TIDMADMR
RNS Number : 1223K
Admiral Acquisition Limited
23 August 2023
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION
WHERE TO DO SO WOULD BE IN BREACH OF APPLICABLE LAWS OF THAT
JURISDICTION
Admiral Acquisition Limited
23 August 2023
Interim Report and Financial Statements
Admiral Acquisition Limited (the "Company"), today announced the
publication of its report and unaudited financial statements for
the period from incorporation on 15 December 2022 to 31 May 2023
(the "Interim Report and Financial Statements"). Copies of the
Interim Report and Financial Statements will be available on the
Company's website at www.admiralacquisition.com and are set out in
full below.
For further information please contact:
Oak Fund Services
(Guernsey) Limited,
Company Secretary +44 (0) 1481 723450
James Christie
Hannah Crocker
About Admiral
Admiral (LSE: ADMR) is a British Virgin Islands company founded
by Sir Martin E. Franklin, Ian G.H. Ashken, Desiree DeStefano,
Michael E. Franklin, Robert A.E. Franklin, and James E. Lillie. The
Company was created to pursue its objective of acquiring a target
company or business (the "Acquisition"). There is no specific
expected target value for the Acquisition and the Company expects
that any funds not used for the Acquisition will be used for future
acquisitions, internal or external growth and expansion, purchase
of outstanding debt and/or working capital in relation to the
acquired company or business. The Company's efforts in identifying
a prospective target business will not be limited to a particular
industry or geographic region.
Important Notices
This announcement does not contain or constitute an offer of, or
the solicitation of an offer to buy or subscribe for, securities to
any person in any jurisdiction including the United States,
Australia, Canada, Japan or South Africa. The securities referred
to herein have not been registered under the U.S. Securities Act of
1933, as amended (the "Securities Act") and may not be offered,
sold, transferred or delivered, directly or indirectly, in or into
the United States absent registration under the Securities Act or
an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. There will be no
public offer of the securities in the United States.
This announcement is an advertisement and not a prospectus and
does not constitute or form part of, and should not be construed
as, an offer to sell or issue, or a solicitation of any offer to
buy or subscribe for, any securities, nor should it or any part of
it form the basis of, or be relied on in connection with, any
contract or commitment whatsoever. Investors should not subscribe
for or purchase any securities referred to in this announcement
except on the basis of information in the Prospectus published by
the Company in connection with such securities. This announcement
is only addressed to, and directed at, persons in member states of
the European Economic Area and the United Kingdom who are
"qualified investors" within the meaning of Article 2(e) of
Regulation (EU) 2017/1129 as amended. In the United Kingdom, this
announcement is directed only at "qualified investors" within the
meaning of Article 2(e) of Regulation (EU) 2017/1129 as it forms
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 (as amended) who are also (i) persons having
professional experience in matters relating to investments who fall
within the definition of "investment professionals" in Article
19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the "Order"), or (ii) persons
who are high net worth bodies corporate, unincorporated
associations or partnerships or trustees of high value trusts as
described in Article 49(2) of the Order; or (iii) other persons to
whom it may lawfully be communicated. Under no circumstances should
persons of any other description rely or act upon the contents of
this announcement.
LEI: 213800ZDFRNC8QXEZ48
Chairman's Statement
It is with pleasure that I present to you, the shareholders, the
report and unaudited financial statements of Admiral Acquisition
Limited (the "Company") for the period from incorporation on 15
December 2022 to 31 May 2023.
The Company
The Company raised gross proceeds of US$539.5 million in its
initial public offering ("IPO"), through the placing of ordinary
shares of no par value in the capital of the Company ("Ordinary
Shares") (with matching (" Warrants") to subscribe for Ordinary
Shares issued at a placing price of US$10.00 per Ordinary Share and
a further US$10.5 million through the subscription of the founder
preferred shares of no par value ("Founder Preferred Shares") (with
Warrants being issued on the basis of one Warrant per Founder
Preferred Share) at a price of US$10.50 per Founder Preferred
Share). The Company was admitted to the Official List of the FCA by
way of a standard listing and to trading on the main market of the
London Stock Exchange on 22 May 2023 ("Admission"). As at 18 August
2023, the Company had 53,975,000 Ordinary Shares and 54,975,000
Warrants in issue. The net proceeds from the IPO are easily
accessible when required.
As set out in the Company's prospectus dated 17 May 2023 (the
"Prospectus"), the Company was formed to undertake an acquisition
of a target company or business. There is no specific expected
target value for the acquisition and the Company expects that funds
not used for the acquisition, if any, will be used for future
acquisitions, internal or external growth and expansion, purchase
of outstanding debt and/or working capital in relation to the
acquired company or business. Following completion of the
acquisition, the objective of the Company is expected to be to
operate the acquired business and implement an operating strategy
with the objective of building and growing the business and
generating value for the Company's shareholders ("Shareholders")
through operational improvements as well as potentially through
additional complementary acquisitions.
The Board of Directors continues to review a number of
acquisition targets and will remain disciplined in only proceeding
with an acquisition that it believes it can produce attractive
returns to its Shareholders.
Financial Results
During the period commenced 15 December 2022 and ended 31 May
2023, the Company has incurred operating costs of US$248,000. These
expenses were offset by investment income totalling approximately
US$659,000. Costs of Admission of US$10.5 million were recorded as
an offset to the gross proceeds from the IPO in the Company's
Balance Sheet.
Principal Risks and Uncertainties
The Company set out in the Prospectus the principal risks and
uncertainties that could impact its performance; the Directors
consider that these principal risks and uncertainties remain
unchanged since that document was published and apply for the
period of the remaining six months of the financial year. Your
attention is drawn to the Principal Risks and Uncertainties section
on page 11 for a summary of these and to the Prospectus for the
detailed assessment. A copy of the Prospectus is available on the
Company's website ( www.admiralacquisition.com ) and was submitted
to the National Storage Mechanism and is available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Related Parties
Related party disclosures are given in note 7 to these financial
statements.
Rory Cullinan
Chairman
18 August 2023
Report of the Directors
The Directors have pleasure in submitting their Report and the
unaudited financial statements for the period from 15 December 2022
through 31 May 2023.
Status and activities
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Business Companies
Act, 2004, on 15 December 2022. The address of the Company's
registered office is Ritter House, Wickhams Cay II, Road Town,
Tortola, VG 1110, British Virgin Islands. The Ordinary Shares and
Warrants were admitted for trading on the main market of the London
Stock Exchange on 22 May 2023. The Company raised gross proceeds of
US $539.5 million in its IPO and a further US$10.5 million through
the subscription of Founder Preferred Shares for a potential
acquisition of a target company or business (which may be in the
form of a merger, capital stock exchange, asset acquisition, stock
purchase, scheme of arrangement, reorganization or similar business
combination) of an interest in an operating company or business (an
" Acquisition " ). Costs of Admission of US$10.5 million were paid
in relation to the IPO, resulting in net proceeds of US$539.5
million.
There is no specific expected target value for the Acquisition
and the Company expects that funds not used for the Acquisition, if
any, will be used for future acquisitions, internal or external
growth and expansion, purchase of outstanding debt and/or working
capital in relation to the acquired company or business. Following
the completion of any Acquisition, the objective of the Company is
expected to be to operate the acquired business and implement an
operating strategy with the objective of building and growing the
business and generating value for its Shareholders through
operational improvements as well as potentially through additional
complementary acquisitions. Following the Acquisition, the Company
intends to seek re-admission of the enlarged group to such listing
venue as is appropriate for it based on the industry, geographic
focus and track record of the company or business acquired, subject
to fulfilling the relevant eligibility criteria at the time. The
Company expects to acquire a controlling interest in a target
company or business. The Company (or its successor) may consider
acquiring a controlling interest constituting less than the whole
voting control or
less than the entire equity interest in a target company or
business if such opportunity is attractive; provided, the Company
(or its successor) would acquire a sufficient portion of the target
entity such that it could consolidate the operations of such entity
for applicable financial reporting purposes (and, in any event,
would not be required to register as an investment company under
the U.S. Investment Company Act of 1940, as amended). In connection
with an Acquisition, the Company may issue additional Ordinary
Shares which could result in the Company's then existing
Shareholders owning a minority interest in the Company following
the Acquisition.
The Company's efforts in identifying a prospective target
company or business will not be limited to a particular industry or
geographic region. The Company may subsequently seek to raise
further capital for the purposes of the Acquisition.
Unless required by applicable law or other regulatory process,
no Shareholder approval will be sought by the Company in relation
to the Acquisition. The Acquisition will be subject to Board
approval, including by a majority of the Company's Board, including
a majority of those Directors of the Board from time to time
considered by the Board to be independent for the purposes of the
UK Corporate Governance Code issued by the Financial Reporting
Council (the " FRC " ) in the UK from time to time (the " Code " )
(or any other appropriate corporate governance regime complied with
by the Company from time to time) together with the chairman of the
Board provided that such person was considered by the Board to be
independent on appointment for the purposes of the UK Corporate
Governance Code (or any other appropriate corporate governance
regime complied with by the Company from time to time).
The determination of the Company's post-Acquisition strategy and
whether any of the Directors will remain with the combined company
and on what terms will be made at or prior to the time of the
Acquisition.
In the event that the Acquisition has not been announced by the
second anniversary of Admission, the Board will recommend to
Shareholders either that the Company be wound up (in order to
return capital to Shareholders and holders of the Founder Preferred
Shares, to the extent assets are available) or that the Company
continue to pursue the Acquisition for a further 12 months from the
second anniversary of Admission. The Board's recommendation will
then be put to a Shareholder vote (from which the Directors, the
Founders and Mariposa Acquisition IX, LLC (the "Founder Entity")
will abstain).
Report of the Directors (Continued)
The Company has identified the following criteria and guidelines
that it believes are important in evaluating potential acquisition
opportunities. It will generally use these criteria and guidelines
in evaluating acquisition opportunities but the Company may decide
to complete an Acquisition that does not meet these criteria and
guidelines:
-- leading competitive industry position with a defensible moat;
-- a company with strong underlying free cash flow characteristics;
-- an established company or business with a proven track record;
-- experienced management team; and
-- diversified customer and supplier base.
In addition, the Company expects to consider a variety of
factors with respect to potential acquisition opportunities,
including, among others:
-- financial condition and results of operations;
-- growth potential;
-- brand recognition and potential;
-- experience and skill of management and availability of additional personnel;
-- capital requirements;
-- stage of development of the business and its products or services;
-- existing distribution or other sales arrangements and the potential for expansion;
-- degree of current or potential market acceptance of the products or services;
-- proprietary aspects of products and the extent of
intellectual property or other protection for products or
formulas;
-- impact of regulation and potential future regulation on the business;
-- regulatory environment of the industry;
-- seasonal sales fluctuations and the ability to offset these
fluctuations through other acquisitions, introduction of new
products, or product line extensions; and
-- the amount of working capital available.
Results
For the period from incorporation on 15 December 2022 to 31 May
2023, the Company's net income was US$411,000.
Share capital
General:
As at 31 May 2023, the Company had in issue 53,975,000 Ordinary
Shares and 1,000,000 Founder Preferred Shares. In addition, the
Company has 54,975,000 Warrants in issue.
1 Founder Preferred Share was issued on 21 December 2022 with a
further 999,999 Founder Preferred Shares issued on 22 May 2023.
There are no Founder Preferred Shares held in Treasury. Each
Founder Preferred Share was issued at US$10.50 per share with an
associated Warrant as described in note 4.
Report of the Directors (Continued)
Share capital (Continued)
53,975,000 Ordinary Shares were issued on 22 May 2023
(53,950,000 were issued in the IPO at US$10.00 per share and 25,000
were issued, in aggregate, to Rory Cullinan, Melanie Stack and
Thomas V. Milroy (the "Independent Non-Founder Directors") in
connection with the IPO. There are no Ordinary
Shares held in Treasury. Each Ordinary Share was issued with an
associated Warrant as described in note 4.
Founder Preferred Shares:
Details of the Founder Preferred Shares can be found in note 4
to the financial statements and are incorporated into this Report
by reference.
Securities carrying special rights:
Other than 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 relation to any Resolution of Members that
the Directors, determine is (i) necessary or desirable in
connection with a merger or consolidation in relation to, in
connection with or resulting from the Acquisition (including at any
time after the Acquisition has been made); or (ii) to approve
matters in relation to, in connection with or resulting from the
Acquisition (whether before or after the Acquisition has been
made). Each Shareholder entitled to attend and 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 Shareholder present in person or
by proxy will have one vote for each share held by him.
In the case of joint holders of an Ordinary Share, if two or
more persons hold an Ordinary Share 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 members, 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 per cent. 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, 2004 (as amended)
(the "BVI 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.
Report of the Directors (Continued)
Transfer of shares (Continued)
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, 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 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 the initial holders of Founder Preferred Shares
(being the Founder Entity together with its affiliates and
permitted transferees) holds 20 per cent. or more of the Founder
Preferred Shares in issue, such holders shall be entitled to
nominate up to three persons as Directors of the Company and the
Directors shall appoint such persons.
In the event such holders notify the Company to remove any
Director nominated by them the other Directors shall remove such
Director, and in the event of such a removal the relevant holders
shall have the right to nominate a Director to fill such
vacancy.
No Director has a service contract with the Company, nor are any
such contracts proposed. There are no pension, retirement, benefits
or other similar arrangements in place with the Directors nor are
any such arrangements proposed.
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 period and
subsequent to the date of this Report are:
Name Position Date of appointment
Sir Martin E. Franklin Founder and Non-Executive 15 December 2022
Director
-------------------------- --------------------
Robert A.E. Franklin Founder and Non-Executive 4 May 2023
Director
-------------------------- --------------------
Melanie Stack Independent Non-Executive 4 May 2023
Director
-------------------------- --------------------
Thomas V. Milroy Independent Non-Executive 4 May 2023
Director
-------------------------- --------------------
Rory Cullinan Chairman and Independent 4 May 2023
Non-Executive Director
-------------------------- --------------------
Report of the Directors (Continued)
Directors and their interests (Continued)
As of 18 August 2023, all of the Directors listed above continue
to serve as Directors of the Company. As at 18 August 2023 (the
latest practicable date prior to the publication of this Report),
the Directors have the following interests in the Company's
securities:
Percentage No. of Warrants
No. of Ordinary of issued Ordinary No. of Founder
Director Shares Shares Preferred Shares
Sir Martin E.
Franklin (1) 8,950,000 16.60 9,950,000 1,000,000
---------------- -------------------- ---------------- ------------------
Robert A.E. Franklin - - - -
---------------- -------------------- ---------------- ------------------
Rory Cullinan 10,000 0.02 10,000 -
---------------- -------------------- ---------------- ------------------
Melanie Stack 7,500 0.01 7,500 -
---------------- -------------------- ---------------- ------------------
Thomas V. Milroy 7,500 0.01 7,500 -
---------------- -------------------- ---------------- ------------------
([1]) Represents an interest held by the Founder Entity. Sir
Martin E. Franklin is the managing member of the Founder Entity and
controls 100 per cent. of the voting and dispositive power of the
Founder Entity. The Founders (as defined below), in aggregate, hold
an indirect pecuniary interest of approximately 69 per cent in the
Founder Entity.
Directors' remuneration
Each of the Directors entered into a Director's letter of
appointment with the Company dated 17 May 2023. Under the
Independent Non-Founder Directors' letters of appointment, Thomas
V. Milroy and Melanie Stack are entitled to a fee of US$75,000 per
annum and Rory Cullinan, as Chairman, is entitled to receive a fee
of US$100,000 per annum. Fees are payable quarterly in arrears.
During the period from 15 December 2022 to 31 May 2023, the Company
issued 25,000 Ordinary Shares, in aggregate, to the Independent
Non-Founder Directors in lieu of their first year's annual cash
remuneration. The Ordinary Shares were valued at US$10.00 per share
and are being expensed over the one-year service period. Sir Martin
E. Franklin and Robert A.E. Franklin do not receive a fee in
connection with their appointment as Non-Executive Directors of the
Company. In addition, all of the Directors are entitled to be
reimbursed by the Company for travel, hotel and other expenses
incurred by them in the course of their directors' duties relating
to the Company.
Substantial shareholdings
As at 18 August 2023 (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"):
Notified
percentage
Number of Date of disclosure of voting
Shareholder Ordinary Shares to Company rights (2)
Viking Global Investors
LP 10,000,000 23 May 2023 18.53%
----------------- ------------------- ------------------------------
Progeny 3, Inc. 10,000,000 25 May 2023 18.53%
----------------- ------------------- ------------------------------
Mariposa Acquisition
IX, LLC 8,950,000 22 May 2023 16.58%
----------------- ------------------- ------------------------------
(2) 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.
Report of the Directors (Continued)
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 British Virgin Islands registered company with
a standard listing on the main market of 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 Code.
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 observe the requirements of 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 first acquisition.
-- Until completion of the Company's first acquisition, 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 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/EU) as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
(as amended) (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 always available for communication with
shareholders and all shareholders will have the opportunity, and
are encouraged, to attend and vote at the Annual General Meetings
of the Company 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, taking into account the current cash resources available
and expected run rate expenses and have concluded that it is
appropriate to prepare the financial statements on a going concern
basis.
Report of the Directors (Continued)
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 its first acquisition.
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.
Branches
At the date of this Report, the Company does not have any
branches.
Interim Management Report
For the purposes of compliance with DTR 4.2.3 (2) and DTR 4.2.7
(2), the required content of the "Interim Management Report" can be
found in this Report of Directors and the Principal Risks and
Uncertainties section on page 11.
Directors' Responsibilities
The Directors of the Company (as listed in the Report) are
responsible for preparing the Report and the financial statements
in accordance with applicable law and regulations.
The Directors have prepared the Company's financial statements
in accordance with United States of America generally accepted
accounting principles (U.S. GAAP) and the DTRs . 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 period.
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 have been followed,
subject to any material departures disclosed and explained in the
financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
A copy of the interim financial statements is available on our
website www.admiralacquisition.com . The Directors consider that
the interim report accounts, taken as a whole, are fair, balanced
and understandable and provide the information necessary for
shareholders to assess the Company's performance, business model
and strategy.
Each of the Directors, who are in office and whose names and
functions are listed on page 25, confirms that, to the best of his
or her knowledge:
the Company financial statements, which have been prepared in
accordance with U.S. GAAP, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;
and
the interim management report includes a fair review of the
information required by:
DTR 4.2.7R, being: (i) an indication of important events that
have occurred during the first six months of the financial year,
and their impact on the condensed set of financial statements; and
(ii) a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
DTR 4.2.8R, being: (i) related parties transactions that have
taken place in the first six months of the current financial year
and that have materially affected the financial position or the
performance of the enterprise during that period; and (ii) any
changes in the related parties transactions described in the last
annual report that could have a material effect on the financial
position or performance of the enterprise in the first six months
of the current financial year.
Report of the Directors (Continued)
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
Rory Cullinan
Chairman
18 August 2023
Principal Risks and Uncertainties
The Board has identified the following principal risks and
uncertainties facing the Company as set out in the Prospectus. 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 deem 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.
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 and has not yet identified any potential target company or
business for the Acquisition.
-- The Company may acquire either less than whole voting control
of, or less than a controlling equity interest in, a target, which
may limit its operational strategies.
-- 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 its Directors and Mariposa
Capital, LLC ("Mariposa Capital") to identify potential acquisition
opportunities and to execute the Acquisition and the loss of the
services of any of them could materially adversely affect it.
-- Sir Martin E. Franklin, Robert A.E. Franklin, Michael E.
Franklin, James E. Lillie, Ian G.H. Ashken and Desiree A. DeStefano
(collectively, the "Founders"), the Founder Entity and Mariposa
Capital are currently affiliated and the Founders, the Founder
Entity, Mariposa Capital and the Directors, 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, which could have a negative impact on the Company's
ability to complete the Acquisition.
-- The Company may be required to issue additional Ordinary
Shares pursuant to the terms of the Founder Preferred Shares, which
could dilute the value of existing Ordinary Shares.
Taxation
-- The Company may be a "passive foreign investment company" for
U.S. federal income tax purposes and adverse tax consequences could
apply to U.S. 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 Subscription
Period and to the extent a Warrant holder 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.
Principal Risks and Uncertainties (Continued)
-- 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.
Balance Sheet
As of 31 May 2023 (Unaudited)
31 May 2023
---------------------------------
ASSETS US$
(in thousands,
except share
amounts)
Current assets
Cash and cash equivalents 138,018
Marketable securities at fair value 402,204
Prepayments and other assets 410
Total assets 540,632
=================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accrued expenses 496
---------------------------------
Total current liabilities 496
Total liabilities 496
---------------------------------
Shareholders' equity
Founder Preferred Shares, no par
value; unlimited authorised shares;
1,000,000 shares issued and outstanding -
as of 31 May 2023
Ordinary Shares, no par value; unlimited
authorised shares; 53,975,000 shares
issued and outstanding as of 31 -
May 2023
54,975,000 Warrants issued and outstanding -
as of 31 May 2023
Additional paid-in capital (Net
of costs) 539,725
Retained earnings 411
Total shareholders' equity 540,136
---------------------------------
Total liabilities and shareholders'
equity 540,632
=================================
The notes on pages 16 to 24 form an integral part of these
unaudited financial statements.
Statement of Income for the period ended from incorporation on
15 December 2022 to 31 May 2023 (Unaudited)
For the period
from
incorporation
on 15 December
2022 to
31 May 2023
US$
(in thousands,
except share and
per share amounts)
Operating expenses:
General and administrative (249)
Loss from operations (249)
-------------------
Other income:
Investment income 660
Total other income 660
-------------------
Net income 411
===================
Basic and diluted income per ordinary share 0.0076
===================
Weighted average Ordinary Shares outstanding,
basic 53,975,000
==========
Weighted average Ordinary Shares outstanding,
diluted 54,975,000
==========
The notes on pages 16 to 24 form an integral part of these
unaudited financial statements.
Statement of Shareholders' Equity for the period from
incorporation on 15 December 2022 to 31 May 2023 (Unaudited)
Preferred Shares Ordinary Shares Warrants
No. of Shares US$ No. of Shares US$ No. of Warrants US$
--------------------- --------------------- -----------------------
Balance as of incorporation, 1 - - -
15 December 2022
Issue of shares 999,999 53,950,000 - - -
Issue of warrants - - - - 54,975,000 -
Issue costs - - - - - -
Share-based compensation - - 25,000 - - -
- directors
Net income - - - - - -
Balance as at 31 May 2023 1,000,000 - 53,975,000 - 54,975,000 -
================ === ================= ================== ===
Additional paid in Retained earnings Total Equity
capital
US$ US$ US$
(in thousands, except (in thousands, except (in thousands, except
share amounts) share amounts) share amounts)
Balance as of incorporation, - - -
15 December 2022
Issue of shares 550,000 - 550,000
Issue of warrants - - -
Issue costs (10,525) - (10,525)
Share-based compensation -
directors 250 - 250
Net income - 411 411
Balance as at 31 May 2023 539,725 411 540,136
====================== ====================== ======================
The notes on pages 16 to 24 form an integral part of these
unaudited financial statements.
Statement of Cash Flows for the period from incorporation on 15
December 2022 to 31 May 2023 (Unaudited)
For the period
from
incorporation
on 15 December
2022 to
31 May 2023
US$
(in thousands)
Net income 411
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Unrealised gain on marketable securities (489)
Changes in operating assets and liabilities:
Prepaids and other assets (410)
Accruals 496
Other 1
Net cash provided by operating activities 9
INVESTING ACTIVITIES:
Purchase of marketable securities - short-term (401,716)
Net cash used in investing activities (401,716)
FINANCING ACTIVITIES:
Proceeds from issuance of Founder Preferred Shares
and Warrants 10,500
Proceeds from issuance of Ordinary Shares and
Warrants, net 529,225
Net cash provided by financing activities 539,725
Net increase in cash and cash equivalents 138,018
Cash and cash equivalents at beginning of -
period
Cash and cash equivalents at end of period 138,018
================
The notes on pages 16 to 24 form an integral part of these
unaudited financial statements.
1. Organisation
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Business Companies
Act, 2004, on 15 December 2022. The address of the Company's
registered office is Ritter House, Wickhams Cay II, Road Town,
Tortola, VG 1110, British Virgin Islands. The Ordinary Shares and
Warrants were admitted for trading on the main market of the London
Stock Exchange on 22 May 2023. The Company raised gross proceeds of
US$539.5 million in its initial public offering ("IPO"), through
the placing of ordinary shares of no par value in the capital of
the Company ("Ordinary Shares") (with matching warrants
("Warrants") to subscribe for Ordinary Shares issued) at a placing
price of US$10.00 per Ordinary Share and a further US$10.5 million
through the subscription of the founder preferred shares of no par
value ("Founder Preferred Shares") (with Warrants being issued on
the basis of one Warrant per Founder Preferred Share) at a price of
US$10.50 per Founder Preferred Share for a potential acquisition of
a target company or business (which may be in the form of a merger,
capital stock exchange, asset acquisition, stock purchase, scheme
of arrangement, reorganization or similar business combination) of
an interest in an operating company or business (an "Acquisition"
). The Company was admitted to the Official List of the FCA by way
of a standard listing and to trading on the main market of the
London Stock Exchange on 22 May 2023 ("Admission"). Costs of
Admission of US$10.5 million were paid in relation to the IPO,
resulting in net proceeds of US$539.5 million.
2. Summary of significant Accounting Policies
Basis of preparation
The accompanying financial statements are presented in U.S.
dollars rounded to the nearest thousand and have been prepared in
accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP"). and pursuant to the
accounting and disclosure rules and regulations of the London Stock
Exchange.
As the Company was incorporated on 15 December 2022, there is no
comparative information.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable
future given the cash funds available and the current forecast cash
outflows. Thus, the Company continues to adopt the going concern
basis of accounting in preparing the financial statements.
Use of Estimates
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.
Cash and Cash Equivalents
While cash held by financial institutions may at times exceed
federally insured limits, the Company believes that no material
credit or market risk exposure exists due to the high quality of
the institutions. The Company has not experienced any losses on
such accounts. The Company considers all highly liquid investments
purchased with a maturity of three months or less from the date of
purchase to be cash equivalents. The Company has US$138.0 million
of cash and cash equivalents as of 31 May 2023.
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. All unrealised gains and losses are reported in
investment income in the statements of 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 prioritises 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
uses the Level 2 fair value hierarchy assumptions to measure the
marketable securities as of 31 May 2023. 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 categorised within levels of the fair value
hierarchy. The fair value measurement is categorised 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 period ended 31 May 2023.
Share-based Compensation
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 share 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 share option grants using the Black-Scholes option
pricing model. An offsetting increase to shareholders' equity will
be recorded equal to the amount of the compensation expense charge.
The Company recognises forfeitures as they occur as a reduction of
expense. The Company does not have any forfeitures for the period
ended 31 May 2023. See Note 4.
Founder Preferred Shares
In connection with the IPO, the Company issued 1,000,000 Founder
Preferred Shares at US$10.50 per share to Mariposa Acquisition IX,
LLC (the "Founder Entity"), an entity controlled by Sir Martin E.
Franklin. 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
accompanying balance sheets. 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. The conversion features and
participating dividends of the Founder Preferred Shares
Founder Preferred Shares (Continued)
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 Founder
Preferred Shares have been recorded in additional paid-in capital.
See Note 4.
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 (see
Note 4). The Company also issued Warrants with shares issued to
non-executive 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.
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 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.
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 recognises 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 realised. 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 recognises the tax benefit of tax positions to the
extent that the benefit will more likely than not be realised. The
determination as to whether the tax benefit will more likely than
not be realised 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.
Comprehensive Income
Comprehensive income is the same as net income for all periods
presented.
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 Board is of the
opinion that there is only a single operational segment being the
investment in US Treasury Bills as disclosed in note 3. As a result
no segment
Segment reporting (Continued)
information has been provided as the Company only accumulates
its funds raised for investment in US Treasury Bills.
Recently Adopted Accounting Pronouncements
The Financial Accounting Standards Board (FASB) issued an
Accounting Standards Update: ASU No. 2022-02, Financial
Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings
and Vintage Disclosure (TDRs)s . The amendments in this update
eliminate the accounting guidance for troubled debt restructurings
TDRs by creditors in Subtopic 310-40, Receivables-Troubled Debt
Restructurings by Creditors, while enhancing disclosure
requirements for certain loan refinancings and restructurings by
creditors when a borrower is experiencing financial difficulty.
Specifically, rather than applying the recognition and measurement
guidance for TDRs, an entity must apply the loan refinancing and
restructuring guidance in paragraphs 310-20-35-9 through 35-11 to
determine whether a modification results in a new loan or a
continuation of an existing loan.
For public business entities, the amendments in this Update
require that an entity disclose current-period gross write-offs by
year of origination for financing receivables and net investments
in leases within the scope of Subtopic 326-20, Financial
Instruments-Credit Losses-Measured at Amortised Cost.
Effective Date: Effective for fiscal years beginning after
December 15, 2022, and interim periods within those fiscal years.
The adoption of this update did not impact the Company's financial
statements.
TH other standard update issued in the period by the FASB is:
ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value
Hedging-Portfolio Layer Method : These amendments clarify the
accounting for and promote consistency in the reporting of hedge
basis adjustments applicable to both a single hedged layer and
multiple hedged layers as follows:
1. An entity is required to maintain basis adjustments in an
existing hedge on a closed portfolio basis (that is, not allocated
to individual assets).
2. An entity is required to immediately recognise and present
the basis adjustment associated with the amount of the dedesignated
layer that was breached in interest income. In addition, an entity
is required to disclose that amount and the circumstances that led
to the breach.
3. An entity is required to disclose the total amount of the
basis adjustments in existing hedges as a reconciling amount if
other areas of GAAP require the disaggregated disclosure of the
amortised cost basis of assets included in the closed
portfolio.
4. An entity is prohibited from considering basis adjustments in
an existing hedge when determining credit losses.
Effective Date: effective for fiscal years beginning after
December 15, 2022, and interim periods within those fiscal years.
The adoption of this update did not impact the Company's financial
statements.
Recent Accounting Pronouncements
The following pronouncements were issued by the FASB which are
not yet effective.
ASU 2020-06 - Debt-Debt with Conversion and Other Options and
Derivatives and Hedging-Contracts in Entity's Own Equity:
Accounting for Convertible Instruments and Contracts in an Entity's
Own Equity. Effective Fiscal years beginning after December 15,
2023, and interim periods within those fiscal years.
ASU 2022-03 - Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale
Restriction. Effective Fiscal years beginning after December 15,
2023, and interim periods within those fiscal years.
The Company does not expect the adoption of these recent
guidance pronouncements to have a material impact on its financial
statements.
Note 3 - Marketable Securities
The Company's investment in marketable securities consists of
U.S. Treasury Bills. Investment income is recorded as a realised
investment income at the time the investment in U.S. Treasury Bills
matures.
The change in the unrealised gains on these investments are
included in the statements of Income as investment income.
Unrealised gains on the U.S. Treasury Bills are summarised in
thousands as follows:
US$ in thousands
Gross
Gross Unrealised Unrealised Net Unrealised
Cost Gain Loss Gain Fair Value
As of 31 May 2023
U.S. Treasury Bills
owned 535,671 660 - 660 536,331
Less amounts classified
as cash equivalent (133,955) (172) - (172) (134,127)
---------- ----------------- ------------ --------------- -----------
U.S. Treasury Bills
classified as Marketable
Securities 401,716 488 - 488 402,204
========== ================= ============ =============== ===========
US Treasury Bills within the portfolio which have a maturity of
3 months or less from their transaction date or are due to mature
within 3 months of the balance sheet date are classified as being
cash or cash equivalent. At the 31 May 2023 US Treasury Bills of
US$134.0 million were recognised as being cash or cash equivalent
with US$172,000 being considered interest receivable on those US
Treasury Bills. Associated income is reflected as investment income
at the period end. The total investment income of US$660,000 within
the Statement of Income, comprises US$488,000 in respect of fair
value gains and losses and US$172,000 in respect of interest income
on the US Treasury Bills classified within cash and cash
equivalents.
Note 4 - Shareholders' Equity
On 22 May 2023, the Company's IPO raised gross proceeds of
US$550.0 million, consisting of US$539.5 million through the
placement of ordinary shares at US$10.00 per share, and US$10.5
million through the subscription of 1,000,000 Founder Preferred
Shares at US$10.50 per share by the Founders through the Founder
Entity. Costs of Admission of US$10.5 million were paid in relation
to the IPO, resulting in net
Note 4 - Shareholders' Equity (Continued)
proceeds of US$539.5 million. In addition, 25,000 ordinary
shares were issued, in aggregate, to the Independent Non-Founder
Directors in lieu of cash totalling a combined value US$250,000.
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 Price
(as defined in the Articles) of the ordinary shares is at least
US$11.50 per share for any ten consecutive trading days, 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 per cent. of the appreciation of the
market price of ordinary shares issued to ordinary shareholders in
the IPO. In the first year an Annual Dividend Amount (as defined in
the Articles) is payable (if any), the Annual Dividend Amount will
be calculated at the end of the calendar year based on the Dividend
Price, (as defined below) compared to the initial ordinary share
offering price of US$10.00 per ordinary share. In subsequent years,
the Annual Dividend Amount will be calculated based on the
appreciated Dividend Price compared to the highest Dividend Price
previously used in calculating the Annual Dividend Amount. 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 and 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 tenth 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 will
only be triggered upon the Acquisition (which is not considered
probable until consummated). The fair value of the any potential
future Annual Dividend amounts to US$72.8 million, which has been
measured using a Monte Carlo method which takes into consideration
different share price paths. Following are the assumptions used in
calculating the issuance date fair value:
Number of securities issued 1,000,000
Vesting period Immediate
Assumed price upon Acquisition US$10.00
Probability of winding-up 40.50%
Probability of Acquisition 59.50%
Time to Acquisition 1.17 years
Volatility (post-Acquisition) 46.47%
Risk free interest rate 3.54%
Founder Preferred Shares (Continued)
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
per cent. of the Founder Preferred Shares, can nominate up to three
people as directors of the Company.
Ordinary shares
In connection with the IPO on 22 May 2023, the Company issued
53,950,000 Ordinary Shares for gross proceeds of US$539.5 million.
In conjunction with the IPO, the Company also issued an aggregate
of 25,000 Ordinary Shares to the Independent Non-Founder Directors
for US$10.00 per share in lieu of their cash directors' fees for
one year. Each ordinary share was issued with a Warrant. Ordinary
shares have voting rights and winding-up rights.
Warrants
The Company issued 54,975,000 Warrants to the purchasers of both
Ordinary Shares and Founder Preferred Shares (including the 25,000
Warrants that were issued to the Independent Non-Founder Directors
in connection with their fees). Each Warrant has a term of 3 years
following an Acquisition and entitles a Warrant holder to purchase
one-fourth 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 Warrants).
Note 5 - Commitments and Contingencies
There were no known or threatened lawsuits or unasserted claims
known at the balance sheet date up to date of singing these interim
unaudited financial statements.
Note 6 - Share-based Compensation
On 17 May 2023, the Company issued its Independent Non-Founder
Directors an aggregate of 125,000 share options (the "Share
Options") to purchase Ordinary Shares of the Company that vest upon
the Acquisition. The Independent Non-Founder Directors are required
to have continued service until the time of the Acquisition to vest
in the Share Options. The options expire on the 5th anniversary
following the Acquisition and have an exercise price of US$11.50
per Ordinary Share (subject to such adjustment as the Directors
consider appropriate in accordance with the terms of the Option
Deeds). The Share Options have a performance condition of vesting
on an Acquisition (which is not considered probable until an
Acquisition). Therefore, in accordance with ASC 718 - Compensation
- Stock Compensation, the fair value of the awards, as determined
on the grant date, will be recognised as an expense and an increase
of additional paid-in capital upon consummation of an
Acquisition.
Note 6 - Share-based Compensation (Continued)
The following table summarises the share option activity:
Weighted
Number Average Exercise Aggregate
of Shares Price Intrinsic Value
------------------------ ------------------ -----------------
Options outstanding -
at inception $ - $ -
Granted 125,000 $ 11.50 $ -
------------------------
Options outstanding at
31 May 2023 125,000 $ 11.50 $ -
------------------------
Options vested and
exercisable - $ - $ -
========================
The fair value of each Share Option was estimated at US$1.647 on
the grant date using the Black-Scholes option pricing model with
the following assumptions for the grant during the period from 17
May 2023 to 31 May 2023:
Share Price $10.00
Exercise Price $11.50
Risk-Free Rate 3.52%
Dividend Yield -
Post-Acquisition
Volatility 46.39%
On 22 May 2023, the Company issued 25,000 Ordinary Shares and
Warrants, in aggregate, to Independent Non-Founder Directors for
their first year's annual fees in lieu of cash. The US$10.00 per
share fair value of the Ordinary Shares and Warrants was based on
the price paid by outside shareholders in the equity offering on 22
May 2023 (see Note 4). In accordance with ASC 718 - Compensation -
Stock Compensation, as the shares and related Warrants were fully
vested and have a non-substantive service period, the fair value of
US$10,000 was recorded as an expense on the grant date.
Note 7 - Related Parties
During the period ended 31 May 2023, 1,000,000 Founder Preferred
Shares, 8,950,000 Ordinary Shares and 9,950,000 Warrants were
issued to the Founder Entity. Sir Martin E. Franklin, a Founder and
Director, is a beneficial owner and the managing member of the
Founder Entity and, as such, may be considered to have beneficial
ownership of all the Founder Entity's interests in the Company. The
Founders, in aggregate, hold an indirect pecuniary interest of
approximately 69 per cent. in the Founder Entity. Other directors
were issued 25,000 Ordinary Shares and 25,000 Warrants along with
125,000 Share Options.
Note 7 - Related Parties (Continued)
Except as set forth herein, there were no other Ordinary Shares,
Warrants and options issued to the directors of the Company for the
period from inception ended 31 May 2023.
An entity owned by Sir Martin E. Franklin, Mariposa Capital,
LLC, earned advisory fees of US$10,000 for the period.
Note 8 - Earnings Per Share
Net income is allocated between the ordinary share and other
participating securities based on their participation rights. The
Founder Preferred Shares (see Note 4), represent participating
securities. Earnings attributable to Founder Preferred Shares are
not included in earnings attributable to Ordinary Shares in
calculating earnings per ordinary share. For the period from 15
December 2022 to 31 May 2023, the Company excluded the Share
Options to purchase 125,000 Ordinary Shares from the diluted
earnings per ordinary share as the performance condition (see Note
6) for these Share Options was not considered probable until the
time of the Acquisition. The Company has also excluded the Warrants
in issue from such earnings on the basis they are non-dilutive.
The following table sets forth (in US$ except share and per
share amounts) the computation of basic and diluted earnings per
ordinary share using the two-class method (see Note 2):
For the
period from
incorporation
on
15 December
2022
through
31 May 2023
----------------
Numerator:
Net income $ 411
Adjustment for vested Founder
Preferred Shares -
----------------
Net income attributable to Ordinary
Shares 411
Denominator:
Weighted average shares outstanding
- basic 53,975,000
----------------
Weighted average shares outstanding
- diluted 54,975,000
----------------
Basic and diluted earnings per
ordinary share $ 0.0076
================
Ordinary Shares issuable upon
conversion of Founder Preferred
Shares 1,000,000
================
Note 9 - Subsequent Events
There were no subsequent events for the period up to the date of
signing the unaudited financial statements.
Directors Legal advisers to the Company
Sir Martin E. Franklin (English and US Law)
Robert A.E. Franklin Greenberg Traurig, LLP
Rory Cullinan (Chairman) 8th Floor
Thomas V. Milroy (Independent) The Shard
Melanie Stack (Independent) 32 London Bridge Street
London
Registered office SE1 9SG
Ritter House
Wickhams Cay II Legal advisers to the Company
Road Town, Tortola (BVI Law)
VG1 110 Carey Olsen
British Virgin Islands Carey House
Les Banques
Administrator and secretary St Peter Port
Oak Fund Services (Guernsey) Guernsey GY1 4BZ
Limited
PO Box 282 Depositary
Oak House Computershare Investor Services
Hirzel St PLC
St Peter Port The Pavilions
Guernsey Bridgewater Road
GY1 3RH Bristol
BS 13 8AE
Registrar
Computershare Investor Services Principal bankers
(BVI) Limited Barclays PLC
Woodbourne Hall 1st Floor
PO Box 3162 Eagle Court
Road Town Circular Road
Tortola Douglas
British Virgin Islands Isle of Man
IM1 1AD
Auditors
Grant Thornton LLP
30 Finsbury Square
London
EC2A 1AG
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END
IR PPUCARUPWGAP
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August 23, 2023 02:00 ET (06:00 GMT)
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