TIDMEVRA

RNS Number : 9288L

EverArc Holdings Limited

15 January 2021

EVERARC HOLDINGS LIMITED

ANNUAL FINANCIAL REPORT

EverArc Holdings Limited has today published its report and audited financial statements from incorporation on 8 November 2019 to 31 October 2020 ("Annual Financial Report"). The Annual Financial Report will shortly be available at: www.everarcholdings.com .

In compliance with Listing Rule 14.3.6, a copy of the Annual Financial Report will also shortly be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

Co-Chairmens' Statement

Fellow Shareholders,

2020 was a productive inaugural year for EverArc.

Despite the turbulent market backdrop, we remained focused on our goal of acquiring an exceptionally high-quality business to provide our shareholders private equity-like returns with the liquidity of a public market.

We evaluate every acquisition opportunity relative to our target economic criteria, which we believe best position a business to consistently generate our long-term target returns across economic and market cycles:

   --      predictable and growing revenue streams; 
   --      secular growth tailwinds; 
   --      products or services that account for critical but small portions of larger value streams; 
   --      significant free cash flow generation with high returns on tangible capital; and 
   --      businesses in fragmented industries with potential for opportunistic consolidation. 

The events of 2020 reinforced our focus on these target criteria.

While the private transaction market was effectively closed for a portion of 2020, and remains tepid in various sectors including Industrials and (to a lesser extent) Services, our origination and diligence activities ran at full throttle throughout the year.

A handful of potentially actionable opportunities proved sufficiently compelling to merit significant diligence and careful consideration. These were excellent businesses which, we believe, could have potentially met our target returns. These businesses, however, fell short of the high bar we set for our platform acquisition, and we decided to keep the bat on our shoulder and wait for an even better pitch.

We are comfortable that we will see this pitch. We have spent much of 2020 proactively deepening our knowledge of, and relationships with, some of the most compelling businesses we have come across in our collective careers. We also got to know some new exceptional businesses that closely match our target economic criteria.

While the current environment is uniquely dynamic and unpredictable around transaction timing, we enter 2021 with a robust and growing list of what we believe are exceptionally high-quality businesses that match our target criteria, and that should meet our long-term target equity returns. We are confident that we will acquire such a business in our search window.

In closing, we would like to sincerely thank our founding shareholders, who we consider our long-term partners. We will remain patient, disciplined, and hard at work to reward your faith in us.

W.Nicholas Howley

William Nicholas Thorndike, Jr

Co-Chairmen

14 January 2021

Report of the Directors

The financial statements on pages 18 to 32 were approved by the Board of Directors on 2021 and signed on their behalf by William Nicholas Thorndike, Jr.

The Directors have pleasure in submitting their Report and the audited financial statements for the period ended 31 October 2020.

Status and activities

The Company was incorporated with limited liability under the laws of the British Virgin Islands under the BVI Companies Act on 8 November 2019. 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 17 December 2019, after raising gross proceeds of US$340,000,000 on its initial public offering ("IPO") 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.

As set out in the Prospectus dated 12 December 2019 and published by the Company in connection with the IPO (the "Prospectus"), the Company was formed to undertake an acquisition of a target company or business ("Acquisition"). There is no specific expected target value for the Acquisition and the Company expects that any funds not used for the Acquisition will be used for future acquisitions, internal or external growth and expansion, purchase of outstanding debt and 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.

The Company expects to acquire a controlling interest in a target company or business. The Company may consider acquiring a controlling interest constituting less than the whole voting control or less than the entire equity interest in a target company or business if such opportunity is attractive; provided, the Company (or its successor) would acquire a sufficient portion of the target entity such that it could consolidate the operations of such entity for applicable financial reporting purposes. In connection with an Acquisition, the Company may issue additional Ordinary Shares which could result in the Company's then existing Shareholders owning a minority interest in the Company following the Acquisition.

The Company's efforts in identifying a prospective target company or business are not limited to a particular industry or geographic region. However, given the experience of the Company's founders, William N. Thorndike, Jr., W. Nicholas Howley, Tracy Britt Cool, Vivek Raj and Haitham Khouri (the "Founders"), the Company expects to focus on acquiring an operating company or business with a significant proportion of its activities in North America. The Company may seek to raise further capital for the purposes of the Acquisition.

Unless required by applicable law or other regulatory process, no Shareholder approval will be sought by the Company in relation to the Acquisition. The Acquisition, as well as the associated governance and capital structure decisions, will be subject to Board approval by an Acquisition Approval Majority (as defined in the Prospectus).

The determination of the Company's post-Acquisition strategy and whether any of the Directors will remain with the combined company and on what terms will be made at or prior to the time of the Acquisition.

In the event that an Acquisition has not been announced by the third anniversary of Admission, the Board will recommend to Shareholders either that the Company be wound up (in order to return capital to Shareholders and holders of the Founder Shares, to the extent assets are available) or that the Company continue to pursue the Acquisition for a further 12 months from the third anniversary of Admission. The Board's recommendation will then be put to a Shareholder vote (from which the Directors and the Founders will abstain).

The Company has identified the following core economic attributes that it believes are important in evaluating potential acquisition opportunities. These are closely aligned with the economic attributes that members of the Founder team have collectively and consistently targeted in businesses that they have managed, acquired or invested in previously. The Company will generally use these attributes in evaluating acquisition opportunities. However, it may also decide to enter into the Acquisition of a target company or business that does not have these attributes.

These core economic attributes include:

   --      predictable and growing revenue streams; 
   --      products or services that account for critical but small portions of larger value streams; 
   --      significant free cash flow generation with high returns on tangible capital; 
   --      secular growth tailwinds; and 
   --      businesses in fragmented industries with potential for opportunistic consolidation. 

Results and dividends

For the period ended 31 October 2020, the Company's loss was US$947,832.

It is the Company's policy that no dividends will be declared until after the Acquisition.

The Company's current intention is to retain any earnings for use in its business operations, and the Company does not anticipate declaring any dividends in the foreseeable future. The Company will only pay dividends to the extent that to do so is in accordance with all applicable laws.

Share capital

General:

As at 31 October 2020, the Company had in issue 40,832,500 Ordinary Shares and 100 Founder Shares.

34,030,000 Ordinary Shares were issued on 17 December 2019 at US$10 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 (with no matching Warrants) were issued on 15 January 2020 at US$10.50 per share. On 15 April 2020, 2,500 Ordinary Shares were issued on the exercise of 10,000 Warrants held by an investor at an exercise price of US$12 per share. There are no Ordinary Shares held in treasury.

100 Founder Shares were issued to the EverArc Founders LLC (the Founder Entity") on 14 November 2019 at US$10 per share.

Founder Shares:

Details of the Founder Shares can be found in note 11 to the financial statements, and are incorporated into this Report by reference.

Voting rights:

Holders of Ordinary Shares have the right to receive notice of and to attend and vote at any meetings of members except in relation to any Resolution of Members that the Directors, in their absolute discretion determine is necessary or desirable: (i) 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). Each holder of shares being present in person or by proxy at a meeting will, upon a show of hands, have one vote and upon a poll each such holder of shares present in person or by proxy will have one vote for each share held by him.

In the case of joint holders of a share, if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member, and if one or more joint holders are present at a meeting of persons, in person or by proxy, they must vote as one.

Restrictions on voting:

No member shall, if the Directors so determine, be entitled in respect of any share held by him to attend or vote (either personally or by proxy) at any meeting of members or separate class meeting of the Company or to exercise any other right conferred by membership in relation to any such meeting if he or any other person appearing to be interested in such shares has failed to comply with a notice requiring the disclosure of shareholder interests and given in accordance with the Company's articles of association (the "Articles") within 14 calendar days, in a case where the shares in question represent at least 0.25% of their class, or within seven days, in any other case, from the date of such notice. These restrictions will continue until the information required by the notice is supplied to the Company or until the shares in question are transferred or sold in circumstances specified for this purpose in the Articles.

Transfer of shares:

Subject to the terms of the Articles, any member may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Directors may approve. The Directors may accept such evidence of title of the transfer of shares (or interests in shares) held in uncertificated form (including in the form of depositary interests or similar interests, instruments or securities) as they shall in their discretion determine. The Directors may permit such shares or interests in shares held in uncertificated form to be transferred by means of a relevant system of holding and transferring shares (or interests in shares) in uncertificated form.

No transfer of shares will be registered if, in the reasonable determination of the Directors, the transferee is or may be a Prohibited Person (as defined in the Articles), or is or may be holding such shares on behalf of a beneficial owner who is or may be a Prohibited Person. The Directors shall have power to implement and/or approve any arrangements they may, in their absolute discretion, think fit in relation to the evidencing of title to and transfer of interests in shares in the Company in uncertificated form (including in the form of depositary interests or similar interests, instruments or securities).

Rights to appoint and remove Directors

Subject to the BVI Companies Act and the Articles, the Directors shall have power at any time, and from time to time, without sanction of the members, to appoint any person to be a Director, either to fill a casual vacancy or as an additional Director. Subject to the BVI Companies Act and the Articles, the members may by a Resolution of Members appoint any person as a Director and remove any person from office as a Director.

The Directors may from time to time appoint one or more of their body to the office of managing director or to any other office for such term and at such remuneration and upon such terms as they determine.

Powers of the Directors

Subject to the provisions of the BVI Companies Act and the Articles, the business and affairs of the Company shall be managed by, or under the direction or supervision of, the Directors. The Directors have all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The Directors may exercise all the powers of the Company to borrow or raise money (including the power to borrow for the purpose of redeeming shares) and secure any debt or obligation of or binding on the Company in any manner including by the issue of debentures (perpetual or otherwise) and to secure the repayment of any money borrowed, raised, or owing by mortgage, charge, pledge, or lien upon the whole or any part of the Company's undertaking property or assets (whether present or future) and also by a similar mortgage, charge, pledge, or lien to secure and guarantee the performance of any obligation or liability undertaken by the Company or any third party.

Directors and their interests

The Directors of the Company who served during the period and subsequent to the date of this Report are:

 
 
        Name                   Position            Date of appointment 
 W.Nicholas Howley   Founder and Non-Executive     13 November 2019 
                      Director 
                    ----------------------------  -------------------- 
 Tracy Britt Cool    Founder and Non-Executive     14 November 2019 
                      Director 
                    ----------------------------  -------------------- 
 William Nicholas 
  Thorndike, Jr        Founder and Non-Executive     14 November 2019 
                       Director 
                    ----------------------------  -------------------- 
 Michael Tobin       Independent Non-Executive     4 December 2019 
  OBE                 Director 
                    ----------------------------  -------------------- 
 Bram Belzberg       Independent Non-Executive     4 December 2019 
                      Director 
                    ----------------------------  -------------------- 
 Adam Luke Hall      Independent Non-Executive     4 December 2019 
                      Director 
                    ----------------------------  -------------------- 
 John Staer          Independent Non-Executive     4 December 2019 
                      Director 
                    ----------------------------  -------------------- 
 

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

 
                                Ordinary    Percentage    Warrants 
                                  Shares    of Ordinary 
                                             Shares in 
                                               issue 
                                  Number              %     Number 
 W. Nicholas Howley              595,239           1.46    500,000 
 William Nicholas Thorndike, 
 Jr                              500,000           1.22    500,000 
 Tracy Britt Cool                 30,000           0.07     30,000 
 Michael Tobin OBE                 7,500           0.02      7,500 
 Bram Belzberg                     7,500           0.02      7,500 
 Adam Luke Hall                    7,500           0.02      7,500 
 John Staer                        7,500           0.02      7,500 
 
 

Directors' remuneration

The fees to directors during the period to 31 October 2020 were as follows:

 
                           US$ 
 Michael Tobin OBE      66,781 
 Bram Belzberg          66,781 
 Adam Luke Hall         66,781 
 John Staer             66,781 
 

Each of the Directors has entered into a Director's Letter of Appointment with the Company. Under the Independent Non-Founder Directors' letters of appointment, they are each entitled to a fee of US$75,000 per annum, payable quarterly in arrears. Prior to an Acquisition the Founder Directors will not be entitled to fees or other remuneration.

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.

Substantial shareholdings

As at 14 January 2021 (the latest practicable date prior to the publication of this Report), the following had disclosed an interest in the issued Ordinary Share capital of the Company (being 5% or more of the voting rights in the Company) in accordance with the requirements of the Disclosure and Transparency Rules (the "DTRs"):

 
                                 Number      Date of disclosure    Notified 
                               of Ordinary     to Company (1)      percentage 
         Shareholder             Shares                            of voting 
                                   (1)                               rights 
                                                                      (1) 
 Senator Investment Group                           24 December 
  LP                             3,000,000                 2019         8.82% 
                             -------------  -------------------  ------------ 
 Select Equity Group, L.P.       5,500,000      21 January 2020        13.47% 
                             -------------  -------------------  ------------ 
 Third Point LLC                 4,600,000         6 March 2020        11.27% 
                             -------------  -------------------  ------------ 
 

(1) Since the date of disclosures to the Company, the interest of any person listed above in Ordinary Shares may have increased or decreased without any obligation on the relevant person to make further notification to the Company pursuant to the DTRs.

Change of control

The Company is not party to any significant contracts that are subject to change of control provisions in the event of a takeover bid. There are no agreements between the Company and its Directors or employees providing compensation for loss of office or employment that occurs because of a takeover bid.

The Directors have provided the auditors with full access to all of the books and records of the Company.

Corporate Governance Statement

The Company is a BVI registered company with a standard listing on the London Stock Exchange. For as long as the Company has a standard listing it is not required to comply or explain non-compliance with the UK Corporate Governance Code (the "Code") issued by the Financial Reporting Council ("FRC") in July 2018. However, the Company is firmly committed to high standards of corporate governance and maintaining a sound framework through which the strategy and objectives of the Company are set and the means of attaining these objectives and monitoring performance are determined. At Admission, the Company therefore stated its intention to voluntarily comply with the Code. The Code is available on the FRC's website, www.frc.co.uk . The Company also complies with the corporate governance regime applicable to the Company pursuant to the laws of the British Virgin Islands.

As at the date of this Report, the Company is in compliance with the Code with the exception of the following:

-- Given the wholly non-executive composition of the Board, certain provisions of the Code (in particular the provisions relating to the division of responsibilities between the Chairman and chief executive and executive compensation) are considered by the Board to be inapplicable to the Company.

-- The Company's Co-Chairmen, Mr. Thorndike and Mr. Howley, are not considered to be independent and therefore the Company does not comply with the requirements of the U.K. Corporate Governance Code in relation to the requirement for the chairman to be independent on appointment. The Board considers that this is reflective of their importance to the Company at this stage and is not detrimental to the Board's overall effectiveness or role in promoting the long-term sustainable success of the Company. The Board is comprised of a majority of independent directors and the Acquisition will require the approval of a majority of those Directors which the Board considers independent for the purposes of the U.K. Corporate Governance Code. The Company's senior independent director, currently Mr. Tobin, will also be available for regular engagement with shareholders in order to understand their views on governance and performance.

-- The Code also recommends the submission of all directors for re-election at annual intervals. No Director will be required to submit for re-election until the first annual general meeting of the Company following the Company's first acquisition.

-- Until the Acquisition is made, the Company will not have nomination, remuneration, audit or risk committees. The Board as a whole will instead review its size, structure and composition, the scale and structure of the Directors' fees (taking into account the interests of Shareholders and the performance of the Company), take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company's financial statements and take responsibility for any formal announcements on the Company's financial performance. Following the Acquisition, the Board intends to put in place nomination, remuneration, audit and risk committees.

-- The Code recommends the inclusion of a viability statement in addition to the statement of going concern. This is not considered by the Board to be applicable given the Company's activities prior to an acquisition.

Share dealing

As at the date of this Report, the Board has voluntarily adopted a share dealing code which is consistent with the rules of the Market Abuse Regulation 596/2014 (the "Market Abuse Regulation"). The Board is responsible for taking all proper and reasonable steps to ensure compliance with the Market Abuse Regulation by the Directors.

Relations with Shareholders

The Directors are available for communication with shareholders and all shareholders will have the opportunity, and are encouraged, to attend and vote at any future Annual General Meeting of the Company, the first of which will take place within 18 months following completion of the Acquisition, during which the Board will be available to discuss issues affecting the Company.

Statement of going concern

The Directors, having considered the financial position of the Company for a period of at least 12 months from the date of approval of the financial statements, have a reasonable expectation and belief that the Company has adequate resources to continue in operational existence for the foreseeable future given the available cash and forecast cash outflows. Thus, the financial statements are prepared on a going concern basis.

Internal control

The Board is responsible for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives. The Board maintains sound risk management and internal control systems. The Board has reviewed the Company's risk management and control systems and believes that the controls are satisfactory given the nature and size of the Company. Controls will be reviewed following completion of its first acquisition.

Financial Risk Profile

The Company's financial instruments comprise mainly of cash and cash equivalents, and various items such as payables and receivables that arise directly from the Company's operations. The Board has conducted a robust assessment of the Company's emerging and principal risks including those that would threaten its business model, future performance, solvency or liquidity. Details of the risks relevant to the Company are included in the notes to the financial statements and on page 11 of this report.

Management Report

For the purposes of compliance with DTR 4.1.5R(2), DTR 4.1.8R and DTR4.1.11R, the required content of the "Management Report" can be found in this Report of Directors and the Principal Risks and Uncertainties section on page 11 of this report.

Directors' Responsibilities

The Directors are responsible for preparing the Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and its interpretations as issued by the International Accounting Standards Board ("IASB"). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that year. In preparing these financial statements, the Directors are required to:

   --      select suitable accounting policies and then apply them consistently; 
   --      make judgements and accounting estimates that are reasonable and prudent; 

-- state whether applicable IFRSs and its interpretations as issued by the IASB have been followed, subject to any material departures disclosed and explained in the financial statements;

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to prepare the financial statements. They are also responsible for safeguarding the assets of the Company and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the company's website. A copy of the financial statements is placed on our website www.everarcholdings.com. Legislation in the BVI governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors consider that the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company's performance, business model and strategy.

Each of the Directors, who are in office and whose names and functions are listed in Corporate information, confirms that, to the best of his knowledge:

   --      the Company financial statements, which have been prepared in accordance with IFRSs and its interpretations as issued by the IASB, give a true and fair view of the assets, liabilities, financial position and loss of the Company; and 

-- the management report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

Disclosure of information to Auditors

Each of the persons who is a Director at the date of approval of this Report confirms that:

-- so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

-- each director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Directors' indemnities

As at the date of this Report, indemnities granted by the Company to the Directors are in force to the extent permitted under BVI law. The Company also maintains Directors' and Officers' liability insurance, the level of which is reviewed annually.

By order of the Board:

William NicholasThorndike, Jr

Director

14 January 2021

Principal Risks and Uncertainties

The Board has identified the following principal risks and uncertainties facing the Company which remain unchanged from the principal risks and uncertainties set out in the Prospectus. The risks referred to below do not purport to be exhaustive and are not set out in any particular order of priority. Additional risks and uncertainties not currently known to the Board or which the Board currently deems immaterial may also have an adverse effect on the Company's business. In particular, the Company's performance may be affected by changes in the market and/or economic conditions and in legal, regulatory and tax requirements.

Key information on the key risks that are specific to the issuer

Business Strategy

-- The Company is a newly formed entity with no operating history and has not yet identified any potential target company or business for the Acquisition and may be unable to complete the Acquisition in a timely manner if at all.

-- The Company may acquire either less than whole voting control of, or less than a controlling equity interest in, a target, which may limit its operational strategies.

-- The Company may be unable to complete the Acquisition in a timely manner or at all or to fund the operations of the target business if it does not obtain additional funding.

The Company's relationship with the Directors, the Founders and the Founder Entity and conflicts of interest

-- The Company is dependent on the Founders to identify potential acquisition opportunities and to execute the Acquisition. The loss of the services of any of them could materially adversely affect it.

-- The Founders and Directors are currently affiliated and may in the future become affiliated with entities engaged in business activities similar to those intended to be conducted by the Company and may have conflicts of interest in allocating their time and business opportunities.

-- The Directors and the Founders are involved in other businesses, which could have a negative impact on the Company's ability to complete the Acquisition.

-- The Company may be required to issue additional Ordinary Shares pursuant to the terms of the Founder Advisory Agreement, which would dilute the value of existing Shareholders Ordinary Shares.

Taxation

-- The Company may be a "passive foreign investment company" for US federal income tax purposes and adverse tax consequences could apply to US investors.

Key information on the key risks that are specific to the securities

The Ordinary Shares and Warrants

-- The Standard Listing of the Ordinary Shares and Warrants will not afford Shareholders the opportunity to vote to approve the Acquisition.

-- The Warrants can only be exercised during the Subscription Period and to the extent a Warrantholder has not exercised its Warrants before the end of the Subscription Period, those Warrants will lapse, resulting in the loss of a holder's entire investment in those Warrants.

-- The Warrants are subject to mandatory redemption and therefore the Company may redeem a Warrantholder's unexpired Warrants prior to their exercise at a time that is disadvantageous to a Warrantholder, thereby making those Warrants worthless.

-- The issuance of Ordinary Shares pursuant to the exercise of the Warrants will dilute the value of a Shareholder's Ordinary Shares.

Statement of Comprehensive Income for the period ended 31 October 2020

 
                                               For the period 
                                                     ended 31 
                                                 October 2020 
                                        Note              US$ 
 
 Unrealised gain on investments                        26,708 
 Investment income                                  1,646,166 
 Other income                                               6 
 Expenses                                3        (2,620,712) 
                                                     ________ 
 Operating loss                                     (947,832) 
                                                     ________ 
 Loss and total comprehensive loss for 
  the period                                        (947,832) 
 
 
 Basic and diluted loss per Ordinary 
  and Founder share                       8            (0.03) 
 

The notes form an integral part of these financial statements.

Statement of Financial Position as at 31 October 2020

 
                                                   31 October 
                                                         2020 
                                           Note           US$ 
 Assets 
 Current assets 
 Cash and cash equivalents                             19,997 
 Short-term investments                     7     399,986,263 
 Prepayments and other assets               9         490,051 
                                                  ___________ 
 Total assets                                     400,496,311 
                                                  ___________ 
 Liabilities 
 Current liabilities 
 Payables                                   10       (87,599) 
                                                  ___________ 
 Total current liabilities                           (87,599) 
 
 
                                                  ___________ 
 Net assets                                       400,408,712 
 
 
 Equity 
 
 Ordinary Share Capital - nominal                           - 
  value 
 Ordinary Share Capital - share premium 
  and warrants                              11    401,356,544 
 Accumulated losses                                 (947,832) 
                                                  ___________ 
 Total equity                                     400,408,712 
 
 
 Net asset value per share                  8         US$9.80 
 

The notes form an integral part of these financial statements.

The financial statements were approved and authorised for issue by the board of directors on 14 January 2021 and signed on its behalf by:

William Nicholas Thorndike, Jr

Director

Statement of Changes in Equity for the period ended 31 October 2020

 
 
                                Note         Ordinary         Ordinary     (Retained 
                                        Share Capital    Share Capital       losses)          Total 
                                            - nominal          - share 
                                                value          premium 
                                                  US$              US$           US$            US$ 
 
 At inception, 8 November                           -                -             -              - 
  2019 
 Issue of shares                  11                -      411,730,000                  411,730,000 
 Issue costs                      11                -     (10,373,456)             -   (10,373,456) 
 Loss and total comprehensive 
 loss for year                                      -                -     (947,832)      (947,832) 
                                             ________        _________     _________      _________ 
 Balance as at 31 October 
  2020                                              -      401,356,544     (947,832)    400,408,712 
                                             ________        _________     _________      _________ 
 
 
 

There is no Other Comprehensive Income during the period.

The notes form an integral part of these financial statements.

Statement of Cash Flows for the period ended 31 October 2020

 
                                                  For the period 
                                                        ended 31 
                                                    October 2020 
                                          Note               US$ 
 Cash flows from operating activities 
 
 Loss and total comprehensive loss 
  for the year                                         (947,832) 
 
 Adjustments for: 
 Unrealised gain on short-term 
  investments                                           (26,708) 
 
 Movements in working capital: 
 Increase in debtors and prepayments                   (490,051) 
 Increase in payables                                     87,599 
                                                     ___________ 
 Net cash used in operating activities               (1,376,992) 
                                                     ___________ 
 Investing activities 
 Purchase of short-term investments              (1,891,057,881) 
 Sale of short-term investments                    1,491,098,326 
                                                     ___________ 
 Net cash used in investing activities             (399,959,555) 
                                                     ___________ 
 Financing activities 
 Issue of Ordinary Shares and warrants     11        411,730,000 
 Share issue expenses                      11       (10,373,456) 
                                                     ___________ 
 Net cash provided by financing 
  activities                                         401,356,544 
                                                     ___________ 
 Increase in cash and cash equivalents                    19,997 
 Cash and cash equivalents at start                            - 
  of year 
                                                     ___________ 
 Cash and cash equivalents at end 
  of year                                                 19,997 
 
 
 
 
 
 

The notes form an integral part of these financial statements.

Notes to the financial statements for the period ended 31 October 2020

   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 2019. 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 17 December 2019, after raising gross proceeds of US$340,000,000 on its initial public offering ("IPO") 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.

These financial statements were approved and authorised for issue in accordance with a resolution of the

Directors on    January 2021. 
   2.         Summary of significant accounting policies 

The principal accounting policies applied in these financial statements are set out below.

   2.1        Basis of preparation 

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss and are in accordance with International Financial Reporting Standards as adopted by the European Union and its interpretations as issued by the International Accounting Standards Board ("IASB") and those parts of the BVI Business Companies Act applicable under IFRS. As the Company was incorporated on 8 November 2019, there is no comparative information.

The financial statements and notes thereto are presented in U.S. dollars, which is the Company's presentational and functional currency and are rounded to the nearest dollar, except when otherwise indicated.

Accounting policies have been consistently applied.

There are no new accounting standards adopted which have a material impact on these financial statements.

The preparation of 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 2.13.

   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 given the available cash and forecast cash outflows. Thus, the 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 and the subscription of Founder Shares 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 statement of comprehensive income.

   2.4        Financial assets at fair value through profit or loss 

Classification

The Company classifies its investment in US Treasury Bills as a financial asset at fair value through profit or loss.

Financial assets classified at fair value through profit or loss are financial instruments that 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 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 statement of comprehensive loss within dividend income when the Company's right to receive payments is established.

   2.5        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.

   2.6        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.

   2.7        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.

   2.8        New accounting standards 

This is the first full year set of financial statements prepared by the Company. The Company applied all applicable standards and applicable interpretations published by the IASB for the period ended 31 October 2020. The Company did not adopt any standard or interpretation published by the IASB 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 31 October 2020 that will have a material impact on the Company.

   2.9        Share-based payments 

Directors' remuneration settled by the issue of Ordinary Shares is recognised in the statement of comprehensive income based on the issue price over the period of service to which the issue relates,

   2.10      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 and liquidity funds.

   2.11      Share capital 

Founder Shares, 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. Consideration in excess of the par value and the fair value of the warrants is included in share premium and warrants.

   2.12      Auditor remuneration 

During the period ended 31 October 2020, the Company obtained the following services from the independent auditors:

Fees payable to the Company's auditor for the audit of the Company's financial statements for the period ended 31 October 2020 - US$77,599

Fees payable to the Company's auditor for review of the interim financial information - US$ 18,969

Fees payable to the Company's auditor for reporting accountant work - US$ 147,770

   2.13      Critical accounting judgements and key sources of estimation uncertainty 

Management have considered the terms of the Founders Agreement and concluded that, due to the terms of the agreement, particularly the fact that the Company has the ability to decide whether to accept an acquisition presented under the Agreement and there is no penalty for the advisors specified in the contract in the event of no work being performed, the substance of the service provided is the Acquisition. As no Acquisition has occurred, management have concluded that the services under the Agreement have not yet been performed and no share based payment charge is therefore recognised.

   3.         Expenses 
 
                                      2020 
                                       US$ 
 
 Listing expenses                  412,921 
 Legal and professional fees     1,206,416 
 Insurance                         408,029 
 Directors' remuneration*          267,123 
 Administration fees                97,539 
 Audit fee                          77,599 
 General expenses                  151,085 
                                  ________ 
                                 2,620,712 
 
 

* 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. The Directors' remuneration stated above is the value of the Ordinary Shares at issue pro-rated for the period of service.

   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 often 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 maximise the use of observable inputs and minimise 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.

As at 31 October 2020 financial assets at fair value through profit or loss of US$399,986,263 were categorised as level 2 securities. There were no transfers between levels during the year.

   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, 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 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 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.

Fees will be recognised when they become due and the amount can be calculated with reliability. There are no fees charged or recognised under the Founder Advisory Agreement in the period.

   7.         Short-term investments 

The Company holds zero coupon US Treasury Bills and investments in US Treasury Liquidity Funds which at 31 October 2020 had a cost of US$399,959,555 and a market value of US$399,986,263.

   8.         Loss per share and net asset value per share 

The loss per share calculation for the period ended 31 October 2020 is based on loss for the period of US$(947,832) and the weighted average number of Ordinary Shares of 36,301,525.

Net asset value per share is based on net assets of US$400,408,712 divided by the 40,832,500 Ordinary Shares in issue at 31 October 2020.

The Warrants are considered non-dilutive at 31 October 2020.

   9.         Prepayments and other assets 
 
                                       2020 
                                        US$ 
 Other prepayments                  488,064 
 Investment income receivable         1,987 
                                  _________ 
                                    490,051 
 
 
   10.        Payables 
 
                            2020 
                             US$ 
 Audit fee accrual        77,599 
 Other payables           10,000 
                       _________ 
                          87,599 
 
 
   11.        Share capital 

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            - 
 Issued during the period              1,000 
                                   _________ 
 Balance at end of year                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               - 
 Shares issued during the period    411,730,000 
                                     __________ 
 Balance at end of period           411,730,000 
 
 

100 Founder Shares were issued to the Founder Entity on 14 November 2019 at US$10 per share.

34,030,000 Ordinary Shares were issued on 12 December 2019 at US$10 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 (with no matching Warrants) were issued on 15 January 2020 at US$10.50 per share. On 15 April 2020, 2,500 Ordinary Shares were issued on the exercise of 10,000 Warrants held by an investor at an exercise price of US$12 per share.

Issue costs of US$10,373,456 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 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 on the date of admission (17 December 2019) and ends on 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).

   12.       Related party and material transactions 

During the period the Company issued the following Ordinary Shares and Warrants to Directors of the Company:

 
 
                                Ordinary     Percentage 
                                  Shares     of Ordinary     Warrants 
                                              Shares in 
                                                issue 
                                    2020            2020         2020 
                                  Number               %       Number 
 W. Nicholas Howley              595,239            1.46      500,000 
 William Nicholas Thorndike, 
 Jr                              500,000            1.22      500,000 
 Tracy Britt Cool                 30,000            0.07       30,000 
 Michael Tobin OBE                 7,500            0.02        7,500 
 Bram Belzberg                     7,500            0.02        7,500 
 Adam Luke Hall                    7,500            0.02        7,500 
 John Staer                        7,500            0.02        7,500 
 
 

Directors' remuneration

The fees to directors during the period to 31 October 2020 were as follows:

 
                          2020 
                           US$ 
 Michael Tobin OBE      66,781 
 Bram Belzberg          66,781 
 Adam Luke Hall         66,781 
 John Staer             66,781 
 

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. The Directors' remuneration stated above is the value of the Ordinary Shares at issue pro-rated for the period of service.

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 Mr Howley 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$187,990 of which US$nil is outstanding at the period end.

The Company incurred total issuance costs of US$10.373 million. The details of these costs are as follows:

 
                          2020 
                           US$ 
 
 Placement fees      9,578,337 
 Legal fees            554,316 
 Other expenses        240,803 
                      ________ 
                    10,373,456 
 
 
   13.        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. Currently the Company does not carry out any significant operations in currencies outside the above. 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 US 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 31 October 2020, US$399.99 million was held in U.S. treasury bills. 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 
  W. Nicholas Howley (appointed           (English and US Law) 
  13 November 2019)                       Greenberg Traurig, LLP 
  Tracy Britt Cool (appointed             8th Floor 
  14 November 2019)                       The Shard 
  William Nicholas Thorndike,             32 London Bridge Street 
  Jr. (appointed 14 November 2019)        London 
  Michael Tobin OBE (appointed            SE1 9SG 
  4 December 2019) 
  Bram Belzberg (appointed 4 December     Legal advisers to the Company 
  2019)                                   (BVI Law) 
  Adam Luke Hall (appointed 4             Maples and Calder 
  December 2019)                          200 Aldersgate Street 
  John Staer (appointed 4 December        11(th) Floor 
  2019)                                   London 
                                          EC1A 4HD 
  Registered office 
  Kingston Chambers                       Depositary 
  PO Box 173                              Computershare Investor Services 
  Road Town                               PLC 
  Tortola                                 The Pavilions 
  British Virgin Islands                  Bridgewater Road 
                                          Bristol 
  Administrator and secretary             BS 13 8AE 
  Oak Fund Services (Guernsey) 
  Limited 
  Oak House 
  Hirzel Street 
  St Peter Port 
  Guernsey 
  GY1 2NP 
 
  Registrar 
  Computershare Investor Services 
  (BVI) Limited 
  Woodbourne Hall 
  PO Box 3162 
  Road Town 
  Tortola 
  British Virgin Islands 
 
  Independent auditors 
  Grant Thornton UK LLP 
  30 Finsbury Square 
  London 
  EC2A 1AG 
 

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