TIDMLAHL TIDMLAHW
RNS Number : 0113W
Landscape Acquisition Holdings Ltd
30 July 2018
Landscape Acquisition Holdings Limited
Interim Condensed Financial Information
for the Period from Incorporation on 1 November 2017
to 30 April 2018 (Unaudited)
Interim Management Report and Chairman's Statement
It is with pleasure that I write to you for the first time as
Chairman of Landscape Acquisition Holdings Limited (the "Company")
and I would like to take this opportunity to welcome you as a
shareholder of the Company.
I am pleased to present to the shareholders the Company's first
half-yearly unaudited financial report for the period ended 30
April 2018.
The Company
The Company raised gross proceeds of US$484 million in its
initial public offering ("IPO"), through the placing of Ordinary
Shares (with matching Warrants) at a placing price of $10 per
Ordinary Share and a further US$16 million through the subscription
of Founder Preferred Shares (with Warrants being issued to
subscribers of Founder Preferred Shares on the basis of one Warrant
per Founder Preferred Share). The Company was admitted to trading
with a standard listing on the main market of the London Stock
Exchange on 20 November 2017. As at 30 April 2018, the Company had
48,425,000 Ordinary Shares in issue. The net proceeds from the IPO
and the subscription of the Founder Preferred Shares are easily
accessible when required.
As set out in the Company's Prospectus dated 15 November 2017
(the "Prospectus"), the Company was formed to undertake an
acquisition of a target company ("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.
Financial Results
During the period commenced 1 November 2017 and ended 30 April
2018, the Company has incurred operating costs of $60.0 million
including $3.6 million of administrative expenses, $0.05 million
non-cash charge for non-executive Directors' Fees, $55.9 million of
non-cash charges related to Founder Preferred Share dividend rights
and associated warrants as outlined in the Company's Prospectus and
$0.5m related to warrant redemption liability. These expenses were
partially offset by finance income totalling $2.6 million and other
operating income of $0.2 million. Costs of Admission of $9.7
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 2018. Your attention is drawn to that Prospectus for the
detailed assessment.
A copy of the Prospectus is available on the Company's website
(www.landscapeacquisitionholdingslimited.com) and has been
submitted to the National Storage Mechanism and is available for
inspection at www.morningstar.co.uk/uk/nsm.
Related Parties
Related party disclosures are given in note 14 to these
condensed interim financial statements.
Lord Myners of Truro CBE
Chairman
26 July 2018
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:
Lord Myners of Truro CBE
Chairman
26 July 2018
Condensed Statement of Comprehensive Loss for the period ended
30 April 2018
For the
period
from 1
November
2017 to
30
April
2018
Note US$
Investment income 2,574,303
Other income 198,260
Expenses 3 (3,590,122)
Non-cash charge related
to Founder Preferred Shares
and associated warrants 6 (55,889,180)
Non-cash charge related
to warrant redemption
liability 13 (484,250)
________
Operating loss (57,190,989)
________
Loss and total comprehensive
loss for the period (57,190,989)
Basic and diluted loss
per Ordinary and Founder 8 US$(1.26)
Preferred share
The notes form an integral part of these financial
statements.
Condensed Statement of Financial Position as at 30 April
2018
2018
Note US$
Assets
Current assets
Cash and cash equivalents 6,548,112
Short-term investments 7 485,460,481
Prepayments and other
assets 9 174,481
___________
Total assets 492,183,074
___________
Liabilities
Current liabilities
Payables 10 (2,414,123)
___________
Total current liabilities (2,414,123)
Non-current liabilities
Warrant redemption liability 13 (484,250)
___________
Total non-current liabilities (484,250)
___________
Total liabilities (2,898,373)
___________
Net assets 489,284,701
Equity
Founder Preferred Share
Capital 11 16,000,000
Ordinary Share Capital -
- nominal value
Ordinary Share Capital
- share premium 11 474,533,991
Retained losses (1,249,290)
___________
489,284,701
Net asset value per share 8 US$9.78
The notes form an integral part of these financial
statements.
Condensed Statement of Changes in Equity for the period ended 30
April 2018
Founder
Preferred Ordinary Ordinary
Share Share Share Retained
Capital Capital Capital losses Total
- nominal - share
value premium
US$ US$ US$ US$ US$
At inception - - - - -
Issue of shares 16,000,000 - 484,250,000 55,889,180 556,139,180
Issue costs - - (9,716,009) - (9,716,009)
Loss and total
comprehensive
loss for period - - - (57,190,989) (57,190,989)
Share based compensation
-
Directors' options - - - 52,519 52,519
_________ _________ _________ _________ _________
Balance as at
30 April 2018 16,000,000 - 474,533,991 (1,249,290) 489,284,701
_________ _________ _________ _________ _________
The notes form an integral part of these financial
statements.
Condensed Statement of Cash Flows for the period ended 30 April
2018
For the
period
from 1
November
2017
to 30
April 2018
Note US$
Cash flows from operating
activities
Loss and total comprehensive
loss for the period (57,190,989)
Adjustments for:
Gains on short-term investments (2,574,303)
Charge related to Founder
Preferred Shares 6 55,889,180
Charge related to warrant
redemption liability 13 484,250
Charge related to director
options 12 52,519
Movements in working capital:
(Increase) in debtors
and prepayments (174,481)
Increase in payables 2,414,123
___________
Net cash used in operating
activities (1,099,701)
___________
Investing activities
Purchase of short-term
investments (676,807,378)
Disposal of short-term
investments 193,921,200
___________
Net cash used in investing
activities (482,886,178)
___________
Financing activities
Issue of Founder Preferred
Shares and warrants 11 16,000,000
Issue of Ordinary Shares
and warrants 11 484,250,000
Share issue expenses 11 (9,716,009)
___________
Net cash provided by financing
activities 490,533,991
___________
Increase in cash and cash
equivalents 6,548,112
Cash and cash equivalents -
at start of period
___________
Cash and cash equivalents
at end of period 6,548,112
The notes form an integral part of these financial
statements.
Notes to the interim financial statements for the period ended
30 April 2018
1. General information
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Companies Act on 1
November 2017. The address of the Company's registered office is
Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110, British
Virgin Islands. The Company's Ordinary Shares and Warrants were
admitted for trading on the Main Market of the London Stock
Exchange on 20 November 2017, after raising gross proceeds of
US$500,000,000 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 and the subscription of
Founder Preferred Shares (with warrants) being issued to
subscribers of Founder Preferred Shares on the basis of one Warrant
per Founder Preferred Share).
This condensed interim financial information was approved and
authorised for issue in accordance with a resolution of the
Directors on 26 July 2018.
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 2018 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 2018 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 and the subscription of
Founder Preferred 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 condensed statement of comprehensive loss.
2.4 Financial assets at fair value through profit or loss
Classification
The Company classifies its investment in U.S. Treasury Bills as
a financial asset at fair value through profit or loss. This
financial asset is designated by the Directors at fair value
through profit or loss at inception.
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.
A provision for impairment is established when there is
objective evidence that the Company will not be able to collect all
amounts to be received. Significant financial difficulties of the
counterparty, probability that the counterparty will enter
bankruptcy or financial reorganisation, and default in payments are
considered indicators that the amount to be received is impaired.
Once a financial asset or a group of similar financial assets has
been written down as a result of an impairment loss, interest
income is recognised using the effective interest rate used to
discount the future cash flows for the purpose of measuring the
impairment loss.
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.
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
The Founder Preferred Shares represent equity-settled share
based arrangements under which the Company receives services as a
consideration for the additional rights attached to these equity
shares, over and above their nominal price. The fair value of the
grant of Founder Preferred Shares in excess of any purchase price
received is recognised as an expense. In addition, the Company has
granted options to the Non-Founder Directors. The fair value of the
Founder Preferred Shares and the options is determined using a
valuation model.
The total amount to be expensed as a respective share-based
payment charge is determined by reference to the fair value of the
awards granted:
-- including any market performance condition;
-- excluding the impact of any service and non-market performance vesting conditions; and
-- including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in
assumptions about the number of awards that are expected to
vest.
2.10 Fair Value of Warrants
Warrants not subject to IFRS 2 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.
The total expense is recognised in the income statement with a
corresponding credit to equity over the vesting period, which is
the period over which all of the specified vesting conditions are
to be satisfied. The Company does not begin to recognise expense
associated with share-based awards with performance conditions
until it is probable that the performance condition will be
achieved.
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 2018. 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 2018.
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 2018
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 being the
investment in US Treasury Bills as disclosed in note 7. 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
Founder Preferred 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.
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. The only area involving a higher degree of
judgement or complexity, and where assumptions and estimates are
significant is the valuation of the Founder Preferred Shares.
The terms of the Founder Preferred Shares are summarised in the
Prospectus and in note 11.
Management has also considered, at the grant date, the
probability of an Acquisition being completed, and the potential
range of values for the Founder Preferred Shares, based on the
circumstances on the grant date.
The fair value of the Founder Preferred Shares with attached
warrants and related share based payments were calculated using a
Monte Carlo valuation model. The share based payment related to the
Founder Preferred Shares with warrants in excess of the amount paid
for such shares has been charged immediately in full to the income
statement with a corresponding credit to equity as such shares
vested immediately on the grant date.
3. Expenses
2018
US$
Listing expenses 958,205
Legal and professional fees 2,310,277
Directors' fees 177,519
Administration fees 82,865
General expenses 61,256
________
3,590,122
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
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.
5. Fair value (continued)
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 of 30 April 2018, financial assets at fair value through
profit or loss of US$485,460,481 were categorized as Level 2
securities. There were no transfers between Levels during the
period.
6. Charge Related to Founder Preferred Shares
The total charge related to Founder Preferred Shares and
warrants for the period ended 30 April 2018 was US$55,889,180.
Founder Preferred Shares
The Company has outstanding Founder Preferred Shares issued to
entities connected to its Founders, which have been accounted for
in accordance with IFRS 2 "Share-based payment" as equity-settled
share-based payment awards. The fair value of the Founder Preferred
Shares over and above their purchase price was determined as
US$55,402,429 at the grant date. The preferred share awards do not
have any vesting or service conditions and vested immediately on
the dates of the grant. Accordingly, the aggregate non-cash charge
relating to the Founder Preferred Shares for the period ended 30
April 2018 was US$55,402,429. The fair value of the awards were
determined using a Monte Carlo valuation model and was based on the
following assumptions:
15-Nov-2017
Number of securities issued 1,600,000
Vesting period Immediate
Ordinary share price upon initial public offering ("IPO") US$10.00
Founder Preferred Share price US$10.00
Probability of IPO 100.0%
Probability of Acquisition 65.5%
Time to Acquisition 1.5 years
Volatility (post-Acquisition) 38.68%
Risk free interest rate 2.26%
Expected volatility was estimated with reference to a
representative set of listed companies taking into account the
circumstances of the Company.
The probability and timing of an Acquisition has been estimated
only for the purposes of valuing the Founder Preferred Shares
issued as at 15 November 2017 and no assurance can be given that
the Acquisition will occur at all or in any particular
timeframe.
Warrants
The Company has outstanding warrants issued to entities
connected to its Founders. The warrants do not have any vesting or
service conditions and vested immediately on the date of the grant.
Accordingly, the aggregate non-cash charge relating to the warrants
for the period ended 30 April 2018 was US$486,751. The fair value
of the awards was determined using a Monte Carlo valuation model
and was based on the following assumptions:
Share price US$10.00
Exercise price US$11.50
Redemption price US$18.00
Risk free rate 2.26%
Probability of Acquisition 65.5%
Volatility (post-Acquisition) 38.68%
Expected volatility was estimated with reference to a
representative set of listed companies taking into account the
circumstances of the Company.
The probability and timing of an Acquisition has been estimated
only for the purposes of valuing the Warrants issued as at 15
November 2017 and no assurance can be given that the Acquisition
will occur at all or in any particular timeframe.
7. Financial assets at fair value through profit or loss
The Company holds zero coupon U.S. Treasury Bills which at 30
April 2018 had a cost of US$483,657,707, a market value of
US$485,460,481 and a maturity value of US$486,609,200. All mature
within three months of the period end.
8. Loss per share and net asset value per share
The loss per share calculation for the period from 1 November
2017 through 30 April 2018 is based on loss for the period of
US$(57,190,989) and the weighted average number of Ordinary Shares
and Founder Preferred Shares of 45,247,332.
Net asset value per share is based on net assets of
US$489,284,701 divided by the 48,425,000 Ordinary Shares and
1,600,000 Founder Preferred Shares in issue at 30 April 2018.
The Warrants and Options are considered non-dilutive at 30 April
2018.
9. Prepayments
2018
US$
Prepaid Directors' fees 125,000
Other prepayments 36,280
Accrued interest receivable 13,201
_________
174,481
10. Payables
2018
US$
Accruals 2,131,220
Other payables 282,903
_________
2,414,123
11. Share capital
The authorised shares of the Company are as follows:
The authorised shares of the Company are as follows:
2018
US$
Authorised
Unlimited number of Ordinary -
Shares of no par value
Founder Preferred Shares Number
Balance at beginning of period -
Issued during the period 1,600,000
_________
Balance at end of period 1,600,000
Founder Preferred Share Capital US$
Balance at beginning of period -
On shares issued during the period 16,000,000
_________
Balance at end of period 16,000,000
Ordinary Shares Number
Balance at beginning of period -
Issued during the period 48,425,000
_________
Balance at end of period 48,425,000
Ordinary Share Capital US$
Balance at beginning of period -
On shares issued during the period 484,250,000
__________
Balance at end of period 484,250,000
2 Founder Preferred Shares were issued on 3 November 2017 at
US$10.00 per share and a further 1,599,998 issued on 20 November
2017, also at US$10.00 per share. There are no Founder Preferred
Shares held in Treasury. Each Founder Preferred Share was issued
with a Warrant as described below.
48,425,000 Ordinary Shares were issued on 20 November 2017
(48,400,000 were issued in the IPO at US$10.00 per share and 25,000
were issued to the Non-Founder Directors in conjunction with the
IPO). There are no Ordinary Shares held in Treasury. Each Ordinary
Share was issued with a Warrant as described below.
Issue costs of US$9,716,009 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 Preferred 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 Preferred Shares had been
converted into Ordinary Shares immediately prior to the
winding-up;
(b) the right, together with any holder of the Founder Preferred
Shares, 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 in each case
distributed in respect of the fully paid up Founder Preferred
Shares pro rata to the number of fully paid up Ordinary Shares held
by any holder of Founder Preferred Shares, as if for such purpose
the Founder Preferred Shares had been converted into Ordinary
Shares immediately prior to such distribution plus, commencing from
consummation of the Acquisition, an amount equal to 20 per cent. of
the dividend which would be distributable on such number of
Ordinary Shares equal to the Preferred Share Dividend Equivalent
(as defined in the Prospectus)); 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 Preferred Shares
The Founder Preferred Shares have US$nil par value.
Founder Preferred Shares confer upon the holder the
following:
-- the right to a share in the Annual Dividend Amount (as
defined in the Prospectus);
-- the right to receive notice of, attend and vote as a Member
at any meeting of Members;
-- subject to the right of the holders of Founder Preferred
Shares to receive any Annual Dividend Amount from time to time, the
right, together with the holders of Ordinary Shares, to receive
such portion of all amounts available for distribution and from
time to time distributed by way of dividend or otherwise at such
time determined by the Directors;
-- in addition, commencing on and after an Acquisition, where
the Company pays a dividend on its Ordinary Shares, the holders of
the Founder Preferred Shares will receive an amount equal to 20 per
cent. of the dividend which would be distributable on such number
of Ordinary Shares equal to the Preferred Share Dividend
Equivalent. All such dividends on the Founder Preferred Shares will
be paid contemporaneously with the dividends on the Ordinary
Shares;
-- the right to an equal share (with the holders of Ordinary
Shares) in the distribution of the surplus assets of the Company on
its liquidation as are attributable to the Founder Preferred
Shares; and
-- the ability to convert into Ordinary Shares on a 1-for-1
basis subject to certain adjustments (mandatorily upon the last day
of the seventh full financial year after an Acquisition).
The Founder Preferred Shares are structured to provide a
dividend based on the future appreciation of the market value of
the Ordinary Shares thus aligning the interests of the Founders (as
defined in the Prospectus) with those of the investors on a long
term basis. Annual Dividend Amounts will be paid, at the discretion
of the Company, in either 1) Ordinary Shares and will be dilutive
to existing holders of Ordinary Shares, or 2) cash.
After an Acquisition, once the average price per Ordinary Share
is at least $11.50 for ten consecutive Trading Days, the holders of
Founder Preferred Shares will be entitled to receive "Annual
Dividend Amounts". In the first year in which such dividend becomes
payable, such dividend will be equal in value to 20 per cent. of
the increase in the market value of one Ordinary Share, being the
difference between US$10.00 and the Dividend Price (the average
closing price of the last ten trading days of the Company's
financial year), multiplied by such number of Ordinary Shares equal
to the Preferred Share Dividend Equivalent.
Thereafter, the Annual Dividend Amount will only become payable
if the Dividend Price during any subsequent year is greater than
the highest Dividend Price in any preceding year in which a
dividend was paid in respect of the Founder Preferred Shares. An
Annual Dividend Amount will be 20 per cent. of the increase in the
Dividend Price over the highest prior Dividend Price in any
preceding year multiplied by the Preferred Share Dividend
Equivalent.
The amounts used for the purposes of calculating an Annual
Dividend Amount and the relevant Preferred Share Dividend
Equivalent are 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 to trading or otherwise as
determined in accordance with the Company's Memorandum and Articles
of Association.
Warrants
The Company has issued an aggregate of 50,025,000 Warrants to
the purchasers of both Ordinary Shares and Founder Preferred Shares
(including the 25,000 Warrants that were issued to Non-Founder
Directors in connection with their appointment). Each Warrant has a
term of 3 years following an Acquisition and entitles a Warrant
holder to subscribe for one-third of an Ordinary Share upon
exercise. Warrants will be exercisable in multiples of three for
one Ordinary Share at a price of US$11.50 per whole Ordinary
Share.
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. Share-based compensation
On 15 November 2017, the Company issued 125,000 options to
purchase its Ordinary Shares to its Non-Founder Directors that vest
upon an Acquisition; continued service until that time is required
for vesting. The options expire on the 5(th) anniversary following
an Acquisition and have an exercise price of US$11.50 per share
(subject to such adjustment as the Directors consider appropriate
in accordance with the terms of the Option Deeds).
The Company estimated the grant date fair value of each option
at US$1.61 using a Monte Carlo simulation model with the following
assumptions:
Share price US$10.00
Exercise price US$11.50
Risk free rate 2.26%
Probability of Acquisition 65.5%
Volatility (post-Acquisition) 38.68%
Share-based compensation expense of US$52,519 has been
recognised for these options in the accompanying condensed
financial statements for the period ended 30 April 2018.
Unamortized share-based compensation expense of US$120,223 will be
recognised over the remaining estimated vesting period of
approximately 1 year.
13. Warrant redemption liability
As a contingent obligation to redeem for cash, a separate
liability of US$484,250 was recognised.
14. Related party and material transactions
During the period the Company issued the following shares and
options to Directors of the Company:
Founder
Ordinary Preferred
Shares Shares Warrants Options
2018 2018 2018 2018
Number Number Number Number
Noam Gottesman 1,200,000 800,000 2,000,000 -
Michael Fascitelli 1,200,000 800,000 2,000,000 -
Lord Myners 10,000 - 10,000 50,000
Jeremy Isaacs 7,500 - 7,500 37,500
Guy Yamen 7,500 - 7,500 37,500
The fees to directors during the period to 30 April 2018 were as
follows:
2018
US$
Lord Myners 50,000
Jeremy Isaacs 37,500
Guy Yamen 37,500
The Non-Founder Directors opted to have their first year's
annual remuneration settled by the issue of Ordinary Shares at
US$10 per Ordinary Share. Lord Myners received 10,000 Ordinary
Shares and Jeremy Isaacs and Guy Yamen received 7,500 Ordinary
Shares each.
The Founder Entities, Toms Acquisition LLC and Imperial
Landscape Sponsor LLC or their affiliates, have received
reimbursements of expenses of US$124,589 of which US$35,000 is
outstanding at the period end. Noam Gottesman is the Founder and
Managing Partner of Toms Capital LLC and Michael Fascitelli is the
Founder and Managing General Partner of Imperial Companies LLC.
The Company incurred total issuance costs of US$9.7 million. The
details of these costs are as follows:
2018
US$
Placement fees 9,200,000
Legal fees 450,000
Other expenses 66,009
________
9,716,009
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 Pounds Sterling and 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 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 2018,
US$485.5 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
Lord Myners of Truro Company (English and
CBE (Chairman) US Law)
Michael Fascitelli Greenberg Traurig, LLP
Noam Gottesman 8th Floor
Jeremy Isaacs CBE The Shard
Guy Yamen 32 London Bridge Street
London
Registered office SE1 9SG
Ritter House
Wickhams Cay II Legal advisers to the
Road Town Company (BVI Law)
Tortola Carey Olsen
VG1110 Carey House
British Virgin Islands Les Banques
St Peter Port
Administrator and secretary Guernsey
International Administration GY1 4BZ
Group (Guernsey) Limited
Regency Court Depositary
Glategny Esplanade Computershare Investor
St Peter Port Services PLC
Guernsey The Pavilions
GY1 1WW Bridgewater Road
Bristol
Registrar BS 13 8AE
Computershare Investor
Services (BVI) Limited Principal bankers
Woodbourne Hall Barclays Bank Plc
PO Box 3162 PO Box 8
Road Town Library Place
Tortola St Helier
British Virgin Islands Jersey JE4 8NE
Auditors
PricewaterhouseCoopers
LLP
1 Embankment Place
London
WC2N 6RH
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 GCGDRIDDBGIR
(END) Dow Jones Newswires
July 30, 2018 02:00 ET (06:00 GMT)
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