TIDMLAHL TIDMLAHW
RNS Number : 0241C
Landscape Acquisition Holdings Ltd
05 February 2020
Landscape Acquisition Holdings Limited
Report and Financial Statements
For the Year Ended 31 October 2019
Directors' Statement
It is with pleasure that I present to you the shareholders the
report and audited financial statements of Landscape Acquisition
Holdings Limited (the "Company") for the year ended 31 October
2019.
The Company
On 20 November 2017, the Company completed its initial public
offering. The offering raised gross proceeds of US$500 million,
consisting of US$484 million through the placement of ordinary
shares ("Ordinary Shares") with matching warrants ("Warrants") at a
placing price of US$10.00 per Ordinary Share and a further US$16
million through the subscription of 1,600,000 preferred shares
("Founder Preferred Shares") (with Warrants being issued to the
subscribers of Founder Preferred Shares on the basis of one Warrant
per Founder Preferred Share) also at US$10 per Founder Preferred
Share. The Company was admitted to trading with a standard listing
on the main market of the London Stock Exchange on 20 November 2017
("Admission") and the listing was suspended on 20 November 2019.
The net proceeds from the IPO and the subscription of the Founder
Preferred Shares are easily accessible when required.
As set out in the Company's prospectus dated 15 November 2017
(the "Prospectus"), the Company was formed to undertake an
acquisition of a target company or business (an "Acquisition").
On 19 November 2019, the Company entered into a definitive
agreement to acquire AP WIP Investment Holdings, LP ("AP
Wireless"), one of the largest international aggregators of rental
streams underlying wireless sites through the acquisition of
wireless telecom real property interests and contractual rights,
for aggregate consideration of approximately US$860 million
consisting of cash, shares and assumption of debt (the
"Transaction"). Of this aggregate consideration, the cash
consideration is expected to be approximately US$333 million. The
Transaction is expected to complete in early 2020.
The Company's ordinary shares and warrants on the standard
segment of the Official List were suspended by the UK Financial
Conduct Authority at the Company's request with effect from 7.30
a.m. (London time) on 20 November 2019 as, in accordance with the
provisions of the UK Listing Rules, the transaction is treated as a
reverse takeover. The Company intends to seek re-admission of its
ordinary shares and warrants (subject to meeting relevant
eligibility criteria) on the London Stock Exchange as soon as
practicable. As soon as practicable following re-admission to
trading in London, the Company intends to complete a change in its
jurisdiction of incorporation to Delaware and that, in conjunction
with such change, it will pursue a listing of its ordinary shares
on a U.S.-based stock exchange.
Financial Results
For the year ended 31 October 2019, the Company incurred
operating costs of US$7.5 million (2018: US$7.7 million) relating
to general and administrative expenses. These expenses were offset
by net investment income totalling approximately US$11.3 million
(2018: US$7.3 million).
Principal Risks and Uncertainties
The Company set out in the Prospectus the principal risks and
uncertainties that could impact its performance; these principal
risks and uncertainties remain largely unchanged since that
document was published and apply in the year ended 31 October 2019.
These are summarised on page 11 of this report and your attention
is drawn to the Prospectus for a detailed assessment. Once the
acquisition of AP Wireless is completed, the risks of the Company
will expand to reflect the risks of AP Wireless and its
subsidiaries. These risks are summarised on page 12.
A copy of the Prospectus is available on the Company's website
(www.landscapeacquisitionholdingslimited.com) and has been
submitted to the National Storage Mechanism and is available for
inspection at www.morningstar.co.uk/uk/nsm.
Related Parties
Related party disclosures are given in note 9 to these financial
statements.
Noam Gottesman
Director
4 February 2020
Report of the Directors
The financial statements on pages 17 to 34 were approved by the
Board of Directors on 4 February 2020 and signed on its behalf by
Noam Gottesman.
The Directors have pleasure in submitting their Report and the
audited financial statements for the year ended 31 October
2019.
Status and activities
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Companies Act on 1
November 2017. The address of the Company's registered office is
Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110, British
Virgin Islands. As at 31 October 2019, the Company had 48,425,000
Ordinary Shares in issue.
On 19 November 2019, the Company entered into a definitive
agreement to acquire AP WIP Investment Holdings, LP ("AP
Wireless"), one of the largest international aggregators of rental
streams underlying wireless sites through the acquisition of
wireless telecom real property interests and contractual rights,
for aggregate consideration of approximately US$860 million
consisting of cash, shares and assumption of debt (the
"Transaction"). The Transaction is expected to complete in early
2020.
The Company's ordinary shares and warrants on the standard
segment of the Official List were suspended by the UK Financial
Conduct Authority at the Company's request with effect from 7.30
a.m. (London time) on 20 November 2019 as, in accordance with the
provisions of the UK Listing Rules, the transaction is treated as a
reverse takeover. The Company intends to seek re-admission of its
ordinary shares and warrants (subject to meeting relevant
eligibility criteria) on the London Stock Exchange as soon as
practicable. As soon as practicable following re-admission to
trading in London, the Company intends to complete a change in its
jurisdiction of incorporation to Delaware and that, in conjunction
with such change, it will pursue a listing of its ordinary shares
on a U.S.-based stock exchange.
Following completion of the Transaction, the Company will seek
to expand the enlarged group's business by implementing organic
growth strategies, including expanding into different geographies,
asset classes and technologies; continued acquisition of real
estate interests and contractual rights in wireless communications
sites and other communications infrastructure; and developing a
portfolio of infrastructure assets including through acquisition or
build to suit.
Results and dividends
For the year ended 31 October 2019, the Company's net income was
US$4.0 million (2018: loss of US$0.1 million).
No dividends will be declared until after the Company completes
its initial Acquisition which is expected to be the Transaction.
Following completion of the Transaction, the Company may pay
dividends at such times (if any) and in such amounts (if any) as
the Board determines appropriate. Following completion of the
Transaction, the Company's current intention is to retain any
earnings for use in its business operations, and the Company does
not anticipate declaring any dividends in the foreseeable future.
The Company will only pay dividends to the extent that to do so is
in accordance with all applicable laws.
Share capital
General:
As at 31 October 2019, the Company had in issue 48,425,000
Ordinary Shares and 1,600,000 Founder Preferred Shares.
2 Founder Preferred Shares were issued on 3 November 2017 at
US$10.00 per share and a further 1,599,998 issued on 14 November
2017, also at US$10.00 per share. There are no Founder Preferred
Shares held in Treasury. Each Founder Preferred Share was issued
with a Warrant as described in note 6.
48,425,000 Ordinary Shares were issued on 20 November 2017
(48,400,000 were issued in the IPO at US$10.00 per share and 25,000
were issued to the Non-Founder Directors in conjunction with the
IPO). There are no Ordinary Shares held in Treasury. Each Ordinary
Share was issued with a Warrant as described in note 6.
Founder Preferred Shares:
Details of the Founder Preferred Shares can be found in note 6
to the financial statements and are incorporated into this Report
by reference.
Securities carrying special rights:
Save as disclosed above in relation to the Founder Preferred
Shares, no person holds securities in the Company carrying special
rights with regard to control of the Company.
Voting rights:
Holders of Ordinary Shares and Founder Preferred Shares have the
right to receive notice of and to attend and vote at any meetings
of members except, in the case of the holders of Ordinary Shares,
in relation to any Resolution of Members that the Directors, in
their absolute discretion (acting in good faith) determine is
necessary or desirable: (i) in connection with a merger or
consolidation in relation to, in connection with or resulting from
the Acquisition (including at any time after the Acquisition has
been made); or (ii) to approve matters in relation to, in
connection with or resulting from the Acquisition (whether before
or after the Acquisition has been made). Each holder of shares
being present in person or by proxy at a meeting will, upon a show
of hands, have one vote and upon a poll each such holder of shares
present in person or by proxy will have one vote for each share
held by him.
In the case of joint holders of a share, if two or more persons
hold shares jointly each of them may be present in person or by
proxy at a meeting of members and may speak as a member, and if one
or more joint holders are present at a meeting of persons, in
person or by proxy, they must vote as one.
Restrictions on voting:
No member shall, if the Directors so determine, be entitled in
respect of any share held by him to attend or vote (either
personally or by proxy) at any meeting of members or separate class
meeting of the Company or to exercise any other right conferred by
membership in relation to any such meeting if he or any other
person appearing to be interested in such shares has failed to
comply with a notice requiring the disclosure of shareholder
interests and given in accordance with the Company's articles of
association (the "Articles") within 14 calendar days, in a case
where the shares in question represent at least 0.25% of their
class, or within seven days, in any other case, from the date of
such notice. These restrictions will continue until the information
required by the notice is supplied to the Company or until the
shares in question are transferred or sold in circumstances
specified for this purpose in the Articles.
Transfer of shares:
Subject to the BVI Business Companies Act and the terms of the
Articles, any member may transfer all or any of his certificated
shares by an instrument of transfer in any usual form or in any
other form which the Directors may approve. The Directors may
accept such evidence of title of the transfer of shares (or
interests in shares) held in uncertificated form (including in the
form of depositary interests or similar interests, instruments or
securities) as they shall in their discretion determine. The
Directors may permit such shares or interests in shares held in
uncertificated form to be transferred by means of a relevant system
of holding and transferring shares (or interests in shares) in
uncertificated form.
No transfer of shares will be registered if, in the reasonable
determination of the Directors, the transferee is or may be a
Prohibited Person (as defined in the Articles), or is or may be
holding such shares on behalf of a beneficial owner who is or may
be a Prohibited Person. The Directors shall have power to implement
and/or approve any arrangements they may, in their absolute
discretion, think fit in relation to the evidencing of title to and
transfer of interests in shares in the Company in uncertificated
form (including in the form of depositary interests or similar
interests, instruments or securities).
Rights to appoint and remove Directors
Subject to the BVI Companies Act and the Articles, the Directors
shall have power at any time, and from time to time, without
sanction of the members, to appoint any person to be a Director,
either to fill a casual vacancy or as an additional Director.
Subject to the BVI Companies Act and the Articles, the members may
by a Resolution of Members appoint any person as a Director and
remove any person from office as a Director.
For so long as an initial holder of Founder Preferred Shares
(being a Founding Entity together with its affiliates) holds 20% or
more of the Founder Preferred Shares in issue, such holder shall be
entitled to nominate a person as a Director of the Company and the
Directors shall appoint such persons. In the event such holder
notifies the Company to remove any Director nominated by him the
other Directors shall remove such Director, and in the event of
such a removal the relevant holder shall have the right to nominate
a Director to fill such vacancy.
Currently, no Director has a service contract with the Company
and there are no pension, retirement or other similar arrangements
in place with the Directors.
Powers of the Directors
Subject to the provisions of the BVI Companies Act and the
Articles, the business and affairs of the Company shall be managed
by, or under the direction or supervision of, the Directors. The
Directors have all the powers necessary for managing, and for
directing and supervising, the business and affairs of the Company.
The Directors may exercise all the powers of the Company to borrow
or raise money (including the power to borrow for the purpose of
redeeming shares) and secure any debt or obligation of or binding
on the Company in any manner including by the issue of debentures
(perpetual or otherwise) and to secure the repayment of any money
borrowed, raised, or owing by mortgage, charge, pledge, or lien
upon the whole or any part of the Company's undertaking property or
assets (whether present or future) and also by a similar mortgage,
charge, pledge, or lien to secure and guarantee the performance of
any obligation or liability undertaken by the Company or any third
party.
Directors and their interests
The Directors of the Company who served during the year and
subsequent to the date of this Report are:
Name Position Date of appointment
Noam Gottesman Founder and Non-Executive 3 November 2017
Director
-------------------------- --------------------
Michael Fascitelli Founder and Non-Executive 3 November 2017
Director
-------------------------- --------------------
Lord Myners of Truro Chairman 3 November 2017
CBE
-------------------------- --------------------
Jeremy Isaacs CBE Independent Non-Executive 3 November 2017
Director
-------------------------- --------------------
Guy Yamen Independent Non-Executive 3 November 2017
Director
-------------------------- --------------------
Subject to completion of the Transaction, William Berkman will
be appointed as Co-Chairman and Chief Executive Officer of the
Company and Michael Fascitelli will become Co-Chairman.
No shares or options were issued to Directors during the year
ended 31 October 2019. During the prior year the Company issued the
following shares and options to Directors of the Company:
Percentage
of Ordinary Founder
Ordinary Shares in Preferred
Shares issue Shares Warrants Options
Number % Number Number Number
Noam Gottesman(1) 1,200,000 2.48 800,000 2,000,000 -
Michael Fascitelli(2) 1,200,000 2.48 800,000 2,000,000 -
Lord Myners of Truro
CBE 10,000 0.02 - 10,000 50,000
Jeremy Isaacs CBE 7,500 0.02 - 7,500 37,500
Guy Yamen 7,500 0.02 - 7,500 37,500
(1) Represents an interest held by TOMS Acquisition II LLC. Mr
Gottesman is the managing member and majority owner of TOMS
Acquisition II LLC and may be considered to have beneficial
ownership of TOMS Acquisition II LLC's interests in the
Company.
(2) Represents an interest held by Imperial Landscape Sponsor
LLC. Mr. Fascitelli is the manager and majority owner of Imperial
Landscape Sponsor LLC and may be considered to have beneficial
ownership of Imperial Landscape Sponsor LLC's interests in the
Company.
Directors' remuneration
The fees to directors during the year to 31 October 2019 were as
follows:
2019 2018
US$ US$
Lord Myners of Truro CBE 100,000 100,000
Jeremy Isaacs CBE 75,000 75,000
Guy Yamen 75,000 75,000
The Non-Founder Directors opted to have their first year's
annual remuneration settled by the issue of Ordinary Shares at
US$10 per Ordinary Share. Lord Myners received 10,000 Ordinary
Shares and Jeremy Isaacs and Guy Yamen received 7,500 Ordinary
Shares each.
Substantial shareholdings
As at 23 January 2020 (the latest practicable date prior to the
publication of this Report), the following had disclosed an
interest in the issued Ordinary Share capital of the Company (being
5% or more of the voting rights in the Company) in accordance with
the requirements of the Disclosure and Transparency Rules (the
"DTRs"):
Number Date of disclosure Notified percentage
of Ordinary to Company of voting
Shareholder Shares (1) rights (1)
(1)
Suvretta Captial Management, 4 September
LLC 2,500,000 2019 5.16%
------------- ------------------- --------------------
4 September
Jana Partners LLC 2,500,000 2019 5.16%
------------- ------------------- --------------------
V3 Capital Management 4 September
L.P. 2,800,000 2019 5.78%
------------- ------------------- --------------------
4 September
Long Pond Capital, LP 2,450,000 2019 5.06%
------------- ------------------- --------------------
Alyeska Investment Group, 4 September
L.P. 2,500,000 2019 5.16%
------------- ------------------- --------------------
4 September
Third Point LLC 4,500,000 2019 9.29%
------------- ------------------- --------------------
Wellington Management 4 September
Group LLC 2,563,150 2019 5.29%
------------- ------------------- --------------------
(1) Since the date of disclosures to the Company, the interest
of any person listed above in Ordinary Shares may have increased or
decreased without any obligation on the relevant person to make
further notification to the Company pursuant to the DTRs.
Change of control
The Company is not party to any significant contracts that are
subject to change of control provisions in the event of a takeover
bid. There are no agreements between the Company and its Directors
or employees providing compensation for loss of office or
employment that occurs because of a takeover bid.
Corporate Governance Statement
The Company is a BVI registered company with a standard listing
on the London Stock Exchange. For as long as the Company has a
standard listing it is not required to comply or explain
non-compliance with the UK Corporate Governance Code (the "Code")
issued by the Financial Reporting Council ("FRC") in April 2016 and
updated in July 2018. However, the Company is firmly committed to
high standards of corporate governance and maintaining a sound
framework through which the strategy and objectives of the Company
are set and the means of attaining these objectives and monitoring
performance are determined. At Admission, the Company therefore
stated its intention to voluntarily comply with the Code. The Code
is available on the FRC's website, www.frc.co.uk. The Company also
complies with the corporate governance regime applicable to the
Company pursuant to the laws of the British Virgin Islands.
As at the date of this Report, the Company is in compliance with
the Code with the exception of the following:
-- Given the wholly non-executive composition of the Board,
certain provisions of the Code (in particular the provisions
relating to the division of responsibilities between the Chairman
and chief executive and executive compensation) are considered by
the Board to be inapplicable to the Company. In addition, the
Company does not comply with the requirements of the Code in
relation to the requirement to have a senior independent
director.
-- The Code also recommends the submission of all directors for
re-election at annual intervals. No Director will be required to
submit for re-election until the first annual general meeting of
the Company following the Company's initial acquisition.
-- Until completion of the Company's first acquisition, which is
expected to be the acquisition of AP Wireless, the Company will not
have nomination, remuneration, audit or risk committees. The Board
as a whole instead reviews its size, structure and composition, the
scale and structure of the Directors' fees (taking into account the
interests of Shareholders and the performance of the Company),
takes responsibility for the appointment of independent auditors
and payment of their audit fee, monitors and reviews the integrity
of the Company's financial statements, including the Company's
internal control and risk management arrangements in relation to
its financial reporting process, and takes responsibility for any
formal announcements on the Company's financial performance.
Following the Company's first acquisition, the Board intends to put
in place nomination, remuneration, audit and risk committees.
Share dealing
As at the date of this Report, the Board has voluntarily adopted
a share dealing code which is consistent with the rules of the
Market Abuse Regulation 596/2014 (the "Market Abuse Regulation").
The Board is responsible for taking all proper and reasonable steps
to ensure compliance with the Market Abuse Regulation by the
Directors.
Relations with Shareholders
The Directors are available for communication with shareholders
and all shareholders will have the opportunity, and are encouraged,
to attend and vote at any future Annual General Meeting of the
Company, the first of which will take place within 18 months
following completion of the Company's initial acquisition, during
which the Board will be available to discuss issues affecting the
Company.
Statement of going concern
The Directors have considered the financial position of the
Company, including the impact of the acquisition of AP Wireless and
its subsidiaries and the risk environment and cash flows of the
enlarged group after completion of the acquisition, and have
concluded that it is appropriate to prepare the financial
statements on a going concern basis. The Directors note that, in
the unlikely event of the Acquisition not completing, the Board
will recommend to shareholders that the Company either continue to
pursue an acquisition strategy for a further 12 months from the
second anniversary of Admission or be wound up with a capital
return to shareholders, such that a going concern basis of
preparation might not be appropriate, but that the Directors
consider the possibility of this scenario to be remote.
Internal control
The Board is responsible for determining the nature and extent
of the significant risks it is willing to take in achieving its
strategic objectives. The Board maintains sound risk management and
internal control systems. The Board has reviewed the Company's risk
management and control systems and believes that the controls are
satisfactory given the nature and size of the Company. Controls
will be reviewed following completion of the Transaction.
Financial Risk Profile
The Company's financial instruments comprise mainly of cash and
cash equivalents, and various items such as payables and
receivables that arise directly from the Company's operations.
Details of the risks relevant to the Company are included in the
notes to the financial statements and on page 31 of this
report.
Branches
At the date of this Report, the Company does not have any
branches.
Management Report
For the purposes of compliance with DTR 4.1.5R(2), DTR 4.1.8R
and DTR4.1.11R, the required content of the "Management Report" can
be found in this Report of Directors and the Principal Risks and
Uncertainties section on page 11 of this report.
Directors' Responsibilities
The Directors are responsible for preparing the Report and the
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the company financial statements in accordance with
accounting principles generally accepted in the United States of
America ("U.S. GAAP") and its interpretations as issued by the
Financial Accounting Standards Board ("FASB"). Under company law
the Directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the company and of the profit or loss of the company for
that year. In preparing these financial statements, the Directors
are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable U.S. GAAP accounting principles and
its interpretations as issued by the FASB have been followed,
subject to any material departures disclosed and explained in the
financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to prepare the
financial statements. They are also responsible for safeguarding
the assets of the Company and hence taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the company's website. A copy of the financial statements is
placed on our website www.landscapeacquisitionholdingslimited.com.
The Directors consider that the annual report and accounts, taken
as a whole, are fair, balanced and understandable and provide the
information necessary for shareholders to assess a company's
performance, business model and strategy.
Each of the Directors, who are in office and whose names and
functions are listed in Corporate information, confirms that, to
the best of his knowledge:
-- the Company financial statements, which have been prepared in
accordance with U.S. GAAP accounting principles and its
interpretations as issued by the FASB, give a true and fair view of
the assets, liabilities, financial position and loss of the
Company; and
-- the management report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that it faces.
Disclosure of information to Auditors
Each of the persons who is a Director at the date of approval of
this Report confirms that:
-- so far as the director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
-- each director has taken all the steps that he/she ought to
have taken as a director in order to make himself/herself aware of
any relevant audit information and to establish that the Company's
auditors are aware of that information.
Directors' indemnities
As at the date of this Report, indemnities granted by the
Company to the Directors are in force to the extent permitted under
BVI law. The Company also maintains Directors' and Officers'
liability insurance, the level of which is reviewed annually.
By order of the Board:
Noam Gottesman
Director
4 February 2020
Principal Risks and Uncertainties
The Board has identified the following principal risks and
uncertainties facing the Company which remain largely unchanged
from the principal risks and uncertainties set out in the Company's
prospectus dated 15 November 2017 in Section A. Section B below
sets out additional risks expected to be those of the enlarged
group once the Company completes the Transaction which is expected
to complete in early 2020.
The risks referred to below do not purport to be exhaustive and
are not set out in any particular order of priority. Additional
risks and uncertainties not currently known to the Board or which
the Board currently deems immaterial may also have an adverse
effect on the Company's business. In particular, the Company's
performance may be affected by changes in the market and/or
economic conditions and in legal, regulatory and tax
requirements.
Section A:
Key information on the key risks that are specific to the issuer
or its industry
Business Strategy
-- The Company is a newly formed entity with no operating
history.
-- The Company may be unable to complete the Acquisition in a
timely manner or at all or to fund the operations of the target
business if it does not obtain additional funding.
The Company's relationship with the Directors, the Founders and
the Founder Entity and conflicts of interest
-- The Company is dependent on Mr Gottesman and Mr Fascitelli,
(collectively, the "Founders") to identify potential acquisition
opportunities and to execute the Acquisition. The loss of the
services of any of them could materially adversely affect it.
-- The Founders and Directors are currently affiliated and may
in the future become affiliated with entities engaged in business
activities similar to those intended to be conducted by the Company
and may have conflicts of interest in allocating their time and
business opportunities.
-- The Directors will allocate a portion of their time to other
businesses leading to the potential for conflicts of interest in
their determination as to how much time to devote to the Company's
affairs.
-- The Company may be required to issue additional Ordinary
Shares pursuant to the terms of the Founder Preferred Shares, which
would dilute existing Ordinary Shareholders.
Taxation
-- The Company may be a "passive foreign investment company" for
US federal income tax purposes and adverse tax consequences could
apply to US investors.
Key information on the key risks that are specific to the
securities
The Ordinary Shares and Warrants
-- The Standard Listing of the Ordinary Shares and Warrants will
not afford Shareholders the opportunity to vote to approve the
Acquisition.
-- The Warrants can only be exercised during the period
commencing on 20 November 2017 and ending on the earlier to occur
of (i) 5.00 p.m. on the third anniversary of the completion of the
Acquisition and (ii) such earlier date as determined by the Warrant
Instrument provided that if such day is not a trading day, the
trading day immediately following such day (the "Subscription
Period") and to the extent a Warrantholder has not exercised its
Warrants before the end of the Subscription Period, those Warrants
will lapse, resulting in the loss of a holder's entire investment
in those Warrants.
-- The Warrants are subject to mandatory redemption and
therefore the Company may redeem a Warrantholder's unexpired
Warrants prior to their exercise at a time that is disadvantageous
to a Warrantholder, thereby making those Warrants worthless.
-- The issuance of Ordinary Shares pursuant to the exercise of
the Warrants will dilute the value of a Shareholder's Ordinary
Shares.
Section B:
Key information on the key risks that will be specific to the
Company after the completion of the acquisition of AP Wireless and
its subsidiaries (the "APW Group" and collectively, with the
Company, the "Group")
The APW Group is one of the largest international aggregators of
rental streams underlying wireless sites through the acquisition of
wireless telecom real property interests and contractual rights. As
of 30 June 2019, the APW Group had interests in the revenue stream
of approximately 5,400 assets that were situated on approximately
4,100 different communications sites throughout the United States
and 19 other countries.
-- If the wireless carriers or tower companies consolidate their
operations, exit the wireless communications business or share site
infrastructure to a significant degree, the Group's business and
profitability could be materially and adversely affected.
-- New technologies may significantly reduce demand for wireless
infrastructure and therefore negatively impact the Group's revenue
and future growth.
-- The Group may become involved in expensive litigation or
other contentious legal proceedings relating to its real property
interests and contractual rights, the outcome of which is
unpredictable and could require the Group to change its business
model in certain jurisdictions or exit certain markets
altogether.
-- Competition for assets could adversely affect the Group's
ability to achieve its anticipated growth.
-- If the tenant leases for the wireless communication tower or
antennae located on the Group's real property interests are not
renewed with similar rates or at all, the Group's future revenue
may be materially affected.
-- Substantially all of the tenant leases associated with the
Group's assets may be terminated upon limited notice by the
wireless carrier or tower company, and unexpected lease
cancellations could materially impact cash flow from
operations.
-- The Group's operations outside the U.S. are subject to
economic, political, cultural and other risks that could materially
and adversely affect the Group's revenues or financial position,
including risks associated with fluctuations in foreign currency
exchange rates.
-- The Group's results may be negatively affected by foreign
currency exchange rates.
-- The Electronic Communications Code enacted in the United
Kingdom may limit the amount of lease income the Group generates in
the United Kingdom, which would have a material adverse effect on
the Group's results of operations and financial condition.
-- AP Wireless has a history of net losses and negative net cash
flow; if the Group continues to grow at an accelerated rate, it may
be unable to achieve profitability or positive cash flow at a
company level (as determined in accordance with US GAAP) for the
foreseeable future.
-- The Group has incurred a significant amount of debt and may
in the future incur additional indebtedness. The Group's payment
obligations under such indebtedness may limit the funds available
to the Group.
-- The terms of the Group's debt agreements may restrict the
Group's flexibility in operating its business.
-- The Group's growth strategy requires access to new capital,
which could be impaired by unfavourable capital markets.
-- An increase in market interest rates could increase the
Group's interest costs on existing and future debt, reduce the
value of the Group's assets and affect the growth of the Group's
business, all of which may materially and adversely affect the
Group's results of operations and financial condition.
Independent auditors' report to the directors of Landscape
Acquisition Holdings Limited
Report on the audit of the financial statements
Opinion
In our opinion, Landscape Acquisition Holdings Limited's
financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 October 2019 and of its profit and cash flows for
the year then ended; and
-- have been properly prepared in accordance with US GAAP.
We have audited the financial statements, included within the
Report and Financial Statements (the "Annual Report"), which
comprise: the Balance Sheet; the Statement of Comprehensive Income,
the Statement of Cash Flows, the Statement of Stockholders' Equity;
and the notes to the financial statements, which include a
description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities under ISAs (UK) are further described in the
Auditors' responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remained independent of the company in accordance with the
ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC's Ethical
Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements.
Our audit approach
Overview
* Overall materiality: $4.9 million (2018: $4.9
million), based on 1% of net assets.
===============================================================
* Single audit location to cover the company's
operations, transactions and balances.
===============================================================
* The company's current year adoption of US GAAP and
conversion from International Financial reporting
Standards (IFRS)
* Going concern
=================================================================
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all
of our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors'
professional judgement, were of most significance in the audit of
the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had
the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the context of
our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on
these matters. This is not a complete list of all risks identified
by our audit.
Key audit matter How our audit addressed the key audit matter
========================================================== ==========================================================
The company's conversion from IFRS to US GAAP We have assessed the company's accounting policies under
The company has prepared its 31 October 2019 financial US GAAP and the company's conversion
statements under US GAAP in a change from IFRS to US GAAP.
to the preparation under IFRS in the prior year. We have obtained accounting papers commissioned by the
This required an assessment of the current year under US company and considered them for compliance
GAAP and the conversion from IFRS with US GAAP requirements.
and restatement of the comparative period as at and for We have considered the competency of management's expert
the year to 31 October 2018 to US and deployed our own auditor's expert
GAAP as set out in Note 14. to evaluate the accounting papers.
A key difference between US GAAP and IFRS is the timing of With respect to the recognition of the share-based
recognition of share-based payments. payments on the Annual Dividend Amount,
In the prior year, in connection with its IPO, the company we determined that these would fall to be treated under
issued 1,600,000 Founder Preferred ASC 718.
Shares to its Founder Entities as set out in Note 6 to the Because the Annual Dividend Amount is only triggered upon
financial statements. an acquisition, the fair value,
The Founder Preferred Shares provide a right to receive an measured at the date of issuance of the Founder Preferred
Annual Dividend Amount which is Shares, is recognised upon consummation
payable based on the future growth in share price and in of the acquisition when the requisite service period has
line with a calculation specified been rendered.
by the terms of the Founder Preferred Shares set forth in We agreed the proposed conversion entries required to
the Company's Articles of Association. present the company's financial statements
Under US GAAP, the fair value of the Founder Preferred under US GAAP and set out in Note 14 to our assessment of
Shares share-based payment charge is the required US GAAP conversion
recognised upon consummation of an acquisition. adjustments.
As an acquisition had not occurred as of 31 October 2019, We have obtained the relevant financing agreements and
no share-based payment charge has board approved cash flow forecasts.
been recognised by the company. This is a change to the We have evaluated management's assessment of the entity's
treatment adopted in the prior year ability to continue as a going concern
under IFRS which specifies that the share-based payment and enquired of management as to its knowledge of events
charge is recognised on the date of or conditions beyond the period of
grant. management's assessment that may cast significant doubt
The different timing of recognition of the fair value of on the entity's ability to continue
share-based payments was also applicable as a going concern. This included sensitivity analysis as
to the share options granted to non-founder directors. to key forecast assumptions.
Going concern We have recalculated management's forecast covenant
The basis of preparation is set out in Note 2.2. As the compliance calculations, considered the
company has announced an acquisition historical accuracy of budgeting and forecasting and
of the AP Wireless group after the year-end date but considered any restrictions on the availability
before the approval of the financial of external borrowings during the going concern period.
statements, the cash flow position of the enlarged group We have also assessed the probability of consummation of
needs to be considered in the going the acquisition of the AP Wireless
concern assessment. group not happening and the consequent potential impact
The directors have undertaken an assessment of the on the company's obligation to repay
enlarged group's trading cash flows and its assets to shareholders. We have assessed this
cash commitments and assessed covenant compliance over a probability as remote but note it here for
period to June 2021. the attention of shareholders as a key assumption made by
A number of key assumptions are used in the cash flow the directors in connection with
workings which are considered highly the company's determination of going concern.
judgemental.
========================================================== ==========================================================
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
company, the accounting processes and controls, and the industry in
which it operates.
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain.
We did not identify any key audit matters relating to any
irregularities, including fraud. As in all of our audits we also
addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the
directors that represented a risk of material misstatement due to
fraud.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Overall materiality $4.9 million (2018: $4.9 million).
=============================== =====================================================================================
How we determined it 1% of net assets.
=============================== =====================================================================================
Rationale for benchmark applied We applied this benchmark given the stage of development of the Company activities
since incorporation
and funds raised as a special purpose acquisition company which meant that an asset
benchmark
was more appropriate than an income statement benchmark such as profit before tax or
revenue.
=============================== =====================================================================================
We agreed with the directors that we would report to them
misstatements identified during our audit above $0.24 million
(2018: $0.24 million) as well as misstatements below that amount
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
ISAs (UK) require us to report to you when:
-- the directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the company's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for
issue.
We have nothing to report in respect of the above matters.
However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the company's
ability to continue as a going concern. For example, the terms of
the United Kingdom's withdrawal from the European Union are not
clear, and it is difficult to evaluate all of the potential
implications on the company's trade, customers, suppliers and the
wider economy.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our auditors'
report thereon. The directors are responsible for the other
information. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If we
identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to
report that fact. We have nothing to report based on these
responsibilities.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Directors' Statement set out on
page 9, the directors are responsible for the preparation of the
financial statements in accordance with the applicable framework
and for being satisfied that they give a true and fair view. The
directors are also responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors' report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors' report.
Use of this report
This report, including the opinion, has been prepared for and
only for the company's directors as a body for fulfilling their
obligation under the Listing Rules 14.3.23R and 4.1.7R of the FCA's
Disclosure Guidance and Transparency Rules sourcebook ("DTR") in
accordance with our engagement letter dated 23 December 2019 and
for no other purpose. We do not, in giving this opinion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come,
including without limitation under any contractual obligations of
the company, save where expressly agreed by our prior consent in
writing.
Partner responsible for the audit
The engagement partner on the audit resulting in this
independent auditors' report is Philip Stokes.
PricewaterhouseCoopers LLP
Chartered Accountants
London
4 February 2020
Statement of Comprehensive Income
(in thousands, except share and per share amounts)
For the years ended 31 October
2019 2018
US$ US$
------------------------------------------- -------------------------------------------
Operating expenses:
General and
administrative 7,537 7,661
------------------------------------------- -------------------------------------------
Total operating
expenses 7,537 7,661
------------------------------------------- -------------------------------------------
Loss from operations (7,537) (7,661)
------------------------------------------- -------------------------------------------
Other income:
Investment income 11,308 7,264
233 254
Interest income
(7) (4)
Foreign exchange
Total other income 11,534 7,514
------------------------------------------- -------------------------------------------
Net income (loss) 3,997 (147)
=========================================== ===========================================
Net income (loss) per
ordinary
share, basic and
diluted 0.08 (0.00)
=========================================== ===========================================
Weighted average
ordinary
shares, outstanding,
basic
and diluted 48,425,000 45,904,247
=========================================== ===========================================
The notes form an integral part of these financial
statements.
Balance Sheet
(in thousands, except share and per share amounts)
31 October 31 October
2019 2018
US$ US$
----------------------------------------------- ----------------------------------------------
ASSETS
Current assets
Cash and
cash
equivalents 501,331 3,434
Marketable
securities
at fair
value - 490,127
Prepayments 76 28
and other
assets
501,407 493,589
Total assets
================================================ ==============================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
7,023 3,202
Accounts
payable and
accrued
expenses
------------------------------------------------ ----------------------------------------------
7,023 3,202
Total current
liabilities
7,023 3,202
Total
liabilities
------------------------------------------------ ----------------------------------------------
Stockholders' equity
Preferred - -
shares, no par
value;
unlimited
authorized
shares;
1,600,000
shares issued
and outstanding
as
of 31 October
2019 and 2018
Ordinary shares, - -
no par value;
unlimited
authorized
shares;
48,425,000
shares issued
and outstanding
as
of 31 October
2019 and 2018
490,534 490,534
Additional
paid-in
capital
Retained 3,850 (147)
earnings
494,384 490,387
Total
stockholders'
equity
------------------------------------------------ ----------------------------------------------
501,407 493,589
Total
liabilities
and
stockholders'
equity
================================================ ==============================================
The notes form an integral part of these financial
statements.
The financial statements were approved and authorised for issue
by the board of directors on 4 February 2020 and signed on its
behalf by:
Noam Gottesman
Director
Statement of Stockholders' Equity
(in thousands, except share amounts)
Preferred Shares Ordinary Shares Additional Retained Total Stockholders'
--------------------------------------------------- ----------------------------------------------------------------
Shares Amount Shares Amount Paid-in Earnings Equity
Capital
US$ US$ US$ US$ US$
----------------------------- -------------------- ---------------------------- ---------------------------------- ------------------------------------ ------------------------------------ ------------------------------------------
Balance as - - - - - - -
of inception,
1 November
2017
Issuance of
Founder
preferred
shares and
warrants 1,600,000 - - - 16,000 - 16,000
Issuance of
Ordinary
shares
and warrants,
net of fees - - 48,400,000 - 474,284 - 474,284
Share-based - - 25,000 - 250 - 250
compensation
- directors
Net loss - - - - - (147) (147)
----------------------------- -------------------- ---------------------------- ---------------------------------- ------------------------------------ ------------------------------------ ------------------------------------------
Balance as
of 31 October
2018 1,600,000 - 48,425,000 - 490,534 (147) 490,387
Net income - - - - - 3,997 3,997
----------------------------- -------------------- ---------------------------- ---------------------------------- ------------------------------------ ------------------------------------ ------------------------------------------
Balance as
of 31 October
2019 1,600,000 - 48,425,000 - 490,534 3,850 494,384
============================= ==================== ============================ ================================== ==================================== ==================================== ==========================================
The notes form an integral part of these financial
statements.
Statement of Cash Flows
(in thousands)
For the years ended 31 October
2019 2018
US$ US$
------------------------------------------------------ -----------------------------------------------------
OPERATING
ACTIVITIES:
Net income (loss) 3,997 (147)
Adjustments to
reconcile net
income
(loss) to net cash
provided by (used
in) operating
activities:
Gains on
marketable
securities (7,230) (4,217)
Share-based
compensation
- directors - 250
Changes in
operating assets
and liabilities:
Prepayments (48) (28)
and other
assets
Accounts 3,821 3,202
payable and
accrued
expenses
------------------------------------------------------ -----------------------------------------------------
Net cash provided 540 (940)
by (used in)
operating
activities
------------------------------------------------------ -----------------------------------------------------
INVESTING
ACTIVITIES:
Purchase of (202,287) (972,714)
marketable
securities -
short-term
Sales and 699,644 486,804
maturities of
marketable
securities
- short-term
------------------------------------------------------ -----------------------------------------------------
Net cash provided 497,357 (485,910)
by (used in)
investing
activities
------------------------------------------------------ -----------------------------------------------------
FINANCING
ACTIVITIES:
Proceeds from
issuance of
Founder preferred
shares and
warrants - 16,000
Proceeds from
issuance of
Ordinary shares
and warrants, net
of fees - 474,284
------------------------------------------------------- -----------------------------------------------------
Net cash provided
by financing
activities - 490,284
------------------------------------------------------- -----------------------------------------------------
Net increase in 497,897 3,434
cash and cash
equivalents
Cash and cash 3,434 -
equivalents at
beginning
of period
------------------------------------------------------- -----------------------------------------------------
Cash and cash 501,331 3,434
equivalents at end
of
period
======================================================= =====================================================
The notes form an integral part of these financial
statements.
Notes to the financial statements
1. General information
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Companies Act on 1
November 2017. The address of the Company's registered office is
Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110, British
Virgin Islands. The Company's Ordinary Shares and Warrants were
admitted for trading on the Main Market of the London Stock
Exchange on 20 November 2017, after raising gross proceeds of
US$500.0 million for a potential acquisition (an "Acquisition")
from the placing of Ordinary Shares (with matching Warrants) at a
placing price of US$10 per Ordinary Share and the subscription of
Founder Preferred Shares (with warrants) being issued to
subscribers of Founder Preferred Shares on the basis of one Warrant
per Founder Preferred Share.
These financial statements were approved and authorised for
issue in accordance with a resolution of the Directors on 4
February 2020.
2. Summary of significant accounting policies
The principal accounting policies applied in these financial
statements and are set out below.
2.1 Basis of preparation
The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP"). This is a change from the
prior year, when the Company's financial statements were prepared
in accordance with International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board
("IASB"). The change reflects the environment in which the Company
will operate following completion of the acquisition of AP WIP
Investment Holdings, LP ("AP Wireless"). A reconciliation of the
prior year financial statements between IFRS and U.S. GAAP is shown
in Note 14.
The financial statements and notes thereto are presented in U.S.
dollars, which is the Company's presentational and functional
currency.
Accounting policies have been consistently applied.
There are no new accounting standards adopted which have a
material impact on these financial statements.
The preparation of the financial statements in conformity with
U.S. GAAP requires the Company to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
It also requires the Directors to exercise judgement in the
process of applying the Company's accounting policies. Changes in
assumptions may have a significant impact on the financial
statements in the period the assumptions changed. The Directors
believe that the underlying assumptions are appropriate and that
the Company's financial statements therefore present the financial
position and results fairly. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed in note
2.15.
2.2 Going concern
The Directors have a reasonable expectation and belief that the
Company has adequate resources to continue in operational existence
for the foreseeable future given the available cash and forecasted
cash outflows. The Directors have considered the financial position
of the Company, including the impact of the acquisition of AP
Wireless and its subsidiaries and the risk environment and cash
flows of the enlarged group after the completion of the
acquisition, and have concluded that it is appropriate to prepare
the financial statements on a going concern basis. The Directors
note that, in the unlikely event of the Acquisition not completing,
the Board will recommend to shareholders that the Company either
continue to pursue an acquisition strategy for a further 12 months
from the second anniversary of Admission or be wound up with a
capital return to shareholders, such that a going concern basis of
preparation might not be appropriate, but that the Directors
consider the possibility of this scenario to be remote.
2.3 Foreign currency translation
Functional and presentation currency
The Company is listed on the Main Market of the London Stock
Exchange, the capital raised in the IPO and the subscription of
Founder Preferred Shares is denominated in US dollars and it is
intended that any dividends and distributions to be paid to
shareholders are to be denominated in US dollars. The performance
of the Company is measured and reported to the shareholders in US
dollars, which is the Company's functional currency. The Directors
consider the US dollar as the currency of the primary economic
environment in which the Company operates and the one that most
faithfully represents the economic effects of the underlying
transactions, events and conditions.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign currency assets and liabilities are
translated into the functional currency using the exchange rate
prevailing at the balance sheet date, while revenue and expenses
are translated at the average exchange rates during the period.
Foreign exchange gains and losses arising from translation are
included in the statement of comprehensive income.
2.4 Financial assets at fair value
Investments in Marketable Securities
Marketable securities are stated at fair value as determined by
the most recently traded price of each security at the balance
sheet date. Marketable securities are classified as trading
securities with all unrealized gains and losses reported in
investment income in the statement of comprehensive income.
Fair Value Measurements
Fair value is determined using the principles of ASC 820, Fair
Value Measurement. Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The fair value hierarchy prioritizes and defines the inputs to
valuation techniques as follows:
-- Level 1- Observable quoted prices (unadjusted) for identical
assets or liabilities in active markets.
-- Level 2-Quoted prices for similar assets and liabilities in
active markets, quoted prices in markets that are not active, or
inputs which are observable, either directly or indirectly, for
substantially the full term of the asset or liability.
-- Level 3-Unobservable inputs that reflect the Company's own
assumptions about the assumptions market participants would use in
pricing the asset or liability in which there is little, if any,
market activity for the asset or liability at the measurement
date.
Marketable securities are recorded at fair value. The Company
used the Level 2 fair value hierarchy assumptions to measure the
marketable securities as of 31 October 2018. The Company had no
marketable securities as of 31 October 2019. The Company's cash and
cash equivalents and accrued expenses are carried at cost, which
approximates fair value due to the short-term nature of these
instruments and are considered Level 1 securities.
The inputs used to measure the fair value of an asset or a
liability are categorized within levels of the fair value
hierarchy. The fair value measurement is categorized in its
entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the measurement. There
have not been any transfers between the levels of the hierarchy for
the years ended 31 October 2019 and 2018, respectively.
2.5 Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits,
highly liquid investments purchased with a maturity of three months
or less from the date of purchase, and bank overdrafts. Realized
and unrealized gains and losses on highly liquid investments
classified as cash equivalents are reported in investment income in
the statement of comprehensive income.
2.6 Share-based payments
The Company expenses share-based compensation over the requisite
service period of the awards (usually the vesting period) based on
the grant date fair value of awards. For stock option grants with
performance-based milestones, the expense is recorded over the
service period after the achievement of the milestone is probable
or the performance condition is achieved. The Company estimates the
fair value of stock option grants using the Black-Scholes option
pricing model. An offsetting increase to stockholders' equity is
recognized equal to the amount of the compensation expense charge.
The Company recognizes forfeitures as they occur as a reduction of
expense. The Company did not have any forfeitures for the years
ended 31 October 2019 and 2018.
2.7 Founder preferred shares
In connection with the IPO, the Company issued 1,600,000
preferred shares (the "Founder Preferred Shares") at $10 per share
to TOMS Acquisition II LLC and Imperial Landscape Sponsor LLC
(collectively, the "Founder Entities"), entities controlled by the
Founders. The Founder Preferred Shares are not mandatorily
redeemable and do not embody an unconditional obligation to settle
in a variable number of equity shares. As such, the Founder
Preferred Shares are classified as permanent equity in the balance
sheet. The Founder Preferred Shares are not unconditionally
redeemable or conditionally puttable by the Holder for cash. The
Founder Preferred Shares are considered an equity-like host for
purposes of assessing embedded derivative features for potential
bifurcation. In accordance with ASC 815, Derivatives and Hedging,
the conversion features and participating dividends of the Founder
Preferred Shares are not bifurcated and are included in permanent
equity as they are clearly and closely related to the host. The
Founder Preferred Shares do not have a par value or stated value
and thus the have been recorded in additional paid-in capital.
2.8 Warrants
The Company has warrants issued with its ordinary shares and
Founder Preferred Shares that were determined to be equity
classified in accordance with ASC 815, Derivatives and Hedging. The
Company also issued warrants with shares issued to non-founder
directors for compensation that were determined to be equity
classified in accordance with ASC 718 - Compensation - Stock
Compensation. The fair value of the warrants was recorded as
additional paid-in capital on the issuance date, and no further
adjustments were made.
2.9 Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors as it is
the body that makes strategic decisions. The Directors are of the
opinion that there is only a single operational segment being the
investment in US Treasury Bills. As a result, no segment
information has been provided as the Company only accumulates its
funds raised for investment in US Treasury Bills.
2.10 Income taxes
Income taxes are recorded in accordance with ASC 740, Accounting
for Income Taxes ("ASC 740"), which provides for deferred taxes
using an asset and liability approach. The Company recognizes
deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial
statements or tax returns. The Company determines its deferred tax
assets and liabilities based on differences between financial
reporting and tax bases of assets and liabilities, which are
measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. Valuation
allowances are provided if, based upon the weight of available
evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. The Company does not have
any deferred taxes.
The Company accounts for uncertain tax positions in accordance
with the provisions of ASC 740. When uncertain tax positions exist,
the Company recognizes the tax benefit of tax positions to the
extent that the benefit will more likely than not be realized. The
determination as to whether the tax benefit will more likely than
not be realized is based upon the technical merits of the tax
position as well as consideration of the available facts and
circumstances. The Company does not have any significant uncertain
tax positions.
As a British Virgin Islands limited liability company, the
Company is not subject to any income, withholding or capital gains
taxes.
2.11 Earnings per share
Basic earnings per ordinary share excludes dilution and is
computed by dividing net income by the weighted average number of
ordinary shares outstanding during the period. The Company has
determined that its Founder Preferred Shares are participating
securities as the Founder Preferred Shares participate in
undistributed earnings on an as-if-converted basis. Accordingly,
the Company used the two-class method of computing earnings per
share, for ordinary shares and Founder Preferred Shares according
to participation rights in undistributed earnings. Under this
method, net income applicable to holders of ordinary shares is
allocated on a pro rata basis to the holders of ordinary shares and
Founder Preferred Shares to the extent that each class may share
income for the period; whereas undistributed net loss is allocated
to ordinary shares because Founder Preferred Shares are not
contractually obligated to share the loss.
Diluted earnings per ordinary share reflects the potential
dilution that would occur if securities were exercised or converted
into ordinary shares.
2.12 Revenue recognition
The Company accounts for revenue earned from contracts with
customers under ASU No. 2014-09, Revenue from Contracts with
Customers (Topic 606). The Company did not have any revenue for the
years ended 31 October 2019 and 2018.
2.13 Comprehensive income
Comprehensive income is the same as net income for all periods
presented.
2.14 Auditor remuneration
During the years ended 31 October 2019 and 2018, the Company
obtained the following services from the independent auditors (in
thousands):
2019 2018
US$ US$
Audit of the Company's financial statements 168 38
Capital markets services in relation
to the Company's IPO - 107
Work performed in connection with potential
acquisitions 1,680 3,045
2.15 Critical accounting judgements and key sources of estimation uncertainty
There were no critical estimates or judgments in the year. In
the prior year, the accounting for the Founder Preferred Shares and
warrants (detailed in Note 6) and share option accounting (detailed
in Note 8) involved critical estimates and judgements.
2.16 Recently adopted accounting pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB")
issued an Accounting Standards Update ("ASU") 2014-09, Revenue from
Contracts with Customers (Topic 606), which requires entities to
recognize revenue in a way that depicts the transfer of promised
goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in
exchange for those goods or services. The new guidance also
requires additional disclosure about the nature, amount, timing and
uncertainty of revenue and cash flows arising from customer
contracts. The guidance is effective for annual periods beginning
after 15 December 2017, including interim periods within those
periods, with early application permitted as of annual reporting
periods beginning after 15 December 2016, including interim
reporting periods within that period. The Company adopted the
standard on 1 November 2017. The Company does not have any revenue
for the years ended 31 October 2019 and 2018. Accordingly, the
adoption of this guidance did not have a material effect on the
Company's financial statements and related disclosures.
In May 2017, the FASB issued ASU 2017-09, Compensation-Stock
Compensation (Topic 718): Scope of Modification Accounting, which
clarifies when to account for a change to the terms or conditions
of a share-based payment award as a modification. Under the new
guidance, modification accounting is required only if the fair
value, the vesting conditions, or the classification of the award
(as equity or liability) changes as a result of the change in terms
or conditions. The new standard was effective on 1 January 2018;
however, early adoption is permitted. The Company adopted ASU No.
2017-09 as of 1 November 2017. The adoption of this update did not
impact the Company's financial statements.
In January 2017, the FASB issued an ASU 2017-01, Business
Combinations (Topic 805) Clarifying the Definition of a Business.
The amendments in this ASU clarify the definition of a business
with the objective of adding guidance to assist entities with
evaluating whether transactions should be accounted for as
acquisitions (or disposals) of assets or businesses. The definition
of a business affects many areas of accounting including
acquisitions, disposals, goodwill, and consolidation. The guidance
is effective for annual periods beginning after 15 December 2017,
including interim periods within those periods. The Company adopted
ASU 2017-01 on 1 November 2017. The adoption of this update did not
impact the Company's financial statements.
In June 2018, the FASB issued ASU 2018-07, Improvements to
Nonemployee Share-Based Payment Accounting, which simplifies the
accounting for share-based payments granted to nonemployees for
goods and services. Under the ASU, most of the guidance on such
payments to nonemployees would be aligned with the requirements for
share-based payments granted to employees. The changes take effect
for public companies for fiscal years starting after 15 December
2018, including interim periods within that fiscal year. For all
other entities, the amendments are effective for fiscal years
beginning after 15 December 2019, and interim periods within fiscal
years beginning after 15 December 2020. Early adoption is
permitted, but no earlier than an entity's adoption date of Topic
606. The Company adopted ASU No. 2018-07 as of the period of
inception. The adoption of this update did not have a material
impact on the Company's financial statements.
3. Expenses
Expenses consist of the following for the years ended 31 October
2019 and 2018 (in thousands):
2019 2018
US$ US$
Listing expenses - 958
Legal and professional fees 6,817 6,291
Directors' remuneration (including
share-based compensation charge) 250 250
Administration fees 112 98
General expenses 358 64
________ ________
7,537 7,661
4. Taxation
The Company is not subject to income tax or corporation tax in
the British Virgin Islands.
5. Marketable Securities
The Company's investment in marketable securities consists of
U.S. Treasury Bills. Investment income is recorded as realized
investment income at the time the investment in U.S. Treasury Bills
matures.
The change in the unrealized gains on these investments are
included in the statement of comprehensive income as investment
income. The Company had no unrealized gains and losses on
marketable securities as of 31 October 2019. Unrealized gains on
the U.S. Treasury Bills as of 31 October 2018 are summarized as
follows (in thousands):
Gross Unrealized Gross Unrealized Net Unrealized
Cost Gain Loss Gain Fair Value
US$ US$ US$ US$ US$
-------- ----------------- ----------------- --------------- -----------
U.S. Treasury
Bills 489,147 980 - 980 490,127
As of 31 October 2019, US$450.0 million of U.S. Treasury Bills
were classified as cash and cash equivalents as their original
maturities were less than three months. These securities had an
unrealized gain of approximately US$0.5 million, which is included
in cash equivalents in the accompanying balance sheets. Realized
and unrealized gains and losses on U.S. Treasury Bills classified
as cash equivalents are included in the statement of comprehensive
income as investment income.
As of 31 October 2018, all trading securities were included in
marketable securities at fair value in the accompanying balance
sheets.
6. Stockholders' Equity
In November 2017, the Company's equity offering raised gross
proceeds of US$500.0 million, consisting of US$484.0 million
through the placement of ordinary shares at US$10 per share in the
Initial Public Offering, and US$16.0 million through the
subscription of 1,600,000 preferred shares at US$10 per share by
the Founder Entities. Each ordinary share and Founder Preferred
Share was issued with a warrant as described below.
Founder Preferred Shares
After the closing of an Acquisition, and if the average stock
price of the ordinary shares is at least US$11.50 per share for any
ten consecutive Trading Days (as defined in the Prospectus), the
holders of the Founder Preferred Shares will be entitled to receive
a dividend in the form of ordinary shares or cash, at the option of
the Company, equal to 20% of the appreciation of the market price
of ordinary shares issued to ordinary shareholders in the initial
offering. In the first year a dividend is payable (if any), the
dividend amount will be calculated at the end of the calendar year
based on the appreciated stock price (the "Dividend Price", as
defined below) compared to the initial offering price of US$10 per
ordinary share. In subsequent years, the dividend amount will be
calculated based on the appreciated stock price compared to the
highest Dividend Price previously used in calculating the Preferred
stock dividends. For the purposes of determining the Annual
Dividend Amount, the Dividend Price is the average price per
ordinary share for the last ten consecutive Trading Days in the
relevant Dividend Year. Upon the liquidation of the Company, an
Annual Dividend Amount shall be payable for the shortened Dividend
Year. Subsequent to the liquidation, the holders of Founder
Preferred Shares shall have the right to a pro rata share (together
with holders of the ordinary shares) in the distribution of the
surplus assets of the Company.
The Founder Preferred Shares will participate in any dividends
on the ordinary shares on an as converted basis. In addition,
commencing on and after consummation of the Acquisition, where the
Company pays a dividend on its ordinary shares, the Founder
Preferred Shares will also receive an amount equal to 20 per cent
of the dividend which would be distributable on such number of
ordinary shares. All such dividends on the Founder Preferred Shares
will be paid at the same time as the dividends on the ordinary
shares. Dividends are paid for the term the Founder Preferred
Shares are outstanding.
The Founder Preferred Shares will be automatically converted
into ordinary shares on a one for one basis upon the last day of
the seventh full financial year following an Acquisition (the
"Conversion"). Each Founder Preferred Share is convertible into one
ordinary share at the option of the holder until the Conversion. If
there is more than one holder of Founder Preferred Shares, a holder
of Founder Preferred Shares may exercise its rights independently
of any other holder of Founder Preferred Shares.
In accordance with ASC 718 - Compensation - Stock Compensation,
the Annual Dividend Amount based on the market price of the
Company's ordinary shares is akin to a market condition award
settled in shares. As the right to the Annual Dividend Amount is
only triggered upon an Acquisition (which is not considered
probable until an Acquisition has been consummated), the fair value
of the Annual Dividend Amount measured on the date of issuance of
the Founder Preferred Shares would be recognized upon consummation
of an Acquisition. The fair value of the Founder Preferred Shares,
US$55.4 million, has been measured on issuance date using a Monte
Carlo method which takes into consideration different stock price
paths. Of the US$55.4 million fair value of the Founder Preferred
Shares, approximately US$39.4 million is attributed to the fair
value of the Annual Dividend Amount, which represents the excess of
the fair value of the Founder Preferred Shares over the price paid
by the Founders for the shares.
At the time of an Acquisition, the estimated fair value of the
preferred dividends will be recorded as a one-time charge to the
statement of comprehensive income. Following are the assumptions
used in calculating the issuance date fair value:
Number of securities issued 1,600,000
Vesting period Immediate
Ordinary share price upon initial public
offering ("IPO") US$10.00
Founder Preferred Share price US$10.00
Probability of Acquisition 65.5%
Time to Acquisition 1.5 years
Volatility (post-Acquisition) 38.68%
Risk free interest rate 2.26%
The Founder Preferred Shares carry the same voting rights as are
attached to the ordinary shares being one vote per Founder
Preferred Share. Additionally, the Founder Preferred Shares alone
carry the right to vote on any Resolution of Members required,
pursuant to BVI law, to approve any matter in connection with an
Acquisition, or a merger or consolidation in connection with an
Acquisition. Initial Founder Preferred Shareholders, that hold 20%
of the Founder Preferred Shares, can nominate up to three people as
directors of the Company.
Ordinary Shares
In connection with the IPO on 20 November 2017, the Company
issued 48,400,000 ordinary shares (no par value) for gross proceeds
of US$484.0 million. In conjunction with the IPO, the Company also
issued an aggregate of 25,000 ordinary shares to non-founder
directors for US$10 per share in lieu of their cash directors' fees
for one year.
Each ordinary share was issued with a Warrant. The ordinary
shares have voting rights and winding-up rights.
Warrants
The Company issued 50,025,000 Warrants to the purchasers of both
ordinary shares and Founder Preferred Shares (including the 25,000
Warrants that were issued to non-founder directors for their fees).
Each Warrant has a term of 3 years following an Acquisition and
entitles a Warrant holder to purchase one-third of an ordinary
share upon exercise. Warrants will be exercisable in multiples of
three for one ordinary share at a price of US$11.50 per whole
ordinary share. The warrants are mandatorily redeemable by the
Company at a price of US$0.01 should the average market price of an
ordinary share exceed US$18.00 for 10 consecutive trading days
(subject to any prior adjustment in accordance with the terms of
the Warrant Instrument).
7. Commitments and Contingencies
The Company may be subject to lawsuits or claims as a result of
the proposed business combination. As of 31 October 2019, there
were no known or threatened lawsuits or unasserted claims.
8. Share-based Compensation
On 15 November 2017, the Company issued its non-founder
directors 125,000 stock options (the "Stock Options") to purchase
ordinary shares of the Company that vest upon an Acquisition. The
non-founder directors are required to have continued service until
the time of the Acquisition to vest in the Stock Options. The
options expire on the 5th anniversary following an Acquisition and
have an exercise price of US$11.50 per share (subject to such
adjustment as the Directors consider appropriate in accordance with
the terms of the Option Deeds). The Stock Options have a
performance condition of vesting on an Acquisition (which is not
considered probable until an Acquisition is consummated).
Therefore, in accordance with ASC 718 - Compensation - Stock
Compensation, the fair value of the awards, as determined on the
grant date, will be recognized as an expense and an increase of
additional paid-in capital upon consummation of an Acquisition.
The following table summarizes the stock option activity:
Weighted
Average Aggregate
Number Exercise Intrinsic
of Shares Price Value
US$ US$
------------------------- ----------------------- -----------------------
Options outstanding at -
inception - -
Granted 125,000 11.50 -
-------------------------
Options outstanding at
October 31, 2018 125,000 11.50 -
-------------------------
Options outstanding at
October 31, 2019 125,000 11.50 -
=========================
Options vested and
exercisable - - -
=========================
The fair value of each stock option was estimated at US$3.26 on
the grant date using the Black-Scholes option pricing model with
the following assumptions for the grant:
Share price US$10.00
Exercise price US$11.50
Risk free rate 2.26%
Dividend yield -
Volatility (post-Acquisition) 38.68%
On 20 November 2017, the Company issued 25,000 ordinary shares
and Warrants to independent non-founder directors for their first
year's annual fees in lieu of cash. The US$10 fair value of the
shares and warrants was based on the price paid by outside
shareholders in the equity offering on 20 November 2017 (see Note
6). In accordance with ASC 718 - Compensation - Stock Compensation,
the fair value of the shares and related Warrants of US$250,000 was
recorded as an expense over the one-year service period.
9. Related Parties
During the year ended 31 October 2018, the Company issued the
following shares, warrants and options to the directors of the
Company:
Founder
Ordinary Preferred
Shares Shares Warrants Options
Number Number Number Number
Noam Gottesman(1) 1,200,000 800,000 2,000,000 -
Michael Fascitelli(2) 1,200,000 800,000 2,000,000 -
Lord Myners of Truro
CBE 10,000 - 10,000 50,000
Jeremy Isaacs CBE 7,500 - 7,500 37,500
Guy Yamen 7,500 - 7,500 37,500
(1) Represents an interest held by TOMS Acquisition II LLC. Mr
Gottesman, a Founder, is the managing member and majority owner of
TOMS Acquisition II LLC and may be considered to have beneficial
ownership of TOMS Acquisition II LLC's interests in the
Company.
(2) Represents an interest held by Imperial Landscape Sponsor
LLC. Mr. Fascitelli, a Founder, is the manager and majority owner
of Imperial Landscape Sponsor LLC and may be considered to have
beneficial ownership of Imperial Landscape Sponsor LLC's interests
in the Company.
There were no shares, warrants and options issued to the
directors of the Company for the year ended 31 October 2019.
The fees to the non-founder directors were as follows during the
years ended 31 October 2019 and 2018 (in thousands):
2019 2018
US$ US$
Lord Myners of Truro CBE 100,000 100,000
Jeremy Isaacs CBE 75,000 75,000
Guy Yamen 75,000 75,000
The Non-Founder Directors opted to have their first year's
annual remuneration settled by the issue of ordinary shares at
US$10 per ordinary share. Lord Myners received 10,000 ordinary
shares and Jeremy Isaacs and Guy Yamen received 7,500 ordinary
shares each.
The Founder Entities, Toms Acquisition II LLC and Imperial
Landscape Sponsor LLC or their affiliates, have received
reimbursements of expenses of US$251,059 and US$124,589 as of 31
October 2019 and 2018, respectively, of which US$247,797 and
US$35,000 were outstanding at 31 October 2019 and 2018,
respectively. Noam Gottesman is the Founder and Managing Partner of
Toms Capital LLC and Michael Fascitelli is the Founder and Managing
General Partner of Imperial Companies LLC.
10. Earnings Per Share
Net income is allocated between the ordinary shares and other
participating securities based on their participation rights. The
Founder Preferred Shares (see Note 6), represent participating
securities. Earnings attributable to Founder Preferred Shares is
not included in earnings attributable to ordinary shares in
calculating earnings per ordinary share. For the years ended 31
October 2019 and 2018, the Company excluded the stock options to
purchase 125,000 ordinary shares from the diluted earnings per
ordinary share as the performance condition for these stock options
was not considered probable until the time of the Acquisition.
The following table sets forth the computation of basic and
diluted earnings per ordinary share using the two-class method (see
Note 2.11) (in thousands, except share and per share amounts):
For the years ended 31
October
2019 2018
US$ US$
Numerator:
Net income 3,997 (147)
Adjustment for vested participating (128) -
preferred stock
------------- -------------
Net income attributable to ordinary
shares 3,869 (147)
Denominator:
Weighted average shares outstanding
- basic and diluted 48,425,000 45,904,247
------------- -------------
Basic and diluted earnings per ordinary
share 0.08 (0.00)
============= =============
Ordinary shares issuable upon conversion
of Founders Preferred Shares 1,600,000 1,600,000
============= =============
11. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following
at 31 October (in thousands):
2019 2018
US$ US$
Professional fees 6,678 3,164
Other 345 38
_________ _________
7,023 3,202
12. Financial risk management
The Company's policies with regard to financial risk management
are clearly defined and consistently applied. They are a
fundamental part of the Company's long-term strategy covering areas
such as foreign exchange risk, interest rate risk, credit risk,
liquidity risk and capital management.
Financial risk management is under the direct supervision of the
Board of Directors which follows policies covering specific areas,
such as foreign exchange risk, interest rate risk, credit risk, use
of derivative and non derivative financial instruments and
investment of excess liquidity.
The Company does not intend to acquire or issue derivative
financial instruments for trading or speculative purposes and has
yet to enter into a derivative transaction.
Currency risk
The majority of the Company's financial cash flows are
denominated in Pounds Sterling and United States Dollars. Currently
the Company does not carry out any significant operations in
currencies outside the above. Foreign exchange risk arises from
recognised monetary assets and liabilities. The Company does not
hedge systematically its foreign exchange risk.
Credit risk
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk
from its financing activities, including deposits with banks and
financial institutions. Credit risk from balances with banks and
financial institutions is managed by the Board. Surplus funds are
invested in US treasury bills or such money market fund instruments
as approved by the Non-Founder Directors. The Company has nominal
credit risk related to US treasury bills as they are backed by the
United States government.
Liquidity risk
The Company monitors liquidity requirements to ensure it has
sufficient cash to meet operational needs while maintaining
sufficient headroom. Such forecasting takes into consideration the
Company's debt financing plans (when applicable), compliance with
internal balance sheet ratio targets and external regulatory or
legal requirements if appropriate. The Company's payables are
administrative in nature and due within three months.
Cash flow interest rate risk
The Company has no long-term borrowings and as such is not
currently exposed to interest rate risk. To mitigate against the
risk of default by one or more of its counterparties, the Company
currently holds its assets in US treasuries. As of 31 October 2019
and 2018, US$450.0 million and US$490.1 million, respectively, was
held in US treasury bills. The Company anticipates that it will
continue to hold the bulk of its assets in US treasury bills until
an Acquisition is consummated. The Board regularly monitors
interest rates offered by, and the credit ratings of, current and
potential counterparties, to ensure that the Company remains in
compliance with its stated investment policy for its cash balances.
The Company does not currently use financial instruments to hedge
its interest rate exposure.
Capital risk management
The Company's objectives when managing capital (currently
consisting of share capital and share premium) are to safeguard the
Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to
shareholders, return capital to shareholders or issue new
shares.
13. Subsequent Events
On 19 November 2019, the Company entered into a definitive
agreement to acquire 100% of the voting interests of AP WIP
Investment Holdings, LP, one of the largest international
aggregators of rental streams underlying wireless sites through the
acquisition of wireless telecom real property interests and
contractual rights, for aggregate consideration of approximately
US$860 million consisting of cash, shares and assumption of debt
(the "Transaction"). Since the acquisition has not completed, no
initial accounting for the business combination has been undertaken
as yet and therefore details of the acquisition accounting and
financial information about the enlarged group have not been
presented.
The Company's ordinary shares and warrants on the standard
segment of the Official List were suspended by the UK Financial
Conduct Authority at the Company's request with effect from 7.30
a.m. (London time) on 20 November 2019 as, in accordance with the
provisions of the UK Listing Rules, the transaction is treated as a
reverse takeover. The Company intends to seek re-admission of its
ordinary shares and warrants (subject to meeting relevant
eligibility criteria) on the London Stock Exchange as soon as
practicable. As soon as practicable following re-admission to
trading in London, the Company intends to complete a change in its
jurisdiction of incorporation to Delaware and that, in conjunction
with such change, it will pursue a listing of its ordinary shares
on a U.S.-based stock exchange.
As of the closing of the AP WIP Investment Holdings LP
acquisition, the Company will record a one-time, non-cash expense
preliminarily estimated to be approximately US$39.4 million, which
represents the fair value attributable to the Annual Dividend
Amount. See Note 6.
14. Prior Year Financial Statements
The Company previously issued its financial statements as of and
for the period ended 31 October 2018 in accordance with
International Financial Reporting Standards ("IFRS") and its
interpretations as issued by the International Accounting Standards
Board ("IASB"). The following reconciliation shows the changes to
the previously filed balance sheet and statement of comprehensive
income of the Company as a result of the Company's change to U.S.
GAAP (in thousands, except share and per share amounts):
31 October 2018
-----------------------------------------------------------------------------------------------
IFRS US GAAP
US$ Adjustments US$
---------------------------- ----------------------------------- ----------------------------
ASSETS
Current assets
Cash and cash
equivalents 3,434 3,434
Marketable
securities at
fair
value 490,127 490,127
Prepayments and
other assets 28 28
Total assets 493,589 493,589
============================ ============================
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
liabilities
Accounts
payable and
accrued
expenses 3,202 3,202
---------------------------- ----------------------------
Total
current
liabilities 3,202 3,202
Non-current
liabilities
Warrant
redemption
liability 484 (484) (a) -
484 -
Total
non-current
liabilities
---------------------------- ----------------------------
Total liabilities 3,686 3,202
---------------------------- ----------------------------
Stockholders'
equity
Preferred shares, - -
no par value;
unlimited
authorized shares;
1,600,000 shares
issued and
outstanding as of
31 October
2019 and 2018
Ordinary shares, - -
no par value;
unlimited
authorized shares;
48,425,000 shares
issued and
outstanding as of
31 October
2019 and 2018
Additional
paid-in capital
(b) 490,534 490,534
Retained earnings (631) 484 (a) (147)
Total
stockholders'
equity 489,903 490,387
---------------------------- ----------------------------
Total liabilities
and stockholders'
equity 493,589 493,589
============================ ============================
a) The warrants issued with its Founder Preferred Shares were
determined to be equity classified in accordance with ASC 815,
Derivatives and Hedging.
b) Previously issued IFRS financial statements presented the
share premium associated with the founder preferred shares as
Founder Preferred Share Capital within the stockholders' equity
section. For the purposes of the reconciliation above, the share
premium associated with the founder preferred shares of
approximately US$ 16 million was included within Additional paid-in
capital within the stockholders' equity section.
For the year ended 31 October
2018
-----------------------------------------------------------------------------------------
IFRS US GAAP
US$ Adjustments US$
--------------------------- ------------------------------ ----------------------------
Operating expenses:
General and
administrative 7,775 (114) (a)(b)(c) 7,661
--------------------------- ----------------------------
Total operating
expenses 7,775 7,661
--------------------------- ----------------------------
Loss from
operations (7,775) (7,661)
--------------------------- ----------------------------
Other income:
Investment
income 7,264 7,264
Non-cash charge
related to
Founder Preferred
Shares and
associated
warrants (55,889) 55,889 (a)(b) -
Non-cash charge
related to
warrant
redemption
liability (484) 484 (d) -
Other income 253 (3) (c) 250
Total other income (48,856) 7,514
--------------------------- ----------------------------
Net income (loss) (56,631) (147)
=========================== ============================
a) Under US GAAP, the fair value of the Annual Dividend Amount
(US$39.4 million) associated with the founder preferred shares and
the fair value of the stock options (US$0.1 million) granted to
non-founder directors are recognized upon consummation of an
Acquisition. As an Acquisition did not occur as of 31 October 2018,
amounts recognized in earnings on grant date under IFRS were
removed from earnings in accordance with US GAAP for the year ended
31 October 2018.
b) Under IFRS, the non-cash charge related to the Founder
Preferred Shares and associated warrants and the charge associated
with the stock options granted to non-founder directors were
recognized with an offsetting entry to retained earnings.
Accordingly, the removal of these charges from earnings under U.S.
GAAP, and the associated removal of the direct offsetting entry
within retained earnings, did not result in a change to total
retained earnings on the U.S. GAAP balance sheet.
c) Foreign exchange losses classified within Expenses under IFRS
were reclassified to Other income under US GAAP.
d) The warrant issued with its Founder Preferred Shares were
determined to be equity classified in accordance with ASC 815,
Derivatives and Hedging, and accordingly no charge to earnings is
recognized under US GAAP.
Corporate information
Directors Legal advisers to the Company
Noam Gottesman (English and US Law)
Michael Fascitelli Greenberg Traurig, LLP
Lord Myners of Truro CBE (Chairman) 8th Floor
Jeremy Isaacs CBE The Shard
Guy Yamen 32 London Bridge Street
London
Registered office SE1 9SG
Ritter House
Wickhams Cay II Legal advisers to the Company
Road Town (BVI Law)
Tortola Carey Olsen
VG1110 Carey House
British Virgin Islands Les Banques
St Peter Port
Administrator and secretary Guernsey
Oak Fund Services (Guernsey) GY1 4BZ
Limited
(formerly International Administration Depositary
Group (Guernsey) Limited) Computershare Investor Services
Regency Court PLC
Glategny Esplanade The Pavilions
St Peter Port Bridgewater Road
Guernsey Bristol
GY1 1WW BS 13 8AE
Registrar Principal bankers
Computershare Investor Services Barclays Bank Plc
(BVI) Limited PO Box 8
Woodbourne Hall Library Place
PO Box 3162 St Helier
Road Town Jersey JE4 8NE
Tortola
British Virgin Islands
Independent auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UPUGAPUPUUQA
(END) Dow Jones Newswires
February 05, 2020 02:00 ET (07:00 GMT)
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