What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-10 compared with 2022-08-12 · 34 added, 54 removed, 104 unchanged (46% of the section changed)

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References to the “Company,” “our,” “us” or “we” refer to ESGEN Acquisition Corporation.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q

(this “Quarterly Report”).

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

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our pool of prospective target businesses;

our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-19

pandemic, as well as from the emergence of variant strains of COVID-19,

including the efficacy and adoption of recently developed vaccines with respect to COVID-19

and variant strains thereof;

our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-19pandemic, as well as from the emergence of variant strains of COVID-19, including the efficacy and adoption of recently developed vaccines with respect to COVID-19 and variant strains thereof;

the ability of our officers and directors to generate a number of potential business combination opportunities;

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Of this amount, $15,428,121 was charged to shareholder’s deficit and $710,081 was allocated to the warrants and expensed.

Following the closing of our initial public offering on October 22, 2021, $281,520,000 ($10.20 per Unit) from the net proceeds sold in our initial public offering, including proceeds of the sale of the Private Placement Warrants, was deposited in a trust account (“Trust Account”) and will only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7

promulgated under the Investment Company Act which invest only in direct U.S.

government treasury obligations.

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(i) cease all operations except for the purpose of winding up;

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay income taxes, if any (less up to $100,000 of interest to pay winding up and dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at aper-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay income taxes, if any (less up to $100,000 of interest to pay winding up and dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);

and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

Results of Operations

All of our activity from April 19, 2021 (inception) through June 30, 2022, was in preparation for our initial public offering, and since our initial public offering, our activity has been limited to the search for a prospective initial Business Combination.

All of our activity from April 19, 2021 (inception) through September 30, 2022, was in preparation for our initial public offering, and since our initial public offering, our activity has been limited to the search for a prospective initial Business Combination.

We will not generate any operating revenues until the closing and completion of our initial Business Combination.

For the three months ended June 30, 2022, we had income of $1,494,631, which consisted of a gain on change in fair value of warrant liabilities of $1,527,600, interest income from marketable securities held in trust account of $368,774, offset by formation and operating costs of $401,743.

For the six months ended June 30, 2022, we had income of $7,375,172, which consisted of a gain on change in fair value of warrant liabilities of $8,262,960, interest income from marketable securities held in trust account of $386,945, offset by formation and operating costs of $1,274,733.

For the period from April 19, 2021 (inception) to June 30, 2021, we had a loss of $13,703, which consisted of formation and operating costs.

For the three months ended September 30, 2022, we had income of $4,262,070, which consisted of a gain on change in fair value of warrant liabilities of $3,345,600, interest income from marketable securities held in trust account of $1,245,745, partially offset by operating costs of $329,275.

For the nine months ended September 30, 2022, we had income of $11,637,242, which consisted of a gain on change in fair value of warrant liabilities of $11,608,560, interest income from marketable securities held in trust account of $1,632,690, partially offset by operating costs of $1,604,008.

For the three months ended September 30, 2021, we had net loss of $1,690, which consisted of formation and operating costs.

For the period from April 19, 2021 (inception) to September 30, 2021, we had a loss of $15,393, which consisted of formation and operating costs.

Liquidity and Capital Resources

As of June 30, 2022, the Company had cash of $947,477 and owes $995,805 in accrued offering costs and expenses and an additional $255,539 to related parties.

Prior to the completion of our initial public offering, our liquidity needs had been satisfied through a capital contribution from the Sponsor of $25,000 and a loan to us of up to $300,000 by our Sponsor under an unsecured promissory note, which had an outstanding balance of $171,346 at June 30, 2022.

As of September 30, 2022, the Company had cash of $890,273 and owes $1,089,536 in accrued offering costs and expenses and an additional $285,539 to related parties.

In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor, an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans.

As of June 30, 2022, there were no amounts outstanding under any Working Capital Loans.

As of September 30, 2022, there were no amounts outstanding under any Working Capital Loans.

Based on the foregoing, management believes that we will not have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a Business Combination or one year from this filing.

Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40,

“Presentation of Financial Statements – Going Concern”, the Company has until January 22, 2023 (unless extended) to consummate a Business Combination.

In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic205-40, “Presentation of Financial Statements – Going Concern”, the Company has until January 22, 2023 (unless extended) to consummate a Business Combination.

If a Business Combination is not consummated by this date and an extension not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company.

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Underwriting Agreement

We granted the underwriters a 45-day

option to purchase up to 3,600,000 additional Units to cover over-allotments, if any, at our initial public offering price less the underwriting discounts and commissions.

We granted the underwriters a45-dayoption to purchase up to 3,600,000 additional Units to cover over-allotments, if any, at our initial public offering price less the underwriting discounts and commissions.

The underwriters exercised the full over-allotment at the consummation of our initial public offering on October 22, 2021.

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Commencing on the date that our securities are first listed on the NASDAQ through the earlier of consummation of our initial Business Combination and the liquidation, we are expected to pay our Sponsor a total of $10,000 per month for office space, utilities, secretarial support and administrative services.

As of June 30, 2022, we had incurred $84,193 pursuant to this agreement, which was accrued in “Due to related party”.

As of September 30, 2022, we had incurred $114,193 pursuant to this agreement, which was accrued in “Due to related party”.

Registration Rights

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In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination.

period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares issuable upon exercise of the Private Placement Warrants, 30 days after the completion of the initial Business Combination.

However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”) to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares issuable upon exercise of the Private Placement Warrants, 30 days after the completion of the initial Business Combination.

We will bear the expenses incurred in connection with the filing of any such registration statements.

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We will bear the expenses incurred in connection with the filing of any such registration statements.

day period commencing at least 150 days after the initial Business Combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Except as described herein, the Sponsor and its directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any30-tradingday period commencing at least 150 days after the initial Business Combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Any permitted transferees would be subject to the same restrictions and other agreements of the Sponsor and its directors and executive officers with respect to any founder shares.

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Going Concern

As of June 30, 2022, the Company had cash of $947,477 and owes $995,805 in accrued offering costs and expenses and an additional $255,539 to related parties.

The Company anticipates that the cash held outside of the Trust Account as of June 30, 2022 will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time.

As of September 30, 2022, the Company had cash of $890,273 and owes $1,089,536 in accrued offering costs and expenses and an additional $285,539 to related parties.

The Company anticipates that the cash held outside of the Trust Account as of September 30, 2022 will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time.

The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.

There is no assurance that the Company’s plans to consummate an initial Business Combination will be successful or successful within the Combination Period.

In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40,

“Presentation of Financial Statements – Going Concern”, the Company has until January 22, 2023 (unless extended) to consummate a Business Combination.

If a Business Combination is not consummated by this date and an extension not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company.

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Warrant Liability

The Company accounts for the Public and Private Placement warrants issued in connection with the Public Offering in accordance with the guidance contained in ASC 815-40

and ASC 480, Distinguishing Liabilities from Equity.

The Company accounts for the Public and Private Placement warrants issued in connection with the Public Offering in accordance with the guidance contained in ASC815-40and ASC 480, Distinguishing Liabilities from Equity.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

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This liability is subject tore-measurement at each balance sheet date.

With each such re-measurement,

the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

Offering Costs Associated with Initial Public Offering

We comply with the requirements of Accounting Standards Codification (“ASC”) 340-10-S99-1

and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering”.

We comply with the requirements of Accounting Standards Codification (“ASC”) 340-10-S99-1and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering”.

Offering costs consist of legal, accounting, underwriting and other costs incurred through the balance sheet date that are related to our initial public offering.

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Our Class A ordinary shares sold in our initial public offering feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events.

Accordingly, as of June 30, 2022 and December 31, 2021, 27,600,000 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholder’s (deficit) equity section of our balance sheets.

Accordingly, as of September 30, 2022 and December 31, 2021, 27,600,000 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholder’s (deficit) equity section of our balance sheets.

Net Income (Loss) Per Ordinary Share

We apply the two-class

method in calculating earnings per share.

We apply the two-class method in calculating earnings per share.

Ordinary share subject to possible redemption which is not currently redeemable and is not redeemable at fair value, has been excluded from the calculation of basic net income (loss) per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings.

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Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06,

Debt — Debt with Conversion and Other Options (Subtopic 470-20)

and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40)

(“ASU 2020-06”)

to simplify accounting for certain financial instruments.

eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments.

ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity.

amends the diluted earnings per share guidance, including the requirement to use the if-converted

method for all convertible instruments.

is effective January 1, 2022 and was applied on a full or modified retrospective basis.

The Company assessed the impact that ASU 2020-06

would have on its financial position, results of operations or cash flows and noted there was no material effect on the Company’s financial statement.

Sheet Arrangements

As of June 30, 2022, we did not have any off-balance

sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K

and did not have any commitments or contractual obligations.

ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.

As a smaller reporting company, ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021.

We are currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

We have not adopted this guidance as of September 30, 2022.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the financial statement.

Off-Balance Sheet Arrangements

As of September 30, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis