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PROSPECTUS SUPPLEMENT NO. 8 |
Filed pursuant to Rule 424(b)(3) |
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(To prospectus dated October 21, 2021) |
Registration No. 333-260094 |
ARCHAEA ENERGY INC.
110,334,394 SHARES OF CLASS A COMMON STOCK
7,021,000 WARRANTS TO PURCHASE SHARES OF CLASS A COMMON
STOCK
This prospectus supplement is being filed to update and supplement
the information contained in the prospectus dated October 21, 2021
(the “Prospectus”), with the information contained in Item 8.01 of
our Current Report on Form 8-K filed with the SEC on March 21,
2022. Accordingly, we have attached the Form 8-K to this prospectus
supplement.
The Prospectus and this prospectus supplement relate to the
issuance by us of up to 18,883,492 shares of our Class A common
stock, par value $0.0001 per share (the “Class A Common Stock”),
which consist of (i) 11,862,492 shares that may be issued upon the
exercise of the 11,862,492 warrants (the “Public Warrants”)
originally sold as part of the units issued in the initial public
offering (the “IPO”) of Rice Acquisition Corp. (“RAC”), (ii)
6,771,000 shares of Class A Common Stock that may be issued upon
the exercise of the 6,771,000 warrants originally issued to Rice
Acquisition Sponsor LLC (the “Sponsor”) and Atlas Point Energy
Infrastructure Fund, LLC (“Atlas”) in a private placement that
closed simultaneously with the consummation of the IPO (the
“Private Placement Warrants”) and (iii) 250,000 shares of Class A
Common Stock that may be issued upon the exercise of the 250,000
warrants issued to Atlas in a private placement that closed
simultaneously with the consummation of the Business Combinations
(as defined in the Prospectus) (the “Forward Purchase Warrants”
and, together with the Public Warrants and the Private Placement
Warrants, the “Warrants”). Each Warrant is exercisable to purchase
for $11.50 one share of Class A Common Stock, subject to
adjustment.
In addition, the Prospectus and this
prospectus supplement relate to the resale from time to time of
6,771,000 Private Placement Warrants, 250,000 Forward Purchase
Warrants and 110,334,394 shares of Class A Common Stock by the
selling security holders named in the Prospectus or their permitted
transferees (each a “Selling Securityholder” and, collectively, the
“Selling Securityholders”). The 110,334,394 shares of Class A
Common Stock consist of (i) 29,166,667 shares of Class A Common
Stock issued in a private placement that closed concurrently with
the consummation of the Business Combinations, (ii) 2,500 shares of
Class A Common Stock issued to the Sponsor in a private placement
prior to the consummation of the IPO, (iii) 18,883,492 shares of
Class A Common Stock issuable upon exercise of the Warrants, (iv)
5,931,350 shares of Class A Common Stock issuable upon redemption
of the 5,931,350 Class A units of LFG Acquisition Holdings LLC
(f/k/a Rice Acquisition Holdings LLC) (“Opco”) held by the initial
stockholders of RAC, all of which were issued prior to the
consummation of the IPO, (v) 23,000,000 shares of Class A Common
Stock issuable upon redemption of the 23,000,000 Opco Class A units
issued as partial consideration upon consummation of the Aria
Merger (as defined in the Prospectus) and (vi) 33,350,385 shares of
Class A Common Stock issuable upon redemption of the 33,350,385
Opco Class A units issued as consideration upon consummation of the
Archaea Merger (as defined in the Prospectus).
This prospectus supplement updates and
supplements the information in the Prospectus and is not complete
without, and may not be delivered or utilized except in combination
with, the Prospectus, including any other amendments or supplements
thereto. This prospectus supplement should be read in conjunction
with the Prospectus, and if there is any inconsistency between the
information in the Prospectus and this prospectus supplement, you
should rely on the information in this prospectus
supplement.
The information in this prospectus supplement modifies and
supersedes, in part, the information in the Prospectus, and
supersedes the financial statements included in the Prospectus. Any
information in the Prospectus that is modified or superseded shall
not be deemed to constitute a part of the Prospectus except as
modified or superseded by this prospectus supplement.
You should not assume that the information
provided in this prospectus supplement or the Prospectus is
accurate as of any date other than their respective dates. Neither
the delivery of this prospectus supplement and Prospectus, nor any
sale made hereunder, shall under any circumstances create any
implication that there has been
no change in our affairs since the date of this prospectus
supplement, or that the information contained in this prospectus
supplement or the Prospectus is correct as of any time after the
date of that information.
The Class A Common Stock is listed on the New York Stock Exchange
(“NYSE”) under the symbol “LFG.” On March 18, 2022, the last sale
price of the Class A Common Stock as reported on the NYSE was
$21.20 per share.
_______________________
Investing in our securities involves certain risks, including those
that are described in the “Risk Factors” section beginning on page
7 of the Prospectus dated October 21, 2021, as updated and
supplemented by the section entitled “Risk Factors” section in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2021.
Neither the SEC nor any state securities commission has approved or
disapproved of the securities to be issued under the Prospectus or
determined if the Prospectus or this prospectus supplement is
truthful or complete. Any representation to the contrary is a
criminal offense.
_______________________
The date of this prospectus supplement is March 21,
2022.
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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549
__________________ |
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FORM 8-K
___________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of Report (Date of earliest event reported: March 21,
2022)
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ARCHAEA ENERGY INC. |
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(Exact name of registrant as specified in its
charter) |
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Delaware
(State or other jurisdiction of incorporation)
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001-39644
(Commission File Number)
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85-2867266
(I.R.S. Employer Identification No.)
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4444 Westheimer Road,
Suite G450
Houston,
Texas
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77027
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(Address of principal executive offices) |
(Zip Code) |
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(346) 708-8272
(Registrant’s
telephone number, including area code)
Not applicable
(Former name or former address, if changed since last
report)
__________________
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Class A common stock, par value $0.0001 per share |
LFG |
The New York Stock Exchange |
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
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Item 8.01 Other Events.
Archaea Energy Inc. (the “Company”) is
filing this Current Report on Form 8-K (this “8-K”) to provide
certain pro forma financial information relating to the business
combinations completed on September 15, 2021.
Included as Exhibit 99.1 to this Form 8-K
is the unaudited pro forma condensed combined statement of
operations of the Company for the year ended December 31, 2021 and
the notes related thereto (the “pro forma financial information”),
giving effect to the Merger (as defined therein) as if it closed on
January 1, 2021.
The pro forma financial information has
been prepared for informational purposes only and does not purport
to represent what the actual results of operations of the Company
would have been had the Merger closed on January 1, 2021, nor is it
necessarily indicative of future results of operations. Future
results may vary significantly from the results reflected because
of various factors, including those discussed in the “Risk Factors”
section in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2021.
Item 9.01. Financial Statements and
Exhibits.
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Exhibit Number |
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Description |
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99.1 |
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Unaudited Pro Forma Condensed Combined Statement of Operations for
the year ended December 31, 2021 and the notes related
thereto. |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL
document). |
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: March 21, 2022
ARCHAEA ENERGY INC.
By: /s/
Chad
Bellah
Name:
Chad Bellah
Title: Chief Accounting
Officer
ARCHAEA ENERGY INC.
Unaudited Pro Forma Condensed Combined Statement of
Operations
On September 15, 2021 (the “Closing Date”), Rice Acquisition Corp
(“RAC”) completed the Business Combinations to acquire Legacy
Archaea and Aria Energy LLC (“Aria”). Following the closing of the
Business Combinations, RAC changed its name from “Rice Acquisition
Corp.” to “Archaea Energy Inc.,” also referred to herein as the
“Company.” Rice Acquisitions Holdings LLC was renamed “LFG
Acquisition Holdings LLC,” also referred to herein as “Opco.” In
connection with the Business Combinations closing, the Company
completed a private placement of 29,166,667 shares of Class A
Common Stock and 250,000 warrants (each warrant exercisable for one
share of Class A Common Stock at a price of $11.50) for gross
proceeds of $300 million.
The Company and Opco issued 33.4 million Class A Opco Units and
33.4 million shares of Class B Common Stock at the Closing Date to
Legacy Archaea Holders to acquire Legacy Archaea. Aria was acquired
for total initial consideration of $863.1 million (the “Merger”),
subject to certain future adjustments set forth in the Aria Merger
Agreement (the “Aria Closing Merger Consideration”). The Aria
Closing Merger Consideration consisted of cash consideration of
$377.1 million paid to Aria Holders, equity consideration in the
form of 23.0 million newly issued Class A Opco Units and 23.0
million newly issued shares of the Company’s Class B Common Stock,
par value $0.0001 per share, and $91.1 million for repayment
of Aria debt.
The following unaudited pro forma condensed combined statement of
operations for the year ended December 31, 2021 has been prepared
to give effect to the Merger. This unaudited pro forma condensed
combined statement of operations is derived from the historical
consolidated financial statements of the Company and Aria. This
statement of operations has been adjusted as described in the notes
to the unaudited pro forma condensed combined statement of
operations. Please see the Company’s Balance Sheet as of December
31, 2021 on the Company’s Form 10-K, as filed with the
SEC.
The Company has prepared the unaudited pro forma combined condensed
statement of operations based on available information using
assumptions that it believes are reasonable. These pro forma
financial statements are being provided for informational purposes
only and do not claim to represent the Company’s actual results of
operations had the Merger occurred on the date specified, January
1, 2021, nor do they project the Company’s results of operations or
financial position for any future period or date. The actual
results reported by the combined company in periods following the
Merger may differ significantly from this unaudited pro forma
combined condensed statement of operations for a number of reasons.
The pro forma financial statement of operations does not account
for the cost of any synergies resulting from the Merger or other
costs relating to the integration of the two
companies.
The unaudited pro forma combined condensed statement of operations
was prepared using the acquisition method of accounting as outlined
in Financial Accounting Standards Board Accounting Standards
Codification (“ASC”) 805,
Business Combinations,
with the Company considered the acquiring company. Based on the
acquisition method of accounting, the consideration paid for Aria
is allocated to its assets and liabilities based on their fair
value as of the date of the completion of the Merger. The purchase
price allocation and valuation is based on preliminary estimates,
subject to final adjustments and provided for informational
purposes only.
This unaudited pro forma combined condensed statement of operations
should be read in conjunction with the Company’s consolidated
financial statements, accompanying notes, and the financial
statements of Aria for period from January 1, 2021 to September 14,
2021 included in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2021.
ARCHAEA ENERGY INC.
Unaudited Pro Forma Condensed Combined Statement of
Operations
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Year Ended December 31, 2021 |
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(in thousands, except shares and per share data) |
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Archaea Energy Inc. |
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Aria (Historical) |
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Proforma Adjustments |
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Proforma Combined |
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Total Revenues and Other Income |
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$ |
77,126 |
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$ |
117,589 |
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$ |
11,043 |
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(a) |
$ |
205,758 |
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Equity Investment Income, Net |
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5,653 |
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19,777 |
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(7,451) |
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(b) |
17,979 |
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Cost of Sales |
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Cost of revenue |
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46,488 |
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56,321 |
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6,592 |
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(c) |
109,401 |
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Depreciation, amortization and accretion |
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16,025 |
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15,948 |
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12,860 |
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(d) |
44,833 |
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Total Cost of Sales |
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62,513 |
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72,269 |
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19,452 |
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154,234 |
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Gain on disposal of assets |
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— |
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(1,347) |
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— |
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(1,347) |
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Merger related costs |
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3,045 |
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(e) |
19,624 |
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(e) |
— |
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22,669 |
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(e) |
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General and administrative expenses |
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40,782 |
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14,113 |
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— |
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54,895 |
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Operating Income (Loss) |
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(23,561) |
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32,707 |
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(15,860) |
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(6,714) |
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Other Income (Expense) |
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Interest expense, net |
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(4,797) |
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(10,729) |
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(7,623) |
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(f) |
(23,149) |
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Gain (loss) on derivative contracts |
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(3,727) |
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1,129 |
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(107,565) |
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(g) |
(110,163) |
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Gain on extinguishment of debt |
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— |
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61,411 |
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(h) |
— |
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61,411 |
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(h) |
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Other income (expense) |
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1,164 |
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2 |
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— |
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1,166 |
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Total Other Income (Expense) |
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(7,360) |
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51,813 |
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(115,188) |
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(70,735) |
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Income (Loss) Before Income Taxes |
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(30,921) |
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84,520 |
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(131,048) |
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(77,449) |
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Income tax benefit |
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— |
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— |
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— |
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— |
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Net Income (Loss) |
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(30,921) |
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84,520 |
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(131,048) |
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(77,449) |
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Net income (loss) attributable to nonredeemable noncontrolling
interests |
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(712) |
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289 |
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— |
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(423) |
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Net income (loss) attributable to redeemable noncontrolling
interests and Class A Common Stock |
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$ |
(30,209) |
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$ |
84,231 |
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$ |
(131,048) |
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$ |
(77,026) |
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Net income (loss) attributable to redeemable noncontrolling
interests |
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(41,104) |
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Net income (loss) attributable to Class A Common Stock |
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$ |
(35,922) |
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Net income (loss) per Class A common share: |
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Net income (loss) – basic and diluted
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$ |
(0.67) |
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Weighted average shares of Class A Common Stock
outstanding: |
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Basic and diluted
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56,465,786 |
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— |
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(2,553,117) |
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(i) |
53,912,669 |
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF
OPERATIONS
NOTE 1 - Basis of Presentation
The unaudited pro forma combined statement of operations for the
year ended December 31, 2021 combines the historical consolidated
statement of operations of the Company and Aria and has been
prepared as if the Merger closed on January 1, 2021. The unaudited
pro forma condensed combined statement of operations has also been
adjusted to give effect to pro forma events that are directly
attributable to the Merger, factually supportable and expected to
have a continuing impact on the combined results. We have included
the impacts of the change in fair value of the warrants associated
with the Company’s reverse merger with RAC. Other revenues and
costs incurred by RAC during 2021 were not material to the pro
forma condensed statement of operations and have not been
included.
The Merger was accounted for under the acquisition method of
accounting in accordance with ASC 805,
Business Combinations.
Under the acquisition method, the Company determines and allocates
the purchase price of Aria to the tangible and intangible assets
acquired and the liabilities assumed as of the date of acquisition
at fair value. Fair value may be estimated using comparable market
data, a discounted cash flow method, or a combination of the two.
In the discounted cash flow method, estimated future cash flows are
based on management’s expectations for the future and can include
estimates of future biogas production, commodity prices, operating
and development costs, and a risk-adjusted discount
rate.
The Company uses its best estimates and assumptions as part of the
purchase price allocation process to accurately value assets
acquired and liabilities assumed at the acquisition date, and these
estimates and assumptions are inherently uncertain and subject to
refinement during the measurement period not to exceed one year
from the acquisition date.
These pro forma financial statements are being provided for
informational purposes only and do not claim to represent the
Company’s actual results of operations had the Merger occurred on
the date specified nor do they project the Company’s results of
operations for any future period or date. The actual results
reported by the combined company in periods following the Merger
may differ significantly from this unaudited pro forma combined
condensed statement of operations for a number of reasons. The pro
forma statement of operations does not account for the cost of any
restructuring activities or synergies resulting from the Merger or
other costs relating to the integration of the two
companies.
NOTE 2 - The Business Combination
Aria was acquired to complement Archaea's existing RNG assets and
for its operational expertise in the renewable gas industry. Aria
was determined to be a VIE immediately prior to the Business
Combinations. As a result of the Business Combinations, the Company
became the primary beneficiary of Aria. The Aria Closing Merger
Consideration consisted of both cash consideration and
consideration in the form of newly issued Class A Opco Units and
newly issued shares of the Company’s Class B Common Stock. The cash
component of the Aria Closing Merger Consideration paid upon
Closing was $377.1 million paid to Aria Holders, subject to
certain future adjustments set forth in the Aria Merger Agreement,
and $91.1 million for repayment of Aria debt. The remainder
of
the Aria Closing Merger Consideration consisted of
23.0 million Class A Opco Units and 23.0 million shares of
Class B Common Stock.
Total consideration was determined to be as follows:
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(in thousands) |
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At September 15, 2021 |
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Class A Opco Units (and corresponding shares of Class B Common
Stock) |
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$ |
394,910 |
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Cash consideration |
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377,122 |
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Repayment of Aria debt at Closing |
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91,115 |
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Total purchase price consideration |
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$ |
863,147 |
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The Aria Merger represented an acquisition of a business and was
accounted for using the acquisition method, whereby all of the
assets acquired and liabilities assumed were recognized at their
fair value on the acquisition date, with any excess of the purchase
price over the estimated fair value recorded as goodwill. Certain
data to complete the purchase price allocation is not yet
available, including but not limited to final appraisals of certain
assets acquired and liabilities assumed and tax calculations. The
Company will finalize the purchase price allocation during the
12-month period following the Closing, during which time the value
of the assets and liabilities may be revised as appropriate. The
following table sets forth the preliminary allocation of the Aria
Closing Merger Consideration.
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(in thousands)
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As of September 15, 2021 |
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Fair value of assets acquired
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Cash and cash equivalents
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$ |
4,903 |
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Account receivable, net
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27,331 |
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Inventory |
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9,015 |
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Prepaid expenses and other current assets
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3,834 |
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Property, plant and equipment, net
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126,463 |
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Intangible assets, net
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607,610 |
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Equity method investments
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243,128 |
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Other non-current assets
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861 |
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Goodwill |
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26,457 |
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Amount attributable to assets acquired
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$ |
1,049,602 |
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Fair value of liabilities assumed
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Accounts payable
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$ |
2,760 |
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Accrued and other current liabilities
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26,496 |
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Below-market contracts |
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146,990 |
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Other long-term liabilities
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10,209 |
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Amount attributable to liabilities assumed
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186,455 |
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Net assets acquired
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863,147 |
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Total Aria Merger consideration
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$ |
863,147 |
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The goodwill is primarily attributable to the expected synergies
Archaea believes will be created as a result of the combined
companies, the ability to enhance Aria's current RNG production
facilities, and the ability to convert certain of Aria's
electricity production facilities to RNG production facilities. We
expect a majority, if not all of the goodwill, to be assigned to
the RNG reporting unit upon finalizing the purchase price
allocation. Due to the existence of cumulative losses, no deferred
taxes are recorded for the Aria merger transaction.
NOTE 3 - Pro Forma Adjustments
The pro forma adjustments included in the unaudited pro forma
condensed statement of operations are as follows:
(a) Reflects the adjustment of historical
Aria out of market contract amortization as well as amortization
totaling $11.8 million for contracts that were determined to be
below market value for the purchase price allocation.
(b) Represents the adjustment of basis
difference between the Company’s share of investee equity and the
fair value of the investment recognized for the purchase price
allocation including amortization of $10.5 million.
(c) Reflects the adjustment of historical
Aria out of market contract amortization as well as amortization
totaling $6.7 million for contracts that were determined to be
above market value for the purchase price allocation.
(d) Represents estimated additional
depreciation of property, plant, and equipment and additional
amortization of biogas rights as a result of the purchase price
allocation.
(e) Represents certain transactions costs
directly incurred as part of the Merger that are not expected to be
recurring in nature and costs related to the Company’s reverse
merger with RAC. These costs are included in the pro forma
results.
(f) Represents additional interest expense
as result of additional borrowings totaling $220 million to
refinance Aria’s debt balance as of December 31, 2020 at an
effective rate of 3.5%. The Company assumed the remaining cash
consideration was financed through its reverse recapitalization
with RAC. The Company assumed there would be no additional interest
capitalized for the period presented.
(g) Represents the change in value of the
warrants for the period from January 1, 2021 through September 14,
2021. Changes in fair value from September 15, 2021 though December
31, 2021 are included under Archaea Energy Inc.
(h) Represents the gain on extinguishment of
debt associated with the forgiveness of debt as part of Aria’s sale
of its 100% interest in LESPH in June 2021.
(i) Represents the impact to the weighted
average shares of Class A Common Stock outstanding to adjust for
the September 15, 2021 Class A Common Stock to be treated as
outstanding beginning January 1, 2021.
Archaea Energy (NYSE:LFG)
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Archaea Energy (NYSE:LFG)
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