the Members present shall be a quorum. |
23.5 | The Directors may, at any time prior to the time appointed for the meeting to commence, appoint any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman, if any, of the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors present shall elect one of their number to be chairman of the meeting. |
23.6 | If no Director is willing to act as chairman or if no Director is present within fifteen minutes after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the meeting. |
23.7 | The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. |
23.8 | When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting. |
23.9 | If, prior to a Business Combination, a notice is issued in respect of a general meeting and the Directors, in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting at the place, the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general meeting to another place, day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting is promptly given to all Members. No business shall be transacted at any postponed meeting other than the business specified in the notice of the original meeting. |
23.10 | When a general meeting is postponed for thirty days or more, notice of the postponed meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone a general meeting which has already been postponed. |
23.11 | A resolution put to the vote of the meeting shall be decided on a poll. |
23.12 | A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded. |
23.13 | A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs, and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of the poll. |
23.14 | In the case of an equality of votes the chairman shall be entitled to a second or casting vote. |
24 |
Votes of Members |
24.1 | Subject to any rights or restrictions attached to any Shares, including as set out at Article 31.4, every Member present in any such manner shall have one vote for every Share of which he is the holder. |
24.2 | In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the Register of Members. |
24.3 | A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member’s behalf appointed by that court, and any such committee, receiver, curator bonis or other person may vote by proxy. |
24.4 | No person shall be entitled to vote at any general meeting unless he is registered as a Member on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid. |
24.5 | No objection shall be raised as to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision shall be final and conclusive. |
24.6 | Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify the number of Shares in respect of which each proxy is entitled to exercise the related votes. |
24.7 | A Member holding more than one Share need not cast the votes in respect of his Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed. |
25 |
Proxies |
25.1 | The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non-natural person, under the hand of its duly authorised representative. A proxy need not be a Member. |
25.2 | The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting or adjourned meeting to commence at which the person named in the instrument proposes to vote. |
25.3 | The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared to have been duly deposited by the chairman, shall be invalid. |
25.4 | The instrument appointing a proxy may be in any usual or common form (or such other form as the Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll. |
25.5 | Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy. |
26 |
Corporate Members |
26.1 | Any corporation or other non-natural person which is a Member may in accordance with its constitutional |
documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member. |
26.2 | If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such persons as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided that the authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised. Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the Clearing House (or its nominee(s)) as if such person was the registered holder of such Shares held by the Clearing House (or its nominee(s)). |
27 |
Shares that May Not be Voted |
28 |
Directors |
28.1 | There shall be a board of Directors consisting of not less than one person provided however that the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors. |
28.2 | The Directors shall be divided into three classes: Class I, Class II and Class III. The number of Directors in each class shall be as nearly equal as possible. Upon the adoption of the Articles, the existing Directors shall by resolution classify themselves as Class I, Class II or Class III Directors. The Class I Directors shall stand appointed for a term expiring at the Company’s first annual general meeting, the Class II Directors shall stand appointed for a term expiring at the Company’s second annual general meeting and the Class III Directors shall stand appointed for a term expiring at the Company’s third annual general meeting. Commencing at the Company’s first annual general meeting, and at each annual general meeting thereafter, Directors appointed to succeed those Directors whose terms expire shall be appointed for a term of office to expire at the third succeeding annual general meeting after their appointment. Except as the Statute or other Applicable Law may otherwise require, in the interim between annual general meetings or extraordinary general meetings called for the appointment of Directors and/or the removal of one or more Directors and the filling of any vacancy in that connection, additional Directors and any vacancies in the board of Directors, including unfilled vacancies resulting from the removal of Directors for cause, may be filled by the vote of a majority of the remaining Directors then in office, although less than a quorum (as defined in the Articles), or by the sole remaining Director. All Directors shall hold office until the expiration of their respective terms of office and until their successors shall have been appointed and qualified. A Director appointed to fill a vacancy resulting from the death, resignation or removal of a Director shall serve for the remainder of the full term of the Director whose death, resignation or removal shall have created such vacancy and until his successor shall have been appointed and qualified. |
29 |
Nomination of Directors |
29.1 | Subject to Article 31.1, nominations of persons for appointment as Directors may be made at an annual general meeting only by: |
(a) | the Directors; or |
(b) | by any Member who: |
(i) | is a Minimum Member at the time of giving of the notice provided for in this Article and at the time of the annual general meeting; |
(ii) | is entitled to vote for the appointments at such annual general meeting; and |
(iii) | complies with the notice procedures set forth in this Article (notwithstanding anything to the contrary set forth in the Articles, this Article 29.1(b) shall be the exclusive means for a Member to make nominations of persons for appointment of Directors at an annual general meeting). |
29.2 | Any Member entitled to vote for the elections may nominate a person or persons for appointment as Directors only if written notice of such Member’s intent to make such nomination is given in accordance with the procedures set forth in this Article, either by personal delivery or express or registered mail (postage prepaid), to the Company not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the one-year anniversary of the date of the annual general meeting for the immediately preceding year. However, in the event that the date of the annual general meeting is more than 30 days before or after such anniversary date, in order to be timely, a Member’s notice must be received by the Company not later than the later of: (x) the close of business 90 days prior to the date of such annual general meeting; and (y) if the first public announcement of the date of such advanced or delayed annual general meeting is less than 100 days prior to such date, 10 days following the date of the first public announcement of the annual general meeting date. In no event shall the public announcement of an adjournment or postponement of an annual general meeting, or such adjournment or postponement, commence a new time period or otherwise extend any time period for the giving of a Member’s notice as described herein. Members may nominate a person or persons (as the case may be) for appointment as Directors only as provided in this Article and only for such class(es) as are specified in the notice of annual general meeting as being up for appointment at such annual general meeting. |
29.3 | Each such notice of a Member’s intent to make a nomination of a Director shall set forth: |
(a) | as to the Member giving notice and any beneficial owner on whose behalf the nomination is made: |
(i) | the name and address of such Member (as it appears in the Register of Members) and any such beneficial owner on whose behalf the nomination is made; |
(ii) | the class and number of Shares which are, directly or indirectly, owned beneficially and of record by such Member and any such beneficial owner, respectively, or their respective Affiliates (naming such Affiliates), as at the date of such notice; |
(iii) | a description of any Covered Arrangement to which such Member or beneficial owner, or their respective Affiliates, directly or indirectly, is a party as at the date of such notice; |
(iv) | any other information relating to such Member and any such beneficial owner that would be required to be disclosed in a proxy statement in connection with a solicitation of proxies for the appointment of Directors in a contested election pursuant to section 14 of the Exchange Act; and |
(v) | a representation that the Member is a holder of record of Shares entitled to vote at such annual general meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in such Member’s notice; |
(b) | a description of all arrangements or understandings between the Member or any beneficial owner, or their respective Affiliates, and each nominee or any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the Member; |
(c) | a representation whether the Member or the beneficial owner is or intends to be part of a Group which intends: |
(i) | to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Ordinary Shares (or other Shares) required to appoint the Director or Directors nominated; and/or |
(ii) | otherwise to solicit proxies from Members in support of such nomination or nominations; |
(d) | as to each person whom the Member proposes to nominate for appointment or re-appointment as a Director: |
(i) | all information relating to such person as would have been required to be included in a proxy statement filed in connection with a solicitation of proxies for the appointment of Directors in a contested election pursuant to section 14 of the Exchange Act; |
(ii) | a description of any Covered Arrangement to which such nominee or any of his Affiliates is a party as at the date of such notice |
(iii) | the written consent of each nominee to being named in the proxy statement as a nominee and to serving as a Director if so appointed; and |
(iv) | whether, if appointed, the nominee intends to tender any advance resignation notice(s) requested by the Directors in connection with subsequent elections, such advance resignation to be contingent upon the nominee’s failure to receive a majority vote and acceptance of such resignation by the Directors; and |
(e) | an undertaking by the Member of record and each beneficial owner, if any, to (i) notify the Company in writing of the information set forth in Articles 29.3(a)(ii), (a)(iii), (b) and (d) above as at the record date for the annual general meeting promptly (and, in any event, within five business days) following the later of the record date or the date notice of the record date is first disclosed by public announcement and (ii) update such information thereafter within two business days of any change in such information and, in any event, as at close of business on the day preceding the meeting date. |
29.4 | No person shall be eligible for appointment as a Director unless nominated in accordance with the procedures set forth in the Articles. Except as otherwise provided by Applicable Law or the Articles, the chairman or co-chairman of any annual general meeting to appointment Directors or the Directors may, if the facts warrant, determine that a nomination was not made in compliance with the foregoing procedure or if the Member solicits proxies in support of such Member’s nominee(s) without such Member having made the representation required by Article 29.3(c); and if the chairman, co-chairman or the Directors should so determine, it shall be so declared to the annual general meeting, and the defective nomination shall be disregarded. Notwithstanding anything in the Articles to the contrary, unless otherwise required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, if a Member intending to make a nomination at an annual general meeting in accordance with this Article does not: |
(a) | timely provide the notifications contemplated by of Article 29.3(e); or |
(b) | timely appear in person or by proxy at the annual general meeting to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Company or any other person or entity. |
29.5 | Notwithstanding the foregoing provisions of this Article, any Member intending to make a nomination at an annual general meeting in accordance with this Article, and each related beneficial owner, if any, shall also comply with all requirements of the Exchange Act and the rules and regulations thereunder applicable to the same extent as if the Shares were registered under the Exchange Act with respect to the matters set forth in the Articles; provided, however, that any references in the Articles to the Exchange Act are not intended to and shall not limit the requirements applicable to nominations made or intended to be made in accordance with Article 29.1(b). |
29.6 | Nothing in this Article shall be deemed to affect any rights of the holders of any class of Preference Shares, or any other class of Shares authorised to be issued by the Company, to appoint Directors pursuant to the terms thereof. |
29.7 | To be eligible to be a nominee for appointment or re-appointment as a Director pursuant to Article 29.1(b), a person must deliver (not later than the deadline prescribed for delivery of notice) to the Company a |
written questionnaire prepared by the Company with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Company upon written request) and a written representation and agreement (in the form provided by the Company upon written request) that such person: |
(a) | is not and will not become a party to: |
(i) | any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if appointed as a Director, will act or vote on any issue or question (a “ Voting Commitment |
(ii) | any Voting Commitment that could limit or interfere with such person’s ability to comply, if appointed as a Director, with such person’s duties under Applicable Law; |
(b) | is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a Director that has not been disclosed therein; |
(c) | in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if appointed as a Director, and will comply with, Applicable Law and corporate governance, conflict of interest, confidentiality and share ownership and trading policies and guidelines of the Company that are applicable to Directors generally; and |
(d) | if appointed as a Director, will act in the best interests of the Company and not in the interest of any individual constituency. The Nominating Committee shall review all such information submitted by the Member with respect to the proposed nominee and determine whether such nominee is eligible to act as a Director. The Company and the Nominating Committee may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent Director or that could be material to a reasonable Member’s understanding of the independence, or lack thereof, of such nominee. |
29.8 | At the request of the Directors, any person nominated for appointment as a Director shall furnish to the Company the information that is required to be set forth in a Members’ notice of nomination pursuant to this Article. |
29.9 | Any Member proposing to nominate a person or persons for appointment as Director shall be responsible for, and bear the costs associated with, soliciting votes from any other voting Member and distributing materials to such Members prior to the annual general meeting in accordance with the Articles and applicable rules of the Securities and Exchange Commission. A Member shall include any person or persons such Member intends to nominate for appointment as Director in its own proxy statement and proxy card. |
30 |
Powers of Directors |
30.1 | Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors. |
30.2 | All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall determine by resolution. |
30.3 | The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance. |
30.4 | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. |
31 |
Appointment and Removal of Directors |
31.1 | Prior to the closing of a Business Combination, the Company may by Ordinary Resolution of the holders of the Class B Shares appoint any person to be a Director or may by Ordinary Resolution of the holders of the Class B Shares remove any Director. For the avoidance of doubt, prior to the closing of a Business Combination, holders of Class A Shares shall have no right to vote on the appointment or removal of any Director, even if such Director will be appointed in connection with the closing of a Business Combination. |
31.2 | The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with the Articles as the maximum number of Directors. |
31.3 | After the closing of a Business Combination, the Company may by Ordinary Resolution appoint any person to be a Director or may by Ordinary Resolution remove any Director. |
31.4 | Prior to the closing of a Business Combination, Article 31.1 may only be amended by a Special Resolution passed by at least two-thirds of such Members (which shall include a simple majority of the holders of Class B Shares) as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been given, or by way of unanimous written resolution. |
32 |
Vacation of Office of Director |
(a) | the Director gives notice in writing to the Company that he resigns the office of Director; or |
(b) | the Director absents himself (for the avoidance of doubt, without being represented by proxy) from three consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass a resolution that he has by reason of such absence vacated office; or |
(c) | the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors generally; or |
(d) | the Director is found to be or becomes of unsound mind; or |
(e) | all of the other Directors (being not less than two in number) determine that he should be removed as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held in accordance with the Articles or by a resolution in writing signed by all of the other Directors. |
33 |
Proceedings of Directors |
33.1 | The quorum for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be a majority of the Directors then in office. |
33.2 | Subject to the provisions of the Articles, the Directors may regulate their proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. |
33.3 | A person may participate in a meeting of the Directors or any committee of Directors by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting. Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is located at the start of the meeting. |
33.4 | A resolution in writing (in one or more counterparts) signed by all the Directors or all the members of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held. |
33.5 | A Director may, or other Officer on the direction of a Director shall, call a meeting of the Directors by at least two days’ notice in writing to every Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall apply mutatis mutandis. |
33.6 | The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose. |
33.7 | The Directors may elect a chairman of their board and determine the period for which he is to hold office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting. |
33.8 | All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as the case may be. |
33.9 | A Director may be represented at any meetings of the board of Directors by a proxy appointed in writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing Director. |
34 |
Presumption of Assent |
35 |
Directors’ Interests |
35.1 | A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine. |
35.2 | A Director may act by himself or by, through or on behalf of his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director. |
35.3 | A Director may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company. |
35.4 | No person shall be disqualified from the office of Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon. |
35.5 | A general notice that a Director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction. |
36 |
Minutes |
37 |
Delegation of Directors’ Powers |
37.1 | The Directors may delegate any of their powers, authorities and discretions, including the power to sub-delegate, to any committee consisting of one or more Directors (including, without limitation, the Audit Committee, the Compensation Committee and the Nominating Committee). Any such delegation may be made subject to any conditions the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying. |
37.2 | The Directors may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying. |
37.3 | The Directors may adopt formal written charters for committees. Each of these committees shall be empowered to do all things necessary to exercise the rights of such committee set forth in the Articles and shall have such powers as the Directors may delegate pursuant to the Articles and as required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. Each of the Audit Committee, |
the Compensation Committee and the Nominating Committee, if established, shall consist of such number of Directors as the Directors shall from time to time determine (or such minimum number as may be required from time to time by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law). |
37.4 | The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and may be revoked by the Directors at any time. |
37.5 | The Directors may by power of attorney or otherwise appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in him. |
37.6 | The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise specified in the terms of his appointment an Officer may be removed by resolution of the Directors or Members. An Officer may vacate his office at any time if he gives notice in writing to the Company that he resigns his office. |
38 |
No Minimum Shareholding |
39 |
Remuneration of Directors |
39.1 | The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors shall determine, provided that no cash remuneration shall be paid to any Director by the Company prior to the consummation of a Business Combination. The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of one such method and partly the other. |
39.2 | The Directors may by resolution approve additional remuneration to any Director for any services which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration as a Director. |
40 |
Seal |
40.1 | The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has been affixed shall be signed by at least one person who shall be either a Director or some Officer or other person appointed by the Directors for the purpose. |
40.2 | The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used. |
40.3 | A Director or Officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever. |
41 |
Dividends, Distributions and Reserve |
41.1 | Subject to the Statute and this Article and except as otherwise provided by the rights attached to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised or unrealised profits of the Company, out of the share premium account or as otherwise permitted by law. |
41.2 | Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly. |
41.3 | The Directors may deduct from any Dividend or other distribution payable to any Member all sums of money (if any) then payable by him to the Company on account of calls or otherwise. |
41.4 | The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner as may seem expedient to the Directors. |
41.5 | Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required and how any costs involved are to be met. |
41.6 | The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company. |
41.7 | Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders. |
41.8 | No Dividend or other distribution shall bear interest against the Company. |
41.9 | Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed after six months from the date on which such Dividend or other distribution becomes payable may, in the |
discretion of the Directors, be paid into a separate account in the Company’s name, provided that the Company shall not be constituted as a trustee in respect of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable shall be forfeited and shall revert to the Company. |
42 |
Capitalisation |
43 |
Books of Account |
43.1 | The Directors shall cause proper books of account (including, where applicable, material underlying documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions. |
43.2 | The Directors shall determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting. |
43.3 | The Directors may cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. |
44 |
Audit |
44.1 | The Directors may appoint an Auditor of the Company who shall hold office on such terms as the Directors determine. |
44.2 | Without prejudice to the freedom of the Directors to establish any other committee, if the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors and shall adopt a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an annual basis. |
The composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. |
44.3 | If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit Committee for the review and approval of potential conflicts of interest. |
44.4 | The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists). |
44.5 | If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill the vacancy and determine the remuneration of such Auditor. |
44.6 | Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers such information and explanation as may be necessary for the performance of the duties of the Auditor. |
44.7 | Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during their term of office, upon request of the Directors or any general meeting of the Members. |
45 |
Notices |
45.1 | Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where the notice is given by e-mail by sending it to the e-mail address provided by such Member). Notice may also be served by Electronic Communication in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or by placing it on the Company’s Website. |
45.2 | Where a notice is sent by: |
(a) | courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following the day on which the notice was delivered to the courier; |
(b) | post; service of the notice shall be deemed to be effected by properly addressing, pre paying and posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted; |
(c) | cable, telex or fax; service of the notice shall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day that it was transmitted; |
(d) | e-mail or other Electronic Communication; service of the notice shall be deemed to be effected by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient; and |
(e) | placing it on the Company’s Website; service of the notice shall be deemed to have been effected one hour after the notice or document was placed on the Company’s Website. |
45.3 | A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred. |
45.4 | Notice of every general meeting shall be given in any manner authorised by the Articles to every holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person shall be entitled to receive notices of general meetings. |
46 |
Winding Up |
46.1 | If the Company shall be wound up, the liquidator shall apply the assets of the Company in satisfaction of creditors’ claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding up: |
(a) | if the assets available for distribution amongst the Members shall be insufficient to repay the whole of the Company’s issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them; or |
(b) | if the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the Company’s issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. |
46.2 | If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares and with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability. |
47 |
Indemnity and Insurance |
47.1 | Every Director and Officer (which for the avoidance of doubt, shall not include auditors of the Company), together with every former Director and former Officer (each an “ Indemnified Person |
47.2 | The Company shall advance to each Indemnified Person reasonable attorneys’ fees and other costs and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall be returned to the Company (without interest) by the Indemnified Person. |
47.3 | The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company. |
48 |
Financial Year |
49 |
Transfer by Way of Continuation |
49.1 | If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. |
49.2 | Prior to the closing of a Business Combination: |
(a) | only the Class B Shares shall carry the right to vote on any resolution of the shareholders to approve any transfer by way of continuation pursuant to this Article (including any Special Resolution required to amend the constitutional documents of the Company or to adopt new constitutional documents of the Company, in each case, as a result of the Company approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands); and |
(b) | this Article 49.2 may only be amended by a Special Resolution passed by at least 90 per cent of such Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been given, or by way of unanimous written resolution. |
50 |
Mergers and Consolidations |
51 |
Business Combination |
51.1 | Notwithstanding any other provision of the Articles, this Article shall apply during the period commencing upon the adoption of the Articles and terminating upon the first to occur of the consummation of a Business Combination and the full distribution of the Trust Account pursuant to this Article. In the event of a conflict between this Article and any other Articles, the provisions of this Article shall prevail. |
51.2 | Prior to the consummation of a Business Combination, the Company shall either: |
(a) | submit such Business Combination to its Members for approval; or |
(b) | provide Members with the opportunity to have their Shares repurchased by means of a tender offer for a per-Share repurchase price payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of such Business Combination, including interest earned on the Trust Account (net of taxes paid or payable, if any), divided by the number of then issued Public Shares, provided that the Company shall not repurchase Public Shares in an amount that would exceed the Redemption Limitation. Such obligation to repurchase Shares is subject to the completion of the proposed Business Combination to which it relates. |
51.3 | If the Company initiates any tender offer in accordance with Rule 13e-4 and Regulation 14E of the Exchange Act in connection with a proposed Business Combination, it shall file tender offer documents with the Securities and Exchange Commission prior to completing such Business Combination which contain substantially the same financial and other information about such Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act. If, alternatively, the Company holds a general meeting to approve a proposed Business Combination, the Company will conduct any redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, and not pursuant to the tender offer rules, and file proxy materials with the Securities and Exchange Commission. |
51.4 | At a general meeting called for the purposes of approving a Business Combination pursuant to this Article, in the event that such Business Combination is approved by Ordinary Resolution, the Company shall be authorised to consummate such Business Combination, provided that the Company shall not consummate such Business Combination unless the Company has net tangible assets of at least US$5,000,001 immediately prior to or upon such consummation of, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to, such Business Combination (the “ Redemption Limitation |
51.5 | Any Member holding Public Shares who is not the Sponsor, a Founder, Officer or Director may, at least two business days’ prior to any vote on a Business Combination, elect to have their Public Shares redeemed for cash, in accordance with any applicable requirements provided for in the related proxy materials (the “ IPO Redemption per-Share redemption price payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then issued Public Shares (such redemption price being referred to herein as the “Redemption Price |
51.6 | A Member may not withdraw a Redemption Notice once submitted to the Company unless the Directors determine (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). |
51.7 | In the event that the Company does not consummate a Business Combination within 24 months from the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles, the Company shall: |
(a) | cease all operations except for the purpose of winding up; |
(b) | 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 (less taxes paid or payable, if any, and up to US$100,000 of interest to pay dissolution expenses), divided by the number of then Public Shares in issue, which redemption will completely extinguish public Members’ rights as Members (including the right to receive further liquidation distributions, if any); and |
(c) | as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Members and the Directors, liquidate and dissolve, |
51.8 | In the event that any amendment is made to the Articles: |
(a) | to modify the substance or timing of the Company’s obligation to allow redemption in connection with a Business Combination or redeem 100 per cent of the Public Shares if the Company does not consummate a Business Combination within 24 months from the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles; or |
(b) | with respect to any other provision relating to Members’ rights or pre-Business Combination activity, |
51.9 | A holder of Public Shares shall be entitled to receive distributions from the Trust Account only in the event of an IPO Redemption, a repurchase of Shares by means of a tender offer, a redemption in connection with an amendment to the Articles or a distribution of the Trust Account. In no other circumstance shall a holder of Public Shares have any right or interest of any kind in the Trust Account. |
51.10 | After the issue of Public Shares, and prior to the consummation of a Business Combination, the Company shall not issue additional Shares or any other securities that would entitle the holders thereof to: |
(a) | receive funds from the Trust Account; or |
(b) | vote as a class with Public Shares on the Company’s initial Business Combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial Business Combination or (b) to approve an amendment to the Memorandum or the Articles to (x) extend the time the Company has to consummate a business combination beyond 24 months from the closing of the IPO or (y) amend the foregoing provisions. |
51.11 | A Director may vote in respect of a Business Combination in which such Director has a conflict of interest with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict to the other Directors. |
51.12 | As long as the securities of the Company are listed on the New York Stock Exchange, the Company must complete one or more Business Combinations having an aggregate fair market value of at least 80 per cent |
of the assets held in the Trust Account (net of amounts previously disbursed to the Company’s management for taxes and excluding the amount of deferred underwriting discounts held in the Trust Account) at the time of the Company’s signing a definitive agreement in connection with a Business Combination. A Business Combination must not be effectuated with another blank cheque company or a similar company with nominal operations. |
51.13 | The Company may enter into a Business Combination with a target business that is Affiliated with the Sponsor, a Founder, a Director or an Officer. In the event the Company seeks to consummate a Business Combination with a target that is Affiliated with the Sponsor, a Founder, a Director or an Officer, the Company, or a committee of Independent Directors, will obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business the Company is seeking to acquire that is a member of the United States Financial Industry Regulatory Authority or an independent accounting firm that such a Business Combination is fair to the Company from a financial point of view. |
52 |
Certain Tax Filings |
53 |
Business Opportunities |
53.1 | To the fullest extent permitted by Applicable Law, no individual serving as a Director or an Officer (“ Management |
53.2 | Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for both the Company and Management, about which a Director and/or Officer who is also a member of Management acquires knowledge. |
53.3 | To the extent a court might hold that the conduct of any activity related to a corporate opportunity that is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the fullest extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities. To the fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in the future and that have been conducted in the past. |
(i) | no suspension of the qualification of the Subscribed Shares for offering or sale or trading in any jurisdiction, or any proceedings for any of such purposes, shall be ongoing; |
(ii) | all conditions precedent to the closing of the Transactions set forth in the Transaction Agreement shall have been satisfied (as determined by the parties to the Transaction Agreement) or waived (other than those conditions which, by their nature, are to be satisfied at the closing of the Transactions pursuant to the Transaction Agreement or by the Closing itself, but subject to their satisfaction or valid waiver at the closing of the Transactions), and the closing of the Transactions shall be scheduled to occur substantially concurrently with or immediately following the Closing; and |
(iii) | no 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 the consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions or the Subscription contemplated hereby and no such governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition. |
(i) | all representations and warranties of Subscriber contained in this Backstop Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect (as defined below), which representations and warranties shall be true and correct in all respects) at and as of the Closing Date; and |
(ii) | Subscriber shall not be in material breach of any covenant, agreement or condition required by this Backstop Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing. |
(i) | Each of the respective representations and warranties of each of the Company and Fathom contained in this Backstop Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Company Material Adverse Effect and Fathom Material Adverse Effect (each as defined below), which such respective representations and warranties shall be true and correct in all respects) at and as of the Closing Date; |
(ii) | the Company shall not be in material breach of any covenant, agreement or condition required by this Backstop Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and |
(iii) | the terms of the Transaction Agreement shall not have been amended or modified in a manner that would materially and adversely affect Subscriber (in its capacity as such) without Subscriber’s prior written consent. |
(i) | advise Subscriber, as expeditiously as possible: |
(i) | when a Registration Statement or any amendment thereto has been filed with the Commission; |
(ii) | after it shall receive notice or obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose; |
(iii) | of the receipt by the Company of any notification with respect to the suspension of the qualification of the Subscribed Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and |
(iv) | subject to the provisions in this Backstop Subscription Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading. |
(ii) | use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable; |
(iii) | upon the occurrence of any event contemplated in Section 6(b)(i)(iv) above, except for such times as the Company is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement, the Company shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Subscribed Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; |
(iv) | use its commercially reasonable efforts to allow Subscriber to review disclosure regarding Subscriber in the Registration Statement; and |
(v) | otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by Subscriber, consistent with the terms of this Backstop Subscription Agreement, in connection with the registration of the Subscribed Shares. |
ALTIMAR ACQUISITION CORP. II | ||||
By: | /s/ Tom Wasserman | |||
Name: Tom Wasserman | ||||
Title: Chief Executive Officer |
Address for Notices: | ||||
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ATTN: | | |||
EMAIL: |
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with a copy (not to constitute notice) to: | ||||
Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019 Attn: Raphael M. Russo, Esq. rrusso@paulweiss.com |
FATHOM HOLDCO, LLC | ||
By: | /s/ John May | |
Name: John May | ||
Title: President | ||
Address for Notices: | ||
c/o CORE Industrial Partners, LLC 150 N. Riverside Plaza, Suite #2050 Chicago, Illinois 60606 ATTN: John May EMAIL: john@coreipfund.com | ||
with a copy (not to constitute notice) to: Winston & Strawn LLP 35 W. Wacker Drive Chicago, IL 60601 ATTN: Steven J. Gavin, Matthew F. Bergmann and Jason D. Osborn EMAIL: SGavin@winston.com, MBergmann@winston.com and JOsborn@winston.com |
SUBSCRIBER: | ||||
CORE INDUSTRIAL PARTNERS FUND I, L.P. | ||||
By: CORE Industrial Partners GP I, LLC, its general partner | ||||
By: | /s/ John May | |||
Name: John May | ||||
Title: Managing Partner | ||||
CORE INDUSTRIAL PARTNERS FUND I PARALLEL, L.P. | ||||
By: CORE Industrial Partners GP I, LLC, its general partner | ||||
By: | /s/ John May | |||
Name: John May | ||||
Title: Managing Partner | ||||
Address for Notices: | ||||
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Names in which shares are to be registered: | ||||
CORE Industrial Partners Fund I, L.P. | ||||
CORE Industrial Partners Fund I Parallel, L.P. | ||||
Number of Subscribed Shares: |
Up to 1,000,000 | |||
CORE Industrial Partners Fund I, L.P.: Up to 870,000 Subscribed Shares | ||||
CORE Industrial Partners Fund I Parallel, L.P.: Up to 130,000 Subscribed Shares | ||||
Price Per Subscribed Share: |
$10.00 | |||
Aggregate Purchase Price: |
Up to $10,000,000 | |||
|
A. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the applicable subparagraphs) |
☐ | Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB. |
☐ | We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs) |
☐ | Subscriber is an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13) under the Securities Act) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an “accredited investor.” We are not a natural person. |
☐ | We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is an institutional “accredited investor.” |
C. | AFFILIATE STATUS |
1 |
“ Family of investment companies 18f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor) |
SUBSCRIBER: | ||
Print Name: | ||
By: |
| |
Name: |
||
Title: |
ALTIMAR SPONSOR II, LLC | ||
By: | /s/ Tom Wasserman | |
Name: Tom Wasserman | ||
Title: Chief Executive Officer |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Kevin Beebe | |
Name: Kevin Beebe |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Payne Brown | |
Name: Payne Brown |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Rick Jelinek | |
Name: Rick Jelinek |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Roma Khanna | |
Name: Roma Khanna |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Michael Rubenstein | |
Name: Michael Rubenstein |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Vijay Sondhi | |
Name: Vijay Sondhi |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Michael Vorhaus | |
Name: Michael Vorhaus |
Agreed and accepted as of the date set forth above: | ||
ALTIMAR ACQUISITION CORP. II | ||
By: | /s/ Tom Wasserman | |
Name: Tom Wasserman | ||
Title: Chief Executive Officer |
FATHOM HOLDCO, LLC | ||
By: | /s/ John May | |
Name: John May | ||
Title: President | ||
CORE INDUSTRIAL PARTNERS, LLC | ||
By: | /s/ John May | |
Name: John May | ||
Title: President | ||
CORE FUND I BLOCKER-5 LLC | ||
By: | /s/ John May | |
Name: John May | ||
Title: Managing Partner | ||
CORE FUND I BLOCKER-2, LLC | ||
By: | /s/ John May | |
Name: John May | ||
Title: Managing Partner |
SG (MCT) BLOCKER, LLC | ||
By: | /s/ Joshua Posner | |
Name: Joshua Posner | ||
Title: Authorized Signatory |
ALTIMAR SPONSOR II, LLC | ||||
By: | /s/ Tom Wasserman | |||
Name: | Tom Wasserman | |||
Title: | Chief Executive Officer |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Kevin Beebe | |
Name: Kevin Beebe |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Payne Brown | |
Name: Payne Brown |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Rick Jelinek | |
Name: Rick Jelinek |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Roma Khanna | |
Name: Roma Khanna |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Michael Rubenstein | |
Name: Michael Rubenstein |
INDIVIDUAL CLASS B HOLDERS | ||
By: | /s/ Vijay Sondhi | |
Name: Vijay Sondhi |
INDIVIDUAL CLASS B HOLDERS | ||||
By: | /s/ Michael Vorhaus | |||
Name: | Michael Vorhaus |
ALTIMAR ACQUISITION CORP. II | ||||
By: | /s/ Tom Wasserman | |||
Name: | Tom Wasserman | |||
Title: | Chief Executive Officer |
FATHOM HOLDCO, LLC | ||||
By: | /s/ John May | |||
Name: | John May | |||
Title: | President | |||
CORE INDUSTRIAL PARTNERS, LLC | ||||
By: | /s/ John May | |||
Name: | John May | |||
Title: | President | |||
CORE FUND I BLOCKER-5 LLC | ||||
By: | /s/ John May | |||
Name: | John May | |||
Title: | Managing Partner | |||
CORE FUND I BLOCKER-2, LLC | ||||
By: | /s/ John May | |||
Name: | John May | |||
Title: | Managing Partner |
SG (MCT) BLOCKER, LLC | ||||
By: | /s/ Joshua Posner | |||
Name: | Joshua Posner | |||
Title: | Authorized Signatory |
Holder |
Cayman Class B Shares Owned | |
Kevin Beebe |
25,000 | |
Payne Brown |
25,000 | |
Rick Jelinek |
25,000 | |
Roma Khanna |
25,000 | |
Michael Rubenstein |
25,000 | |
Vijay Sondhi |
25,000 | |
Michael Vorhaus |
25,000 |
Holder |
Cayman Class B Shares Forfeited | |
ALTIMAR SPONSOR II, LLC |
2,535,000 | |
Kevin Beebe |
7,500 | |
Payne Brown |
7,500 | |
Rick Jelinek |
7,500 | |
Roma Khanna |
7,500 | |
Michael Rubenstein |
7,500 | |
Vijay Sondhi |
7,500 | |
Michael Vorhaus |
7,500 |
ALTIMAR ACQUISITION CORP. II | ||
By: | | |
Name: | ||
Title: | ||
RAPID MERGER SUB, LLC | ||
By: | | |
Name: | ||
Title: |
[SECURITYHOLDER] | ||
By: | | |
Name: | ||
Title: | ||
Fathom Units Held : | ||
[[ · ] Fathom Class A Common Units] | ||
[[ · ] Fathom Class B Common Units] | ||
[[ · ] Fathom Class A Preferred Units] |
[SECURITYHOLDER] | ||
By: | | |
Name: | ||
Title |
Exhibit No. |
Description | |
2.1† | Business Combination Agreement, dated as of July 15, 2021, by and among Altimar Acquisition Corp. II, Fathom Holdco, LLC and the other parties hereto (incorporated by reference to Exhibit 2.1 to Altimar II’s Current Report on Form 8-K filed with the SEC on July 19, 2021 and attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
2.2† | Amendment No. 1 to the Business Combination Agreement, dated as of November 16, 2021, by and among Altimar Acquisition Corp. II, Fathom Holdco, LLC and the other parties hereto (incorporated by reference to Exhibit 2.1 to Altimar II’s Current Report on Form 8-K filed with the SEC on November 16, 2021 and attached to the proxy statement/ prospectus which forms a part of this registration statement as ). | |
3.1 | Amended and Restated Memorandum and Articles of Association of Altimar Acquisition Corp. II (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
3.2 | Form of Certificate of Incorporation of Fathom Digital Manufacturing Corporation (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
3.3 | Form of Bylaws of Fathom Digital Manufacturing Corporation (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
4.1 | Form of 2021 Omnibus Plan (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
4.2 | Form of ESPP (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
4.3 | Warrant Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to Altimar II’s Current Report on Form 8-K filed on February 9, 2021). | |
5.1** | Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to the validity of the shares of Class A common stock and warrants. | |
8.1** | Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP regarding certain U.S. federal income tax matters. | |
10.1 | Form of Investor Rights Agreement to be entered into by and among Fathom Digital Manufacturing Corporation and the other parties thereto (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
10.2 | Form of Registration Rights Agreement to be entered into by and among Fathom Digital Manufacturing Corporation and the other parties thereto (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
10.3 | Form of Tax Receivable Agreement to be entered into by and among Fathom Digital Manufacturing Corporation, Fathom OpCo and the other parties thereto (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
10.4 | Form of Fathom Operating Agreement to be entered into by and among Fathom Digital Manufacturing Corporation, Fathom OpCo and the other parties thereto (attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
10.5 | Forfeiture and Support Agreement, dated as of July 15, 2021, by and among Altimar Sponsor II, LLC, the Altimar II Class B Holders party thereto, Altimar Acquisition Corp. II, Fathom Holdco, LLC and the other parties thereto (incorporated by reference to Exhibit 10.1 to Altimar II’s Current Report on Form 8-K filed with the SEC on July 19, 2021 and attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
10.6 | Amended Forfeiture and Support Agreement, dated as of November 16, 2021, by and among Altimar Sponsor II, LLC, the Altimar II Class B Holders party thereto, Altimar Acquisition Corp. II, Fathom Holdco, LLC and the other parties thereto (incorporated by reference to Exhibit 10.2 to Altimar II’s Current Report on Form 8-K filed with the SEC on November 16, 2021 and attached to the proxy statement/prospectus which forms a part of this registration statement as ). | |
10.7 | Fathom Form of Voting and Support Agreement (incorporated by reference to Exhibit 10.4 to Altimar II’s Current Report on Form 8-K filed with the SEC on July 19, 2021 and attached to the proxy statement/prospectus which forms a part of this registration statement as ). |
* | Filed herewith |
** | Previously Filed |
† | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
(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 the 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 SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement); and (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 offering of such securities at that time shall be deemed to be the initial bona fide |
(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 offering. |
(4) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of securities, 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 offering required to be filed pursuant to Rule 424; (ii) any free writing prospectus relating to the offering 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 offering 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 offering made by the undersigned registrant to the purchaser. |
(5) | 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. |
(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 registrant 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 Securities 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 has become effective, and 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 offering of such securities at that time shall be deemed to be the initial bona fide |
(8) | To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 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. |
(9) | 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, this registration statement when it became effective. |
(10) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant 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 registrant 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 Securities Act of 1933 and will be governed by the final adjudication of such issue. |
ALTIMAR ACQUISITION CORP. II | ||
By: | /s/ Tom Wasserman | |
Name: Tom Wasserman | ||
Title: Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Tom Wasserman Tom Wasserman |
Chief Executive Officer (Principal Executive Officer) and Director |
November 30, 2021 | ||
/s/ Wendy Lai Wendy Lai |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
November 30, 2021 | ||
* Kevin L. Beebe |
Director | November 30, 2021 | ||
* Payne D. Brown |
Director | November 30, 2021 | ||
* Richard M. Jelinek |
Director | November 30, 2021 | ||
* Roma Khanna |
Director | November 30, 2021 | ||
* Michael Rubenstein |
Director | November 30, 2021 | ||
* Vijay K. Sondhi |
Director | November 30, 2021 | ||
* Michael Vorhaus |
Director | November 30, 2021 |
*By: | /s/ Wendy Lai | |
Name: Wendy Lai | ||
Title: Attorney-in-Fact |