SEC Form 10-Q filed by Americas Technology Acquisition Corp.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The stock exchange listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (less any taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination (initially $10.10 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, subject to certain limitations as described in the prospectus. The per-share amount to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by any cash fees the Company will pay to the underwriters (as discussed in Note 6).

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Initial Public Offering (the “Initial Shareholders”) have agreed to vote its Founder Shares (as defined in Note 5), Representative Shares (as defined in Note 8) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.

The Initial Shareholders have agreed (a) to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares.

The Company initially had until December 17, 2021 to complete a Business Combination. However, if the Company anticipated that it would not be able to consummate a Business Combination by December 17, 2021, the Company could extend the period of time to consummate a Business Combination up to two times, each by an additional three months (until June 17, 2022, to complete a Business Combination (the “Combination Period”)). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliate or designees must deposit into the Trust Account $1,150,000 ($0.10 per Public Share), on or prior to the date of the applicable deadline, for each three-month extension. On December 13, 2021, the Company extended the period of time it had to consummate a Business Combination by three months from December 17, 2021 to March 17, 2022. An additional three-month extension was granted on March 11, 2022, further extending the Combination Period to June 17, 2022.

On June 14, 2022, the Company held a shareholder meeting to extend the Combination Period from June 17, 2022 to December 17, 2022. As part of the meeting, shareholders exercised their right to redeem 7,362,342 ordinary shares for an aggregate cash balance of $75,897,772 and approved the extension amendment extending the date by which the Company must consummate its initial Business Combination from June 17, 2022 to December 17, 2022. Pursuant to the extension amendment and the Third Note (as defined below in Note 5), on June 16, 2022, the Sponsor deposited $413,766 (or $0.10 per Public Share that was not redeemed) into the Company’s Trust Account and thereby extended the Combination Period from June 17, 2022 to September 17, 2022. In order to further extend the Combination Period from September 17, 2022, an additional $137,922 (or $0.033 per Public Share that was not redeemed) will be deposited into the Company’s Trust account for each month. The Sponsor or its designees will have the sole discretion whether to continue extending for additional calendar months until December 17, 2022 and if the Sponsor determines not to continue extending for additional calendar months, no additional funds will be deposited into the Trust Account. On June 1, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) which was further amended on July 26, 2022 (see Note 6).

If the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The Initial Shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of their respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than amount of funds deposited into the Trust Account ($10.10 per share).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.10 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Going Concern

As of September 30, 2022, the Company had $4,126 in operating cash, $43,261,353 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital of $597,494. Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination. The Company may need to raise additional capital through loans or additional investments from its Sponsor or third parties as discussed in Note 5.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until December 17, 2022 to consummate the proposed Business Combination. It is uncertain that the Company will be able to consummate the proposed Business Combination by this time. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these financial statements. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after December 17, 2022. The Company intends to complete the proposed Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business Combination by December 17, 2022.

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event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of September 30, 2022 and December 31, 2021, the Company had no outstanding borrowings under the Working Capital Loans.

Related Party Extension Loans –Promissory Notes

As discussed in Note 1, the Company may extend the Combination Period up to two times, each by an additional three months (until December 17, 2022 to complete a Business Combination). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account $1,150,000 ($0.10 per Public Share), on or prior to the date of the applicable deadline, for each three-month extension. Any such payments would be made in the form of a non-interest bearing, unsecured promissory note. Such notes would either be paid upon consummation of a Business Combination, or, at the relevant insider’s discretion, converted upon consummation of a Business Combination into additional Private Warrants at a price of $1.00 per Private Warrant. The Sponsor and its affiliates or designees are not obligated to fund the Trust Account to extend the time for the Company to complete a Business Combination. On December 13, 2021, convertible promissory note (the “New Note”) related to the deposit in Trust of $1,150,000 required to satisfy the extension to March 17, 2022 was issued and an aggregate of $1,150,000 was deposited into the Trust Account on January 10, 2022. The New Note is non-interest bearing and payable upon consummation of the Company’s initial Business Combination. At the lender’s discretion, the New Note may be repayable in warrants upon closing of the Business Combination at a price of $1.00 per warrant. At September 30, 2022 and December 31, 2021, there were $1,150,000 and $0 outstanding under the New Note, respectively. Management has determined the par value of the New Note approximates fair value since the conversion price is significantly higher than the value of the warrants into which the balance may be converted. No arms-length transaction by a note holder would result in a conversion with this fact pattern, thus par value is deemed to approximate fair value. As such no fair value change was booked to the statement of operations.

On March 14, 2022, an aggregate of $1,150,000 was deposited by the Sponsor into the Trust Account, representing $0.10 per Public Share, which enabled the Company to extend the period of time it has to consummate a Business Combination by three months from March 17, 2022 to June 17, 2022. In connection with this payment, the Company issued an unsecured promissory note (the “Second Note”) to the Sponsor having a principal amount equal to the amount the Sponsor deposited into the Trust Account of $1,150,000. The Second Note is not convertible. At September 30, 2022, there were $1,150,000 outstanding under the Second Note.

On June 14, 2022, the Company entered into a promissory note with the Sponsor pursuant to which the Sponsor agreed to loan the Company up to an aggregate principal amount of up to $830,000 (the “Third Note”) in connection with the extension of the Company’s Combination Period from June 17, 2022 to December 17, 2022. The Third Note is non-interest bearing and payable on the earlier of the date on which the Company consummates a Business Combination or the date that the winding up of the Company is effective. The Third Note is not convertible. If the Company does not consummate a Business Combination, the Company may use a portion of any funds held outside the Trust Account to repay the Third Note; however, no proceeds from the Trust Account may be used for such repayment. On June 17, 2022, the Sponsor deposited $413,766 of such funds in the Trust Account, therefore extending the Company’s Combination Period from June 17, 2022 to September 17, 2022. As of September 30, 2022, the outstanding principal balance under the Third Note amounted to an aggregate of $413,766.

On August 25, 2022, the Company entered into a promissory note with the Sponsor pursuant to which the Sponsor agreed to loan the Company up to an aggregate principal amount of up to $500,000 (the “Fourth Note”) in connection with the extension of the Company’s Combination Period from June 17, 2022, to December 17, 2022 for working capital purposes. The Third Note is non-interest bearing and payable on the earlier of the date on which the Company consummates a Business Combination or the date that the winding up of the Company is effective. The Fourth Note is not convertible. If the Company does not consummate a Business Combination, the Company may use a portion of any funds held outside the Trust Account to repay the Fourth Note; however, no proceeds from the Trust Account may be used for such repayment. On August 25, 2022, the Sponsor deposited $270,000 of such funds in the Company’s operating account. As of September 30, 2022, the outstanding principal balance under the Fourth Noted amounted to an aggregate of $270,000.

Administrative Fees

The Company pays an affiliate of its Sponsor and its Chief Executive Officer approximately $7,000 per month for office space and advisory services relating to our search for, and consummation of, an initial Business Combination. Until January 31, 2022, the Company also paid Alberto Pontonio, one of its directors, a fee of approximately $3,000 per month for certain general and administrative services, including office space, utilities and secretarial support, as may be required from time to time. This payment was subsequently made to the affiliate of its Sponsor. For the three and nine months ended September 30, 2022, management fees incurred and paid to an affiliate of our Sponsor were $21,000 and $63,000, respectively, and administrative fees incurred were $9,000 and $27,000, respectively. For the three and nine months ended September 30, 2021, management fees incurred and paid to an affiliate of our Sponsor were $21,000 and $63,000, respectively, and administrative fees paid to Alberto Pontonio were $9,000 and $24,000, respectively. At September 30, 2022 and December 31, 2021, there were no management fees and administrative fees included in accrued expenses in the accompanying balance sheet.

only during the seven year period beginning on the effective date of the registration statement, which incorporates the prospectus. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriters, and the underwriters exercised the option to purchase up to 1,500,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions.

Upon the closing of the Initial Public Offering, the underwriters were paid a cash underwriting discount of $0.20 per Unit, or $2,300,000 in the aggregate.

Business Combination Marketing Agreement

The Company has engaged EarlyBirdCapital, the underwriter in the Initial Public Offering, as an advisor in connection with its Business Combination to assist in holding meetings with the Company shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing its securities in connection with its initial Business Combination, assist in obtaining shareholder approval for the Business Combination and assist with press releases and public filings in connection with the Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation of its initial Business Combination in an amount equal to 3.5% of the gross proceeds of the Initial Public Offering (exclusive of any applicable finder’s fees which might become payable).

Legal Fees

As of September 30, 2022, the Company incurred legal fees of $1,140,511. These fees will only become due and payable upon the consummation of a Business Combination. These fees are not accrued as of September 30, 2022.

Merger Agreement

On June 1, 2022, the Company, entered into Merger Agreement with Rally Communitas Corp., a Delaware corporation (“Rally”), Pubco, Purchaser Merger Sub, Company Merger Sub, Jorge E. Marcos, in the capacity as the representative from and after the effective time of the Merger (as defined below) (the “Effective Time”) of the shareholders of Pubco (other than the Rally Security Holders and their successors and assignees) (the “Purchaser Representative”), and Numaan Akram, in the capacity as the representative of the Rally Security Holders from and after the Effective Time (the “Seller Representative”).

On July 26, 2022, ATAC, Rally, Pubco, the Seller Representative and the Purchaser Representative entered into an amendment (the “Amendment”) to the Merger Agreement. The Amendment clarifies and revises certain provisions of the Merger Agreement relating to (i) the securities for which the investors (the “Support Investors”) that enter into support subscription agreements to purchase securities of Pubco immediately prior to the Closing as a condition to the consummation of ATAC’s initial Business Combination under the Merger Agreement will subscribe pursuant to such agreements, (ii) the contingent value rights to be issued by Pubco at the Closing to non-redeeming ATAC shareholders and the Support Investors and (iii) the expected composition of the board of directors of Pubco (the “Pubco Board”) immediately following consummation of the Business Combination, subject to approval of the proposal related to the election of directors to the Pubco Board that is contained in a registration statement on Form S-4 (as amended, the “Merger Registration Statement”) that Pubco initially filed with the SEC in connection with the Business Combination on July 29, 2022, as amended.

For further information and discussion regarding the proposed Business Combination, please see the Merger Registration Statement and the Current Reports on Form 8-K filed by the Company on June 7, 2022, July 26, 2022 and November 8, 2022.

Voting Agreements

Simultaneously with the execution and delivery of the Merger Agreement, ATAC and Rally have entered into voting agreements (collectively, the “Voting Agreements”) with certain Rally Security Holders required to approve the Transaction. Under the Voting Agreements, each Rally Security Holder party thereto agreed to vote all of such Rally Security Holder’s shares of Rally in favor of the Merger Agreement and the Transaction, terminate certain shareholder agreements and Rally Convertible Instruments that such Rally Security Holder is party thereto, as applicable, and to otherwise take (or not take, as applicable) certain other actions in support of the Merger Agreement and the Transaction and the other matters to be submitted to the Rally Security Holders for approval in connection with the Transaction, in the manner and subject to the conditions set forth in the Voting Agreements, and provide a proxy to Rally to vote such shares accordingly. The Voting Agreements prevent transfers of the Rally shares held by such Rally Security Holder party thereto between the date of the Voting Agreement and the date of Closing, except for certain permitted transfers where the recipient also agrees to comply with the Voting Agreement.

Lock-Up Agreements

Simultaneously with the execution and delivery of the Merger Agreement, certain shareholders of Rally each entered into a Lock-Up Agreement with Pubco and the Purchaser Representative (collectively, the “Lock-Up Agreements”). Pursuant to the Lock-Up Agreements, each Rally shareholder party thereto agreed not to, during the period commencing from the Closing and ending 365 days after the Closing (subject to early release if Pubco consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party): (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any restricted securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such restricted securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i) or (ii) above is to be settled by delivery of the restricted securities or other securities, in cash or otherwise (in each case, subject to certain limited permitted transfers where the recipient takes the shares subject to the restrictions in the Lock-Up Agreement).

CVRs

At the Closing, each Public Shareholder that did not redeem their Ordinary Shares in connection with the consummation of the business combination (the “Initial CVR Holders” and, together with any other holders of Contingent Value Rights (“CVRs”) upon the occurrence of certain events on or about the eighteen (18)- month anniversary of the Closing (the “CVR Settlement Date”), the “CVR Holders”) will receive CVRs with the rights and terms set forth in the CVR Agreement. Pursuant to the CVR Agreement, at the Closing, Pubco will issue CVRs, each representing the contingent right to receive a pro rata portion of the CVR Escrow Shares if certain events set forth in the CVR Agreements occur, to be determined as of the CVR Settlement Date (or earlier, if a qualifying Change of Control (as that term is defined in the CVR Agreements) should occur), with each CVR Holder as of such CVR Settlement Date to receive a number of CVR Escrow Shares determined as a function of the dollar volume-weighted average price for the Pubco Ordinary Shares during the thirty (30) trading days immediately preceding such date, the amount of the preferred return and the number of shares of held by ATAC shareholders that elect not to redeem their ordinary shares in connection with the Redemption. The parties intend for the CVRs to be registered securities listed for trading on a national exchange, subject to applicable listing requirements, such that such CVRs may be traded and exchanged prior to the CVR Settlement Date.

Filing of Merger Registration Statement/Prospectus

On August 1, 2022, ATAC and Rally issued a joint press release announcing the filing by Pubco of the Merger Registration Statement on Form S-4 in connection with the previously disclosed proposed Merger between ATAC and Rally.

The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of ordinary shares at a price below its exercise price. The Company has agreed to use its best efforts to have declared effective a prospectus relating to the ordinary shares issuable upon exercise of the warrants and keep such prospectus current until the expiration of the warrants. However, if the Company does not maintain a current prospectus relating to the ordinary shares issuable upon exercise of the warrants, holders will be unable to exercise their warrants for cash and the Company will not be required to net cash settle or cash settle the warrant exercise. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) such that the effective exercise price per full share will be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issue additional ordinary shares or equity-linked securities.

The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants will be exercisable for cash (even if a registration statement covering the issuance of the ordinary shares issuable upon exercise of such warrants is not effective) or on a cashless basis, at the holder’s option and will not be redeemable by the Company, in each case so long as they are held by the initial purchasers or their affiliates.

Representative Shares

In October 2020, the Company issued to the designees of EarlyBirdCapital 125,000 ordinary shares (the “Representative Shares”). The Company accounted for the Representative Shares as an offering cost of the Initial Public Offering, with a corresponding credit to shareholders’ equity. The Company estimated the fair value of Representative Shares to be $1,137 based upon the price of the Founder Shares issued to the Initial Shareholders. The holders of the Representative Shares have agreed not to transfer, assign or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the completion of a Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete a Business Combination within the Combination Period.

The Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date of the registration statement related to the Initial Public Offering pursuant to Rule 5110(g)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statements related to the Initial Public Offering, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the effective date of the registration statements related to the Initial Public Offering except to any underwriter and selected dealer participating in the Initial Public Offering and their bona fide officers or partners.

The fair value of the Private Warrants was estimated at September 30, 2022 and December 31, 2021 to be $0.03 and $0.44, respectively, using the Binomial Lattice Model option pricing model and the following assumptions:

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The Warrants are measured at fair value on a recurring basis using the Binomial Lattice Model.

As of September 30, 2022, the aggregate value of the Private Warrants was approximately $0.2 million.

The following table presents the change in the fair value of warrant liabilities for the three and nine months ended September 30, 2022:

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The following table presents the change in the fair value of warrant liabilities for the three and nine months ended September 30, 2021:

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Transfers to or from Levels 1, 2 and 3 are recognized at the end of the reporting period. There were no transfers between levels for the three and nine months ended September 30, 2022 and 2021.

Agreement relating to the fact that the parties to the Merger Agreement have mutually agreed that: (i) at the Closing of the transactions contemplated by the Merger Agreement, Pubco will not issue securities previously referred to in the transaction documents as “Private CVRs” (including “Support CVRs”) and provide for various related adjustments to the terms and conditions of the Merger Agreement and other transaction documents referred to therein (including the Pubco securities for which investors, once identified, will subscribe pursuant to the agreements referred to in the Merger Agreement as Support Subscription Agreements), (ii) the condition to the Closing set forth in Section 7.1(h) of the Merger Agreement, waivable by ATAC and Rally that, at the Closing, ATAC and Pubco have cash and cash equivalents, including funds remaining in ATAC’s Trust Account established at the time of its initial public offering (after giving effect to the completion and payment of redemptions by ATAC shareholders and payment of each party’s transaction expenses (to the extent due and unpaid at Closing)) and the aggregate amount of any Purchaser Transaction Financing (including the Support Subscription Agreements) at least equal to $20 million and (iii) to remove from the Merger Agreement the condition to the Closing relating to net tangible assets at Closing set forth in Section 7.1(g) of the Merger Agreement.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.