New Energy One Acquisition Corp Plc Interim Report

RNS Number : 6704X

New Energy One Acquisition Corp.

31 August 2022

 

31 August 2022

New Energy One Acquisition Corporation Plc

Interim Report for the period ended 31 May 2022

New Energy One Acquisition Corporation Plc, (LSE: NEOA) the "Company", a special purpose acquisition company admitted to trading on the London Stock Exchange, today announces its unaudited interim results for the period from 8 November 2021 (its date of incorporation) and ended 31 May 2022.

The highlight of the period was the successful admission of the Company's Ordinary Shares and Public Warrants to trading on the Main Market of the London Stock Exchange on 16 March 2022 in connection with which the Company raised £175 million before expenses through the issue of 17,500,000 Ordinary Shares.

Volker Beckers, Chair of the Board, NEOA said:

"Post the successful admission of NEOA to the Main Market of the London Stock Exchange, the Board and the management team have reviewed and diligently continue to scan investment opportunities. The Board and management are pleased to report that good progress has been made in narrowing down potential acquisition targets that are positioned to benefit from the global transition towards a low carbon economy. The Board looks forward to updating the market on material progress on the execution of its strategy and thanks shareholders for their continued support."

Sanjay Mehta, Executive Director, NEOA said:

"The successful capital raise and admission of NEOA to the Main Market of the London Stock Exchange is testimony to the confidence of investors in the Sponsors, the board of directors and the management of the company to successfully deliver a value accretive business combination.

The Sponsors, the board of directors and the management team are encouraged by the continued proactive legislative, budgetary and tax incentive support from the governments of the UK, EU and US, which is designed to encourage investments in energy transition companies, infrastructure and projects that will deliver the respective governments' commitments to achieving net-zero emissions by 2050.

Particular policy highlights relevant to NEOA's strategy include:

· The UK government's announcement[1] of the first-ever carbon storage licensing round, with 13 areas off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire in areas that have a combination of saline aquifers and depleted oil and gas field storage opportunities. These new carbon storage areas, alongside the six licences issued previously, facilitate attractive investment opportunities.

· Τ he UK government also announced[2] a shortlist of 20 projects for the next licensing stage of its carbon capture utilisation and storage (CCUS) clusters process.

· In the US, the Biden administration signed the Inflation Reduction Act[3]. The Act has total spending and tax breaks of US$485bn, of which US$386bn will go towards emissions-cutting measures such as tax breaks and higher tax credits for qualified CCUS projects, low-carbon energy, and electric vehicles.

The interim results are set out below.

This announcement contains inside information for the purposes of the Market Abuse Regulation (EU) NO. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

- Ends -

  For further information please contact:

New Energy One Acquisition Corporation plc
Sanjay Mehta	[e-mail]
Media FGS Global (Communications Advisor) Email: [e-mail]
Adrian Rimmer, Partner	[phone]
Eirini Lemos, Associate	[phone]

About New Energy One Acquisition Corporation Plc

NEOA has been formed for the purpose of effecting a business combination with targets that are positioned to participate in or benefit from the global transition towards a low carbon economy, what is called the "Energy Transition", which are headquartered in, or which have or are expected to have a substantial nexus to, Europe.

NEOA is sponsored by LiveStream LLC ("LiveStream") and Eni International B.V. ("Eni"), a wholly owned subsidiary of Eni S.p.A (each of Livestream and Eni being a "Sponsor" and together, the "Sponsors"). LiveStream is an investment company formed by one of NEOA's executive directors, Sanjay Mehta.

NEOA has a highly experienced executive team (the "Executive Team") who collectively have more than 20 years of proprietary fund management and principal investment experience, and more than 60 years of extensive capital markets, corporate finance and operational experience in the energy industry. The Executive Team is supported by a strong independent board of directors and group of strategic advisors with broad market expertise and deep industry contacts, including with companies that are at the heart of the Energy Transition.

Disclaimer

This announcement (including the interim financial report) includes forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Forward-looking statements are statements that are not historical facts and may be identified by words such as "plans", "targets", "aims", "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "continues", "should" and similar expressions. By their nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future, many of which are outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements and. accordingly, undue reliance should not be placed on any forward-looking statements. Forward-looking statements speak only as at the date at which they are made and the Company undertakes no obligation to update any forward-looking statements.

Interim Management Report and Financial Statements

Background

The highlight of the period was the successful admission of the ordinary shares and public warrants of New Energy One Acquisition Corporation Plc ("the Company") to trading on the Main Market of the London Stock Exchange ("Admission") on 16 March 2022. The Company raised £175 million before expenses through the issue of 17,500,000 offer shares to investors pursuant to the offering.

Financial Summary

During the period the majority of the Company's administrative expenditure has related to one-off expenses incurred in connection with Admission. The loss for the period was £3.7m.

Trade and other receivables as at 31 May 2022 were £165k, all of which relates to VAT. The cash balance as at 31 May 2022 was £176.8m, which included £175m of funds held in escrow.

Trade and other payables at 31 May 2022 were £633k. Overall, at the period-end, net assets were £24.6m.

Outlook

NEOA operates on the belief that significant investments in technology, alternative fuels and infrastructure will be required across multiple sectors to achieve a tangible reduction in emissions, with a large and growing market of solutions emerging across the Energy Transition value chain. Investing in super charging industrial decarbonisation across hard to abate sectors such as crude oil refining, steel production, cement, extraction, aviation and shipping is key to commitments given by the governments of U.K and E.U countries to achieve 1.5 degrees Celsius and net zero targets.

The Board and management the Board, and the management have reviewed and diligently continue to scan investment opportunities. The Board and management are pleased to report that good progress has been made in narrowing down potential acquisition targets that are positioned to benefit from the global transition towards a low carbon economy.

The Sponsors, the board of directors and the management are encouraged by the continued proactive legislative, budgetary and tax incentive support by the governments in the UK, EU countries and USA for making investments in energy transition projects towards the governments' net zero emission's commitments. Not only does progress need to escalate in the nearer future as we approach these targets, but more viable large scale generation projects need to happen to support the "energy independence agenda". Additional technologies like CCUS, biogas and hydrogen, to name a few, will supplement the transition providing diversity and a natural technology hedge to the future generation mix.

One of the highlights announced by the UK government is the first-ever carbon storage licensing round with 13 areas off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire in the South North Sea, Central North Sea, Northern North Sea and East Irish Sea which comprise a mixture of saline aquifers and depleted oil and gas field. These new carbon storage areas, alongside the six licences which had been previously issued, provide attractive investment opportunities.

In August 2022, the UK government also announced a shortlist of 20 projects for the next licensing stage of carbon capture utilisation and storage (CCUS).

In the U.S, the Biden administration signed the Inflation Reduction Act has total spending and tax breaks of US$ 485bn, US$ 386bn of which will go towards emissions-cutting measures such as tax breaks for low-carbon energy, electric vehicles, and higher tax credits for qualified CCUS projects.

.

Sanjay Mehta

Executive Director

30 August 2022

Statement of Comprehensive Income

	Note		Period ended 31 May 2022 £
Continuing operations
Interest income	6		149,910
Administrative expenses			(1,776,974)
Total operating expenses			(1,627,064)
Finance expense	8		(2,075,343)
Operating loss before taxation			(3,702,407)
Taxation			-
Total comprehensive loss for the period attributable to the equity owners			(3,702,407)
Loss per share
Basic and diluted in pence	4		(1.90)

The above results were derived from continuing operations.

Statement of Financial Position

Company Number: 13727820			31 May 2022
	Note		£
ASSETS
Current assets
Cash and cash equivalents	6		1,676,441
Restricted cash	6		175,149,910
Trade and other receivables	5		165,169
Total current assets			176,991,520
Total assets			176,991,520
LIABILITIES
Non-current liabilities
Redeemable ordinary shares	8		151,682,331
Current liabilities
Trade and other payables	7		633,436
Total liabilities			152,315,767
NET ASSETS			24,675,753
EQUITY
Share capital	8		56,177
Warrant reserve	9		10,050,597
Other reserves	8		(151,866,334)
Retained earnings			166,435,313
TOTAL EQUITY			24,675,753

The Financial Statements were approved by the board of directors and authorised for issue on 30 August 2022and were signed on its behalf by:

Sanjay Mehta

Executive Director

Statement of Changes in Equity

	Share Capital	Share Premium	Warrant Reserve	Other Reserves	Retained Earnings	Total Equity
	£	£	£	£	£	£
As at incorporation	-	-	-	-	-	-
Comprehensive income
Loss for the period	-	-	-	-	(3,702,407)	(3,702,407)
Transactions with owners
Issue of deferred shares	50,000	-	-	-	-	50,000
Issue of sponsor shares	4,332	-	-	-	-	4,332
Issue of redeemable ordinary shares	1,845	18,271,386	-	-	-	18,273,231
Issue of warrants	-	-	7,797,877	-	-	7,797,877
Issue of sponsor warrants	-	-	2,252,720	-	-	2,252,720
Capital reduction	-	(18,271,386)	-	151,866,334	170,137,720	-
As at 31 May 2022	56,220	-	10,050,597	151,866,334	166,435,313	24,675,753

Statement of Cash Flows

			31 May 2022
	Note		£
Cash flow from operating activities
Operating loss			(3,702,407)
Adjustments for non-cash/non-operating items:
Finance expense	8		2,075,343
Interest income			(149,910)
Cash outflow from operating activities			(1,776,974)
Changes in working capital
Increase in trade and other receivables	5		(165,169)
Increase in trade and other payables	7		633,436
Net cash used in operating activities			(1,308,707)
Cash flows from financing activities
Issue of deferred shares	8		50,000
Issue of redeemable ordinary shares	8		175,000,000
Issue of sponsor shares	8		4,375
Issue of warrants	9		7,875,000
Cost of share issue			(4,944,227)
Net cash generated from financing activities			177,985,148
Cash flows from investing activities
Increase in restricted cash	6		(175,149,910)
Interest income received	6		149,910
Net cash used in investing activities			(175,000,000)
Net increase in cash and cash equivalents			1,676,441
Cash and cash equivalents at the beginning of the period			-
Cash and cash equivalents at the end of the period:	6		1,676,441

1.  Company information

New Energy One Acquisition Corporation Plc (the "Company") is a public Company incorporated in England and Wales. The Company is domiciled in England and its registered office is 201 Temple Chambers, 3-7 Temple Avenue, London, United Kingdom, EC4Y 0DT.

The principal activity of the Company is that of identifying and acquiring a business developing and/or supporting the application of renewable energy in an innovative sector which is expected to result in a reverse takeover of the Company within the meaning of the rules of the Access segment of the Main Market.

The Company was incorporated on 8 November 2022. As such, this is the first reporting period.

2.      Accounting policies

2.1  Basis of preparation

These Financial Statements of the Company have been prepared on a going concern basis in accordance with UK-adopted International Accounting Standards and the requirements of Companies Act 2006. These Financial Statements have not been audited or reviewed.

Measurement bases

The Financial Statements have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The preparation of the Financial Statements in compliance with adopted IFRS requires the use of certain critical accounting estimates and management judgements in applying the accounting policies. The significant estimates and judgements that have been made and their effect is disclosed in note 3. IAS 34 has been applied in this interim report.

2.2  Going concern

During the period ended 31 May 2022 the Company made a loss of £3.7m and as at 31 May 2022 had net assets of £24.6m. The operations of the Company are financed from funds raised from investors as it does not currently generate revenue.

The Financial Statements has been prepared on a going concern basis. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company has not commenced a trade from which to generate revenue, however, the Directors are confident that it has access to adequate resources to continue operational existence for the foreseeable future from the capital raised from the issue of shares to private investors and the listing of the Company on the Main Market in 2022. The Company may be required to raise further capital to complete the acquisition of a suitable business which it has identified but otherwise has sufficient resources to pursue its investment activities, however sufficient funds exist to fulfil the Company's existing obligations in the going concern period.

The Board has prepared a forecast for a minimum period of at least twelve months from the date of approval of these Financial Statements that has considered potential future capital in-flows, continued operating losses, projected cash-burn of the Company.

2.3  Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and petty cash.

2.4  Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less loss allowance.

2.5  Trade and other payables

Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accruals and accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

2.6  Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into. Financial liabilities are initially recognised at fair value plus transaction costs that are attributable to their acquisition or issue.

The Company's financial liabilities during the period are comprised of liabilities related to the redeemable ordinary shares and trade and other payables.

Subsequent measurement

The redeemable ordinary shares and trade and other payables are classified as liabilities at amortised cost and are measured at amortised cost using the effective interest rate. The amortised cost of a financial liability is the amount at which the financial liability is measure on initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount. Such amortisation amounts are recognised in the Statement of Comprehensive Income. Due to the short-term nature of trade and other payables, they are stated at their nominal value, which approximates their fair value.

Following the court-approved cancellation of the share premium portion of the redeemable ordinary shares, this value was transferred from financial liability to distributable reserves, as the obligation to repay the share premium is at the Company's discretion.

2.7  Share-based payments

The grant of the sponsor shares is recognised as equity-settled share-based payments under IFRS 2. Services received in exchange for the grant of any share-based payments are measure by reference to the fair value of the instruments at the grant date, which is determined to be the date of consummation of business combination.  Share-based payments are recognised as an expense in the Statement of Comprehensive Income.

2.8  Share capital

The Company has several types of share instrument. The accounting policies for each are detailed below. Incremental costs directly attributable to the issue of new share or options are shown in equity as deduction net of tax before proceeds.

Deferred shares

On incorporation, 1 share was issued at $1.00. Subsequently, this share was re-classed as a Z deferred share and held in equity.

Prior to re-registration of the Company as a public company, 50,000 deferred shares were issued to LiveStream for £1.00 providing an aggregate nominal value of £50,000. The deferred shares are recognised as equity.

Sponsor shares

Post re-registration, the Company's Sponsors subscribed for 4,375,000, at a nominal value of £0.001, for an aggregate value of £4,375. 75% were issued to LiveStream (held for itself, Access Capital, Li You the directors, strategic advisors, future advisors and future employees), and 25% to Eni.

The sponsor shares will convert to ordinary shares on a one-for-one basis as follows:

-  40% on completion of a business combination;

-  30% between completion of a business combination and the 10th anniversary of a business combination if the closing price of ordinary shares is equal to or greater than £12.00 for any 10 trading days within a 30-trading day period; and

-  30% between completion of a business combination and the 10th anniversary of a business combination if the closing price of ordinary shares is equal to or greater than £14.00 for any 10 trading days within a 30-trading day period.

It has been determined that the sponsor shares fall under the scope of IFRS 2 equity-settled share-based payment. The fair value at the grant date of equity-settled share-based payments is generally recognised as an expense with a corresponding increase in equity over the vesting period.

The deemed grant date of the public shares will determine the point at which the public shares will be accounted for under IFRS 2. The effective grant date for the public shares is the point of consummation of a Business Combination, and not the original date of issue of the Sponsor Shares. This is because there is no obligation on the part of the Company to deliver cash or any other financial asset to holders of the sponsor shares exists prior to a Business Combination, the Sponsor Shareholders are not entitled to any preferential terms over holders of public shares and the Sponsor Shareholders have agreed to waive any right to any distributions by the Company from the escrow account. In addition to this, should the Company fail to successfully achieve a Business Combination, then the sponsor shares will not be eligible for conversion to public shares and the sponsor will receive no material compensation for their work in attempting to identify a target acquisition.

As a result, no expense for such payments will be recognised until the Business Combination is consummated. At that date an expense will be recognised in the Statement of Comprehensive Income on a fair value basis.

Redeemable ordinary shares

IPO investors subscribed in aggregate for 15,654,605 redeemable ordinary shares, Eni subscribed for 1,750,000 redeemable ordinary shares of nominal value £0.001 each, at a price of £10.00 each, for £17,500,000, and LiveStream subscribed for 95,395 redeemable ordinary shares, of nominal value £0.001, at a price of £10.00 each, for £953,950.

The redeemable ordinary shares can be tendered for redemption by a shareholder (other than Eni and LiveStream) at any point between the date of the shareholder meeting for business combination approval is convened and the date that is two trading days before the date of the shareholder meeting, and the redemptions will take effect on the business combination completion date. On redemption, the Company will issue the shareholder £10.325 each for every share redeemed.

Initially, the redeemable ordinary shares are recognised in the Statement of Financial Position as a financial liability under IAS 32 as the Company does not have an unavoidable right to avoid payment in cash for the redeemable ordinary shares. The redeemable ordinary shares are initially recognised at fair value, to be calculated taking into consideration the probabilities that shares will be redeemed for £10.325, if redeemed after 15 months for example, or not redeemed at all. Subsequent measurement will be at amortised cost, using the effective interest to bring the liability up to the value due to holders of the redeemable ordinary shares.

The redeemable ordinary shares subscribed for by the sponsors are recognised as equity as part of the subscription agreement both sponsors entered into, contains an agreement whereby the sponsors waive the right to redeem.

In April 2022, it was announced that the planned court-approved capital reduction, whereby the statutory share premium paid on the issue of the redeemable ordinary shares was cancelled and transferred to distributable reserves was completed. The transferred amount sits in retained earnings. As the Company still does not an unavoidable right to avoid payment in cash for the redeemable ordinary shares, the financial liability remains. The Company has set up an 'other reserves' account in equity to account for the transfer of share premium to distributable reserves per Companies Law.

2.9  Taxation

The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the United Kingdom. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Current tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

3.  Significant judgments and estimates

The preparation of the Company's Financial Statements under IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities at the statement of financial position date, amounts reported for revenues and expenses during the period, and the disclosure of contingent liabilities, at the reporting date.

Estimates and judgements are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.

Sponsor shares

In determining whether the sponsor shares should be treated as a financial instrument under IAS 32 or share-based payments under IFRS 2, the Board reviewed the rights of the Sponsor Shareholders to see if they differ from those of the Public Shareholders. Should a Business Combination be successfully achieved, 40% of the sponsor shares will automatically convert into public shares at no further cost to the Sponsor Shareholders. As the issue price of each Sponsor share was £0.001, this represents a considerable discount to the price paid by the Shareholders. The remaining 60% of the sponsor shares may convert into ordinary shares in stages post-Business Combination, again, at no further cost to the Sponsor Shareholders.

Further to this, the Sponsor is providing services to the Company in an equivalent capacity to an employment relationship with the conversion of the sponsor shares to public shares entirely contingent on the successful consummation of a Business Combination, and no award will accrue to the Sponsor for its services if a Business Combination is not consummated.

Based on the above, it has been determined that the sponsor shares fall under the scope of IFRS 2 equity-settled share-based payment. The fair value at the grant date of equity-settled share-based payments is generally recognised as an expense with a corresponding increase in equity over the vesting period.

The deemed grant date of the public shares will determine the point at which the public shares will be accounted for under IFRS 2. The effective grant date for the public shares is the point of consummation of a Business Combination, and not the original date of issue of the sponsor shares. This is because there is no obligation on the part of the Company to deliver cash or any other financial asset to holders of the sponsor shares prior to a Business Combination, the sponsor shareholders are not entitled to any preferential terms over holders of public shares and the sponsor shareholders have agreed to waive any right to any distributions by the Company from the escrow account. In addition to this, should the Company fail to complete a Business Combination, then the sponsor shares will not be eligible for conversion to public shares and the Sponsor will receive no material compensation for their work in attempting to identify a target acquisition.

As a result, no expense for such payments will be recognised until the Business Combination is consummated. At that date an expense will be recognised in the Statement of Comprehensive Income on a fair value basis.

Warrants

Both the sponsor warrants and public warrants are recognised as equity on the Statement of Financial Position, on initial recognition. The public warrants and the sponsor warrants meet the criteria of equity under IAS 32 and IFRS 9, as a fixed number of ordinary shares are due to be received by warrant holders on exercise, for a fixed exercise price. Once the public warrants become exercisable, the Company can issue a redemption notice to redeem not less than all issued and outstanding public warrants for £0.01 per warrant if the market price of the shares equals or exceeds £18.00 for 20 out of 30 trading days. After the redemption notice is issued, warrant holders have not less than 30 days to exercise their warrants on the same fixed terms as above. If this redemption feature is exercised by the Company, the sponsor warrants must also be concurrently called for redemption on the same terms as the public warrants, but the sponsor warrants will be non-redeemable so long as they are held by Eni or LiveStream or their respective permitted transferees.

The Directors have concluded that the redemption feature does not constitute an embedded derivative as the entity will be delivering a fixed number of its own equity instruments and receiving a fixed amount of cash.

The warrants have been valued using the Monte Carlo simulation of fair value, with any change in the fair value recognised in the Statement of Comprehensive Income.

Deferred underwriting fee

The Company's underwriters are potentially entitled to a deferred underwriting fee. The board has exercised judgement in determining at the period end, no liability in relation to this fee exists as IAS 32 requires the recognition of the worst-case liability which would be to repay the funds raised to shareholders if no business combination is completed. This underwriting fee is only payable on completion of a business combination and will be paid from funds held in the escrow account.

Redeemable Ordinary Shares

In April 2022, it was announced that the planned court-approved capital reduction, whereby the statutory share premium paid on the issue of the redeemable ordinary shares was cancelled and transferred to distributable reserves was completed. The transferred amount sits in retained earnings. As the Company still does not an unavoidable right to avoid payment in cash for the redeemable ordinary shares, the financial liability remains. The Company has set up an 'other reserves' account in equity to account for the transfer of share premium to distributable reserves per Companies House.

4.  Loss per share

Basic earnings per share is calculated by dividing the loss attributable in the period to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Company and held as treasury shares. The Company is loss making throughout the period considered, therefore diluted earnings per share has not been considered.

	31 May 2022
	£
Loss for the period attributable to equity holders of the Company	(3,702,407)
Weighted average number of ordinary shares	1,947,804
Loss per share	(1.90)

5.  Trade and other receivables

	31 May 2022
	£
Amounts falling due within one year:
Other receivables	165,169
	165,169

The Directors consider that the carrying amount of trade and other receivables is approximately equal to their value.

Other receivables comprise VAT due on expenses.

6.  Cash and cash equivalents

	31 May     2022
	£
Cash at bank	1,676,441
Restricted cash	175,149,910
	176,826,351

Included within restricted cash is interest income of £149,910.

7.  Trade and other payables

	31 May     2022
	£
Amounts falling due in one year:
Trade payables	565,109
Other payables	68,327
	633,436

8.  Share capital  

	No.	£
Z deferred shares	1	0.01
Deferred shares	50,000	50,000
Redeemable ordinary shares	17,500,000	175,000,000
Sponsor shares	4,375,000	4,375
	21,925,001	175,054,375

Deferred shares

On incorporation, 1 share was issued at $1.00. Subsequently, this share was re-classed as a Z deferred share and held in equity.

Prior to re-registration of the Company as a public company, 50,000 deferred shares were issued to LiveStream for £1.00 providing an aggregate nominal value of £50,000.

The purpose of the subscription for deferred shares was to provide the minimum authorised share capital that is necessary on incorporation of, or re-registration of, a public company, which requires share capital of nominal value of at least £50,000 (or €57,100) and must be denominated in GBP or EUR (section 763 CA 2006).

Redeemable ordinary shares

Further to publication of its prospectus on 9 March 2022, the Company completed the placing of 17,500,000 shares in the Company at a price of £10 per share, each comprising one Redeemable Ordinary Share and the right to receive one half of a warrant in respect of each Redeemable Ordinary Share. 1,845,396 of the redeemable ordinary shares were issued to the Company's sponsors.

On 16 March 2022, the Company announced the admission of 17,500,000 redeemable ordinary shares, and 8,750,000 public warrants, to trading on the London Stock Exchange's main market for listed securities ("LSE").

In addition, and as disclosed in the prospectus, the sponsors subscribed for a further 4,375,000 shares, these remain unlisted as per the terms of the instruments, until a business combination takes place.

On 6 April 2022, pursuant to a shareholder resolution, the Company completed a share capital reduction whereby the portion of statutory share premium pertaining to the redeemable ordinary shares was cancelled. The purpose of which was to create distributable reserves to enable the redemption of ordinary shares. As the Company still has the unavoidable right to pay cash in respect of the redeemable ordinary shares, the financial liability remains. Other reserves consist of the figure pertaining to share premium in relation to the redeemable ordinary share held as a financial liability which was cancelled.

Holders of the redeemable ordinary shares are entitled to redeem all or a portion of their shares upon completion of a business combination. Accordingly, these shares are classified as liabilities in the Company's Statement of Financial Position and are measured at amortised cost.

Redeemable ordinary shares	£
Proceeds	156,546,040
Less initial recognition of public warrants	(2,275,000)
Less issue costs	(4,664,052)
Effective interest accretion	2,075,343
	151,682,331

The redeemable ordinary shares held by the sponsors are restricted and non-redeemable by the sponsors, therefore these are classed as equity and apportioned between share capital and share premium, less issue costs, prior to the capital reduction whereby the share premium portion is cancelled and transferred to retained earnings.

Sponsor shares

As mentioned above, the Company's sponsors subscribed for 4,375,000, at a nominal value of £0.001, for an aggregate value of £4,375. 75% were issued to LiveStream (held for itself, Access Capital, Li You Investment Corporation, the directors, strategic advisors, future advisors and future employees), and 25% to Eni.

By virtue of subscribing for sponsor shares, LiveStream and Eni are both sponsors for the purpose of the Listing Rule and are not able to vote on a business combination. The sponsor shares are not tradable but entitle the holder to dividends and other distributions in line with the Articles of Association. Each sponsor share entitles the holder to attend and cast one vote at a general meeting (other than the general meeting in relation to approving a business combination).

The sponsor shares will convert to ordinary shares on a one-for-one basis as follows:

· 40% on completion of a business combination;

· 30% between completion of a business combination and the 10^th anniversary of a business combination if the closing price of ordinary shares is equal to or greater than £12.00 for any 10 trading days within a 30-trading day period; and

· 30% between completion of a business combination and the 10^th anniversary of a business combination if the closing price of ordinary shares is equal to or greater than £14.00 for any 10 trading days within a 30-trading day period.

All sponsor shares that are issued and outstanding on the 10^th anniversary of a Business Combination will be reclassified as deferred shares.

Accordingly, these sponsor shares are classified as equity. These 4,375,000 shares alongside the deferred shares, and the restricted redeemable ordinary shares, less issue costs of £43 make up share capital of £54,375.

As at 31 May 2022, the Company's issued voting share capital consists of 17,500,000 redeemable ordinary shares, and 4,375,000 unlisted sponsor shares.

9.  Warrants

Sponsor warrants

Alongside the sponsor shares being issued, sponsor warrants were issued to the sponsors in the same ratio as the sponsor shares. The sponsor warrants were issued at £1.50 each and are exercisable at £11.50 for one ordinary share, commencing on the date that is 30 days after a business combination. They expire on the fifth anniversary of the business combination completion date.

Once the public warrants (see below), become exercisable, the Company can issue a redemption notice to redeem not less than all issued and outstanding public warrants for £0.01 per warrant if the market price of the shares equals or exceeds £18.00 for 20 out of 30 trading days. After the redemption notice is issued, warrant holders have not less than 30 days to exercise their warrants on the same fixed terms as above. If this redemption feature is exercised by the Company, the sponsor warrants must also be concurrently called for redemption on the same terms as the public warrants, but the sponsor warrants will be non-redeemable so long as they are held by Eni or LiveStream or their respective permitted transferees.

Public warrants

Each ordinary share carried an entitlement to one half of a public warrant. The public warrants carry the same terms and conditions as the sponsor warrants (other than that the sponsor warrants will be non-redeemable so long as they are held by Eni or LiveStream or their respective permitted transferees).

Once the public warrants become exercisable, the Company can issue a redemption notice to redeem not less than all issued and outstanding public warrants for £0.01 per warrant if the market price of the shares equals or exceeds £18.00 for 20 out of 30 trading days. After the redemption notice is issued, warrant holders have not less than 30 days to exercise their warrants on the same fixed terms as above. If this redemption feature is exercised by the Company, the sponsor warrants must also be concurrently called for redemption on the same terms as the

Public warrants, but the sponsor warrants will be non-redeemable so long as they are held by Eni or LiveStream or their respective permitted transferees.

10.  Financial Risk Management

The Company's activities expose it to credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance.

Credit Risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables. The Company's exposure to credit risk is limited since it does not yet trade and does not hold trade receivables.

The Company considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

Liquidity Risk

In keeping with similar sized investment companies, the Company's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt. The Directors are confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed and the Board regularly manages the working capital requirements of the Company. The Company has minimal committed expenditure and as such the Board is able to manage its payments to ensure adequate liquid resources are available.

Price risk

The Company does not hold any equity securities and as such is not exposed to price risk.

Foreign exchange risk

The Company does not carry out any transactions or hold any balances in currencies other than Sterling, therefore it is not exposed to foreign exchange risk.

11.  Related party transactions

From 8 November 2021 (being the date of the Company's incorporation) to date, the Company entered into the following related party transactions:

On 6 December 2021, LiveStream LLC (Company Sponsor, and a company owned solely by Sanjay Mehta), subscribed for 50,000 deferred shares, which carry no voting or dividend rights.

LiveStream and Eni (Company Sponsor) subscribed for 3,306,250 and 1,068,750 sponsor shares respectively. (See note 8). The Sponsors have entered into an agreement to waive any right to distributions by the Company from the escrow account.

Additionally, LiveStream and Eni subscribed for 3,937,500 and 1,312,500 sponsor warrants respectively. (See note 9).

On IPO, Eni subscribed for 1,750,000 redeemable ordinary shares of nominal value £0.001 each, at a price of £10.00 each, for £17,500,000, and LiveStream subscribed for 95,395 redeemable ordinary shares, of nominal value £0.001, at a price of £10.00 each, for £953,950.

LiveStream agreed to incur and pay or will pay certain Offering Costs on behalf of the Company for an aggregate amount equal to £2,398,379 and the Company has agreed that such amount will be deducted from the aggregate subscription amount payable by LiveStream pursuant to the LiveStream sponsor warrant subscription agreement. As at 31 May 2022, this amount has been recharged to the Company via invoice, so that the costs sit in the Statement of Comprehensive Income, and those that have not yet been settled are recorded in prepayments on the Statement of Financial Position.

Eni entered into a forward purchase agreement with the Company to subscribe to a number of ordinary shares up to the lesser of 15% of the ordinary shares issued in a private investment in public equity transaction; and 4,100,000 ordinary shares at a subscription price of £10.00 per forward purchase share, representing a maximum value of £41,000,000, to be issued at the time of, and conditional on completion of a business combination. As payment is contingent on completion of a business combination, the forward purchase shares will be recognised on settlement of the contract.

An intercompany loan of £68,327 is recognised on the Statement of Financial Position as at 31 May 2022. This loan has been provided to the Company by Access Capital (a Company of which David Kotler is a director). This amount is due to be repaid on completion of a business combination.

12.  Events after the reporting period

There are no subsequent events that require disclosure.

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[1] https://www.nstauthority.co.uk/licensing-consents/carbon-storage/

[2] https://www.gov.uk/government/publications/cluster-sequencing-phase-2-eligible-projects-power-ccus-hydrogen-and-icc/cluster-sequencing-phase-2-shortlisted-projects-power-ccus-hydrogen-and-icc-august-2022

[3] https://www.crfb.org/blogs/whats-inflation-reduction-act

 

END

 

 

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