REG - New Energy One Acqn. New Energy One-NEOW - New Energy One Acquisition Corp Plc Interim Report
31/08/2022 07:00
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RNS Number : 6704X New Energy One Acquisition Corp. 31 August 2022
31 August 2022
New Energy One Acquisition Corporation Plc
Interim Report for the period ended 31 May 2022
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 8
November 2021 (its date of incorporation) and ended 31 May 2022.
The highlight of the period was the successful admission of the Company's
Ordinary Shares and Public Warrants to trading on the Main Market of the
London Stock Exchange on 16 March 2022 in connection with which the Company
raised £175 million before expenses through the issue of 17,500,000 Ordinary
Shares.
Volker Beckers, Chair of the Board, NEOA said:
"Post the successful admission of NEOA to the Main Market of the London Stock
Exchange, the Board and the management team have reviewed and diligently
continue to scan investment opportunities. The Board and management are
pleased to report that good progress has been made in narrowing down potential
acquisition targets that are positioned to benefit from the global transition
towards a low carbon economy. The Board looks forward to updating the market
on material progress on the execution of its strategy and thanks shareholders
for their continued support."
Sanjay Mehta, Executive Director, NEOA said:
"The successful capital raise and admission of NEOA to the Main Market of the
London Stock Exchange is testimony to the confidence of investors in the
Sponsors, the board of directors and the management of the company to
successfully deliver a value accretive business combination.
The Sponsors, the board of directors and the management team are encouraged by
the continued proactive legislative, budgetary and tax incentive support from
the governments of the UK, EU and US, which is designed to encourage
investments in energy transition companies, infrastructure and projects that
will deliver the respective governments' commitments to achieving net-zero
emissions by 2050.
Particular policy highlights relevant to NEOA's strategy include:
· The UK government's announcement 1 (#_ftn1) of the first-ever carbon
storage licensing round, with 13 areas off the coast of Aberdeen, Teesside,
Liverpool and Lincolnshire in areas that have a combination of saline aquifers
and depleted oil and gas field storage opportunities. These new carbon storage
areas, alongside the six licences issued previously, facilitate attractive
investment opportunities.
· Τhe UK government also announced 2 (#_ftn2) a shortlist of 20
projects for the next licensing stage of its carbon capture utilisation and
storage (CCUS) clusters process.
· In the US, the Biden administration signed the Inflation Reduction
Act 3 (#_ftn3) . The Act has total spending and tax breaks of US$485bn, of
which US$386bn will go towards emissions-cutting measures such as tax breaks
and higher tax credits for qualified CCUS projects, low-carbon energy, and
electric vehicles.
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: EnergyOne-LON@fgsglobal.com
Adrian Rimmer, Partner +44 (0) 7793 819 073
Eirini Lemos, Associate +44 (0) 7826 867 589
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
Background
The highlight of the period was the successful admission of the ordinary
shares and public warrants of New Energy One Acquisition Corporation Plc ("the
Company") to trading on the Main Market of the London Stock Exchange
("Admission") on 16 March 2022. The Company raised £175 million before
expenses through the issue of 17,500,000 offer shares to investors pursuant to
the offering.
Financial Summary
During the period the majority of the Company's administrative expenditure has
related to one-off expenses incurred in connection with Admission. The loss
for the period was £3.7m.
Trade and other receivables as at 31 May 2022 were £165k, all of which
relates to VAT. The cash balance as at 31 May 2022 was £176.8m, which
included £175m of funds held in escrow.
Trade and other payables at 31 May 2022 were £633k. Overall, at the
period-end, net assets were £24.6m.
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 management the Board, and the management have reviewed and
diligently continue to scan investment opportunities. The Board and management
are pleased to report that good progress has been made in narrowing down
potential acquisition targets that are positioned to benefit from the global
transition towards a low carbon economy.
The Sponsors, the board of directors 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.
One of the highlights announced by the UK government is the first-ever carbon
storage licensing round with 13 areas off the coast of Aberdeen, Teesside,
Liverpool and Lincolnshire in the South North Sea, Central North Sea, Northern
North Sea and East Irish Sea which comprise a mixture of saline aquifers and
depleted oil and gas field. These new carbon storage areas, alongside the six
licences which had been previously issued, provide attractive investment
opportunities.
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).
In the U.S, the Biden administration signed the Inflation Reduction Act has
total spending and tax breaks of US$ 485bn, US$ 386bn of which will go towards
emissions-cutting measures such as tax breaks for low-carbon energy, electric
vehicles, and higher tax credits for qualified CCUS projects.
.
Sanjay Mehta
Executive Director
30 August 2022
Statement of Comprehensive Income
Period ended
Note 31 May 2022
£
Continuing operations
Interest income 6 149,910
Administrative expenses (1,776,974)
Total operating expenses (1,627,064)
Finance expense 8 (2,075,343)
Operating loss before taxation (3,702,407)
Taxation -
Total comprehensive loss for the period attributable to the equity owners (3,702,407)
Loss per share
Basic and diluted in pence 4 (1.90)
The above results were derived from continuing operations.
Statement of Financial Position
Company Number: 13727820
31 May 2022
Note £
ASSETS
Current assets
Cash and cash equivalents 6 1,676,441
Restricted cash 6 175,149,910
Trade and other receivables 5 165,169
Total current assets 176,991,520
Total assets 176,991,520
LIABILITIES
Non-current liabilities
Redeemable ordinary shares 8 151,682,331
Current liabilities
Trade and other payables 7 633,436
Total liabilities 152,315,767
NET ASSETS 24,675,753
EQUITY
Share capital 8 56,177
Warrant reserve 9 10,050,597
Other reserves 8 (151,866,334)
Retained earnings 166,435,313
TOTAL EQUITY 24,675,753
The Financial Statements were approved by the board of directors and
authorised for issue on 30 August 2022and were signed on its behalf by:
Sanjay Mehta
Executive Director
Statement of Changes in Equity
Share Capital Share Premium Warrant Other Reserves Retained Earnings Total Equity
Reserve
£ £ £ £ £ £
As at incorporation - - - - - -
Comprehensive income
Loss for the period - - - - (3,702,407) (3,702,407)
Transactions with owners
Issue of deferred shares 50,000 - - - - 50,000
Issue of sponsor shares 4,332 - - - - 4,332
Issue of redeemable ordinary shares 1,845 18,271,386 - - - 18,273,231
Issue of warrants - - 7,797,877 - - 7,797,877
Issue of sponsor warrants - - 2,252,720 - - 2,252,720
Capital reduction - (18,271,386) - 151,866,334 170,137,720 -
As at 31 May 2022 56,220 - 10,050,597 151,866,334 166,435,313 24,675,753
Statement of Cash Flows
31 May 2022
Note £
Cash flow from operating activities
Operating loss (3,702,407)
Adjustments for non-cash/non-operating items:
Finance expense 8 2,075,343
Interest income (149,910)
Cash outflow from operating activities (1,776,974)
Changes in working capital
Increase in trade and other receivables 5 (165,169)
Increase in trade and other payables 7 633,436
Net cash used in operating activities (1,308,707)
Cash flows from financing activities
Issue of deferred shares 8 50,000
Issue of redeemable ordinary shares 8 175,000,000
Issue of sponsor shares 8 4,375
Issue of warrants 9 7,875,000
Cost of share issue (4,944,227)
Net cash generated from financing activities 177,985,148
Cash flows from investing activities
Increase in restricted cash 6 (175,149,910)
Interest income received 6 149,910
Net cash used in investing activities (175,000,000)
Net increase in cash and cash equivalents 1,676,441
Cash and cash equivalents at the beginning of the period -
Cash and cash equivalents at the end of the period: 6 1,676,441
1. Company 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.
The Company was incorporated on 8 November 2022. As such, this is the first
reporting period.
2. Accounting policies
2.1 Basis of preparation
These Financial Statements of the Company have been prepared on a going
concern basis in accordance with UK-adopted International Accounting Standards
and the requirements of Companies Act 2006. These Financial Statements have
not been audited or reviewed.
Measurement bases
The Financial Statements have been prepared under the historical cost
convention. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
The preparation of the Financial Statements in compliance with adopted IFRS
requires the use of certain critical accounting estimates and management
judgements in applying the accounting policies. The significant estimates and
judgements that have been made and their effect is disclosed in note 3. IAS 34
has been applied in this interim report.
2.2 Going concern
During the period ended 31 May 2022 the Company made a loss of £3.7m and as
at 31 May 2022 had net assets of £24.6m. The operations of the Company are
financed from funds raised from investors as it does not currently generate
revenue.
The Financial Statements has been prepared on a going concern basis. The
Directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future. The
Company has not commenced a trade from which to generate revenue, however, the
Directors are confident that it has access to adequate resources to continue
operational existence for the foreseeable future from the capital raised from
the issue of shares to private investors and the listing of the Company on the
Main Market in 2022. The Company may be required to raise further capital to
complete the acquisition of a suitable business which it has identified but
otherwise has sufficient resources to pursue its investment activities,
however sufficient funds exist to fulfil the Company's existing obligations in
the going concern period.
The Board has prepared a forecast for a minimum period of at least twelve
months from the date of approval of these Financial Statements that has
considered potential future capital in-flows, continued operating losses,
projected cash-burn of the Company.
2.3 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and petty cash.
2.4 Trade and other receivables
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method,
less loss allowance.
2.5 Trade and other payables
Trade and other payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from suppliers. Accruals
and accounts payable are classified as current liabilities if payment is due
within one year or less. If not, they are presented as non-current
liabilities.
Trade payables are recognised initially at fair value, and subsequently
measured at amortised cost using the effective interest method.
2.6 Financial liabilities
Financial liabilities are classified according to the substance of the
contractual arrangements entered into. Financial liabilities are initially
recognised at fair value plus transaction costs that are attributable to their
acquisition or issue.
The Company's financial liabilities during the period are comprised of
liabilities related to the redeemable ordinary shares and trade and other
payables.
Subsequent measurement
The redeemable ordinary shares and trade and other payables are classified as
liabilities at amortised cost and are measured at amortised cost using the
effective interest rate. The amortised cost of a financial liability is the
amount at which the financial liability is measure on initial recognition,
minus principal repayments, plus or minus the cumulative amortisation using
the effective interest method of any difference between the initial amount
recognised and the maturity amount. Such amortisation amounts are recognised
in the Statement of Comprehensive Income. Due to the short-term nature of
trade and other payables, they are stated at their nominal value, which
approximates their fair value.
Following the court-approved cancellation of the share premium portion of the
redeemable ordinary shares, this value was transferred from financial
liability to distributable reserves, as the obligation to repay the share
premium is at the Company's discretion.
2.7 Share-based payments
The grant of the sponsor shares is recognised as equity-settled share-based
payments under IFRS 2. Services received in exchange for the grant of any
share-based payments are measure by reference to the fair value of the
instruments at the grant date, which is determined to be the date of
consummation of business combination. Share-based payments are recognised as
an expense in the Statement of Comprehensive Income.
2.8 Share capital
The Company has several types of share instrument. The accounting policies for
each are detailed below. Incremental costs directly attributable to the issue
of new share or options are shown in equity as deduction net of tax before
proceeds.
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 deferred shares are recognised as equity.
Sponsor shares
Post re-registration, 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, Li You the directors,
strategic advisors, future advisors and future employees), and 25% to Eni.
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 10th
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 10th
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.
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 public shares will determine the point at which
the public shares will be accounted for under IFRS 2. The effective grant date
for the public 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 exists prior to a Business
Combination, the Sponsor Shareholders are not entitled to any preferential
terms over holders of public 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 successfully achieve
a Business Combination, then the sponsor shares will not be eligible for
conversion to public 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 Statement of Comprehensive Income on a fair value basis.
Redeemable ordinary shares
IPO investors subscribed in aggregate for 15,654,605 redeemable ordinary
shares, 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.
The redeemable ordinary shares can be tendered for redemption by a shareholder
(other than Eni and LiveStream) at any point between the date of the
shareholder meeting for business combination approval is convened and the date
that is two trading days before the date of the shareholder meeting, and the
redemptions will take effect on the business combination completion date. On
redemption, the Company will issue the shareholder £10.325 each for every
share redeemed.
Initially, the redeemable ordinary shares are recognised in the Statement of
Financial Position as a financial liability under IAS 32 as the Company does
not have an unavoidable right to avoid payment in cash for the redeemable
ordinary shares. The redeemable ordinary shares are initially recognised at
fair value, to be calculated taking into consideration the probabilities that
shares will be redeemed for £10.325, if redeemed after 15 months for example,
or not redeemed at all. Subsequent measurement will be at amortised cost,
using the effective interest to bring the liability up to the value due to
holders of the redeemable ordinary shares.
The redeemable ordinary shares subscribed for by the sponsors are recognised
as equity as part of the subscription agreement both sponsors entered into,
contains an agreement whereby the sponsors waive the right to redeem.
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 for
the redeemable ordinary shares, 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 Law.
2.9 Taxation
The income tax expense or credit for the period is the tax payable on the
current period's taxable income based on the applicable income tax rate for
each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
United Kingdom. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax regulation is
subject to interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Current tax is recognised in profit or loss, except to the extent that it
relates to items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive income
or directly in equity, respectively.
3. Significant judgments and estimates
The preparation of the Company's Financial Statements under IFRS 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.
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 public 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 public 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 public shares will determine the point at which
the public shares will be accounted for under IFRS 2. The effective grant date
for the public 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 public 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
public 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 Statement of Comprehensive Income on a fair value basis.
Warrants
Both the sponsor warrants and public warrants are recognised as equity on the
Statement of Financial Position, on initial recognition. The public warrants
and the sponsor warrants 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 Eni or LiveStream or their respective permitted transferees.
The Directors have concluded that the redemption feature does not constitute
an embedded derivative as the entity will be delivering a fixed number of its
own equity instruments and receiving a fixed amount of cash.
The warrants have been valued using the Monte Carlo simulation of fair value,
with any change in the fair value recognised in the Statement of Comprehensive
Income.
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 for
the redeemable ordinary shares, 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.
4. Loss 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, excluding ordinary shares
purchased by the Company and held as treasury shares. The Company is loss
making throughout the period considered, therefore diluted earnings per share
has not been considered.
31 May
2022
£
Loss for the period attributable to equity holders of the Company (3,702,407)
Weighted average number of ordinary shares 1,947,804
Loss per share (1.90)
5. Trade and other receivables
31 May
2022
£
Amounts falling due within one year:
Other receivables 165,169
165,169
The Directors consider that the carrying amount of trade and other receivables
is approximately equal to their value.
Other receivables comprise VAT due on expenses.
6. Cash and cash equivalents
31 May
2022
£
Cash at bank 1,676,441
Restricted cash 175,149,910
176,826,351
Included within restricted cash is interest income of £149,910.
7. Trade and other payables
31 May
2022
£
Amounts falling due in one year:
Trade payables 565,109
Other payables 68,327
633,436
8. Share capital
No. £
Z deferred shares 1 0.01
Deferred shares 50,000 50,000
Redeemable ordinary shares 17,500,000 175,000,000
Sponsor shares 4,375,000 4,375
21,925,001 175,054,375
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.
Accordingly, these shares are classified as liabilities in the Company's
Statement of Financial Position and are measured at amortised cost.
Redeemable ordinary shares £
Proceeds 156,546,040
Less initial recognition of public warrants (2,275,000)
Less issue costs (4,664,052)
Effective interest accretion 2,075,343
151,682,331
The 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 and share premium, less issue costs, prior
to the capital reduction whereby the share premium portion is 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, Li You Investment Corporation,
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 10(th) 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, less issue costs of £43 make up share capital of £54,375.
As at 31 May 2022, the Company's issued voting share capital consists of
17,500,000 redeemable ordinary shares, and 4,375,000 unlisted sponsor shares.
9. Warrants
Sponsor warrants
Alongside the sponsor shares being issued, sponsor warrants were issued to the
sponsors in the same ratio as the sponsor shares. The sponsor warrants were
issued at £1.50 each 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.
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).
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.
10. Financial Risk Management
The Company's activities expose it to credit risk and liquidity risk. The
Company's overall risk management programme 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.
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.
11. 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 8). 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 9).
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 31 May 2022, this amount has been
recharged to the Company via invoice, so that the costs sit in the Statement
of Comprehensive Income, and those that have not yet been settled are recorded
in prepayments on the Statement of Financial Position.
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. As payment is contingent
on completion of a business combination, the forward purchase shares will be
recognised on settlement of the contract.
An intercompany loan of £68,327 is recognised on the Statement of Financial
Position as at 31 May 2022. This loan has been provided to the Company by
Access Capital (a Company of which David Kotler is a director). This amount is
due to be repaid on completion of a business combination.
12. Events after the reporting period
There are no subsequent events that require disclosure.
1 (#_ftnref1)
https://www.nstauthority.co.uk/licensing-consents/carbon-storage/
2 (#_ftnref2)
https://www.gov.uk/government/publications/cluster-sequencing-phase-2-eligible-projects-power-ccus-hydrogen-and-icc/cluster-sequencing-phase-2-shortlisted-projects-power-ccus-hydrogen-and-icc-august-2022
3 (#_ftnref3) https://www.crfb.org/blogs/whats-inflation-reduction-act
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