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
(END) Dow Jones Newswires
July 15, 2020 02:00 ET (06:00 GMT)
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