☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
June 30, 2022
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
IslandsIslands
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
for the year ended December 31, 2021 and our Quarterly Report on Form
March 31, 2021 | ||||
(unaudited) | ||||
Assets: | ||||
Cash | $ | 1,662,766 | ||
Prepaid Expenses | 403,525 | |||
|
| |||
Total current assets | 2,066,291 | |||
Other assets | 319,639 | |||
Cash and investments held in Trust Account | 271,285,654 | |||
|
| |||
Total Assets | $ | 273,671,584 | ||
|
| |||
Liabilities and Shareholders’ Equity | ||||
Accrued offering costs and expenses | $ | 1,212,517 | ||
Due to related party | 2,581 | |||
|
| |||
Total current liabilities | 1,215,098 | |||
Deferred underwriting fee | 9,494,986 | |||
Warrant liability | 16,701,548 | |||
|
| |||
Total liabilities | 27,411,632 | |||
|
| |||
Commitments and Contingencies | ||||
Class A Ordinary shares subject to possible redemption, 24,125,995 shares at redemption value | 241,259,950 | |||
Shareholders’ Equity: | ||||
Preferred share, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding | 0 | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 3,002,537 shares issued and outstanding (excluding 24,125,995 shares subject to possible redemption) | 300 | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,655,368 shares issued and outstanding | 666 | |||
Additional paid-in capital | 5,799,795 | |||
Accumulated deficit | (800,759 | ) | ||
|
| |||
Total shareholders’ equity | 5,000,002 | |||
|
| |||
Total Liabilities and Shareholders’ Equity | $ | 273,671,584 | ||
|
|
SHEETS
June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | (Audited) | |||||||
Assets | ||||||||
Cash | $ | 655,313 | $ | 300,844 | ||||
Due from related party | — | 97,419 | ||||||
Prepaid Expenses | 272,827 | 337,935 | ||||||
Total current assets | 928,140 | 736,198 | ||||||
Other assets | — | 69,842 | ||||||
Marketable securities held in Trust Account | 271,706,551 | 271,298,677 | ||||||
Total Assets | $ | 272,634,691 | $ | 272,104,717 | ||||
Liabilities and Shareholders’ Deficit | ||||||||
Accrued offering costs and expenses | $ | 90,362 | $ | 505,636 | ||||
Convertible Promissory Note – Related Party | 960,000 | — | ||||||
Due to related party | 2,581 | — | ||||||
Total current liabilities | $ | 1,052,943 | 505,636 | |||||
Deferred underwriting fee | 9,494,986 | 9,494,986 | ||||||
Warrant liabilities | 1,259,398 | 10,264,624 | ||||||
Total Liabilities | $ | 11,807,327 | 20,265,246 | |||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A Ordinary shares subject to possible redemption, 27,128,532 shares at redemption value | 271,706,551 | 271,298,677 | ||||||
Shareholders’ Deficit: | ||||||||
Preferred shares, $0.0001 par value; 5,000,000 shares authorized; NaN issued and outstanding | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 0 shares issued and outstanding (excluding 27,128,532 shares subject to possible redemption) | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,782,133 shares issued and outstanding (1) | 678 | 678 | ||||||
Additional paid-in capital(2) | — | — | ||||||
Accumulated deficit | (10,879,865 | ) | (19,459,884 | ) | ||||
Total Shareholders’ Deficit | (10,879,187 | ) | (19,459,206 | ) | ||||
Total Liabilities and Shareholders’ Deficit | $ | 272,634,691 | $ | 272,104,717 | ||||
(1) | On January 19, 2021 an aggregate of 7,187,500 founder shares were issued to Goggo Network Gmbh (the “Sponsor”) for an aggregate purchase price of $25,000. Up to 937,500 Founder Shares were subject to forfeiture by the Sponsor, depending on the extent to which the Underwriters’ over-allotment option was exercised. On March 31, 2021, the Underwriters partially exercised the over-allotment option and purchased an additional 2,128,532 Units and forfeited the remainder of the option. As a result, none of the Class B ordinary shares are subject to forfeiture any longer. |
(2) | On January 31, 2022 the Sponsor executed a settlement agreement in the amount of $255,726 relating to Levere’s IPO legal work. The Sponsor agreed to release Levere from all liability obligations associated with the settlement agreement. As a result, the full amount was recorded to additional paid in capital and was subsequently offset by accretion of trust earnings to Class A Ordinary shares subject to possible redemption which depleted the balance in additional paid in capital. |
FOR THE PERIOD FROM JANUARY 15, 2021 (INCEPTION) THROUGH MARCH 31, 2021
Formation and operating costs | $ | 52,688 | ||
|
| |||
Loss from Operations | (52,688 | ) | ||
|
| |||
Other income: | ||||
Interest earned on cash and marketable securities held in Trust Account | 334 | |||
Offering costs allocated to warrants | (618,405 | ) | ||
Change in fair value of warrant liability | (130,000 | ) | ||
|
| |||
Total other income (expense) | (748,071 | ) | ||
Net loss | $ | (800,759 | ) | |
|
| |||
Weighted average shares outstanding, Class A ordinary shares subject to possible redemption | 23,809,201 | |||
|
| |||
Basic and diluted net income per ordinary share, Class A ordinary shares subject to possible redemption | $ | 0.00 | ||
|
| |||
Weighted average shares outstanding, Non-redeemable Class A and Class B ordinary shares | 6,434,043 | |||
|
| |||
Basic and diluted net loss per share, Non-redeemable Class A and Class B ordinary shares | $ | (0.12 | ) | |
|
|
Three Months Ended June 30, | Six Months Ended June 30, | For the Period from January 15, 2021 (Inception) through June 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Formation and operating costs | $ | 222,058 | $ | 152,434 | $ | 680,933 | $ | 205,122 | ||||||||
Loss from operations | (222,058 | ) | (152,434 | ) | (680,933 | ) | (205,122 | ) | ||||||||
Other income (loss): | ||||||||||||||||
Interest earned on marketable securities held in Trust Account | 385,320 | 4,123 | 407,874 | 4,457 | ||||||||||||
Offering costs allocated to warrants | — | — | — | (618,405 | ) | |||||||||||
Change in fair value of warrant liabilities | 2,988,101 | 1,588,769 | 9,005,226 | 1,458,769 | ||||||||||||
Total other income, net | 3,373,421 | 1,592,892 | 9,413,100 | 844,821 | ||||||||||||
Net income | $ | 3,151,363 | $ | 1,440,458 | $ | 8,732,167 | $ | 639,699 | ||||||||
Weighted average shares outstanding of Class A ordinary shares | 27,128,532 | 27,128,532 | 27,128,532 | 16,142,664 | ||||||||||||
Basic and diluted net income per share, Class A ordinary shares | $ | 0.09 | $ | 0.04 | $ | 0.26 | $ | 0.03 | ||||||||
Weighted average shares outstanding of Class B ordinary shares | 6,782,133 | 6,655,368 | 6,782,133 | 6,323,616 | ||||||||||||
Basic and diluted net income per share, Class B ordinary shares | $ | 0.09 | $ | 0.04 | $ | 0.26 | $ | 0.03 | ||||||||
DEFICIT
Class A | Class B | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Deficit | ||||||||||||||||||||||||
Ordinary shares | Ordinary shares | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2021 | — | $ | — | 6,782,133 | $ | 678 | $ | — | $ | (19,459,884 | ) | $ | (19,459,206 | ) | ||||||||||||||
Net income | — | — | — | — | — | 5,580,804 | 5,580,804 | |||||||||||||||||||||
Expenses paid on behalf of the Company by the Sponsor (1) | — | — | — | — | 255,726 | — | 255,726 | |||||||||||||||||||||
Accretion of Class A Ordinary shares subject to possible redemption | — | — | — | — | (22,554 | ) | — | (22,554 | ) | |||||||||||||||||||
Balance as of March 31, 2022 | — | $ | — | 6,782,133 | $ | 678 | $ | 233,172 | $ | (13,879,080 | ) | $ | (13,645,230 | ) | ||||||||||||||
Net income | — | — | — | — | — | 3,151,363 | 3,151,363 | |||||||||||||||||||||
Accretion of Class A Ordinary shares subject to possible redemption | — | — | — | — | (233,172 | ) | (152,148 | ) | (385,320 | ) | ||||||||||||||||||
Balance as of June 30, 2022 | — | $ | — | 6,782,133 | $ | 678 | $ | — | $ | (10,879,865 | ) | $ | (10,879,187 | ) | ||||||||||||||
(1) | On January 31, 2022 the Sponsor executed a settlement agreement in the amount of $255,726 relating to Levere’s IPO legal work. The Sponsor agreed to release Levere from all liability obligations associated with the settlement agreement. As a result, the full amount was recorded to additional paid in capital. |
(UNAUDITED)
Class A Ordinary shares | Class B Ordinary shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of January 15, 2021 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Class B ordinary shares issued to Sponsor | — | — | 7,187,500 | 719 | 24,281 | — | 25,000 | |||||||||||||||||||||
Sale of 27,128,532 Units, net of offering expenses related to Class A ordinary shares and initial fair value of Public Warrants | 27,128,532 | 2,713 | — | — | 245,501,191 | — | 245,503,904 | |||||||||||||||||||||
Excess Private Placement proceeds received over initial fair value of Private Placement Warrants | — | — | — | — | 1,531,807 | — | 1,531,807 | |||||||||||||||||||||
Forfeiture of Class B ordinary shares by initial shareholders | — | — | (532,132 | ) | (53 | ) | 53 | — | — | |||||||||||||||||||
Net loss | — | — | — | — | — | (800,759 | ) | (800,759 | ) | |||||||||||||||||||
Ordinary shares subject to possible redemption | (24,125,995 | ) | (2,413 | ) | — | — | (241,257,537 | ) | — | (241,259,950 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance as of March 31, 2021 | 3,002,537 | $ | 300 | 6,655,368 | $ | 666 | $ | 5,799,795 | $ | (800,759 | ) | $ | 5,000,002 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited financial statements.
LEVERE HOLDINGS CORP.
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 15, 2021 (INCEPTION) THROUGH MARCH 31, 2021
(UNAUDITED)
Cash flows from operating activities: | ||||
Net loss | $ | (800,759 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest earned on investments held in trust account | (334 | ) | ||
Offering costs allocated to warrants | 618,405 | |||
Change in fair value of warrant liability | 130,000 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (403,525 | ) | ||
Other assets | (319,639 | ) | ||
Accrued expenses | 712,808 | |||
Due to related party | 2,581 | |||
|
| |||
Net cash used in operating activities | (60,463 | ) | ||
|
| |||
Cash Flows from Investing Activities: | ||||
Investment of cash in Trust Account | (271,285,320 | ) | ||
|
| |||
Net cash used in investing activities | (271,285,320 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from issuance of Class B ordinary shares to Sponsor | 25,000 | |||
Proceeds from sale of Units, net of underwriting discount | 265,859,614 | |||
Proceeds from sale of Private Placement Warrants | 7,425,706 | |||
Proceeds from promissory note related party | 211,135 | |||
Payments of promissory note related party | (211,135 | ) | ||
Payment of offering costs | (301,771 | ) | ||
|
| |||
Net cash provided by financing activities | 273,008,549 | |||
|
| |||
Net change in cash | 1,662,766 | |||
Cash, beginning of period | 0 | |||
|
| |||
Cash, end of the period | $ | 1,662,766 | ||
|
| |||
Supplemental disclosure of cash flow information: | ||||
Initial classification of ordinary shares subject to possible redemption | $ | 241,259,950 | ||
|
| |||
Deferred underwriters’ discount payable charged to additional paid-in capital | $ | 9,494,986 | ||
|
|
Class A | Class B | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Deficit | ||||||||||||||||||||||||
Ordinary shares | Ordinary shares | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of as of January 15, 2021 (Inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Class B ordinary shares issued to Sponsor (1) | — | — | 7,187,500 | 719 | 24,281 | — | 25,000 | |||||||||||||||||||||
Excess Private Placement proceeds received over initial fair value of Private Placement Warrants | — | — | — | — | 1,531,807 | — | 1,531,807 | |||||||||||||||||||||
Forfeiture of Class B ordinary shares by initial shareholders | — | — | (532,132 | ) | (53 | ) | 53 | — | — | |||||||||||||||||||
Net loss | — | — | — | — | — | (800,759 | ) | (800,759 | ) | |||||||||||||||||||
Accretion of Class A Ordinary shares subject to possible redemption | — | — | — | — | (1,556,141 | ) | (24,225,609 | ) | (25,781,750 | ) | ||||||||||||||||||
Balance as of March 31, 2021 | — | $ | — | 6,655,368 | $ | 666 | $ | — | $ | (25,026,368 | ) | $ | (25,025,702 | ) | ||||||||||||||
Net income | — | — | — | — | — | 1,440,458 | 1,440,458 | |||||||||||||||||||||
Accretion of Class A Ordinary shares subject to possible redemption | — | — | — | — | — | (4,123 | ) | (4,123 | ) | |||||||||||||||||||
Balance as of June 30, 2021 | — | $ | — | 6,655,368 | $ | 666 | $ | — | $ | (23,590,033 | ) | $ | (23,589,367 | ) | ||||||||||||||
(1) | On January 19, 2021 an aggregate of 7,187,500 founder shares were issued to the Sponsor for an aggregate purchase price of $25,000. Up to 937,500 Founder Shares were subject to forfeiture by the Sponsor, depending on the extent to which the Underwriters’ over-allotment option was exercised. On March 31, 2021, the Underwriters partially exercised the over-allotment option and purchased an additional 2,128,532 Units and forfeited the remainder of the option. As a result, none of the Class B ordinary shares are subject to forfeiture any longer. |
For the Six Months Ended June 30, 2022 | For the Period from January 15, 2021 (Inception) through June 30, 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 8,732,167 | $ | 639,699 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Interest earned on marketable securities held in trust account | (407,874 | ) | (4,457 | ) | ||||
Offering costs allocated to warrants | — | 618,405 | ||||||
Change in fair value of warrant liability | (9,005,226 | ) | (1,458,769 | ) | ||||
Expenses paid on behalf of the Company by the Sponsor | 55,726 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 65,108 | (375,165 | ) | |||||
Other assets | 69,842 | (237,528 | ) | |||||
Accrued expenses | (215,274 | ) | 15,000 | |||||
Due to related party | 100,000 | 2,581 | ||||||
Net cash used in operating activities | (605,531 | ) | (800,234 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Investment of cash in Trust Account | — | (271,285,320 | ) | |||||
Net cash used in investing activities | — | (271,285,320 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from issuance of Class B ordinary shares to Sponsor | — | 25,000 | ||||||
Proceeds from sale of Units, net of underwriting discount | — | 265,859,614 | ||||||
Proceeds from sale of Private Placement Warrants | — | 7,425,706 | ||||||
Proceeds from promissory note related party | — | 211,135 | ||||||
Payments of promissory note related party | — | (211,135 | ) | |||||
Proceeds from convertible promissory note related party | 960,000 | — | ||||||
Payment of offering costs | — | (577,039 | ) | |||||
Net cash provided by financing activities | 960,000 | 272,733,281 | ||||||
Net change in cash | 354,469 | 647,727 | ||||||
Cash, beginning of period | 300,844 | — | ||||||
Cash, end of the period | $ | 655,313 | $ | 647,727 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Initial classification of ordinary shares subject to possible redemption | $ | — | $ | 271,285,654 | ||||
Expenses paid on behalf of the Company by the Sponsor | $ | 200,000 | $ | — | ||||
Change in ordinary shares subject to possible redemption | $ | 407,874 | $ | 4,457 | ||||
Deferred underwriting commissions payable charged to additional paid in capital | $ | — | $ | 9,494,986 | ||||
option on May 2, 2021.
Public Shareholders (as defined below), until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elect to redeem, subject certain limitations described herein, (b) the redemption of any Public Shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association and (c) the redemption of the Company’s Public Shares if the Company has not consummated its Business Combination within 24 months from the closing of IPO (the “Combination Period”), subject to applicable law. Public Shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within the Combination Period, with respect to such Class A ordinary shares so redeemed. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Public Shareholders.
The Company will have 24 months from the closing of the IPO to complete the initial Business Combination (the “Combination Period”).
and Going Concern
$0.8 million excluding the convertible promissory note payable.
Based
Risks and Uncertainties
The Company’s management is continuing to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that it could have a negative effect on the Company’s financial position, results of its operations and/or search for a initial Business Combination candidate, the specific impact is not readily determinable as of the date of these financial statements. Themandatory liquidation date.
Note 2 — Revision of Previously Issued Financial Statements
On April 12, 2021, the staff of the Securities and Exchange Commission (the “Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “Staff Statement”). In the Staff Statement, the Staff expressed its view that certain terms and conditions commonCompany be unable to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity.
Historically, the Warrants were reflectedcontinue as a componentgoing concern.
Therefore, the Company, in consultation with its Audit Committee, concluded that its previously issued balance sheet as of March 23, 2021, should be revised because of a misapplication in the guidance around accounting for certain ofextent to which they may negatively impact our outstanding warrantsbusiness and our ability to purchase ordinary shares. As such, the Company is revising its March 23, 2021 balance sheet included in this Quarterly Report.
Impact of the Revision
The impact to the balance sheet dated March 23, 2021, filed on Form 8-K on March 29, 2021 related to the impact of accounting for public and private warrants as liabilities at fair value resulted in a $15.4 million increase to the warrant liabilities line item on March 23, 2021 and offsetting decrease to the Class A ordinary shares subject to redemption mezzanine equity line item. Transaction costs of the IPO of $562,121 were allocated to expense associated with the warrant liability, which is reflected in the change to the accumulated deficit line. There is no change to total shareholders’ equity at any reported balance sheet date.
As of March 23, 2021 | ||||||||||||
As Previously Reported | Revision Adjustment | As Revised | ||||||||||
Total assets | $ | 252,574,683 | $ | — | $ | 252,574,683 | ||||||
|
|
|
|
|
| |||||||
Liabilities and shareholders’ equity: | ||||||||||||
Total current liabilities | $ | 1,128,657 | $ | — | $ | 1,128,657 | ||||||
Deferred underwriting fee | 8,750,000 | — | 8,750,000 | |||||||||
Warrant liabilities | — | 15,386,666 | 15,386,666 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 9,878,657 | 15,386,666 | 25,265,323 | |||||||||
Class A ordinary shares, $0.0001 par value; share subject to possible redemption | 237,696,020 | (15,386,666 | ) | 222,309,354 | ||||||||
Shareholders’ equity | ||||||||||||
Preference share - $0.0001 par value | — | — | — | |||||||||
Class A ordinary shares - $0.0001 par value | 123 | 154 | 277 | |||||||||
Class B ordinary shares - $0.0001 par value | 719 | — | 719 | |||||||||
Additional paid-in-capital | 5,036,925 | 561,967 | 5,598,892 | |||||||||
Accumulated deficit | (37,761 | ) | (562,121 | ) | (599,882 | ) | ||||||
|
|
|
|
|
| |||||||
Total shareholders’ equity | 5,000,006 | — | 5,000,006 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and shareholders’ equity | $ | 252,574,683 | $ | — | $ | 252,574,683 | ||||||
|
|
|
|
|
|
The interimpresented. Operating results for the three and six months ended March 31, 2021 areJune 30, 2022 is not necessarily indicative of the results tothat may be expected for the year endingthrough December 31, 20212022 or for any future interim periods.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply
The Company accounts for its 9,042,843 ordinary share warrants issued in connection with its Initial Public Offering and overallotment and its Private Placement warrants (4,950,471) as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of warrants issued by the Company in connection with the Public Offering and Private Placement has been estimated using Monte-Carlo simulations at each measurement date.
Warrant Liabilities
The fair value of warrants issued by the Company in connection with the IPO and Private Placement has been estimated using Monte-Carlo simulations at the initial measurement date, and at subsequent measurement dates for the Private Placement Warrants. The fair value of the Public Warrants has been determined as of June 30, 2022 and December 31, 2021, by reference to the quoted market price (see Note 8).
The Company accounts for its
redemption rights that are considered to be classified outside of permanent equity. Ordinary liquidation events, which involve the Company’s controlredemption and subject to occurrenceliquidation of uncertain future events.all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Accordingly, at June 30, 2022 and December 31, 2021, all Class A ordinary shares subject to possible redemption is presented at redemption value as temporary equity, outside of the shareholders’ equitydeficit section of the Company’s condensed balance sheets.
sheets, respectively. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary share to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary share are affected by charges against additional paid in capital and accumulated deficit.
Gross proceeds from public issuance | $ | 271,285,320 | ||
Less: | ||||
Proceeds allocated to public warrants | (10,677,650 | ) | ||
Class A ordinary shares issuance cost | (15,003,767 | ) | ||
Add: | ||||
Accretion of carrying value to redemption value | 25,694,774 | |||
Class A ordinary shares subject to redemption at December 31, 2021 | $ | 271,298,677 | ||
Add: | ||||
Accretion of carrying value to redemption value | 407,874 | |||
Class A ordinary shares subject to redemption at June 30, 2022 | $ | 271,706,551 | ||
Class A ordinary shares and Class B ordinary shares outstanding, allocated proportionally to each class of shares.
Three Months Ended March 31, 2021 | ||||
Redeemable Class A Ordinary Shares | ||||
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares | ||||
Interest earned on marketable securities held in Trust Account | $ | 334 | ||
Less: Interest allocable of to Non-Redeemable Class A Ordinary Shares | (37 | ) | ||
|
| |||
Net income allocable to shares subject to possible redemption | $ | 297 | ||
Denominator: Weighted Average Redeemable Class A Ordinary Shares | ||||
Basic and diluted weighted average shares outstanding | 23,809,201 | |||
|
| |||
Basic and diluted net income per share | $ | 0.00 | ||
|
| |||
Non-Redeemable Class A and Class B Ordinary Shares | ||||
Numerator: Net Loss Minus Net Earnings | ||||
Net loss | $ | (800,759 | ) | |
Less: Income attributable to ordinary shares subject to possible redemption | (297 | ) | ||
|
| |||
Non-Redeemable net loss | $ | (801,056 | ) | |
|
| |||
Weighted average non-redeemable shares outstanding, basic and diluted | 6,434,043 | |||
|
| |||
Basic and diluted net loss per share | $ | (0.12 | ) | |
|
|
Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | For the Period from January 25, 2021 (Inception) Through June 30, 2021 | |||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||||||||
Basic and diluted net income per ordinary share | ||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||
Allocation of net income, as adjusted | $ | 2,521,090 | $ | 630,273 | $ | 1,156,690 | $ | 283,768 | $ | 6,985,734 | $ | 1,746,433 | | $ | 513,679 | $ | 126,020 | |||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding | 27,128,532 | 6,782,133 | 27,128,532 | 6,655,368 | 27,128,532 | 6,782,133 | 16,142,664 | 6,323,616 | ||||||||||||||||||||||||
Basic and diluted net income per ordinary share | $ | 0.09 | $ | 0.09 | $ | 0.04 | $ | 0.04 | $ | 0.26 | $ | 0.26 | $ | 0.03 | $ | 0.03 | ||||||||||||||||
share.
Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
Upon further evaluation, management determined that, due to a clerical error in the calculation of the number of Class B ordinary shares to be surrendered to the Company in connection with the partial exercise of the over-allotment option, the Sponsor inadvertently surrendered 126,765 Class B ordinary shares more than the 405,367 Class B ordinary shares that were required to have been forfeited by it in connection with the partial exercise of the over-allotment option (the “Clerical Error”). Accordingly, on September 16, 2021, the Company issued 126,765 Class B ordinary shares to the Sponsor, for no consideration, to correct the Clerical Error, such that the total number of Class B ordinary shares forfeited by the Sponsor, after giving effect to the correction of the Clerical Error, was 405,367 Class B ordinary shares.
does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may, at the option of the lender, be converted into Private Placement Warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants. Except as set forth above, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of the initial Business Combination, the Company does not expect to seek loans from parties other than the Sponsor, its affiliates or any members of the management team as the Company does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Company’s Trust Account.
June 30, 2022 | May 13, 2022 Borrowing (Initial Measurement) | |||||||
Underlying warrant value | $ | 0.09 | $ | 0.122 | ||||
Exercise price | $ | 1.50 | $ | 1.50 | ||||
Holding period | 0.63 | 0.76 | ||||||
Risk-free rate % | 2.57 | % | 1.76 | % | ||||
Volatility % | 2.50 | % | 1.40 | % | ||||
Dividend yield % | 0.0 | % | 0.0 | % |
Deficit and Shares Subject to Possible Redemption
Company’s amended and restated certificate of incorporation or as required applicable provisions of the Companies Act (2021 Revision) of the Cayman Islands or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.
Level 1 | — | Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. | ||
Level 2 | — | Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. | ||
Level 3 | — | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
June 30, 2022 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
U.S. Money Market held in Trust Account | $ | 271,706,551 | $ | 271,706,551 | $ | — | $ | — | ||||||||
$ | 271,706,551 | $ | 271,706,551 | $ | — | $ | — | |||||||||
Liabilities: | ||||||||||||||||
Public Warrants Liability | $ | 813,856 | $ | 813,856 | $ | — | $ | — | ||||||||
Private Placement Warrants Liability | 445,542 | — | — | 445,542 | ||||||||||||
$ | 1,259,398 | $ | 813,856 | $ | — | $ | 445,542 | |||||||||
March 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 21,285,320 | $ | 21,285,320 | $ | — | $ | — | ||||||||
U.S. Money Market held in Trust Account | 250,000,334 | 250,000,334 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 271,285,654 | $ | 271,285,654 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities: | ||||||||||||||||
Public Warrants Liability | $ | 10,760,983 | — | — | $ | 10,760,983 | ||||||||||
Private Placement Warrants Liability | 5,940,565 | — | — | 5,940,565 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 16,701,548 | $ | — | $ | — | $ | 16,701,548 | |||||||||
|
|
|
|
|
|
|
|
December 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
U.S. Money Market held in Trust Account | $ | 271,298,677 | $ | 271,298,677 | $ | — | $ | — | ||||||||
$ | 271,298,677 | $ | 271,298,677 | $ | — | $ | — | |||||||||
Liabilities: | ||||||||||||||||
Public Warrants Liability | $ | 6,601,275 | $ | 6,601,275 | $ | — | $ | — | ||||||||
Private Placement Warrants Liability | 3,663,349 | — | — | 3,663,349 | ||||||||||||
$ | 10,264,624 | $ | 6,601,275 | $ | — | $ | 3,663,349 | |||||||||
operations.
As of December 31, 2021, the Public Warrants were transferred to Level 1 due to the use of the quoted market price.
Fair Value at January 15, 2021 (inception) | $ | — | ||
Initial fair value of public and private warrants | 15,386,666 | |||
Initial fair value of public and private warrants issued with over-allotment | 1,184,882 | |||
Change in fair value of public and private warrants | 130,000 | |||
|
| |||
Fair Value at March 31, 2021 | $ | 16,701,548 | ||
|
|
liabilities at June 30, 2022 and December 31, 2021:
Fair Value at December 31, 2021 | $ | 3,663,349 | ||
Change in fair value of private warrants | (2,128,703 | ) | ||
Fair Value at March 31, 2022 | $ | 1,534,646 | ||
Change in fair value of private warrants | (1,089,104 | ) | ||
Fair Value at June 30, 2022 | $ | 445,542 | ||
Fair Value at January 15, 2021 (inception) | $ | 0— | ||
Initial fair value of public and private warrants | 15,386,666 | |||
Initial fair value of public and private warrants issued with over-allotment | 1,184,882 | |||
Change in fair value of public and private warrants | (3,141,929 | ) | ||
Transfer of public warrants to Level 1 | (9,766,270 | ) | ||
Fair Value at December 31, 2021 | $ | 3,663,349 | ||
Inputs | (Initial Measurement) March 23, 2021 | March 31, 2021 | ||||||
Risk-free interest rate | 1.06 | % | 1.16 | % | ||||
Expected term remaining (years) | 6.00 | 6.00 | ||||||
Expected volatility | 15.0 | % | 14.8 | % | ||||
Share price | $ | 9.61 | $ | 9.56 |
Inputs | June 30, 2022 | December 31, 2021 | (Initial Measurement) March 23, 2021 | |||||||||
Risk-free interest rate | 3.02 | % | 1.35 | % | 1.06 | % | ||||||
Expected term remaining (years) | 5.63 | 6.0 | 6.0 | |||||||||
Expected volatility | 1 | % | 14 | % | 15.0 | % | ||||||
Share price | $ | 9.78 | $ | 9.74 | $ | 9.61 |
Recent Developments
On April 12, 2021, the staff
and Going Concern
$0.8 million excluding the convertible promissory note payable.
Based on the foregoing, our management believes that we will have sufficient working capital and borrowing capacityconvertible promissory note amounted to meet our needs through the earlieran aggregate of $960,000.
continue as a going concern.
liabilities, other than an agreement to pay the sponsor a monthly fee of $10,000 for office space, utilities, secretarial support and administrative services. We began incurring these fees on March 23, 2021 and will continue to incur these fees monthly until the earlier of the completion of an initial business combination and our liquidation.
Estimates
amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company accounts
Recent Accounting Pronouncements
ASU did not impact the Company’s financial position, results of operations or cash flows.
Off-Balance Sheet Arrangements
Our internal control over financial reporting did not result in the proper accounting classification of complex financial instruments and the accounting for accruals for certain expenses. As a result, we performed additional analyses as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on Form
Our internal control over financial reporting did not result in the proper accounting classification of certain of the Warrants we issued in March 2021 which, due to its impact on our financial statements, we determined to be a material weakness. This mistake in classification was brought to our attention only when the SEC issued the Staff Statement. The SEC Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to those we issued at the time of our IPO in March 2021.
There
There have been no material changes fromriskother information set forth in this Quarterly Report on Formpreviously discloseddiscussed in the Company’s final prospectus Part I, Item 1A Risk Factors in our Annual Report on FormIPO asyear ended December 31, 2021 filed with the SEC on March 19, 2021, except April 20, 2022 and in our Quarterly Report on Formbelow:Our warrantsquarter ended March 31, 2022 filed with the SEC on May 26, 2022, which could materially affect our business, financial condition, or future results.accounted for as liabilitiessubject to laws and theregulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes in value of our warrants could have a material adverse effect on our financial results.On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies,” or the Staff Statement. Specifically, the Staff Statement focused on warrants that have certain settlement terms and provisions related to certain tender offers or warrants which do not meet the criteria to be considered indexed to an entity’s own stock, which terms are similar to those contained in the warrant agreement governing our Warrants. As a result of the Staff Statement, we evaluated the accounting treatment of our 9,042,843 Public Warrants and 4,950,471 Private Placement Warrants, and determined that the Warrants should be recorded as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.As a result, included on our balance sheet from January 15, 2021 (inception) to March 31, 2021 contained elsewhere in this Form 10-Q are derivative liabilities related to embedded features contained within our Warrants. Accounting Standards Codification 815-40, “Derivatives and Hedging — Contracts on an Entity’s Own Equity”, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statementsbusiness, investments and results of operations may fluctuate quarterly, basedoperations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on factors,our business, including our ability to negotiate and complete the Business Combination, and our results of operations.are outsideSPACs could become subject to regulation under the Investment Company Act of our control. Due1940. These rules, if adopted, whether in the form proposed or in revised form, or changes in market practice by market participants in response to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our Warrants each reporting period and that the amount of such gains or losses could be material.We have identified a material weakness in our internal control over financial reporting as of March 31, 2021. If we are unable to develop and maintain an effective system of internal control over financial reporting, weproposed rules, may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business, and operating results.Following this issuance of the Staff Statement our management concluded that, in light of the Staff Statement, a material weakness in our internal controls over financial reporting existed at March 31, 2021.A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.If we identify any new material weaknesses in the future, any such newly identified material weakness could limitincluding our ability to prevent or detect a misstatement ofnegotiate and complete our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, weinitial business combination and may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reportingincrease the costs and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
Unregistered SalesOn January 19, 2021, our Sponsor paid an aggregate of $25,000 to cover certain of our expenses in exchange for issuance of 7,187,500 Founder Shares. Our Sponsor agreed to forfeit up to an aggregate of 937,500 Founder Shares to the extent that the Underwriters’ 45-day over-allotment option to purchase additional Units was not exercised in full by the Underwriters or was reduced, so that the Founder Shares would represent 20% of our issued and outstanding shares after the IPO. On March 31, 2021, the Underwriters partially exercised the over-allotment option to purchase an additional 2,128,532 Units. Concurrently with the exercise of the over-allotment option, our Sponsor surrendered for cancellation 532,132 Founder Shares. The Founder Shares were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.On March 23, 2021, our Sponsor purchased 4,666,667 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at a price of $1.50 per Private Placement Warrant, generating gross proceeds of approximately $7.0 million, in a private placement that closed simultaneously with the closing of the IPO. Simultaneously with the closing of the over-allotment option on March 31, 2021, we sold an aggregate of 283,804 additional Private Placement Warrants to our Sponsor, generating gross proceeds to us of approximately $425,706. The issuances of the Private Placement Warrants were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.No underwriting discounts or commissions were paid with respect to such sales.over-allotmentover- allotment option. The securities in the offering were registered under the Securities Act on a registration statement on Form (No.
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and incorporated as Exhibit 101). |
* | Filed herewith. |
1 | Previously filed as an exhibit to our Current Report on Form 8-K filed on March 23, 2021 and incorporated by reference herein. |
2 | Previously filed as an exhibit to our Current Report on Form 8-K filed on |
|
LEVERE HOLDINGS CORP. | ||
By: | /s/ Stefan Krause |
Name: | Stefan Krause | |
Title: | Chief Financial Officer |
27