REG - New Energy One Acqn. New Energy One-NEOW - Interim Report for the period ended 31.10.23
31/01/2024 07:00
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RNS Number : 4328B New Energy One Acquisition Corp. 31 January 2024
New Energy One Acquisition Corporation Plc
Interim Report for the period ended 31 October 2023
New Energy One Acquisition Corporation Plc, (LSE: NEOA) the "Company", a
special purpose acquisition company admitted to trading on the London Stock
Exchange, today announces its unaudited interim results for the period from 1
May 2023 and ended 31 October 2023.
Volker Beckers, Chair of the Board, NEOA said:
"During the reporting period we saw significant momentum, both legislative and
corporate action, in energy transition related businesses. The UK public
equities markets have been challenging and investor appetite for new issuances
remains an obstacle to NEOA's ability to effect a business combination."
The interim results are set out below.
This announcement contains inside information for the purposes of the Market
Abuse Regulation (EU) NO. 596/2014. Upon the publication of this announcement,
this inside information is now considered to be in the public domain.
- Ends -
For further information please contact:
New Energy One Acquisition Corporation plc
Sanjay Mehta Sanjay.mehta@energyone.je
Media
FGS Global (Communications Advisor)
Email: NEOA@fgsglobal.com
Chiara Albertini +44 (0) 20 7073 6294
Kendall Bitonte +44 (0) 20 7073 6305
About New Energy One Acquisition Corporation Plc
NEOA has been formed for the purpose of effecting a business combination with
targets that are positioned to participate in or benefit from the global
transition towards a low carbon economy, what is called the "Energy
Transition", which are headquartered in, or which have or are expected to have
a substantial nexus to, Europe.
NEOA is sponsored by LiveStream LLC ("LiveStream") and Eni International B.V.
("Eni"), a wholly owned subsidiary of Eni S.p.A (each of Livestream and Eni
being a "Sponsor" and together, the "Sponsors"). LiveStream is an investment
company formed by one of NEOA's executive Directors, Sanjay Mehta.
NEOA has a highly experienced executive team (the "Executive Team") who
collectively have more than 20 years of proprietary fund management and
principal investment experience, and more than 60 years of extensive capital
markets, corporate finance and operational experience in the energy industry.
The Executive Team is supported by a strong independent board of Directors and
group of strategic advisors with broad market expertise and deep industry
contacts, including with companies that are at the heart of the Energy
Transition.
Disclaimer
This announcement (including the interim financial report) includes
forward-looking statements. These forward-looking statements are subject to a
number of risks, uncertainties and assumptions. Forward-looking statements are
statements that are not historical facts and may be identified by words such
as "plans", "targets", "aims", "believes", "expects", "anticipates",
"intends", "estimates", "will", "may", "continues", "should" and similar
expressions. By their nature, forward-looking statements involve known and
unknown risks, uncertainties, assumptions and other factors because they
relate to events and depend on circumstances that will occur in the future,
many of which are outside the control of the Company. Such factors may cause
actual results, performance or developments to differ materially from those
expressed or implied by such forward-looking statements and. accordingly,
undue reliance should not be placed on any forward-looking statements.
Forward-looking statements speak only as at the date at which they are made,
and the Company undertakes no obligation to update any forward-looking
statements.
Interim Management Report and Financial Statements
Principal activity
New Energy One Acquisition Corporation Plc, (the "Company"), is a public
Company incorporated and registered in England and Wales on 08 November 2021
with a registration number 13727820 as a special purpose acquisition company
("SPAC").
NEOA is sponsored by LiveStream LLC ("Livestream") and Eni International B.V.
("Eni"), a wholly owned subsidiary of Eni S.p.A (each of Livestream and Eni
being a "Sponsor"). LiveStream is an investment company formed by one of
NEOA's executive Directors, Sanjay Mehta.
The Company had an initial period of 15 months from the date on which the
Company listed on the London Stock Exchange. The original deadline to complete
a business combination was 16 June 2023. On 14 June 2023, the business
combination deadline was extended by shareholder resolution to 15 March 2024.
If the Company fails to complete a business combination prior to the extended
deadline, it will cease all operations except for the purposes of winding up,
redeem the ordinary shares (to the extent possible) and subsequently commence
a members' voluntary liquidation pursuant to the terms of the memorandum and
articles of association of the Company.
Business Combination
The Company anticipates structuring a Business Combination such that the
post-Business Combination entity will be the listed entity (whether or not the
Company or another entity is the surviving entity following the Business
Combination) and that the Ordinary Shareholders will own a minority interest
in such post-Business Combination entity, depending on the valuations ascribed
to the target company or business and the Company in a Business Combination.
It is expected that the Company will pursue a Business Combination in which it
issues a substantial number of new Ordinary Shares in exchange for all or a
majority of the issued and outstanding share capital of a target, and/or
issues a substantial number of new Ordinary Shares to third parties in
connection with financing a Business Combination. As a result, the
post-Business Combination entity's majority shareholders are expected to be
the sellers of the target and/or third-party equity investors, while the
holders of Ordinary Shares immediately prior to the Business Combination are
expected to own a minority interest in the post-Business Combination entity.
Financial Summary
During the period the majority of the Company's administrative expenditure was
related to ongoing costs of running a plc and fair value adjustments relating
to the Company's financial instruments. The loss before tax for the period was
£3.5m (2022: £8.0m).
Trade and other receivables as at 31 October 2023 were £670k (2022: £861k).
The cash balance as at 31 October 2023 was £21.4m (2022: £177.4m), which
included £19.3m of funds held in escrow (2022: £176.1m).
Trade and other payables at 31 October 2023 were £1.3m (2022: £183k).
Overall, at the period-end, net assets were £14.7m (2022: £11.7m).
Outlook
NEOA operates on the belief that significant investments in technology,
alternative fuels and infrastructure will be required across multiple sectors
to achieve a tangible reduction in emissions, with a large and growing market
of solutions emerging across the Energy Transition value chain. Investing in
super charging industrial decarbonisation across hard to abate sectors such as
crude oil refining, steel production, cement, extraction, aviation and
shipping is key to commitments given by the governments of U.K and E.U
countries to achieve 1.5 degrees Celsius and net zero targets.
The Board and the management have reviewed and diligently continue to scan
investment opportunities and potential acquisition targets that are positioned
to benefit from the global transition towards a low carbon economy.
The Board and the management are encouraged by the continued proactive
legislative, budgetary and tax incentive support by the governments in the UK,
EU countries and USA for making investments in energy transition projects
towards the governments' net zero emission's commitments. Not only does
progress need to escalate in the nearer future as we approach these targets,
but more viable large scale generation projects need to happen to support the
"energy independence agenda". Additional technologies like CCUS, biogas and
hydrogen, to name a few, will supplement the transition providing diversity
and a natural technology hedge to the future generation mix.
In August 2022, the UK government also announced a shortlist of 20 projects
for the next licensing stage of carbon capture utilisation and storage (CCUS).
Building on the momentum in 2022, in December 2023, the UK Government
announced the launch of the Track-1 Expansion process in HyNet, following the
agreement of Heads of Terms with the CO₂ Transport and Storage Company
(T&SCo) in October.
The agreement of Heads of Terms with the T&SCo in the East Coast Cluster
(ECC) was reached on the key commercial principles through the Heads of Terms
with the East Coast Cluster T&SCo, The Northern Endurance Partnership.
The Board and the management have been working diligently towards effecting a
business combination, however, challenging public equity market conditions
remain an obstacle to NEOA effecting a business combination. UK and global
macroeconomic conditions have dampened investor sentiment for new issuances
with a knock-on effect on IPOs in 2023, which is likely to continue in 2024.
Sanjay Mehta
Executive Director
30 January 2024
Condensed Statement of Total Comprehensive Income
For the six months ended 31 October 2023
Six months to Six months to Period ended
31 October 2023 (unaudited) 31 October 2022 (unaudited) 30 April 2023
£ £ (audited)
£
Note
Continuing operations
Administrative expenses (1,909,963) (397,254) (2,145,398)
Fair value loss 12 (2,311,000) (3,872,000) (5,172,500)
Operating loss (4,220,963) (4,269,254) (7,317,898)
Finance income 6 1,924,236 1,079,132 4,022,126
Finance expense 6 (989,067) (4,820,364) (12,917,316)
Loss before taxation (3,285,794) (8,010,486) (16,213,088)
Taxation 4 (202,293) - (615,844)
Total comprehensive loss for the period attributable to the equity owners (3,488,087) (8,010,486) (16,828,932)
Loss per share
Basic and diluted in pence 5 (0.56) (1.29) (3.51)
Condensed Statement of Financial Position
As at 31 October 2023
Note
31 October 2023 (unaudited) 31 October 2022 (unaudited) 30 April
2023
(audited)
ASSETS £ £ £
Current assets
Other receivables 7 670,039 861,218 569,682
Cash and cash equivalents 8 2,063,647 1,225,439 1,054,079
Restricted cash 9 19,314,827 176,129,431 179,022,126
Total current assets 22,048,513 178,216,088 180,645,887
Total assets 22,048,513 178,216,088 180,645,887
LIABILITIES
Current liabilities
Trade and other payables 10 1,320,147 182,864 700,258
Borrowings 11 2,428,047 - -
Corporation tax 818,137 - 615,844
Derivative liabilities 12 2,776,000 12,342,000 465,000
Redeemable ordinary shares 13 2,250 153,993,568 160,672,766
Total current liabilities 7,344,581 166,518,432 162,453,868
Total liabilities 7,344,581 166,518,432 162,453,868
NET ASSETS 14,703,932 11,697,656 18,192,019
EQUITY
Share capital 13 56,220 56,220 56,220
Capital contribution 3,517,500 3,517,500 3,517,500
Other reserves (2,114) (151,852,295) (151,852,295)
Retained earnings 11,132,326 159,976,231 166,470,594
TOTAL EQUITY 14,703,932 11,697,656 18,192,019
Approved by the Board on 30 January 2024.
Sanjay Mehta
Executive Director
Condensed Statement of Changes in Equity
Share capital Share premium Capital contribution Other reserves Retained earnings Total equity
Note £ £ £ £ £ £
Balance on 1 May 2023 56,220 - 3,517,500 (151,852,295) 166,470,594 18,192,019
Loss for the period - - - - (3,488,087) (3,488,087)
Total comprehensive loss for the period - - - - (3,488,087) (3,488,087)
Cancel reserve relating to redeemable ordinary shares 13 - - - 151,850,181 (151,850,181) -
Total transactions with owners - - - 151,850,181 (151,850,181) -
As at 31 October 2023 56,220 - 3,517,500 (2,114) 11,132,326 14,703,932
For the six months ended 31 October 2023
Share capital Share premium Capital contribution Other reserves Retained earnings Total equity
£ £ £ £ £ £
Balance on 1 May 2022 56,220 - 3,517,500 (151,852,295) 167,986,717 19,708,142
Loss for the period - - - - (8,010,486) (8,010,486)
Total comprehensive loss for the period - - - - (8,010,486) (8,010,486)
As at 31 October 2022 56,220 - 3,517,500 (151,852,295) 159,976,231 11,697,656
Condensed Statement of Changes in Equity
Period ended 30 April 2023
Share capital Share premium Capital contribution Other reserves Retained earnings Total equity
£ £ £ £ £ £
As at incorporation - - - - - -
Loss for the period - - - - (16,828,932) (16,828,932)
Total comprehensive loss for the period - - - - (16,828,932) (16,828,932)
Issue of deferred shares 50,000 - - - - 50,000
Issue of sponsor shares 4,375 - - - - 4,375
Issue of redeemable ordinary shares, net of issue costs 1,845 18,269,731 - - - 18,271,576
Issue of sponsor warrants - - 3,517,500 - - 3,517,500
Modification of warrants and sponsor warrants - - - - 13,177,500 13,177,500
Capital reduction - (18,269,731) - (151,852,295) 170,122,026 -
Total transactions with owners 56,220 - 3,517,500 (151,852,295) 183,299,526 35,020,951
As at 30 April 2023 56,220 - 3,517,500 (151,852,295) 166,470,594 18,192,019
Condensed Statement of Cash Flows
For the six months ended 31 October 2023
Six months to
Six months to
31 October 2022 (unaudited)
31 October 2023 (unaudited)
Note £ £
Cash flows from operating activities
Loss before taxation (3,285,794) (8,010,486)
Adjustments for non-cash/non-operating items:
Fair value movements on derivatives 2,311,000 3,872,000
Effective interest on redeemable ordinary shares 6 961,020 4,820,364
Interest on borrowings 11 28,047 -
Finance income 6 (1,924,236) (1,079,132)
Cash used in operating activities before changes in working capital (1,909,963) (397,254)
Changes in working capital
Increase in other receivables 7 (100,357) (696,134)
Increase in trade and other payables 10 619,888 514,579
Net cash used in operating activities (1,390,432) (578,809)
Cash flows from investing activities
Decrease/(increase) in restricted cash 9 159,707,299 (1,079,132)
Finance income received 6 1,924,236 1,079,132
Net cash generated from investing activities 161,631,535 -
Cash flows from financing activities
Redemption of redeemable ordinary shares 13 (161,631,535) -
Proceeds from borrowings 11 2,400,000 -
Net cash used in financing activities (159,231,535) -
Net increase/(decrease) in cash and cash equivalents 1,009,568 (578,809)
Cash and cash equivalents at the beginning of the period 1,054,079 1,804,248
Cash and cash equivalents at the end of the period 8 2,063,647 1,225,439
Notes to the Interim Report for six months ended 31 October 2023
1. General information
New Energy One Acquisition Corporation Plc (the "Company") is a public Company
incorporated in England and Wales. The Company is domiciled in England and its
registered office is 201 Temple Chambers, 3-7 Temple Avenue, London, United
Kingdom, EC4Y 0DT.
The principal activity of the Company is that of identifying and acquiring a
business developing and/or supporting the application of renewable energy in
an innovative sector which is expected to result in a reverse takeover of the
Company within the meaning of the rules of the Access segment of the Main
Market.
2. Accounting policies
The principal accounting policies applied in the preparation of the interim
financial information are set out below.
Basis of preparation
The interim financial statements have been prepared in accordance with IAS 34
"Interim Financial Reporting" as contained in UK-adopted International
Accounting Standards. These interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Accordingly, the interim financial statements should be read in
conjunction with the annual report of the period ended 30 April 2023 (the
"Annual Financial Statements") which was prepared in accordance with
UK-adopted International Accounting Standards.
The Annual Financial Statements constitute statutory accounts as defined in
section 434 of the Companies Act 2006 and a copy of these statutory accounts
has been delivered to the Registrar of Companies. The auditor's report on the
Annual Financial Statements was not qualified, did not include a reference to
any matters to which the auditors drew attention by way of emphasis without
qualifying the reports and did not contain statements under section 498(2) or
(3) of the Companies Act 2006. The accounting policies adopted in the
preparation of the interim financial statements are consistent with those used
to prepare the Company's Annual Financial Statements for the period ended 30
April 2023 and the comparative reporting period.
The interim financial information has been prepared on a historical cost basis
unless otherwise specified within these accounting policies.
The interim financial information has been presented in Pound Sterling (£),
being the functional and presentational currency of the Company. Amounts are
rounded to the nearest £.
There are no new standards, interpretations and amendments that are in issue
but not yet effective which are expected to have a material effect on the
Company's future financial statements.
Going concern
The Company is a special purpose acquisition company ("SPAC") that has been
formed for the sole purpose of effecting a Business Combination. The Company
had a period of 15 months from the date on which the Company listed on the
London Stock Exchange, 16 March 2022, to do so, the deadline being 16 June
2023 (the original Business Combination Deadline). On 14 June 2023, a general
meeting was held, whereby the Company amended its articles of association, and
the original Business Combination Deadline was extended by shareholder
resolution to 15 March 2024. In the absence of a Business Combination by the
extended Business Combination Deadline, the Company will cease all operations
except to commence a members' voluntary liquidation and redeem the ordinary
shares (to the extent possible), as per the prospectus dated 9 March 2022, and
the announcement dated 14 June 2023. The Company does not have a right to
extend the life of the Company beyond the extended Business Combination
Deadline of 15 March 2024 in the absence of an amendment to its articles of
association
Prior to the general meeting, pursuant to the articles of association,
ordinary shareholders were given the right to redeem their ordinary shares, as
the Business Combination had not completed by the original Business
Combination Deadline. 99.99% of ordinary shareholders chose to redeem, and
these funds were repaid from the funds sat in escrow, on 28 June 2023.
The Company has considered its ability to continue as a going concern for the
period to 30 November 2024. Eni had committed to inject £3.6 million as a
working capital loan. During the period ended 31 October 2023, Eni advanced
£2,400,000 of the committed £3,600,000 working capital loan to the Company.
The Company has included these cash inflows in a detailed financial forecast
until 15 March 2024, the extended Business Combination Deadline.
The key assumptions used in the financial forecast include:
- base fixed costs of approximately £30,000 per month until the
extended Business Combination Deadline, including a contingency; and
- additional costs in relation to the identification and assessment of
the potential Business Combination, based on preliminary and existing
agreements with advisors.
The Company has also considered the period post-completion of a Business
Combination. As part of the ongoing Business Combination process, the Company
will carry out appropriate due diligence in order to determine the working
capital and other funding requirements of the target for the remainder of the
going concern period following the Business Combination.
In the unlikely event there are unforeseen working capital expenses in the
lead up to completing a Business Combination, the Sponsors have the option to
inject further funding of up to £3.9m through the issue of loans or
subscribing for additional sponsor warrants. This is however, outside the
Company's control, and has not been relied on as a readily available
mitigation in management's assessment of going concern.
The Company defines a Business Combination as the completion of a merger,
share exchange, asset acquisition, share purchase, reorganisation or similar
business combination involving the Company either with a single company or
business or simultaneously with more than one company or business.
The Company believes that there is the existence of a material uncertainty
regarding a Business Combination which may cast significant doubt on the
Company's ability to continue as a going concern, that being to complete a
Business Combination by 15 March 2024. In order to complete a Business
Combination, the following steps must be undertaken and completed:
- identify an appropriate target;
- completing satisfactory due diligence on the appropriate target;
- the completion of a Private Investment in Public Equity ("PIPE")
in the event of any cash consideration and transaction costs for the Business
Combination being greater than the funds available in the escrow account;
- the completion of a PIPE of a sufficient size to fund any
capital and other expenditure and working capital requirements of the newly
acquired business post Business Combination; and
- obtaining shareholder approval for a Business Combination.
The Company believes that a material uncertainty exists, which casts a
significant doubt on the Company's ability to continue as a going concern,
since following the redemption of 99.99% of its redeemable ordinary shares,
the Company's free float position falls below the 10% minimum required by the
FCA for a listed company on the London Stock Exchange.
The Company's plan to correct this situation within a reasonable time involve
a PIPE that will result in the issuance of new ordinary shares to public
shareholders, raising the free float above the minimum 10%. In the event the
PIPE is unsuccessful, then the Business Combination will not be completed, the
Company will be delisted from the London Stock Exchange and will commence
wind-up proceedings as described above.
Currently, the FCA has not indicated that they require the free float to be
above the 10% threshold prior to the extended Business Combination Deadline.
The Board considers it appropriate to prepare the Financial Statements on a
going concern basis, subject to a material uncertainty in effecting a Business
Combination. The Financial Statements do not include the adjustments that
would result if the Company was unable to continue as a going concern.
3. Significant judgments and estimates
The preparation of the Company's interim financial statements in compliance
with UK-adopted International Accounting Standards requires the Directors to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the statement of financial position date, amounts reported for
revenues and expenses during the period, and the disclosure of contingent
liabilities, at the reporting date.
Estimates and judgements are continually evaluated and are based on historical
experiences and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. The estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amount of assets and liabilities within the next financial year
are discussed below.
Critical accounting judgments
Sponsor shares
In determining whether the sponsor shares should be treated as a financial
instrument under IAS 32 or share-based payments under IFRS 2, the Board
reviewed the rights of the Sponsor Shareholders to see if they differ from
those of the Public Shareholders. Should a Business Combination be
successfully achieved, 40% of the sponsor shares will automatically convert
into ordinary shares at no further cost to the Sponsor Shareholders. As the
issue price of each Sponsor share was £0.001, this represents a considerable
discount to the price paid by the Shareholders. The remaining 60% of the
sponsor shares may convert into ordinary shares in stages post-Business
Combination, again, at no further cost to the Sponsor Shareholders.
Further to this, the Sponsor is providing services to the Company in an
equivalent capacity to an employment relationship with the conversion of the
sponsor shares to ordinary shares entirely contingent on the successful
consummation of a Business Combination, and no award will accrue to the
Sponsor for its services if a Business Combination is not consummated.
Based on the above, it has been determined that the sponsor shares fall under
the scope of IFRS 2 equity-settled share-based payment. The fair value at the
grant date of equity-settled share-based payments is generally recognised as
an expense with a corresponding increase in equity over the vesting period.
The deemed grant date of the sponsor shares will determine the point at which
the sponsor shares will be accounted for under IFRS 2. The effective grant
date for the sponsor shares is the point of consummation of a Business
Combination, and not the original date of issue of the sponsor shares. This is
because there is no obligation on the part of the Company to deliver cash or
any other financial asset to holders of the sponsor shares prior to a Business
Combination, the sponsor shareholders are not entitled to any preferential
terms over holders of sponsor shares and the sponsor shareholders have agreed
to waive any right to any distributions by the Company from the escrow
account. In addition to this, should the Company fail to complete a Business
Combination, then the sponsor shares will not be eligible for conversion to
sponsor shares and the Sponsor will receive no material compensation for their
work in attempting to identify a target acquisition. As a result, no expense
for such payments will be recognised until the Business Combination is
consummated. At that date an expense will be recognised in the Condensed
Statement of Comprehensive Income on a fair value basis.
Critical accounting estimates
Warrants
The Company is accounting for the public warrants and sponsor warrants in
accordance with IAS 32 Financial Instruments: Presentation. IAS 32 provides
that the Company's financial instruments shall be classified on initial
recognition in accordance with the substance of the contractual arrangement
and the definitions of a financial liability or an equity instrument. The
sponsor warrants have substantially the same terms as the public warrants
Complexity can arise between equity and liability classifications under IAS 32
whilst assessing and interpretating certain terms of the warrant terms and
conditions to determine whether the fixed-for-fixed test is applicable or not.
On initial recognition, the Company believed that they had correctly recorded
both the Public and Sponsor warrants correctly as financial liabilities and
subsequently recorded fair value remeasurements at each reporting date.
Given the importance of preserving the Company's distributable reserves, the
Company concluded that it was appropriate to amend the terms of the public
warrants and the sponsor warrants to amend such clauses to ensure that the
fixed for fixed criteria is met under IAS 32 and IFRS 9. The agreements were
updated and approved by the Board on 19 December 2022.
On 19 December 2022, the public warrants and sponsor warrants were re-measured
to fair value and reclassified to equity on the Statement of Financial
Position. The public warrants and the sponsor warrants now meet the criteria
of equity under IAS 32 and IFRS 9, as a fixed number of ordinary shares are
due to be received by warrant holders on exercise, for a fixed exercise price.
Once the public warrants become exercisable, the Company can issue a
redemption notice to redeem not less than all issued and outstanding public
warrants for £0.01 per warrant if the market price of the shares equals or
exceeds £18.00 for 20 out of 30 trading days. After the redemption notice is
issued, warrant holders have not less than 30 days to exercise their warrants
on the same fixed terms as above. If this redemption feature is exercised by
the Company, the sponsor warrants must also be concurrently called for
redemption on the same terms as the public warrants, but the sponsor warrants
will be non-redeemable so long as they are held by Ente Nazionale Idrocarburi
(Eni) or LiveStream or their respective permitted transferees.
The warrants have been valued using the Monte Carlo simulation of fair value,
with any change in the fair value recognised in the Condensed Statement of
Comprehensive Income up to the point that the warrants were reclassified to
equity.
Deferred underwriting fee
The Company's underwriters are potentially entitled to a deferred underwriting
fee. The board has exercised judgement in determining at the period end, no
liability in relation to this fee exists as IAS 32 requires the recognition of
the worst-case liability which would be to repay the funds raised to
shareholders if no Business Combination is completed. This underwriting fee is
only payable on completion of a Business Combination and will be paid from
funds held in the escrow account.
Redeemable ordinary shares
In April 2022, it was announced that the planned court-approved capital
reduction, whereby the statutory share premium paid on the issue of the
redeemable ordinary shares was cancelled and transferred to distributable
reserves was completed. The transferred amount sits in retained earnings. As
the Company still does not an unavoidable right to avoid payment in cash, the
financial liability remains. The Company has set up an 'other reserves'
account in equity to account for the transfer of share premium to
distributable reserves per Companies House.
Following a general meeting in May 2023, it was announced that resolutions to
amend the articles of association and to extend the original Business
Combination Deadline were passed, and a number of ordinary shares were
redeemed, totalling 15,654,386. The amount repaid to shareholders reduced the
financial liability, and the associated value was reclassified from other
reserves to retained earnings.
4. Taxation
The Company's tax jurisdiction is the UK. The effective rate of corporation
tax for the period ended 31 October 2023 was 25.00% (31 October 2022: 19.00%,
30 April 2023: 19.33%).
Six months to Six months to Period ended
31 October 2023 31 October 30 April
2022 2023
£ £ £
Loss for the period (3,285,793) (8,010,486) (16,213,088)
Tax using the Company's effective rate of tax (821,448) (1,521,992) (3,134,631)
Effects of:
Disallowable expenditure 1,023,741 1,436,754 3,543,151
Tax rate changes - - (3,645)
Capital gains - - 210, 969
Losses carried forward - 85,238 -
Tax charge for the period 202,293 - 615,844
The UK tax rate increased to 25.00% from 1 April 2023.
The tax liability for the period ended 31 October 2023 on the loss before tax
of £3,285,793 was £202,293 (2022: £nil), arising on capital gains in
finance income. In the period ended 30 April 2023 there was a tax liability
of £615,844 also arising on capital gains in finance income. However, in the
period ended October 2022 there was a taxable loss and so no tax liability has
been included.
5. Earnings per share
Basic earnings per share is calculated by dividing the loss attributable in
the period to equity holders of the Company by the weighted average number of
ordinary shares in issue during the period. The Company is loss making
throughout the period, therefore diluted earnings per share has not been
considered, however the warrants in issue and the forward purchase contracts
were not exercisable at the period end and therefore not dilutive.
The Company have determined that the following classes of shares are
considered to be ordinary shares in its calculation of loss per share: Sponsor
shares and Redeemable ordinary shares held by the sponsors. Redeemable
ordinary shares held by the public have not been included due to the fact they
are held as a liability on the Condensed Statement of Financial Position based
on the rights attached including the ability for the holders to redeem. The
Deferred shares do not carry any voting or dividend rights, they have been
also excluded from the calculation.
The Sponsor shares and Redeemable ordinary shares held by the sponsors have
the same rights to dividends and votes and are therefore treated as a single
class in the calculation.
Six months to Six months to Period ended
31 October 31 October 30 April
2023 2022 2023
Number Number Number
Sponsor shares 4,375,000 4,375,000 4,375,000
Redeemable ordinary shares 1,845,396 1,845,396 1,845,396
6,220,396 6,220,396 6,220,396
Six months to Six months to Period ended 30 April
31 October 31 October 2023
2023 2022
£ £ £
Loss for the period attributable to equity holders of the Company (3,488,087) (8,010,486) (16,828,932)
Weighted average number of ordinary shares 6,220,396 6,220,396 4,800,899
Loss per share (1.29) (3.51)
(0.56)
(0.56)
(1.29)
(3.51)
6. Finance income and finance expense
Six months to Six months to Period ended
31 October 31 October 30 April
2023 2022 2023
£ £ £
Interest income 1,924,236 1,079,132 4,022,126
Total finance income 1,924,236 1,079,132 4,022,126
Six months to Six months to Period ended
31 October 31 October 30 April
2023 2022 2023
£ £ £
Effective interest on redeemable ordinary shares 961,020 4,820,364 12,917,316
Interest on borrowings 28,047 - -
Total finance expense 989,067 4,820,364 12,917,316
7. Other receivables
As at As at As at
31 October 31 October 30 April
2023 2022 2023
£ £ £
Amounts falling due within one year 670,039 861,218 569,682
Other receivables 670,039 861,218 569,682
The Directors consider that the carrying amount of other receivables is
approximately equal to their value.
8. Cash and cash equivalents
As at As at As at
31 October 31 October 30 April
2023 2022 2023
£ £ £
Cash at bank 2,063,647 1,225,439 1,054,079
2,063,647 1,225,439 1,054,079
9. Restricted cash
As at
31 October As at As at
2023 31 October 30 April
2022 2023
£ £ £
Restricted cash 19,314,827 176,129,431 179,022,126
19,314,827 176,129,431 179,022,126
10. Trade and other payables
As at As at As at
31 October 31 October 30 April
2023 2022 2023
£ £ £
Amounts falling due within one year
Trade payables 546,018 110,608 510,040
Accruals 664,593 929 110,683
Amounts due from related party 68,327 68,327 68,327
Other payables 41,208 3,000 11,208
1,320,146 182,864 700,258
The Directors consider that the carrying value of trade and other payables
approximates to their fair value. Included within other payables is an amount
of £41,208 (31 October 2022: £3,000, 30 April 2023: £11,208) payable to
Livestream (a company of which Sanjay Mehta is a Director).
11. Borrowings
As at As at As at
31 October 31 October 30 April
2023 2022 2023
Current £ £ £
Loan 2,400,000 - -
Interest 28,047 - -
2,428,047 - -
During the interim period to 31 October 2023, the Company entered into a loan
agreement with Eni to provide working capital for the Company. Eni agreed to
provide the Company an unsecured loan of £3.6 million, payable in equal
instalments in September, October and December 2023. The loan, together with
all interest accrued, is repayable in full on or before the expiry date of 31
March 2024. Interest is charged at the aggregate of the applicable margin,
being 3.5% per annum and the base rate.
12. Derivative liabilities
During the period ended 30 April 2023, Eni entered into a Forward Purchase
Agreement with the Company to subscribe to a number of Ordinary Shares up to
the lesser of 15% of the Ordinary Shares issued in a private investment in
public equity transaction; and 4,100,000 Ordinary Shares at a subscription
price of £10.00 per Forward Purchase Share, representing a maximum value of
£41,00,000, to be issued at the time of, and conditional on completion of a
Business Combination. Further, Li You Investment Corporation ("Li You"),
entered into an additional Forward Purchase Agreement, on the same terms, to
subscribe for 1,500,000 Ordinary Shares.
As the number of shares to be issued to both Eni and Li You will vary the
forward purchase agreements are derivative instruments and are recognised at
fair value at the period end. The agreements have been valued by a third-party
as follows:
As at As at As at
31 October 31 October 30 April
2023 2022 2023
£ £ £
Eni 1,222,000 265,000 163,000
Li You 1,554,000 632,000 302,000
Warrants - 11,445,000 -
Total fair value 2,776,000 12,342,000 465,000
The fair value loss of £2,311,000 (31 October 2022: £3,872,000) recognised
in the Condensed Statement of Comprehensive Income consists of £2,311,000 (31
October 2022: £897,000) in relation to the forward purchase contracts above,
and £nil (31 October 2022: £2,975,000) in relation to the revaluation of the
public and sponsor warrants from initial recognition up to the date of
modification of the warrant terms and conditions which were subsequently
reclassed the public and sponsor warrants from liabilities to equity. See note
14 for further detail.
13. Share capital
Share Capital As at As at As at
31 October 31 October 30 April
2023 2022 2023
Number Number Number
Z deferred shares 1 1 1
Deferred shares 50,000 50,000 50,000
Redeemable ordinary shares 1,845,396 1,845,396 1,845,396
Sponsor shares 4,375,000 4,375,000 4,375,000
6,270,397 6,270,397 6,270,397
Share Capital As at As at As at
31 October 31 October 30 April
2023 2022 2023
£ £ £
Z deferred shares 0.01 0.01 0.01
Deferred shares 50,000 50,000 50,000
Redeemable ordinary shares 1,845 1,845 1,845
Sponsor shares 4,375 4,375 4,375
56,220 56,220 56,220
Deferred shares
On incorporation, 1 share was issued at $1.00. Subsequently, this share was
re-classed as a Z deferred share and held in equity.
Prior to re-registration of the Company as a public company, 50,000 deferred
shares were issued to LiveStream for £1.00 providing an aggregate nominal
value of £50,000. The purpose of the subscription for deferred shares was to
provide the minimum authorised share capital that is necessary on
incorporation of, or re-registration of, a public company, which requires
share capital of nominal value of at least £50,000 (or €57,100) and must be
denominated in GBP or EUR (section 763 CA 2006).
Redeemable ordinary shares
Further to publication of its prospectus on 9 March 2022, the Company
completed the placing of 17,500,000 shares in the Company at a price of £10
per share, each comprising one redeemable ordinary share and the right to
receive one half of a warrant in respect of each redeemable ordinary share.
1,845,396 of the redeemable ordinary shares were issued to the Company's
sponsors.
On 16 March 2022, the Company announced the admission of 17,500,000 redeemable
ordinary shares, and 8,750,000 public warrants, to trading on the London Stock
Exchange's main market for listed securities ("LSE").
In addition, and as disclosed in the prospectus, the sponsors subscribed for a
further 4,375,000 shares, these remain unlisted as per the terms of the
instruments, until a Business Combination takes place.
On 6 April 2022, pursuant to a shareholder resolution, the Company completed a
share capital reduction whereby the portion of statutory share premium
pertaining to the redeemable ordinary shares was cancelled. The purpose of
which was to create distributable reserves to enable the redemption of
ordinary shares. As the Company still has the unavoidable right to pay cash in
respect of the redeemable ordinary shares, the financial liability remains.
Other reserves consist of the figure pertaining to share premium in relation
to the redeemable ordinary share held as a financial liability which was
cancelled.
Holders of the redeemable ordinary shares are entitled to redeem all or a
portion of their shares upon completion of a Business Combination or after the
original Business Combination deadline of 16 June 2023. The redeemable shares
are classified as liabilities in the Company's Statement of Financial Position
and are measured at amortised cost.
On 25 May 2023, the Company announced a proposal to amend the articles of
association in order to extend the original Business Combination deadline,
from 16 June 2023 to 15 March 2024, by shareholder resolution at a general
meeting held on 14 June 2023.
Pursuant to the amendment of the articles of association and due to the fact
the Business Combination was not consummated prior to the original Business
Combination Deadline, ordinary shareholders had the right to redeem their
shares at £10.325 each (comprising £10.00 per ordinary share representing
the amount subscribed for by public shareholders in the initial public
offering, together with such ordinary shareholders' pro rata entitlement to
the escrow account overfunding; £0.325 per ordinary share). The redemption of
ordinary shares held by the public shareholders does not trigger the
repurchase or redemption of the public warrants held, and public warrant
holders retain all rights in respect of any public warrants held at redemption
date. Following the general meeting, it was announced that the resolutions to
amend the articles of association and to extend the original Business
Combination Deadline were passed, and the number of ordinary shares to be
redeemed totalled 15,654,386. The redemption amounts, totalling £161,631,536,
were paid to ordinary shareholders from the funds held in escrow, on 28 June
2023, leaving a balance of £18,625,159 (including interest income received
between the period end and 28 June 2023). This amount was deducted from the
redeemable ordinary shares liability, leaving £2,250 relating to the ordinary
shares that were not redeemed. The 18,453,960 ordinary shares held by the
sponsors remain in equity as it was agreed these would not be redeemed.
Redeemable ordinary shares As at As at
31 October 30 April
2023 2023
B/f balance 160,672,766 -
Proceeds - 156,546,040
Less initial recognition of public warrants - (4,112,500)
Less issue costs - (4,678,090)
Effective interest accretion 961,019 12,917,316
Ordinary shares redeemed at £10.325 per share (161,631,535) -
2,250 160,672,766
The 1,845,396 redeemable ordinary shares held by the sponsors are restricted
and non-redeemable by the sponsors, therefore these are classed as equity and
apportioned between share capital (£1,845) and share premium (£18,452,115),
less issue costs of £182,384, prior to the capital reduction whereby the
share premium portion was cancelled and transferred to retained earnings.
Sponsor shares
As mentioned above, the Company's sponsors subscribed for 4,375,000, at a
nominal value of £0.001, for an aggregate value of £4,375. 75% were issued
to LiveStream (held for itself, Access Capital, the Directors, strategic
advisors, future advisors and future employees), and 25% to Eni. By virtue of
subscribing for sponsor Shares, LiveStream and Eni are both sponsors for the
purpose of the Listing Rule and are not able to vote on a Business
Combination. The sponsor shares are not tradable but entitle the holder to
dividends and other distributions in line with the Articles of Association.
Each sponsor share entitles the holder to attend and cast one vote at a
general meeting (other than the general meeting in relation to approving a
Business Combination).
The sponsor shares will convert to ordinary shares on a one-for-one basis as
follows:
- 40% on completion of a Business Combination;
- 30% between completion of a Business Combination and the 10(th)
anniversary of a Business Combination if the closing price of ordinary shares
is equal to or greater than £12.00 for any 10 trading days within a
30-trading day period; and
- 30% between completion of a Business Combination and the 10(th)
anniversary of a Business Combination if the closing price of ordinary shares
is equal to or greater than £14.00 for any 10 trading days within a
30-trading day period.
All sponsor shares that are issued and outstanding on the 10th anniversary of
a Business Combination will be reclassified as deferred shares.
Accordingly, these sponsor shares are classified as equity. These 4,375,000
shares alongside the deferred shares, and the restricted redeemable ordinary
shares, make up share capital of £56,220.
As at 31 October 2023, the Company's issued voting share capital consists of
1,845,396 redeemable ordinary shares, and 4,375,000 unlisted sponsor shares.
14. Warrants
Sponsor warrants
Alongside the sponsor shares being issued, sponsor warrants were issued to the
sponsors in the same ratio as the sponsor shares. 5,250,000 Sponsor warrants
were issued at £1.50 each, valued at £7,875,000, and are exercisable at
£11.50 for one ordinary share, commencing on the date that is 30 days after a
Business Combination. They expire on the fifth anniversary of the Business
Combination completion date. On the date of initial recognition, the fair
value of each Sponsor warrant was £0.87 each with the total fair value being
£4,357,500.
Once the public warrants (see below), become exercisable, the Company can
issue a redemption notice to redeem not less than all issued and outstanding
public warrants for £0.01 per warrant if the market price of the shares
equals or exceeds £18.00 for 20 out of 30 trading days. After the redemption
notice is issued, warrant holders have not less than 30 days to exercise their
warrants on the same fixed terms as above. If this redemption feature is
exercised by the Company, the sponsor warrants must also be concurrently
called for redemption on the same terms as the public warrants, but the
sponsor warrants will be non-redeemable so long as they are held by Eni or
LiveStream or their respective permitted transferees.
Public warrants
Each ordinary share carried an entitlement to one half of a public warrant.
The public warrants carry the same terms and conditions as the sponsor
warrants (other than that the sponsor warrants will be non-redeemable so long
as they are held by Eni or LiveStream or their respective permitted
transferees). 8,750,000 public warrants were issued at £0.26 each, valued at
£2,275,000. On the date of initial recognition, the fair value of each public
warrant was £0.47 each with the total fair value being £4,112,500.
Once the public warrants become exercisable, the Company can issue a
redemption notice to redeem not less than all issued and outstanding public
warrants for £0.01 per warrant if the market price of the shares equals or
exceeds £18.00 for 20 out of 30 trading days. After the redemption notice is
issued, warrant holders have not less than 30 days to exercise their warrants
on the same fixed terms as above. If this redemption feature is exercised by
the Company, the sponsor warrants must also be concurrently called for
redemption on the same terms as the public warrants, but the sponsor warrants
will be non-redeemable so long as they are held by Eni or LiveStream or their
respective permitted transferees.
Fair value adjustment
The sponsor warrants and public warrants were initially recognised as
derivative liabilities due to a clause in the agreement terms which failed the
'fixed for fixed test'. The cash received in relation to the sponsor warrants
which was above the fair value of the instruments has been recognised as a
capital contribution (£3,517,500).
At 31 October 2022, the fair value of the sponsor warrants was £1.23 each,
totalling £6,457,500 and the fair value of each public warrant was £0.57
with the total amounting to £4,987,500. A fair value loss of £2,100,000 was
recognised during the period in respect of the sponsor warrants, and a fair
value loss of £875,000 was recognised in respect of the public warrants.
On 19 December 2022, the terms of both the sponsor warrants and public
warrants were amended which meant the variability was removed and therefore
the classification was amended to equity. Therefore, there was no fair value
adjustment in the income statement during the period ended 31 October 2023.
15. Financial Risk Management
The fair value hierarchy of financial instruments measure at fair value is
provided below. The different levels have been defined as follows:
- Quoted prices (unadjusted), in active markets for identical
assets or liabilities (level 1);
- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly or indirectly (level
2);
- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs), (level 3).
There have been no transfers between levels during the period. Additions to
level 3 during the period are based on third party valuation reports. See note
13 for further detail.
Level 1 Level 2 Level 3 Total
£ £ £ £
Derivative financial liabilities held at fair value through profit or loss - - (2,776,000) (2,776,000)
- - (2,776,000) (2,776,000)
The following summarises the valuation methodologies and inputs used for
derivative liabilities categorised in level 3:
Fair value Valuation methodologies Unobservable inputs
£
Derivative liabilities 2,776,000 Monte Carlo simulation Volatility
Probability of a Business Combination
The following table provides information about the sensitivity of the period
end fair value measurement to changes in the most significant inputs:
Description Significant unobservable input Estimate of the input Sensitivity of the fair value measurement of the input
Derivative liabilities Volatility 50% An increase to 70% (decrease to 30%) would increase fair value by £298,000
(decrease by £286,000).
Derivative liabilities Probability of no Business Combination 75% An increase to 95% (decrease to 50%) would decrease fair value by £2,379,000,
(increase by £1,189,000).
The Company's activities expose it to credit risk and liquidity risk. The
Company's overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the
Company's financial performance.
Credit Risk
Credit risk arises from cash and cash equivalents as well as outstanding
receivables. Management does not expect any losses from non-performance of
these receivables. The Company's exposure to credit risk is limited since it
does not yet trade and does not hold trade receivables. The Company considers
the credit ratings of banks in which it holds funds in order to reduce
exposure to credit risk.
Liquidity Risk
In keeping with similar sized investment companies, the Company's continued
future operations depend on the ability to raise sufficient working capital
through the issue of equity share capital or debt. The Directors are confident
that adequate funding will be forthcoming with which to finance operations.
Controls over expenditure are carefully managed and the Board regularly
manages the working capital requirements of the Company. The
Company has minimal committed expenditure and as such the Board is able to
manage its payments to ensure adequate liquid resources are available.
Management monitors rolling forecasts of the Company's cash and cash
equivalent on the basis of expected cash flows. This is generally carried out
by the Executive Directors in accordance with practice and limits set by the
Company. At the end of the reporting period the Company held cash and cash
equivalents of £2,063,648.
Price risk
The Company does not hold any equity securities and as such is not exposed to
price risk.
Foreign exchange risk
The Company does not carry out any transactions or hold any balances in
currencies other than Sterling, therefore it is not exposed to foreign
exchange risk.
16. Related Party Transactions
From 8 November 2021 (being the date of the Company's incorporation) to date,
the Company entered into the following related party transactions:
On 6 December 2021, LiveStream LLC (Company Sponsor, and a company owned
solely by Sanjay Mehta), subscribed for 50,000 deferred shares, which carry no
voting or dividend rights.
LiveStream and Eni (Company Sponsor) subscribed for 3,306,250 and 1,068,750
sponsor shares respectively. (See note 13). The Sponsors have entered into an
agreement to waive any right to distributions by the Company from the escrow
account. Additionally, LiveStream and Eni subscribed for 3,937,500 and
1,312,500 sponsor warrants respectively. (See note 14).
On IPO, Eni subscribed for 1,750,000 redeemable ordinary shares of nominal
value £0.001 each, at a price of £10.00 each, for £17,500,000, and
LiveStream subscribed for 95,395 redeemable ordinary shares, of nominal value
£0.001, at a price of £10.00 each, for £953,950.
LiveStream agreed to incur and pay or will pay certain Offering Costs on
behalf of the Company for an aggregate amount equal to £2,398,379 and the
Company has agreed that such amount will be deducted from the aggregate
subscription amount payable by LiveStream pursuant to the LiveStream sponsor
warrant subscription agreement. As at 30 April 2023 and 31 October 2023, this
amount has been recharged to the Company via invoice, so that the costs sit in
the Condensed Statement of Comprehensive Income. Further, included in other
receivables is an invoice to LiveStream totalling £484,969 relating to fees
paid by the Company which were agreed to be funded by LiveStream in addition
to the amount above.
Eni entered into a forward purchase agreement with the Company to subscribe to
a number of ordinary shares up to the lesser of 15% of the ordinary shares
issued in a private investment in public equity transaction; and 4,100,000
ordinary shares at a subscription price of £10.00 per forward purchase share,
representing a maximum value of £41,000,000, to be issued at the time of, and
conditional on completion of a Business Combination. The fair value has been
recognised as a derivative liability on the Condensed Statement of Financial
Position. See note 12 for further details.
Related party loans of £68,327 and £11,208 are recognised on the Condensed
Statement of Financial Position as at 30 April 2023 and £68,327 and £41,208
as at 31 October 2023. The loans have been provided to the Company by Access
Capital (a company of which David Kotler is a Director) and Livestream (a
company of which Sanjay Mehta is a Director), respectively. The amounts are
due to be repaid on completion of a Business Combination.
During the period ended 31 October 2023, Eni advanced £2,400,000 of a
committed £3,600,000 working capital loan to the Company. No repayments were
made during the period, and interest was accrued of £28,047. At the period
end, an amount was due to Eni in relation to the working capital loan of
£2,428,047.
17. Events after the reporting period
There are no events after the reporting period that require disclosure.
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. END IR FLFSDLRIIVISRecent news on New Energy One Acquisition
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AnnouncementREG - New Energy One Acqn. New Energy One-NEOW - Annual Report and Accounts ended 30.04.23
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