TIDMEVRA

RNS Number : 0045T

EverArc Holdings Limited

15 July 2020

EverArc Holdings Limited

Interim Condensed Financial Information

for the Period from Incorporation on 8 November 2019

to 30 April 2020 (Unaudited)

Interim Management Report and Chairman's Statement

It is with pleasure that we write to you for the first time as Co-Chairmen of EverArc Holdings Limited (the "Company") and we would like to take this opportunity to welcome you as a shareholder of the Company.

We are pleased to present to the shareholders the Company's first half-yearly unaudited financial report for the period ended 30 April 2020.

The Company

The Company raised gross proceeds of US$340 million on its initial public offering ("IPO") through the placing of Ordinary Shares (with matching warrants) at a placing price of US$10 per Ordinary Share and a further US$71 million (with no matching warrants) on a subsequent placing at a price of US$10.50 per Ordinary Share. The Company was admitted to trading on the basis of a standard listing on the main market of the London Stock Exchange on 17 December 2019 with the further placing shares completed on 20 January 2020. As at 30 April 2020, there were 40,832,500 Ordinary Shares in issue.

As described in the prospectus dated 12 December 2019 and published by in connection with the IPO (the "Prospectus"), the Company was formed to undertake an acquisition of a target company or business (the "Acquisition"). There is no specific expected target value for the Acquisition and the Company expects that funds not used for the Acquisition, if any, will be used for future acquisitions, internal or external growth and expansion, purchase of outstanding debt and/or working capital in relation to the acquired company or business. Following completion of the Acquisition, the objective of the Company is expected to be to operate the acquired business and implement an operating strategy with a view to generating value for Shareholders through operational improvements as well as potentially through additional complementary acquisitions following the Acquisition. Following the Acquisition, the Company intends to seek re-admission of the enlarged group to such listing venue as is appropriate for it based on the industry, geographic focus and track record of the company or business acquired, subject to fulfilling the relevant eligibility criteria at the time.

Financial Results

During the period commenced 8 November 2019 and ended 30 April 2020, the Company has incurred operating costs of US$2.08 million including US$1.74 million of administrative expenses, and US$0.34 million non-cash charge related to warrant redemption liability. These expenses were partially offset by income from investments totalling US$1.58 million. Costs of IPO of US$10.4 million were recorded as an offset of the gross proceeds from the IPO in the Company's Statement of Financial Position.

Principal Risks and Uncertainties

The Company set out in the Prospectus the principal risks and uncertainties that could impact its performance; these principal risks and uncertainties remain unchanged since that document was published and are expected to apply in the remaining period to 31 October 2020. Your attention is drawn to that Prospectus for the detailed assessment.

A copy of the Prospectus is available on the Company's website (www.everarcholdings.com).

Related Parties

Related party disclosures are given in note 14 to these condensed interim financial statements.

W.Nicholas Howley

William Nicholas Thorndike, Jr

Co-Chairmen

Statement of Directors' Responsibility

The Directors confirm that, to the best of their knowledge, these condensed interim financial statements for the period have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. The interim management report includes a fair review of the information required by the Disclosure and Transparency Rules DTR 4.2.7R and DTR 4.2.8R, namely:

(a) an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) material related party transactions that have taken place in the first six months of the current financial year that have materially affected the financial position or performance of the Company during that period.

By order of the Board:

W.Nicholas Howley

William Nicholas Thorndike, Jr

Co-Chairmen

10 July 2020

Independent review report to EverArc Holdings Limited

Introduction

We have reviewed the condensed set of financial statements in the half-yearly financial report of EverArc Holdings Limited (the 'company') for the six months ended 30 April 2020 which comprises Condensed Statement of Comprehensive Loss, Condensed Statement of Financial Position, Condensed Statement of Changes in Equity and Condensed Statement of Cash Flows. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2.1, the annual financial statements of the company are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express a conclusion to the company on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

The impact of uncertainties arising from Covid-19 and the UK exiting the European Union on our review

Our review of the condensed set of financial statements in the half-yearly financial report requires us to obtain an understanding of all relevant uncertainties, including those arising as a consequence of the effects of Brexit. Such reviews assess and challenge the reasonableness of estimates made by the directors and the related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and the company's future prospects and performance.

Covid-19 and Brexit are amongst the most significant economic events currently faced by the UK, and at the date of this report their effects are subject to unprecedented levels of uncertainty, with the full range of possible outcomes and their impacts unknown. We applied a standardised firm-wide approach in response to these uncertainties when assessing the company's future prospects and performance. However, no review should be expected to predict the unknowable factors or all possible future implications for a company associated with these particular events.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2020 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Use of our report

This report is made solely to the company, as a body, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company as a body, for our review work, for this report, or for the conclusion we have formed.

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

13 July 2020

Condensed Statement of Comprehensive Loss for the period ended 30 April 2020

 
                                                   For the 
                                                    period 
                                                    from 8 
                                                  November 
                                                   2019 to 
                                                  30 April 
                                                      2020 
                                        Note       US$ 
 
 Unrealised gain on investments                  244,232 
 Investment income                              1,331,296 
 Other income                                       6 
 Expenses                                3     (1,736,075) 
 Non-cash charge related to warrant 
  redemption liability                   13     (340,200) 
                                                ________ 
 Operating loss                                 (500,741) 
                                                ________ 
 Loss and total comprehensive loss 
  for the period                                (500,741) 
 
 
 Basic and diluted loss per Ordinary     8       US$(0.02) 
  share 
 

Condensed Statement of Financial Position as at 30 April 2020

 
                                                   2020 
                                     Note           US$ 
 Assets 
 Current assets 
 Cash and cash equivalents            7     400,387,238 
 Prepayments and other assets         9         778,210 
                                            ___________ 
 Total assets                               401,165,448 
                                            ___________ 
 Liabilities 
 Current liabilities 
 Payables                             10       (23,550) 
                                            ___________ 
 Total current liabilities                     (23,550) 
 
 Non-current liabilities 
 Warrant redemption liability         13      (340,200) 
                                            ___________ 
 Total non-current liabilities                (340,200) 
                                            ___________ 
 Total liabilities                            (363,750) 
                                            ___________ 
 Net assets                                 400,801,698 
 
 
 Equity 
 
 Ordinary Share Capital - nominal                     - 
  value 
 Ordinary Share Capital - share 
  premium                             11    401,302,439 
 Retained losses                              (500,741) 
                                            ___________ 
                                            400,801,698 
 
 
 Net asset value per share            8         US$9.82 
 

Condensed Statement of Changes in Equity for the period ended 30 April 2020

 
 
                                          Ordinary         Ordinary 
                                     Share Capital    Share Capital 
                                         - nominal          - share     Retained          Total 
                                             value          premium       losses 
                                               US$              US$          US$            US$ 
 
 At inception                                    -                -            -              - 
 Issue of shares                                 -      411,730,000            -    411,730,000 
 Issue costs                                     -     (10,427,561)            -   (10,427,561) 
 Loss and total comprehensive 
 loss for period                                 -                -    (500,741)      (500,741) 
                                         _________        _________    _________      _________ 
 Balance as at 30 April 
  2020                                           -      401,302,439    (500,741)    400,801,698 
                       _________         _________        _________    _________ 
 
 
 

Condensed Statement of Cash Flows for the period ended 30 April 2020

 
                                                   For the period 
                                                  from 8 November 
                                                       2019 to 30 
                                                       April 2020 
                                          Note                US$ 
 Cash flows from operating activities 
 
 Loss and total comprehensive loss 
  for the period                                        (500,741) 
 
 Adjustments for: 
 Charge related to warrant redemption 
  liability                                13             340,200 
 
 Movements in working capital: 
 Increase in debtors and prepayments                    (778,210) 
 Increase in payables                                      22,702 
                                                      ___________ 
 Net cash used in operating activities                  (916,049) 
                                                      ___________ 
 Financing activities 
 Issue of Ordinary Shares and warrants     11         411,730,000 
 Share issue expenses                      11        (10,427,561) 
                                                      ___________ 
 Net cash provided by financing 
  activities                                          401,302,439 
                                                      ___________ 
 Increase in cash and cash equivalents                400,386,390 
 Cash and cash equivalents at start                             - 
  of period 
                                                      ___________ 
 *Cash and cash equivalents at 
  end of period                                       400,386,390 
 
 

* Stated net of bank overdraft of $848. Excluding bank overdraft (included in payables) $400, 387,238

   1.         General information 

The Company was incorporated with limited liability under the laws of the British Virgin Islands under the BVI Companies Act on 8 November 2018. The address of the Company's registered office is Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands. The Company's Ordinary Shares and Warrants were admitted for trading on the Main Market of the London Stock Exchange on 12 December 2019, after raising gross proceeds of US$340,000,000 for a potential acquisition (an "Acquisition") from the placing of Ordinary Shares (with matching Warrants) at a placing price of US$10 per Ordinary Share. Further gross proceeds of US$71,400,000 were raised in January 2020 from a placing of Ordinary Shares at a placing price of US$10.50 per Ordinary Share.

This condensed interim financial information was approved and authorised for issue in accordance with a resolution of the Directors on 9 July 2020.

   2.         Summary of significant accounting policies and basis of preparation of half year report 

This is the Company's first interim financial report and there is no previous annual report, therefore a complete disclosure has been provided below of all significant accounting policies. Statutory annual accounts of the Company for the period ended 31 October 2020 will in due course be prepared in accordance with the International Accounting Standards Board's (IASB) International Financial Reporting Standards (IFRS) as adopted by the European Union.

   2.1        Basis of preparation 

The condensed interim financial information for the half year ended 30 April 2020 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with International Accounting Standard (IAS) 34 "Interim Financial Reporting" as adopted by the European Union. This condensed interim financial information has been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss.

The preparation of interim financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Directors to exercise judgement in the process of applying the Company's accounting policies. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed. The Directors believe that the underlying assumptions are appropriate and that the Company's financial statements therefore present the financial position and results fairly. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.14.

   2.2        Going concern 

The Directors have a reasonable expectation and belief that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, the condensed interim financial statements are prepared on a going concern basis.

   2.3        Foreign currency translation 

Functional and presentation currency

The Company is listed on the main market of the London Stock Exchange, the capital raised in the IPO is denominated in US dollars and it is intended that any dividends and distributions to be paid to shareholders are to be denominated in US dollars. The performance of the Company is measured and reported to the shareholders in US dollars, which is the Company's functional currency. The Directors consider the US dollar as the currency of the primary economic environment in which the Company operates and the one that most faithfully represents the economic effects of the underlying transactions, events and conditions.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the balance sheet date.

Foreign exchange gains and losses arising from translation are included in the condensed statement of comprehensive loss.

   2.4        Financial assets at fair value through profit or loss 

Classification

Financial assets designated at fair value through profit or loss at inception are financial instruments that are not classified as held for trading but are managed, and their performance is evaluated on a fair value basis in accordance with the Company's documented investment strategy.

The Company's policy requires the Directors to evaluate the information about these financial assets on a fair value basis together with other related financial information. Assets in this category are classified as current assets if they are expected to be realised within 12 months of the balance sheet date. Those not expected to be realised within 12 months of the balance sheet date will be classified as non-current.

Recognition, derecognition and measurement

Regular purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investment. Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed as incurred in the statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the condensed statement of comprehensive loss within net changes in fair value of financial assets at fair value through profit or loss in the period in which they arise.

Dividend income or distributions of a revenue nature from financial assets at fair value through profit or loss are recognised in the condensed statement of comprehensive loss within dividend income when the Company's right to receive payments is established.

   2.5        Receivables 

Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Receivables are recognised initially at fair value. They are subsequently measured at amortised cost using the effective interest rate method, less provision for impairment.

At each reporting date, the Company shall measure the loss allowance on receivables carried at amortised cost at an amount equal to the lifetime expected credit losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not increased significantly since initial recognition, the Company shall measure the loss allowance at an amount equal to 12-month expected credit losses. The expected credit losses are estimated using a provision matrix based on the Company's historical credit loss experience, adjusted for factors that are specific to the receivables, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information.

The effective interest rate method is a method of calculating the amortised cost of a financial asset and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts throughout the expected life of the financial instrument - or, when appropriate, a shorter period - to the net carrying amount of the financial asset. When calculating the effective interest rate, the Directors estimate cash flows considering all contractual terms of the financial instrument but do not consider future credit losses. The calculation includes all fees and amounts paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

   2.6        Offsetting financial instruments 

Financial instruments are offset and the net amount reported in the balance sheet only when there is legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

   2.7        Cash and cash equivalents 

Cash and cash equivalents include cash in hand, demand deposits, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts, when applicable, are shown within borrowings in current liabilities.

   2.8        Payables and accrued expenses 

Payables and accrued expenses are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

   2.9        Share-based payments 

Services received in equity-settled share-based payment transactions are measured at the fair value of equity instruments granted.

The fair value of equity instruments is measured at the date when the Company obtains goods or services.

   2.10      Fair Value of Warrants 

Warrants are valued at redemption value of $0.01 as financial instruments. The Warrants are compound financial instruments with a liability recognised and the remainder in equity.

   2.11      New accounting standards 

This is the first set of condensed financial statements prepared by the Company. The Company applied all applicable standards and applicable interpretations published by the IASB and as endorsed by the European Union for the period ended 30 April 2020. The Company did not adopt any standard or interpretation published by the IASB and endorsed by the European Union for which the mandatory application date is on or after 1 January 2020.

Based on the Company's existing activity, there are no new interpretations, amendments or full standards that have been issued but not effective or adopted for the period ended 30 April 2020 that will have a material impact on the Company.

   2.12      Segment reporting 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors as it is the body that makes strategic decisions. The Directors are of the opinion that there is only a single operational segment. As a result no segment information has been provided as the Company only accumulates its funds raised for investment in US Treasury Bills.

   2.13      Share capital 

Ordinary Shares and Warrants are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.

   2.14      Critical accounting judgements and key sources of estimation uncertainty 

The preparation of the historical financial information requires the use of certain critical estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies. There are no items in the current financial statements involving a higher degree of judgement or complexity, and where assumptions and estimates are significant.

   3.         Expenses 
 
                                      2020 
                                       US$ 
 
 Listing fees                      410,622 
 Legal and professional fees       900,991 
 Insurance                         183,082 
 Directors' fees                   115,890 
 Administration fees                74,102 
 General expenses                   51,388 
                                  ________ 
                                 1,736,075 
 
 
   4.         Taxation 

The Company is not subject to income tax or corporation tax in the British Virgin Islands.

   5.         Fair value 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company may use various methods including market, income and cost approaches.

Based on these approaches, the Company utilises certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilises valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values.

Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1 - Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange.

Level 2 - Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data.

Level 3 - Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data.

The Company has various processes and controls in place to ensure that fair value is reasonably estimated. A model validation policy governs the use and control of valuation models used to estimate fair value. The Company performs due diligence procedures over third-party pricing service providers in order to support their use in the valuation process. Where market information is not available to support internal valuations, independent reviews of the valuations are performed and any material exposures are escalated through a management review process.

While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

   6.         Founder Advisory Agreement 

The Company has entered into the Founder Advisory Agreement with EverArc Founders LLC (the "Founder Entity"), which is owned and operated by the Founders; it is intended to have the effect of incentivising the Founders to achieve the Company's objectives. The Founder Advisory Agreement is structured to provide a return linked to the market value of the Ordinary Shares thus aligning the interests of the Founders with those of the Company's shareholders on a long-term basis.

Subject to the terms of the Founder Advisory Agreement, the Founder Entity will, at the request of the Company: (i) prior to consummation of the Acquisition, assist with identifying target opportunities, due diligence, negotiation, documentation and investor relations with respect to the Acquisition; and (ii) following the Acquisition, provide strategic and capital allocation advice and such other services as may from time to time be agreed.

Commencing from consummation of the Acquisition, and provided that the Payment Price per Ordinary Share is at least $10.00, for the financial year in which the Acquisition completes and for a further ten full financial years, the Founder Entity will be entitled to receive the Variable Annual Advisory Amount. In the first Payment Year in which such amount becomes payable, such amount will be equal in value to (i) 18 per cent. of the increase in the market value of one Ordinary Share, being the difference between $10.00 and the Payment Price, multiplied by (ii) such number of Ordinary Shares equal to the Founder Advisory Agreement Calculation Number.

Thereafter, the Variable Annual Advisory Amount will only become payable if the Payment Price during any subsequent Payment Year is greater than the highest Payment Price in any preceding Payment Year in which an amount was paid in respect of the Founder Advisory Agreement. Such Variable Annual Advisory Amount will be equal in value to 18 per cent. of the increase in the Payment Price over the highest Payment Price in any preceding Payment Year multiplied by the Founder Advisory Agreement Calculation Number.

The Variable Annual Advisory Amount, if any, will be paid on the relevant Payment Date by the issue to the Founder Entity of such number of Ordinary Shares as is equal to the Variable Annual Advisory Amount to which it is entitled divided by the Payment Price or partly in cash, at the election of the Founder Entity provided that at least 50 per cent. of the amount payable is paid in Ordinary Shares.

In addition, commencing from consummation of the Acquisition, for the financial year in which the Acquisition completes and for a further six full financial years, the Founder Entity shall be entitled to the Fixed Annual Advisory Amount. Such amount will be equal to such number of Ordinary Shares as is equal to 1.5 per cent. of the Founder Advisory Agreement Calculation Number payable on the relevant Payment Date in Ordinary Shares or partly in cash, at the election of the Founder Entity provided that at least 50 per cent. of the amount payable is paid in Ordinary Shares. Any cash element will be calculated using the Payment Price.

The Founders have advised the Company that their intention is to elect, via the Founder Entity, to receive any amounts due in respect of either the Fixed Annual Advisory Amount or the Variable Annual Advisory Amount in Ordinary Shares and for any cash element to only be such amount as is required to meet any related taxes.

The amounts used for the purposes of calculating the Variable Annual Advisory Amount or the Fixed Annual Advisory Amount and the relevant numbers of Ordinary Shares are subject to adjustment to reflect any split or reverse split of the Ordinary Shares in issue after the date of Admission.

Pursuant to the terms of the Founder Advisory Agreement, the Founder Entity has the right to appoint up to six directors to the Board.

The Founder Advisory Agreement commences with effect from Admission and continues until the end of the tenth full financial year following the closing of the Acquisition unless terminated earlier in accordance with its terms. The Founder Advisory Agreement may be terminated by the Company at any time if the Founder Entity engages in any criminal conduct or in wilful misconduct which is harmful to the Company (as determined by a court of competent jurisdiction in the State of New York). In addition, the agreement can be terminated at any time following consummation of the Acquisition (i) by the Founder Entity if the Company ceases to be traded on the London Stock Exchange, New York Stock Exchange or NASDAQ; or (ii) by the Founder Entity or the Company if there is (A) a Sale of the Company or (B) a liquidation of the Company.

If the Founder Advisory Agreement is terminated under (i) or (ii)(A), the Company will pay the Founder Entity an amount in cash equal to:

(a) the Fixed Annual Advisory Amount for the year in which termination occurs and for each remaining year of the term of the agreement, in each case at the Payment Price; and

(b) the Variable Annual Advisory Amount that would have been payable for the year of termination and for each remaining year of the term of the agreement.

In each case the Payment Price in the year of termination will be calculated on the basis of the Payment Year ending on the Trading Day immediately prior to the date of termination, save that in the event of a Sale of the Company, the Payment Price will be the price per Ordinary Share paid by the relevant third party. For each remaining year of the term of the agreement the Payment Price in each case will increase by 15% each year. No account shall be taken of any Payment Price in any year preceding the termination when calculating amounts due on termination.

On the entry into liquidation of the Company, a Variable Annual Advisory Amount and a Fixed Annual Advisory Amount shall be payable in respect of a shortened Payment Year which shall end on the Trading Day immediately prior to the date of commencement of liquidation.

The Founder Entity must provide the services of at least one Founder at all times.

If, following the Acquisition, the Company is not the publicly traded entity (i.e. the Company's parent company or affiliate is publicly traded), the Company shall cause the rights and obligations of the Company under the Agreement to be assigned to and assumed by (on consummation of the Acquisition) such publicly traded parent company or affiliate.

   7.         Cash and cash equivalents 

The Company holds zero coupon U.S. Treasury Bills and investments in US Treasury Liquidity Funds which at 30 April 2020 had a cost of US$400,143,005, a market value of US$400,387,238 and a maturity value of US$400,396,336.

   8.         Loss per share and net asset value per share 

The loss per share calculation for the period from 8 November 2019 through 30 April 2020 is based on loss for the period of US$(500,741) and the weighted average number of Ordinary Shares of 31,537,529.

Net asset value per share is based on net assets of US$400,801,698 divided by the 40,832,500 Ordinary Shares in issue at 30 April 2020.

The Warrants are considered non-dilutive at 30 April 2020.

   9.         Prepayments and other 
 
                                                2020 
                                                    US$ 
 Prepaid Directors' fees                        184,110 
 Directors & Officers insurance prepaid         225,431 
 Public Offering of Securities insurance 
  prepaid                                       346,532 
 Accrued interest receivable                     22,137 
                                              _________ 
                                                778,210 
 
 
   10.        Payables 
 
                         2020 
                          US$ 
 Accruals              22,702 
 Bank overdraft           848 
                    _________ 
                       23,550 
 
 
   11.        Share capital 

The authorised shares of the Company are as follows:

The authorised shares of the Company are as follows:

 
                                                                            2020 
                                                                             US$ 
 Authorised 
                  Unlimited number of Ordinary Shares of                       - 
                   no par value 
 
 
 
 Founder Shares                       Number 
 Balance at beginning of period            - 
 Issued during the period                100 
                                   _________ 
 Balance at end of period                100 
 
 
 
 Founder Shares                              US$ 
 Balance at beginning of period                - 
 On shares issued during the period        1,000 
                                       _________ 
 Balance at end of period                  1,000 
 
 
 
 Ordinary Shares                       Number 
 Balance at beginning of period             - 
 Issued during the period          40,832,500 
                                    _________ 
 Balance at end of period          40,832,500 
 
 
 
 Ordinary Share Capital                        US$ 
 Balance at beginning of period                  - 
 On shares issued during the period    411,730,000 
                                        __________ 
 Balance at end of period              411,730,000 
 
 

100 Founder Shares of US$10 each were issued to the Founder Entity on 14 November 2019.

34,030,000 Ordinary Shares were issued on 12 December 2019 at US$10.00 per share (34,000,000 were issued in the IPO and a further 30,000 were issued to the Non-Founder Directors in conjunction with the IPO). Each Ordinary Share was issued with a matching Warrant as described below. A further 6,800,000 Ordinary Shares of US$10.50 each (with no matching Warrants) were issued on 15 January 2020. On 15 April 2020, 2,500 ordinary shares of US$12 each were issued on the exercise of 10,000 warrants held by an investor.

Issue costs of US$10,427,561 were deducted from the proceeds of issue.

Ordinary Shares

Ordinary Shares confer upon the holders (in accordance with the Articles):

(a) Subject to the BVI Companies Act, on a winding-up of the Company the assets of the Company available for distribution shall be distributed, provided there are sufficient assets available, to the holders of Ordinary Shares and Founder Shares pro rata to the number of such fully paid up shares held by each holder relative to the total number of issued and fully paid up Ordinary Shares as if such fully paid up Founder Shares had been converted into Ordinary Shares immediately prior to the winding up;

(b) the right to receive all amounts available for distribution and from time to time to be distributed by way of dividend or otherwise at such time as the Directors shall determine; and

(c) the right to receive notice of, attend and vote as a member at any meeting of members except in relation to any Resolution of Members that the Directors, in their absolute discretion (acting in good faith) determine is: (i) necessary or desirable in connection with a merger or consolidation in relation to, in connection with or resulting from the Acquisition (including at any time after the Acquisition has been made); or (ii) to approve matters in relation to, in connection with or resulting from the Acquisition (whether before or after the Acquisition has been made).

Founder Shares

The Founder Shares will automatically convert into Ordinary Shares on a one for one basis (subject to such adjustments as the Directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as determined in accordance with the Articles) immediately following completion of the Acquisition (or if any such date is not a Trading Day, the first Trading Day immediately following such date).

The Founder Shares alone carry the right to vote on any Resolution of Members required, pursuant to BVI law, to approve any matter in connection with an Acquisition, or a merger or consolidation in connection with an Acquisition but otherwise have no right to receive notice of and to attend and vote at any meetings of members.

The Founder Shares do not carry any right to participate in any dividends or other distributions.

Warrants

The Company has issued an aggregate of 34,030,000 Warrants to the purchasers of Ordinary Shares and the non-Founder Directors in connection with the in the IPO. As at 30 April 2020, there were 34,020,000 Warrants in issue. Each Warrant, during the subscription period, entitles a Warrant holder to subscribe for one-fourth of an Ordinary Share upon exercise. Warrants will be exercisable in multiples of four for one Ordinary Share at a price of US$12 per whole Ordinary Share.

The subscription period commenced of the date of admission (December 2019) and ends of the earlier of the third anniversary of the completion of the Acquisition and such earlier date as determined by the Warrant Instrument.

The Warrants are also subject to mandatory redemption at US$0.01 per Warrant if at any time the Average Price per Ordinary Share equals or exceeds US$18.00 for a period of ten consecutive trading days (subject to any prior adjustment in accordance with the terms of the Warrant Instrument).

   13.        Warrant redemption liability 

As a contingent obligation to redeem for cash, a separate liability of US$340,200 was recognised.

   14.       Related party and material transactions 

During the period the Company issued the following shares and warrants to Directors of the Company:

 
 
                                       Ordinary 
                                         Shares     Warrants 
                                           2020         2020 
                                         Number       Number 
 W. Nicholas Howley (Founder)           595,239      500,000 
 William Nicholas Thorndike, 
  Jr (Founder)                          500,000      500,000 
 Tracy Britt Cool (Founder)              30,000       30,000 
 Michael Tobin OBE (Non-Founder)          7,500        7,500 
 Bram Belzberg (Non-Founder)              7,500        7,500 
 Adam Luke Hall (Non-Founder)             7,500        7,500 
 John Staer (Non-Founder)                 7,500        7,500 
 
 
 

The fees to directors during the period to 30 April 2020 were as follows:

 
                          2020 
                           US$ 
 Michael Tobin OBE      28,972 
 Bram Belzberg          28,972 
 Adam Luke Hall         28,972 
 John Staer             28,972 
 

The Non-Founder Directors opted to have their first year's annual remuneration settled by the issue of 7,500 Ordinary Shares each at US$10 per Ordinary Share.

1,500,000 Ordinary Shares and matching Warrants were issued to Founders on the IPO in December 2019 and a further 95,239 Ordinary Shares were issued to Founders in January 2020. This includes the Ordinary Shares held by the Founder Directors as listed above.

In addition, the Founder Entity holds 100 Founder Shares. The Founder Entity is owned and operated by the Founders, including Mr. Howley, Mr. Thorndike and Ms. Britt Cool. The Founder Entity received reimbursements of expenses of US$148,779 of which US$nil is outstanding at the period end.

The Company incurred total issuance costs of US$10.428 million. The details of these costs are as follows:

 
                          2020 
                           US$ 
 
 Placement fees      9,578,337 
 Legal fees            608,421 
 Other expenses        240,803 
                      ________ 
                    10,427,561 
 
 
   15.        Financial risk management 

The Company's policies with regard to financial risk management are clearly defined and consistently applied. They are a fundamental part of the Company's long term strategy covering areas such as foreign exchange risk, interest rate risk, credit risk, liquidity risk and capital management.

Financial risk management is under the direct supervision of the Board of Directors which follows policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative and non derivative financial instruments and investment of excess liquidity.

The Company does not intend to acquire or issue derivative financial instruments for trading or speculative purposes and has yet to enter into a derivative transaction.

Currency risk

The majority of the Company's financial cash flows are denominated in United States Dollars and Sterling. Currently the Company does not carry out any significant operations in other currencies. Foreign exchange risk arises from recognised monetary assets and liabilities. The Company does not hedge systematically its foreign exchange risk.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its financing activities, including deposits with banks and financial institutions. Credit risk from balances with banks and financial institutions is managed by the Board. Surplus funds are invested in U.S. treasury bills or such money market fund instruments as approved by the Non-Founder Directors.

Liquidity risk

The Company monitors liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom. Such forecasting takes into consideration the Company's debt financing plans (when applicable), compliance with internal balance sheet ratio targets and external regulatory or legal requirements if appropriate.

Cash flow interest rate risk

The Company has no long term borrowings and as such is not currently exposed to interest rate risk. To mitigate against the risk of default by one or more of its counterparties, the Company currently holds its assets in U.S. treasuries. As of 30 April 2020, US$400.4 million was held in U.S. treasury bills and U.S treasury liquidity funds. The Company anticipates that it will continue to hold the bulk of its assets in U.S. treasury bills until an Acquisition is consummated. The Board regularly monitors interest rates offered by, and the credit ratings of, current and potential counterparties, to ensure that the Company remains in compliance with its stated investment policy for its cash balances. The Company does not currently use financial instruments to hedge its interest rate exposure.

Capital risk management

The Company's objectives when managing capital (currently consisting of share capital and share premium) are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

Corporate information

 
 Directors                              Legal advisers to the Company 
                                         (English and US Law) 
  W. Nicholas Howley (appointed          Greenberg Traurig, LLP 
  13 November 2019)                      8th Floor 
  Tracy Britt Cool (appointed            The Shard 
  14 November 2019)                      32 London Bridge Street 
  William Nicholas Thorndike,            London 
  Jr. (appointed 14 November 2019)       SE1 9SG 
  Michael Tobin OBE (appointed 
  4 December 2019)                       Legal advisers to the Company 
  Bram Belzberg (appointed 4 December    (BVI Law) 
  2019)                                  Maples and Calder 
  Adam Luke Hall (appointed 4            200 Aldersgate Street 
  December 2019)                         11(th) Floor 
  John Staer (appointed 4 December       London 
  2019)                                  EC1A 4HD 
 
  Registered office                      Depositary 
  Kingston Chambers                      Computershare Investor Services 
  PO Box 173                             PLC 
  Road Town                              The Pavilions 
  Tortola                                Bridgewater Road 
  British Virgin Islands                 Bristol 
                                         BS 13 8AE 
  Administrator and secretary 
  Oak Fund Services (Guernsey) 
  Limited 
  Regency Court 
  Glategny Esplanade 
  St Peter Port 
  Guernsey 
  GY1 1WW 
 
  Registrar 
  Computershare Investor Services 
  (BVI) Limited 
  Woodbourne Hall 
  PO Box 3162 
  Road Town 
  Tortola 
  British Virgin Islands 
 
  Auditors 
  Grant Thornton UK LLP 
  30 Finsbury Square 
  London 
  EC2A 1AG 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR BLGDRLUBDGGS

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July 15, 2020 02:00 ET (06:00 GMT)

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