DEF 14A 1 e2246_def14a.htm FORM DEF 14A

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 SCHEDULE 14A

 

Information Required in Proxy Statement

Schedule 14A Information

 

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. 2)

 

 

 

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Preliminary Proxy Statement

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Soliciting Material Pursuant to §240.14a-12

 

LF CAPITAL ACQUISITION CORP.

 

(Name of Registrant as Specified In Its Charter)

 

 

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LF CAPITAL ACQUISITION CORP.

600 Madison Avenue

Suite 1802

New York, NY 10022

 

Dear Stockholders and warrant holders of LF Capital Acquisition Corp.:

 

For those stockholders of the LF Capital Acquisition Corp., a Delaware corporation (“we,” “us,” “our” or the “Company”), we cordially invite you to attend a special meeting in lieu of the 2020 annual meeting of the stockholders of LF Capital Acquisition Corp., a Delaware corporation (“we,” “us,” “our” or the “Company”), which will be held on December 14, 2020 at 10:00 a.m. local time (the “Special Meeting”). The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

For those warrant holders of the Company (“warrant holders”), we cordially invite you to attend a special meeting of the warrant holders of the Company, which will be held on December 14, 2020 at 9:30 a.m. local time (the “Warrant Holders Meeting”). The Warrant Holders Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

On August 31, 2020, the Company, LFCA Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), Landsea Homes Incorporated, a Delaware corporation (“Landsea”), and Landsea Holdings Corporation, a Delaware corporation (the “Seller”), entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), which provides for, among other things, the merger of Merger Sub with and into Landsea, with Landsea continuing as the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As a result of the Merger, the Company will own 100% of the outstanding common stock of Landsea. Our publicly-traded Class A Stock, public warrants and public units (which are comprised of one share of Class A Stock and one public warrant) are currently listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols “LFAC,” “LFACW” and “LFACU,” respectively. We intend to apply to continue the listing of our publicly-traded Class A Stock, public warrants and units on Nasdaq under the symbols “LSEA,” “LSEAW” and “LSEAU,” respectively, upon the closing of the Business Combination.

 

At the Special Meeting, Company stockholders will be asked to consider and vote upon the following proposals:

 

1.a proposal to adopt the Merger Agreement (the “Business Combination Proposal” or “Proposal No. 1”), a copy of which is attached to the accompanying proxy statement as Annex A, and approve the transactions contemplated thereby, including the Business Combination. Subject to the terms of the Merger Agreement, the aggregate purchase price for the Business Combination and related transactions is approximately $344 million. The consideration to be paid to the Seller will be stock consideration, consisting of 32,557,303 newly-issued shares of our Class A Common Stock, par value $0.0001 per share (the “Class A Stock”), which shares will be valued at $10.56 per share for purposes of determining the number of shares payable to the Seller for its ownership interests therein. The aggregate purchase price and number of shares issued to the Seller as a result of the Business Combination will not be subject to an adjustment but will be subject to customary closing conditions,

 

2.a proposal to approve, for purposes of complying with applicable Nasdaq listing rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock pursuant to the Business Combination (the “Nasdaq Proposal” or “Proposal No. 2”),

 

3.a proposal to adopt the Second Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Annex B (the “Charter Approval Proposal” or “Proposal No. 3”),

 

4.separately presented proposals with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will each be voted upon on a non-binding advisory basis (each a “Governance Proposal,” and collectively, the “Governance Proposals” or “Proposal No. 4”),

 

5.a proposal to elect two (2) directors to our board of directors (our “Board”) to serve as our Class II directors for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. Assuming the Charter Approval Proposal is approved and our Board is declassified, such nominees, if elected, will serve on our Board until the 2021 annual meeting of stockholders, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposal” or “Proposal No. 5”),

 

6.a proposal to approve the Landsea Homes Corporation 2020 Stock Incentive Plan (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 6”), and

 

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7.a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal (the “Adjournment Proposal” or “Proposal No. 7”).

 

At the Warrant Holder Meeting, warrant holders will be asked to consider and vote upon the following proposals:

 

1.a proposal to amend (the “Warrant Amendment”) the warrant agreement that governs all of the Company’s outstanding public warrants. The Warrant Amendment proposes to provide that, upon completion of the business combination (i) each of our outstanding public warrants, which currently entitle the holder thereof to purchase one share of our Class A Stock at an exercise price of $11.50 per share, will become exercisable for one-tenth of one share at an exercise price of $1.15 per one-tenth share ($11.50 per whole share) and (ii) each holder of a public warrant immediately prior to the consummation of the Business Combination will be entitled to receive, for each such warrant (in exchange for the reduction in the number of shares for which such warrants are exercisable), a cash payment of $1.85 as soon as reasonably practicable following the consummation of the Business Combination (the “Warrant Cash Payment” and, with respect to the foregoing proposal to amend the Warrant Agreement, the “Warrant Amendment Proposal”), and

 

2.a proposal to adjourn the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if it is determined by the Company that more time is necessary or appropriate to approve the Warrant Amendment Proposal (the “Warrant Holders Adjournment Proposal” and, together with the Warrant Amendment Proposal, the “Warrant Holder Proposals”).

 

Each of the Special Meeting and Warrant Holder Meeting proposals is more fully described in this proxy statement, which each stockholder and warrant holder is encouraged to read carefully.

 

We are providing the accompanying proxy statement and proxy cards to our stockholders and warrant holders in connection with the solicitation of proxies to be voted at the Special Meeting and Warrant Holder Meeting, as applicable, and at any adjournments or postponements thereof. Information about the Special Meeting and Warrant Holder Meeting, and the proposals to be considered by the Company’s stockholders and warrant holders is included in this proxy statement. Whether or not you plan to attend the Special Meeting and/or the Warrant Holder Meeting, as applicable, we urge all stockholders and warrant holders to read this proxy statement, including the Annexes and the accompanying financials statements of the Company and Landsea, carefully and in their entirety. In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page 62 of this proxy statement.

 

After careful consideration, our Board has unanimously approved the Merger Agreement and the transactions contemplated therein, and unanimously recommends that our stockholders vote “FOR” adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Business Combination, and that our stockholders and warrant holders, as applicable, vote “FOR” all other proposals presented to our stockholders and warrant holders in the accompanying proxy statement. When you consider the Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the Business Combination that may conflict with your interests. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” for additional information.

 

Your vote is very important. Whether or not you plan to attend the Special Meeting and/or Warrant Holder Meeting, as applicable, please vote as soon as possible by following the instructions in this proxy statement to make sure that your shares and/or warrants are represented at the Special Meeting and/or Warrant Holder Meeting, as applicable. If you hold your shares, units or warrants in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares and/or warrants are represented and voted at the Special Meeting and/or Warrant Holder Meeting, as applicable.

 

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting virtually, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If you are a stockholder of record and you attend the Special Meeting and wish to vote virtually, you may withdraw your proxy and vote virtually at the Special Meeting.

 

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT THE COMPANY REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE COMPANY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT SUCH MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

 

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On behalf of our Board, I would like to thank you for your support of LF Capital Acquisition Corp. and look forward to a successful completion of the Business Combination.

 

  Sincerely,

November 23, 2020

 
   
  Baudouin Prot
  Chairman of the Board of Directors

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

This proxy statement is dated November 23, 2020 and is expected to be first mailed to Company stockholders on or about November 27, 2020.

 

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Notice of SPECIAL Meeting IN LIEU OF 2020 ANNUAL MEETING of STOCKHOLDERS OF LF CAPITAL ACQUISITION CORP.

 

TO BE HELD DECEMBER 14, 2020

 

To the Stockholders of LF Capital Acquisition Corp.:

 

NOTICE IS HEREBY GIVEN that a special meeting in lieu of 2020 annual meeting of the stockholders of LF Capital Acquisition Corp., a Delaware corporation (the “Company”), will be held on December 14, 2020 at 10:00 a.m. local time (the “Special Meeting”). The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Special Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Special Meeting, the chair or secretary of the Special Meeting will convene the meeting at 3:00 p.m. Eastern Time on the date specified above and at the offices of Dechert LLP, Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

You are cordially invited to attend the Special Meeting to conduct the following items of business:

 

1.Business Combination Proposal—To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of August 31, 2020 (as it may be amended from time to time, the “Merger Agreement”) by and among the Company, LFCA Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), Landsea Homes Incorporated, a Delaware corporation (“Landsea”), and Landsea Holdings Corporation, a Delaware corporation (the “Seller”), a copy of which is attached to this proxy statement as Annex A, and approve the transactions contemplated thereby, including, among other things, the merger of Merger Sub with and into Landsea, with Landsea continuing as the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”) (Proposal No. 1);

 

2.Nasdaq Proposal—To consider and vote upon a proposal to approve, for purposes of complying with applicable Nasdaq listing rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination (Proposal No. 2);

 

3.Charter Approval Proposal—To consider and vote upon a proposal to adopt the Second Amended and Restated Certificate of Incorporation in the form attached hereto as Annex B (Proposal No. 3);

 

4.Governance Proposals—To consider and vote upon, on a non-binding advisory basis, separately presented proposals with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation in accordance with SEC requirements (Proposal No. 4);

 

5.Director Election Proposal—To consider and vote upon a proposal to elect two (2) directors to our board of directors (our “Board”) to serve as our Class II directors for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. Assuming the Charter Approval Proposal is approved and our Board is declassified, such nominees, if elected, will serve on our Board until the 2021 annual meeting of stockholders, as applicable, and until their respective successors are duly elected and qualified (Proposal No. 5);

 

6.Incentive Plan Proposal—To consider and vote upon a proposal to approve the Landsea Homes Corporation 2020 Stock Incentive Plan (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (Proposal No. 6); and

 

7.Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal (Proposal No. 7).

 

The above matters are more fully described in this proxy statement, which also includes, as Annex A, a copy of the Merger Agreement. We urge you to read carefully this proxy statement in its entirety, including the Annexes and accompanying financial statements of the Company and Landsea.

 

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The record date for the Special Meeting is November 11, 2020. Only stockholders of record at the close of business on that date may vote at the Special Meeting or any adjournment thereof. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for ten days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting.

 

To be admitted to the virtual Special Meeting, go to the webcast URL and enter your unique 12-digit control number. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. You may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. For technical assistance during the meeting, you can contact Continental Stock Transfer for assistance at (917) 262-2373, or via email at proxy@continentalstock.com.

 

The LF Capital Restricted Stockholders, other than the BlackRock Holders, are parties to a voting and support agreement pursuant to which they have agreed to vote their Founder Shares and any public shares purchased during or after our IPO in favor of our Business Combination. As of September 17, 2020, our LF Capital Restricted Stockholders, other than the BlackRock Holders, own approximately 22.6% of our issued and outstanding shares of Common Stock.

 

Pursuant to our current certificate of incorporation, we will provide our public stockholders with the opportunity to redeem, upon the closing of the Business Combination, shares of the Company’s Class A Stock, par value $0.0001 per share (the “Class A Stock”) then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in our Trust Account that holds the proceeds (including interest not previously released to the Company to fund regulatory compliance requirements and other costs related thereto and/or to pay its franchise and income taxes) of our IPO (the “Trust Account”). The per-share amount we will distribute to our stockholders who properly redeem their shares will not be reduced by the deferred underwriting commission totaling $5,433,750 that we will pay to the underwriters of our IPO, as well as other transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the fair value of investment securities held in our Trust Account of $129,126,990.62 as of September 17, 2020, the estimated per share redemption price would have been approximately $10.57 (after giving effect to redemptions in connection with the Business Combination Extension). Public stockholders may elect to redeem their shares even if they vote “FOR” the Business Combination. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the shares of Common Stock included in the units sold in our IPO. We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 20%. Each redemption of shares of Class A Stock by our public stockholders will reduce the amount in our Trust Account, which held investment securities with a fair value of $129,126,990.62 as of September 17, 2020 (after giving effect to redemptions in connection with the Business Combination Extension). The Merger Agreement provides that the Seller’s and Landsea’s obligation to consummate the Business Combination is conditioned on the amount in the Trust Account equaling or exceeding $90,000,000 after taking into account the aggregate amount of Class A Stock redemptions and the aggregate amount of any unpaid Company Transaction Costs and Parent Transaction Costs (each as defined therein). These conditions to closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Stock by our public stockholders, these conditions are not met (or waived), then the Seller and Landsea may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s failure to have net tangible assets in excess of $5,000,000. Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A Stock.

 

Our LF Capital Restricted Stockholders, other than the BlackRock Holders, have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Our LF Capital Restricted Stockholders have also agreed to waive their conversion rights with respect to any Founder Shares they may hold in connection with the consummation of the Business Combination. Our LF Capital Restricted Stockholders, other than the BlackRock Holders are parties to a voting and support agreement pursuant to which they have agreed to vote any shares of the Company’s Common Stock owned by them in favor of the Business Combination and the proposals contemplated hereunder. As of September 17, 2020, our LF Capital Restricted Stockholders, other than the BlackRock Holders, own approximately 22.6% of our issued and outstanding shares of Common Stock.

 

Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal at the Special Meeting. Each of the proposals at the Special Meeting, other than the Governance Proposals, Director Election Proposal and the Adjournment Proposal, is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal. The Governance Proposals, the Director Election Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement. 

 

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The presence, virtually or by proxy, at the Special Meeting of the holders of shares of outstanding Common Stock of the Company representing a majority of the voting power of all outstanding shares of Common Stock entitled to vote at the Special Meeting shall constitute a quorum in order to conduct business at the Special Meeting. Approval of each of the Business Combination Proposal, the Nasdaq Proposal, the Governance Proposals, the Incentive Plan Proposal, and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. Approval of the Charter Approval Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Directors in the Director Election Proposal are elected by a plurality of the votes cast by the holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting; this means that the two individuals nominated for election to the Board who receive the most “FOR” votes will be elected. The Board unanimously recommends that you vote “FOR” each of these proposals.

 

 

By Order of the Board of Directors

 

   
  Baudouin Prot
  Chairman of the Board of Directors

 

New York, New York

November 23, 2020

 

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NOTICE OF MEETING OF WARRANT HOLDERS OF LF CAPITAL ACQUISITION CORP.

 

TO BE HELD DECEMBER 14, 2020

 

To the holders of warrants of LF Capital Acquisition Corp.:

 

NOTICE IS HEREBY GIVEN that a meeting of the holders of public warrants of LF Capital Acquisition Corp., a Delaware corporation (the “Company”), will be held on December 14, 2020 at 9:30 a.m. local time (the “Warrant Holders Meeting”). The Warrant Holders Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Warrant Holders Meeting to satisfy the requirements for a meeting of warrant holders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Warrant Holders Meeting, the chair or secretary of the Warrant Holders Meeting will convene the meeting at 3:00 p.m. Eastern Time on the date specified above and at the offices of Dechert LLP, Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

You are cordially invited to attend the Warrant Holders Meeting to conduct the following items of business:

 

1.Warrant Amendment Proposal—To consider and vote upon an amendment (the “Warrant Amendment”) to the warrant agreement that governs all of the Company’s outstanding public warrants. The Warrant Amendment proposes to provide that, upon consummation of the Business Combination (i) each of our outstanding public warrants, which currently entitle the holder thereof to purchase one share of our Class A Stock at an exercise price of $11.50 per share, will become exercisable for one-tenth of one share at an exercise price of $1.15 per one-tenth share ($11.50 per whole share) and (ii) each holder of a public warrant immediately prior to the consummation of the Business Combination will be entitled to receive, for each such warrant (in exchange for the reduction in the number of shares for which such warrants are exercisable), a cash payment of $1.85 as soon as reasonably practicable following the consummation of the Business Combination (the “Warrant Cash Payment” and, with respect to the foregoing proposal to amend the Warrant Agreement, the “Warrant Amendment Proposal”); and

 

2.Warrant Holders Adjournment Proposal—To consider and vote upon a proposal to adjourn the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if it is determined by the Company that more time is necessary or appropriate to approve the Warrant Amendment Proposal (the “Warrant Holders Adjournment Proposal” and, together with the Warrant Amendment Proposal, the “Warrant Holder Proposals”).

 

The above matters are more fully described in this proxy statement, which also includes as Annex M the substantive text of the Warrant Amendment. We urge you to read carefully this proxy statement in its entirety, including the Annexes and accompanying financial statements of the Company and Landsea.

 

The record date for the Warrant Holders Meeting is November 11, 2020. Only holders of record of the public warrants of the Company at the close of business on that date may vote at the Warrant Holders Meeting or any adjournment thereof. A complete list of our warrant holders of record entitled to vote at the Warrant Holders Meeting will be available for ten days before the Warrant Holders Meeting at our principal executive offices for inspection by warrant holders during ordinary business hours for any purpose germane to the Warrant Holders Meeting. There are currently 15,525,000 public warrants outstanding and 7,760,000 Private Placement Warrants outstanding.

 

To be admitted to the virtual Warrant Holder Meeting, go to the webcast URL and enter your unique 12-digit control number. You may vote during the Warrant Holder Meeting by following the instructions available on the meeting website during the meeting. Warrant holders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. For technical assistance during the meeting, you can contact Continental Stock Transfer for assistance at (917) 262-2373, or via email at proxy@continentalstock.com.

 

The approval of the Warrant Amendment Proposal requires the affirmative vote “FOR” the proposal by the holders of at least 65% of the outstanding public warrants entitled to vote at the Warrant Holders Meeting on the Warrant Amendment Proposal. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will count as a vote cast “AGAINST” the Warrant Amendment Proposal. The approval of the Warrant Holders Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the holders of the Company public warrants present virtually or represented by proxy and entitled to vote at the Warrant Holders Meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the Warrant Holders Meeting and will have no effect on the outcome on the Warrant Holders Adjournment Proposal.

 

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If the Company does not consummate the Business Combination and fails to complete an initial business combination by December 22, 2020, unless the Company seeks and receives stockholder approval for an amendment to its amended and restated certificate of incorporation extending the December 22, 2020 date to a later date, the Company will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to its public stockholders, and the warrants would expire worthless. The Board unanimously recommends that you vote “FOR” each of these proposals.

 

 

By Order of the Board of Directors 

   
  Baudouin Prot
   
  Chairman of the Board of Directors

 

New York, New York

November 23, 2020

 

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Table of Contents

  

 

Page

SUMMARY TERM SHEET 1
FREQUENTLY USED TERMS 6
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS 9
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR WARRANT HOLDERS 24
SUMMARY OF THE PROXY STATEMENT 28
SELECTED HISTORICAL FINANCIAL INFORMATION OF THE COMPANY 44
SELECTED HISTORICAL FINANCIAL INFORMATION OF LANDSEA HOMES 46
SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 47
unaudited pro forma condensed combined financial information 48
Notes to the unaudited pro forma condensed combined financial information 54
Cautionary note regarding forward-looking statements 60
Risk factors 62
Comparative share information 101
Special meeting in lieu of 2020 annual meeting of company stockholders 102
Proposal no. 1 – approval of the business combination 110
Proposal No. 2 – approval of the issuance of more than 20% of the company’s issued and outstanding common stock in connection with the business combination 135
Proposal no. 3 – APPROVAL OF THE Second Amended and Restated CERTIFICATE OF INCORPORATION 137
Proposal no. 4 – APPROVAL OF CERTAIN GOVERNANCE PROVISIONS IN THE Second Amended and Restated CERTIFICATE OF INCORPORATION 141
Proposal no. 5 – election of directors to the board of directors 146
Proposal no. 6 – APPROVAL OF THE INCENTIVE PLAN, INCLUDING THE AUTHORIZATION OF THE INITIAL SHARE RESERVE UNDER THE INCENTIVE PLAN 148
Proposal No. 7 – the adjournment proposal 154
MEETING OF COMPANY WARRANT HOLDERS 155
WARRANT HOLDER PROPOSAL NO. 1 – APPROVAL OF THE WARRANT AMENDMENT PROPOSAL 158
WARRANT HOLDER PROPOSAL NO. 2 – THE WARRANT HOLDERS ADJOURNMENT PROPOSAL 160
Information about the company 161
The company’s management’s discussion and analysis of financial condition and results of operations 166
Information about LANDSEA 173

 

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  Page
LANDSEA’S management’s discussion and analysis of financial condition and results of operations 186
Executive compensation 225
Management after the business combination 232
Description of securities 237
Beneficial ownership of securities 245
Certain relationships and related transactions 248
Price range of securities and dividends 256
Independent registered PUBLIC accounting firm 257
Appraisal rights 257
Householding information 257
Transfer agent and registrar 257
Submission of stockholder proposals 257
Future stockholder proposals 257
Where you can find more information 258
INCORPORATION BY REFERENCE 259
Index to consolidated financial information F-1
Annex A – Merger Agreement A-1
Annex B – Form of Second Amended and Restated Certificate of Incorporation B-1
Annex C – Form of Second Amended and Restated Bylaws C-1
Annex D – Stockholders Agreement D-1
Annex E – investor REPRESENTATION LETTER E-1
ANNEX F – INCENTIVE PLAN F-1
annex G-1 – Seller Lock-up Agreement G-1-1
annex G-2 – Sponsor Lock-up Agreement G-2-1
annex H – License Agreement H-1
Annex I – Sponsor Transfer, Waiver, Forfeiture and Deferral Agreement I-1
Annex J-1 – Founders’ Waiver Agreement J-1-1
Annex J-2 – BlackROck Waiver AGreement J-2-1
Annex K – Voting and Support Agreement K-1
Annex L – Indemnification Agreement L-1
Annex M – warrant amendment M-1
Annex N – Form OF Forward Purchase and Subscription Agreement N-1
annex O-1 – employment agreement of john ho O-1-1
ANNEX O-2 – employment agreement of michael forsum O-2-1
annex O-3 – employment agreement of franco tenerelli O-3-1

 

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SUMMARY TERM SHEET

 

This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals for Stockholders” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the Special Meeting and Warrant Holder Meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Frequently Used Terms.”

 

·LF Capital Acquisition Corp., a Delaware corporation, which we refer to as “we,” “us,” “our,” or the “Company,” is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

·There are currently 16,100,613 shares of Common Stock, par value $0.0001 per share, of the Company, issued and outstanding, consisting of (i) 12,219,363 shares of Class A Stock (15,525,000 shares were originally sold as part of the IPO, 2,089,939 shares were redeemed as part of the June Extension and 1,215,698 shares were redeemed as part of the Business Combination Extension), and (ii) after certain forfeitures and cancellations, 3,881,250 shares of Class B Stock were issued to our Sponsor and the BlackRock Holders, prior to our IPO. There are currently no shares of Company preferred stock issued and outstanding. In addition, we issued 15,525,000 public warrants to purchase Class A Stock (originally sold as part of the units issued in our IPO) as part of our IPO along with 7,760,000 Private Placement Warrants issued to our Sponsor and the BlackRock Holders in a private placement on the IPO closing date. Pursuant to the Warrant Amendment, if adopted, following the consummation of the Business Combination public warrants will be exercisable for 1,552,500 shares of Class A Stock. Each warrant entitles its holder to purchase one share of our Class A Stock at an exercise price of $11.50 per share, to be exercised only for a whole number of shares of our Class A Stock. The warrants will become exercisable 30 days after the completion of our initial business combination, and they expire five years after the completion of our initial business combination or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may redeem the outstanding warrants at a price of $0.01 per warrant, if the last sale price of the Company’s Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. The Private Placement Warrants, however, are non-redeemable so long as they are held by our Sponsor or the BlackRock Holders, as applicable, or their permitted transferees. For more information regarding the warrants, please see the section entitled “Description of the Securities.”

 

·Landsea is a rapidly growing U.S. homebuilder, primarily engaged in the design, construction, marketing and sale of suburban and urban single-family detached and attached homes in California, Arizona and Metro New York. For more information about Landsea, please see the sections entitled “Information About Landsea,” “Landsea’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management after the Business Combination.”

 

·Subject to the terms of the Merger Agreement, the aggregate purchase price for the Business Combination and related transactions is approximately $344 million. The consideration to be paid to the Seller will be stock consideration.

 

·In connection with the Business Combination, Seller will receive approximately $344 million of stock consideration, consisting of 32,557,303 newly issued shares of our Class A Stock, which shares will be valued at $10.56 for purposes of determining the number of shares payable to the Seller for its ownership interests therein. The aggregate purchase price and number of shares of Class A Stock that will be issued to the Seller as a result of the Business Combination will not be subject to an adjustment but will be subject to customary closing conditions. For more information about the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

 

·It is anticipated that, upon completion of the Business Combination: (i) the Company’s public stockholders (excluding the LF Capital Restricted Stockholders’ converted Founder Shares) will retain an ownership interest of approximately 25.9% in the post-combination company; (ii) the LF Capital Restricted Stockholders will own approximately 5.3% of the post-combination company with respect to their converted Founder Shares; and (iii) the Seller will own approximately 68.8% of the post-combination company. The ownership percentage with respect to the post-combination company following the Business Combination (a) does not take into account (1) the issuance of any shares upon the exercise of warrants to purchase Class A Stock that will remain outstanding immediately following the Business Combination or (2) the issuance of any shares upon completion of the Business Combination under the Incentive Plan, but (b) does take into account (1) the conversion of 3,056,700 Founder Shares into an equivalent number of shares of Class A Stock at the closing of the Business Combination on a one-for-one basis (even though such shares of Class A Stock will be subject to transfer restrictions), (2) the transfer of 500,000 Founder Shares from the Sponsor to the Seller pursuant to the Sponsor Surrender Agreement and (3) the issuance of 224,550 shares of Class A Stock by the Company pursuant to the Forward Purchase Transaction and corresponding cancellation of an equal number of shares held by the Sponsor pursuant to the Sponsor Surrender Agreement. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders in the post-combination company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

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·Our management and Board considered various factors in determining whether to approve the Merger Agreement and the transactions contemplated thereby, including the Business Combination, including that Landsea maintains a portfolio of real estate assets in attractive markets poised for growth and has access to the global homebuilding experience and environmentally focused strategy of Landsea Green Group Co., Ltd., a leading environmentally focused homebuilding company that operates in the U.S., Germany and China and an indirect parent of Landsea, which the Board believes positions Landsea for future growth and profitability. For more information about our Board’s decision-making process, see the section entitled “Proposal No. 1 — Approval of the Business Combination—The Company’s Board of Directors’ Reasons for the Approval of the Business Combination.”

 

·Pursuant to our current certificate of incorporation, in connection with the Business Combination, holders of our public shares may elect to have their Class A Stock redeemed for cash at the applicable redemption price per share calculated in accordance with our current certificate of incorporation. As of September 17, 2020, the redemption price would have been approximately $10.57 per share. If a holder exercises its redemption rights, then such holder will be exchanging its shares of our Class A Stock for cash and will no longer own shares of the post-combination company and will not participate in the future growth of the post-combination company, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent at least two business days prior to the Special Meeting. Please see the section entitled “Special Meeting in Lieu of 2020 Annual Meeting of the Company’s Stockholders—Redemption Rights.”

 

·In addition to voting on the proposal to adopt the Merger Agreement and approve the transactions contemplated thereunder, including the Business Combination, at the Special Meeting, the stockholders of the Company will be asked to vote on:

 

oa proposal to approve, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination (the “Nasdaq Proposal” or “Proposal No. 2”);

 

oa proposal to adopt the Second Amended and Restated Certificate of Incorporation in the form attached hereto as Annex B (the “Charter Approval Proposal” or “Proposal No. 3”);

 

oseparately presented proposals with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will be voted upon on a non-binding advisory basis (each a “Governance Proposal” and collectively, the “Governance Proposals” or “Proposal No. 4”);

 

oa proposal to elect two (2) directors to our Board to serve as our Class II directors for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. Assuming the Charter Approval Proposal is approved and our Board is declassified, such nominees, if elected, will serve on our Board until the 2021 annual meeting of stockholders, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposal” or “Proposal No. 5”);

 

oa proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 6”); and

 

oa proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal (the “Adjournment Proposal” or “Proposal No. 7”).

 

 2 

 

 

Please see the sections entitled “Proposal No. 1—Approval of the Business Combination,” “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination,” “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 4—Approval of Certain Governance Provisions in the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 5—Election of Directors to the Board of Directors,” “Proposal No. 6—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve under the Incentive Plan,” and “Proposal No. 7—The Adjournment Proposal.” Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal at the Special Meeting. Each of the proposals at the Special Meeting, other than the Governance Proposals, Director Election Proposal and the Adjournment Proposal, is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal. The Governance Proposals, the Director Election Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement.

 

·At the Warrant Holder Meeting, the warrant holders will be asked to vote on:

 

oA proposal to consider and vote upon an amendment (the “Warrant Amendment”) to provide that, upon completion of the Business Combination (i) each of our outstanding public warrants, which currently entitle the holder thereof to purchase one share of our Class A Stock at an exercise price of $11.50 per share, will become exercisable for one-tenth of one share at an exercise price of $1.15 per one-tenth share ($11.50 per whole share) and (ii) each holder of a public warrant immediately prior to the consummation of the Business Combination will be entitled to receive, for each such warrant (in exchange for the reduction in the number of shares for which such warrants are exercisable), a cash payment of $1.85 as soon as reasonably practicable following the consummation of the Business Combination (the “Warrant Cash Payment” and, with respect to the foregoing proposal to amend the Warrant Agreement, the “Warrant Amendment Proposal”); and

 

oA proposal to consider and vote upon a proposal to adjourn the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if it is determined by the Company that more time is necessary or appropriate to approve the Warrant Amendment Proposal (the “Warrant Holders Adjournment Proposal” and, together with the Warrant Amendment Proposal, the “Warrant Holder Proposals”).

 

·Upon consummation of the Business Combination, we anticipate a Board of nine (9) directors, with directors serving a one year term expiring at the company’s annual meeting of stockholders in 2021 and directors serving until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. Please see the sections entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation” and “Management After the Business Combination” for additional information.

 

·Unless waived by the parties to the Merger Agreement, and subject to applicable law, the closing of the Business Combination is subject to a number of conditions set forth in the Merger Agreement including, among others, expiration of the waiting period under the HSR Act, if required by the HSR Act, receipt of certain stockholder approvals contemplated by this proxy statement and the availability of minimum cash amounts at closing. For more information about the closing conditions to the Business Combination, please see the section entitled “Proposal No. 1—Approval of the Business Combination — The Merger Agreement—Conditions to Closing of the Business Combination.”

 

·The Merger Agreement may be terminated at any time prior to the consummation of the Business Combination upon agreement of the parties thereto, or by certain parties in specified circumstances. For more information about the termination rights under the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination — The Merger Agreement—Termination.”

 

·The proposed Business Combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

 

·In considering the recommendation of our Board to vote for the proposals presented at the Special Meeting, including the Business Combination Proposal, you should be aware that aside from their interests as stockholders, our Sponsor and certain members of our Board and officers may have interests in the Business Combination that are different from, or in addition to, the interests of our stockholders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal. Stockholders and warrant holders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal, and the Warrant Holder Meeting. These interests include, among other things:

 

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othe fact that the LF Capital Restricted Stockholders have no right to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

othe fact that our Sponsor has agreed to forfeit up to 500,000 Founder Shares, contingent upon the valuation of the Company’s Class A Stock achieving certain thresholds during the twenty-four month period following the closing of the Business Combination;

 

othe fact that our Sponsor has agreed to transfer to the Seller 2,200,000 shares of Private Placement Warrants immediately prior to the closing of the Business Combination and 500,000 shares of Class A Stock immediately after the closing of the Business Combination (with such Class A Stock subject to the same contingencies noted above);

 

othe fact that our Sponsor has agreed to forfeit 2,260,000 Private Placement Warrants and 600,000 Founder Shares in connection with a Business Combination;

 

othe fact that our Sponsor has agreed to forfeit an amount of Founder Shares to the Company for retirement and cancellation equal to the total number of Utilization Fee Shares and Additional Fee Shares issued by the Company pursuant to the Forward Purchase Transaction;

 

othe fact that our LF Capital Restricted Stockholders have agreed to waive their rights to certain anti-dilution conversion adjustments with respect to any shares of our Class B Stock they may hold in connection with the consummation of the Business Combination;

 

othe fact that the LF Capital Restricted Stockholders have no rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by December 22, 2020;

 

  o the fact that the LF Capital Restricted Stockholders paid an aggregate of $25,000 for 3,881,250 Founder Shares, which will have a significantly higher value at the time of the Business Combination and if unrestricted and freely tradable would be valued at approximately $41,063,625, based upon the closing trading price of the Class A Stock on November 20, 2020 (but, given the restrictions on such shares, we believe such shares have less value);

 

othe fact that our Sponsor and the BlackRock Holders paid an aggregate of approximately $7,760,000 for their 7,760,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by December 22, 2020;

 

othe continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

oif the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.20 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

othe anticipated continuation of two (2) of our existing directors, Messrs. Reed and Farhat, as directors of the post-combination company;

 

othe continued indemnification of our existing directors and officers prior to the Business Combination and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

 4 

 

 

othe fact that our Sponsor, officers and directors may not participate in the formation of, or become a director or officer of, any other blank check company until we have entered into a definitive agreement regarding an initial business combination or fail to complete an initial business combination by December 22, 2020;

 

othe fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by December 22, 2020; and

 

othat pursuant to the Demand Registration Rights Agreement, the LF Capital Restricted Stockholders are entitled to registration of the shares of Class A Stock into which the Founder Shares will automatically convert at the time of the consummation of the Business Combination.

 

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FREQUENTLY USED TERMS

 

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “LF Capital” refer to LF Capital Acquisition Corp., and the term “post-combination company” refers to the Company following the consummation of the Business Combination.

 

In this proxy statement:

 

BlackRock Holders” means BlackRock Credit Alpha Master Fund L.P. and HC NCBR Fund.

 

Board” means the board of directors of the Company.

 

Business Combination” means the transactions contemplated by the Merger Agreement, including the merger of Merger Sub with and into Landsea, with Landsea continuing as the surviving corporation.

 

Business Combination Extension” means the amendment to the Company’s amended certificate of incorporation to extend the date by which the company has to consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses from September 22, 2020 to December 22, 2020.

 

Class A Stock” means the shares of Class A Stock, par value $0.0001 per share, of the Company, as well as the common stock, par value $0.0001 per share of the post-combination company.

 

Class B Stock” means the shares of Class B Common Stock, par value $0.0001 per share, of the Company.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Common Stock” means the shares of common stock, par value $0.0001 per share, of the Company, consisting of Class A Stock and Class B Stock, as well as the shares of common stock, par value $0.0001 per share of the post-combination company.

 

Company” means LF Capital Acquisition Corp., a Delaware corporation. After the Business Combination, the Company will mean Landsea Homes Corporation.

 

Convertible Note” means that certain Convertible Promissory Note, dated March 4, 2019, as amended, by and between Sponsor and the Company.

 

current certificate of incorporation” or “current certificate” means our Amended and Restated Certificate of Incorporation, dated June 19, 2018, as amended to date.

 

DGCL” means the General Corporation Law of the State of Delaware.

 

Dechert” means Dechert LLP, counsel to the Company.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

Forward Purchase and Subscription Agreement” means those certain agreements entered into by FPSA Investors, the Company, and the Sponsor, on August 31, 2020, a form of which is attached hereto as Annex N.

 

Forward Purchase Transaction” means, collectively, the transactions contemplated by the Forward Purchase and Subscription Agreements.

 

Founder Shares” means the 3,881,250 shares of Class B Stock, of which 3,578,250 shares are held by our Sponsor, 243,000 shares are held by the BlackRock Holders, and 60,000 shares are collectively held by James Erwin, Karen Wendel, and Gregory Wilson.

 

FPSA Investors” means those investors who have executed a Forward Purchase and Subscription Agreement

 

“Gibson Dunn” means Gibson, Dunn & Crutcher LLP, counsel to Seller and Landsea.

 

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HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

Investment Company Act” means the Investment Company Act of 1940, as amended.

 

Incentive Plan” means the Landsea Homes Corporation 2020 Stock Incentive Plan, in the form attached as Annex F to this proxy statement, effective at the closing of the Business Combination.

 

Investor Representation Letter” means that certain investor representation letter, a copy of which is attached hereto as Annex E, whereby, among other things, the Seller will represent to the Company that it is an accredited investor and is otherwise qualified to receive the Stock Consideration pursuant to a private placement effected in reliance on the exemption from the registration requirements of the Securities Act, provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated under the Securities Act, and exemptions from the qualification requirements of applicable state law.

 

IPO” means the Company’s initial public offering, consummated on June 22, 2018, through the sale of 15,525,000 public units (including 2,025,000 units sold pursuant to the underwriters’ exercise of their over-allotment option) at $10.00 per unit.

 

Landsea” means Landsea Homes Incorporated, a Delaware corporation, and additionally, when such term is used in reference to rights, obligations or covenants under the Merger Agreement, Landsea Homes Incorporated’s subsidiaries. Concurrent with the consummation of the Business Combination, Landsea will change its name to Landsea Homes US Corporation.

 

“LF Capital Restricted Stockholders” means those persons holding Founder Shares.

 

License Agreement” means that certain agreement by and between an affiliate of the Seller (“Licensor”), the Company, and each of the Company’s greater than 50% owned subsidiaries (the “Licensees”), pursuant to which, the Licensor will agree, among other things, to grant the Licensees an exclusive license to use the “Landsea” trademark in connection with the “domestic homebuilding business” (as such term is defined in the Stockholder’s Agreement), subject to certain usage standards and the Seller indirectly owning, together with its affiliates, more than 6% of the post-combination company’s Class A Stock, in each case on terms and subject to the conditions set forth therein

 

Lock-up Agreements” mean, collectively, those agreements entered into as of the consummation of the Business Combination by each of the Sponsor and the Seller, on the one hand, and the Company on the other hand, whereby each of Sponsor and Seller have agreed to certain transfer restrictions with respect to their Class A Stock for up to one year, subject to certain exceptions provided for therein.

 

Merger Agreement” means that certain Agreement and Plan of Merger, dated as of August 31, 2020 (as it may be amended from time to time), by and among the Company, Merger Sub, Landsea and the Seller.

 

Merger Sub” means LFCA Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company.

 

Nasdaq” means the Nasdaq Capital Market.

 

“post-combination company” means the Company upon consummation of the Business Combination, which will be renamed Landsea Homes Corporation.

 

Private Placement Warrants” means those warrants issued to our Sponsor and the BlackRock Holders in a private placement on the IPO closing date.

 

Promissory Note” means that certain Promissory Note, dated July 16, 2020, by and between Sponsor and the Company.

 

public shares” means shares of Class A Stock included in the units issued in the Company’s IPO.

 

public stockholders” means holders of public shares, including our LF Capital Restricted Stockholders to the extent our LF Capital Restricted Stockholders hold public shares, provided, that our LF Capital Restricted Stockholders will be considered a “public stockholder” only with respect to any public shares held by them.

 

public units” or “units” means one share of Class A Stock and one public warrant of the Company, whereby each public warrant entitles the holder thereof to purchase one share of Class A Stock at an exercise price of $11.50 per share of Class A Stock, sold in the IPO.

 

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public warrants” means the warrants included in the units issued in the Company’s IPO, each of which is exercisable for one share of Class A Stock, in accordance with its terms.

 

PwC” means PricewaterhouseCoopers, LLP, Landsea’s independent registered public accounting firm.

 

record date” means, with respect to Class A Stock, November 11, 2020, and with respect to public warrants, November 11, 2020.

 

Related Agreements” means, collectively, the Stockholders Agreement, the Investor Representation Letter, the Lock-up Agreements, and the License Agreement.

 

SEC” means the United States Securities and Exchange Commission.

 

Second Amended and Restated Bylaws” means the proposed Second Amended and Restated Bylaws of the Company, a form of which is attached hereto as Annex C, which will become the post-combination company’s bylaws upon consummation of the Business Combination.

 

Second Amended and Restated Certificate of Incorporation” means the proposed Second Amended and Restated Certificate of Incorporation of the Company, a form of which is attached hereto as Annex B, which will become the post-combination company’s certificate of incorporation if the Charter Approval Proposal is approved, assuming the consummation of the Business Combination.

 

Seller” means Landsea Holdings Corporation, a Delaware corporation, and the sole stockholder of Landsea.

 

Securities Act” means the Securities Act of 1933, as amended.

 

Special Meeting” means the special meeting in lieu of the 2020 annual meeting of the stockholders of the Company that is the subject of this proxy statement.

 

Sponsor” means Level Field Capital, LLC, a Delaware limited liability company.

 

Stock Consideration” means the Company Class A Stock to be issued to the Seller pursuant to the transactions contemplated by the Merger Agreement.

 

Stockholders Agreement” means the Stockholders Agreement, substantially in the form attached as Annex D to this proxy statement, which Seller and the Company will enter into at the closing of the Business Combination.

 

Transfer Agent” means Continental Stock Transfer & Trust Company.

 

Trust Account” means the trust account of the Company that holds the proceeds from the Company’s IPO.

 

Trustee” means Continental Stock Transfer & Trust Company.

 

warrants” means the public warrants and Private Placement Warrants.

 

Warrant Agent” means Continental Stock Transfer & Trust Company.

 

Whole Board” means the total number of authorized directors of the post-combination company whether or not there exists any vacancies in previously authorized directorships.

 

Working Capital Loans” means loans from our Sponsor or an affiliate of the Sponsor, or certain of our officers or directors, to finance transaction costs in connection with an initial business combination, including the working capital loans issued pursuant to the Convertible Note and the Promissory Note.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

 

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge stockholders to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the Special Meeting, which will be held on December 14, 2020 at 10:00 a.m. Eastern Time. The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

Q:Why am I receiving this proxy statement?

 

A:Our stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination, among other proposals. We have entered into the Merger Agreement providing for, among other things, the merger of Merger Sub with and into Landsea, with Landsea continuing as the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As a result of the Merger, the Company will own 100% of the outstanding common stock of Landsea. You are being asked to vote on the Business Combination between us and Landsea. Subject to the terms of the Merger Agreement, the aggregate merger consideration to be paid in connection with the Business Combination will be approximately $344 million, to be paid in newly-issued Class A Stock. A copy of the Merger Agreement is attached to this proxy statement as Annex A.

 

This proxy statement and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. You should read this proxy statement and its Annexes carefully and in their entirety.

 

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.

 

Q:When and where is the Special Meeting?

 

A: The Special Meeting will be held on December 14, 2020 at 10:00 a.m. Eastern Time. The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

To be admitted to the virtual Special Meeting, go to the webcast URL address and enter your unique 12-digit control number. Registered stockholders received a notice and access instruction form or proxy card from Continental Stock Transfer. Both forms contain instructions on how to attend the virtual annual meeting, along with your control number. Beneficial investors, who own their investments through a bank or broker, will need to contact Continental Stock Transfer to receive a control number. If you do not have your control number, contact Continental Stock Transfer at (917) 262-2373, or via email at proxy@continentalstock.com.

 

You can pre-register to attend the virtual meeting starting December 10, 2020 at 9:00 a.m. Eastern Time. To pre-register, enter the webcast URL address into your browser and enter your control number, name and email address. Once you pre-register, you may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. For technical assistance during the meeting, you can contact Continental Stock Transfer for assistance at 917-262-2373, or via email at proxy@continentalstock.com.

 

If you do not have internet capabilities, you can listen only to the meeting by dialing +1 (888) 965-8995 (toll-free), outside the U.S., and Canada +1 (415) 655-0243 (standard rates apply). When prompted enter the pin number 74260910#. The telephone line will be listen-only, and you will not be able to vote or enter questions during the meeting via telephone.

 

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Special Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Special Meeting, the chair or secretary of the Special Meeting will convene the meeting at 3:00 p.m. Eastern Time on the date specified above and at the offices of Dechert LLP, Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

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Q:What are the specific proposals on which I am being asked to vote at the Special Meeting?

 

A:The Company’s stockholders are being asked to approve the following proposals:

 

1.Business Combination Proposal—To adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination (Proposal No. 1);

 

2.Nasdaq Proposal—To approve, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination (Proposal No. 2);

 

3.Charter Approval Proposal—To consider and act upon a proposal to adopt the Second Amended and Restated Certificate of Incorporation in the form attached hereto as Annex B (Proposal No. 3);

 

4.Governance Proposals—To consider and act upon separately presented proposals with respect to certain governance provisions in the Second Amended and Restated Certificate of Incorporation, which are being separately presented in accordance with SEC requirements and which will be voted upon on a non-binding advisory basis (Proposal No. 4);

 

5.Director Election Proposal—To consider and vote upon a proposal to elect two (2) directors to our Board to serve as our Class II directors for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. Assuming the Charter Approval Proposal is approved and our Board is declassified, such nominees, if elected, will serve on our Board until the 2021 annual meeting of stockholders, as applicable, and until their respective successors are duly elected and qualified (Proposal No. 5);

 

6.Incentive Plan Proposal—To consider and vote upon a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan (Proposal No. 6); and

 

7.Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal (Proposal No. 7).

 

Q:Are the proposals conditioned on one another?

 

A:Yes. Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal. Each of the proposals at the Special Meeting, other than the Governance Proposals, Director Election Proposal and the Adjournment Proposal, is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal. The Governance Proposals, the Director Election Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement. It is important for you to note that in the event that the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal do not receive the requisite vote for approval at the Special Meeting, subject to waiver by the parties pursuant to the Merger Agreement, we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by December 22, 2020, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to the public stockholders.

 

Q:Why is the Company providing stockholders with the opportunity to vote on the Business Combination?

 

A:Under our current certificate of incorporation, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Business Combination Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the closing of our Business Combination. The approval of the Business Combination is required under our current certificate of incorporation. In addition, such approval is also a condition to the closing of the Business Combination under the Merger Agreement.

 

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Q:What revenues and profits/losses has Landsea generated in the last three years?

 

A:For the fiscal years ended December 31, 2017, December 31, 2018, and December 31, 2019, Landsea had total revenue of $197.3 million, $378.6 million and $631.0 million, respectively, and net income (loss) of $(0.4 million), $29.2 million and $17.2 million, respectively. For additional information, please see the sections entitled “Selected Historical Financial Information of Landsea Homes” and “Landsea Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

Q:What will happen in the Business Combination?

 

A:Pursuant to the Merger Agreement, and upon the terms and subject to the conditions set forth therein, the Company will acquire Landsea in a transaction we refer to as the “Business Combination.” At the closing of the Business Combination contemplated by the Merger Agreement, the parties will undertake a transaction by which Merger Sub will merge with and into Landsea, with Landsea being the surviving entity of the Merger. As a result of the Merger, the Company will own 100% of the outstanding common stock of Landsea.

 

Q:Following the Business Combination, will the Company’s securities continue to trade on a stock exchange?

 

A:Yes. We intend to apply to continue the listing of the post-combination company’s Class A Stock, public warrants and public units on Nasdaq under the symbols “LSEA,” “LSEAW” and “LSEAU,” respectively, upon the closing of the Business Combination.

 

Q:How has the announcement of the Business Combination affected the trading price of the Company’s Class A Stock?

 

A: On August 28, 2020, the trading date before the public announcement of the Business Combination, the Company’s Class A Stock, public warrants and public units closed at $10.57, $0.75 and $11.05, respectively. On November 20, 2020, the trading date immediately prior to the date of this proxy statement, the Company’s Class A Stock, public units and public warrants closed at $10.58, $1.69 and $11.50, respectively.

 

Q:How will the Business Combination impact the shares of the Company outstanding after the Business Combination?

 

A:As a result of the Business Combination and the consummation of the transactions contemplated thereby, the amount of Common Stock outstanding, upon consummation of the Business Combination will increase from 16,100,613 to approximately 48,057,916 shares of Common Stock (assuming that no shares of Class A Stock are redeemed, and no outstanding warrants to purchase shares of Common Stock are exercised, the maximum amount of Utilization Fee Shares and Additional Fee Shares are issued pursuant to the Forward Purchase Transaction, and subject to further issuance of awards under the Incentive Plan described in the following sentence). Pursuant to the Incentive Plan, a copy of which is attached to this proxy statement as Annex F, following the closing of the Business Combination, the Company will grant restricted stock units with a grant date fair value of $4,000,000 that will vest at 20% on the first and second anniversaries and 30% on the third and fourth anniversaries to certain individuals, subject to each individual’s continued employment and other certain limitations and in consultation with and based on the recommendations of the Compensation Committee of the Board of the post-combination company.

 

Q:Is the Business Combination the first step in a “going private” transaction?

 

A:No. The Company does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for Landsea to access the U.S. public markets.

 

Q:Will the management of Landsea change in the Business Combination?

 

A:We anticipate that all of the named executive officers of Landsea will remain with the post-combination company. We expect that Martin Tian, John Ho, Joanna Zhou, Bruce Frank, Robert Miller and Tom Hartfield, current directors at the Seller, will each be appointed to serve as directors of the post-combination company upon completion of the Business Combination. Please see the sections entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation” and “Management After the Business Combination” for additional information.

 

Q:What is the Forward Purchase Transaction?

 

A:In connection with the Business Combination and concurrently with the execution of the Merger Agreement, the Company and the Sponsor have entered into Forward Purchase and Subscription Agreements with the FPSA Investors, whereby each FPSA Investor (i) committed to purchase certain amounts of shares of Class A Stock from public stockholders or in the open market or in privately negotiated transactions at or less than $10.56 per share, inclusive of any fees and commissions (the “Purchase Allocation”), which in the aggregate totals a commitment to purchase $35 million in shares of Class A Stock, (ii) vote its Class A Stock owned prior to the record date (up to the Purchase Allocation) in favor of the proposals set forth in this proxy statement, and (iii) not transfer or redeem its Class A Stock acquired pursuant to the Forward Purchase and Subscription Agreement prior to the consummation of the Business Combination or if the Merger Agreement is otherwise terminated. In consideration for entering into the Forward Purchase and Subscription Agreement, substantially concurrent with the consummation of the Business Combination, the Company will issue to each FPSA Investor such amounts of Class A Stock equal to (x) 0.06775 multiplied by (y) the Purchase Allocation, divided by (z) $10.56 (the “Utilization Fee Shares”). In the event that the per-share price exceeds $10.56 for the five (5) trading day period ending on the close of business on the trading day prior to the date the Company redeems its Class A Stock in connection with the Business Combination, the Company will also issue to each FSPA Investor additional amounts of Class A Stock substantially concurrent with the consummation of the Business Combination equal to (x) 0.04167 multiplied by (y) the Purchase Allocation, divided by (z) $10.56 (the “Additional Fee Shares”). The Sponsor has agreed to, substantially concurrent with the consummation of the Business Combination, forfeit such number of Founder Shares to the Company for retirement and cancellation equal to the total number of Utilization Fee Shares and Additional Fee Shares issued by the Company. The issuance of Utilization Fee Shares and the Additional Fee Shares are conditioned on the substantially concurrent closing of the Business Combination and other customary closing conditions. For additional information, please see the section entitled “The Business Combination—Forward Purchase Transaction.”

 

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Q:What equity stake will current stockholders of the Company and the Seller hold in the post-combination company after the closing?

 

A:It is anticipated that, upon completion of the Business Combination: (i) the Company’s public stockholders (excluding the LF Capital Restricted Stockholders’ converted Founder Shares) will retain an ownership interest of approximately 25.9% in the post-combination company; (ii) the LF Capital Restricted Stockholders will own approximately 5.3% of the post-combination company with respect to their converted Founder Shares; and (iii) the Seller will own approximately 68.8% of the post-combination company. The ownership percentage with respect to the post-combination company following the Business Combination (a) does not take into account (1) the issuance of any shares upon the exercise of warrants to purchase Class A Stock that will remain outstanding immediately following the Business Combination or (2) the issuance of any shares upon completion of the Business Combination under the Incentive Plan, but (b) does take into account (1) the conversion of 3,056,700 Founder Shares into an equivalent number of shares of Class A Stock at the closing of the Business Combination on a one-for-one basis (even though such shares of Class A Stock will be subject to transfer restrictions), (2) the transfer of 500,000 Founder Shares from the Sponsor to the Seller pursuant to the Sponsor Surrender Agreement and (3) the issuance of 224,550 shares of Class A Stock by the Company pursuant to the Forward Purchase Transaction and corresponding cancellation of an equal number of shares held by the Sponsor pursuant to the Sponsor Surrender Agreement. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

Q:Will the Company obtain new financing in connection with the Business Combination?

 

A:No. In connection with the Business Combination and concurrently with the execution of the Merger Agreement, the Company does not intend to obtain any new financing. The Company will use the funds in the Trust Account to pay certain transaction expenses upon the closing of the Business Combination and to fund working capital needs of the Company following the closing of the Business Combination, and the sole consideration for the Business Combination will be stock consideration. In addition, the Company will be assuming approximately $309 million of the existing indebtedness of Landsea. The Company does not anticipate obtaining any new debt financing to fund the Business Combination.

 

Q:What conditions must be satisfied to complete the Business Combination?

 

A:There are a number of closing conditions in the Merger Agreement, including the expiration of any applicable waiting period under the HSR Act, if required by the HSR Act, and the approval by the stockholders of the Company of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

 

Q:Are there any arrangements to help ensure that the Company will have sufficient funds to fund the aggregate purchase price?

 

A:The Merger Agreement provides that the Seller’s and Landsea’s obligation to consummate the Business Combination is conditioned on the amount in the Trust Account equaling or exceeding $90,000,000 after taking into account redemptions of Class A Stock by public stockholders and the aggregate amount of unpaid Parent Transaction Costs and Company Transaction Costs. These conditions to closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Stock by our public stockholders, these conditions are not met (or waived), then the Seller and Landsea may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s failure to have net tangible assets in excess of $5,000,000. Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A Stock.

 

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Q:Why is the Company proposing the Nasdaq Proposal?

 

A:We are proposing the Nasdaq Proposal in order to comply with Nasdaq Listing Rules 5635(a), (b) and (d), which require stockholder approval of certain transactions that result in the issuance of 20% or more of the outstanding voting power or shares of Common Stock outstanding before the issuance of stock or securities.

 

In connection with the Business Combination, we expect to issue (i) 32,557,303 shares of Class A Stock to the Seller pursuant to the terms of the Merger Agreement and (ii) up to 224,550 shares of Class A Stock to FPSA Investors pursuant to the Forward Purchase Transaction. Because we may issue 20% or more of our outstanding Common Stock, we are required to obtain stockholder approval of such issuance pursuant to Nasdaq Listing Rules 5635(a), (b) and (d). For more information, please see the section entitled “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination.”

 

Q:Why is the Company proposing the Charter Approval Proposal?

 

A:The Second Amended and Restated Certificate of Incorporation that we are asking our stockholders to adopt in connection with the Business Combination (the “Charter Approval Proposal” or “Proposal No. 3”) provides for certain amendments to our existing certificate of incorporation. Pursuant to Delaware law and the Merger Agreement, we are required to submit the Charter Approval Proposal to the Company’s stockholders for adoption. For additional information please see the section entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation.”

 

Q:Why is the Company proposing the Governance Proposals?

 

A:As required by applicable SEC guidance, the Company is requesting that its stockholders vote upon, on a non-binding advisory basis, a proposal to approve certain governance provisions contained in the Second Amended and Restated Certificate of Incorporation that materially affect stockholder rights. This separate vote is not otherwise required by Delaware law separate and apart from Proposal No. 3, but pursuant to SEC guidance, the Company is required to submit these provisions to its stockholders separately for approval. However, the stockholder vote regarding this proposal is an advisory vote, and is not binding on the Company or its board of directors (separate and apart from the approval of Proposal No. 3). Furthermore, the Business Combination is not conditioned on the separate approval of the Governance Proposal (separate and apart from approval of Proposal No. 3). For additional information, please see the section entitled “Proposal No. 4—Approval of Certain Governance Provisions in the Second Amended and Restated Certificate of Incorporation.”

 

Q:Why is the Company proposing the Director Election Proposal?

 

A:This Special Meeting is being held in lieu of 2020 Annual Meeting of the Company’s Stockholders, at which the election of Class II directors would otherwise be required pursuant to our existing governing documents. As a result, pursuant to the DGCL and our existing governing documents, the Company is setting forth a proposal to elect two (2) directors to our Board to serve as our Class II directors for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until each such director’s successor has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. Assuming the Charter Approval Proposal is approved and our Board is declassified, such nominees, if elected, will serve on our Board until the 2021 annual meeting of stockholders, as applicable, and until their respective successors are duly elected and qualified.

 

Upon consummation of the Business Combination, our Board anticipates increasing its size from eight (8) directors to nine (9) directors, with the directors serving until the post-combination company’s annual meeting of stockholders in 2021 and the election and qualification of their respective successors, or until their earlier resignation, removal or death. Please see the sections entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation” and “Management After the Business Combination” for additional information.

 

Q:Why is the Company proposing the Incentive Plan Proposal?

 

A:The Incentive Plan will promote ownership in the post-combination company by the employees, officers, non-employee directors and other service providers of the post-combination company and its subsidiaries and align the interests between these service providers and stockholders by providing compensation based on the value of, shares of the post-combination company’s common stock. Please see the section entitled “Proposal No. 6—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve under the Incentive Plan” for additional information.

 

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Q:Why is the Company proposing the Adjournment Proposal?

 

A:We are proposing the Adjournment Proposal to allow our Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal, but no other proposal if the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal are approved. In no event will our Board adjourn the Special Meeting or consummate the Business Combination beyond December 22, 2020. Please see the section entitled “Proposal No. 7—The Adjournment Proposal” for additional information.

 

Q:What happens if I sell my shares of Class A Stock before the Special Meeting?

 

A:The record date for the Special Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Class A Stock after the record date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares of Class A Stock because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your shares of Class A Stock prior to the record date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.

 

Q:What constitutes a quorum at the Special Meeting?

 

A:The presence, virtually or by proxy, at the Special Meeting of the holders of shares of outstanding Common Stock of the Company representing a majority of the voting power of all outstanding shares of Common Stock of the Company entitled to vote at the Special Meeting shall constitute a quorum in order to conduct business at the Special Meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. Our LF Capital Restricted Stockholders, other than the BlackRock Holders, as of September 17, 2020, own approximately 22.6% of our issued and outstanding shares of Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. As of the record date for the Special Meeting, 8,050,307 shares of our Common Stock would be required to achieve a quorum.

 

Q:What vote is required to approve the proposals presented at the Special Meeting?

 

A:The approval of the Business Combination Proposal, the Nasdaq Proposal, the Governance Proposals, which is a non-binding advisory vote, the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. Accordingly, assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the Governance Proposals, which is a non-binding advisory vote, the Incentive Plan Proposal and the Adjournment Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the Governance Proposals, which is a non-binding advisory vote, the Incentive Plan Proposal and the Adjournment Proposal. Our LF Capital Restricted Stockholders, other than the BlackRock Holders are parties to a voting and support agreement pursuant to which they have agreed to vote their Founder Shares and any public shares purchased during or after the IPO in favor of the Business Combination Proposal. Additionally, the parties to the voting and support agreement have agreed to vote any shares of Common Stock owned by them in favor of the proposals set forth in this proxy statement. As of September 17, 2020, our LF Capital Restricted Stockholders, other than the BlackRock Holders, own approximately 22.6% of our issued and outstanding shares of Common Stock, and will be able to vote all such shares at the Special Meeting.

 

The approval of the Charter Approval Proposal requires the affirmative vote of holders of a majority of the voting power of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting and a broker non-vote will have the same effect as a vote “AGAINST” such Charter Approval Proposal.

 

Directors are elected by a plurality of the votes cast by the holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. This means that the two director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting and abstentions and broker non-votes will have no effect on the election of directors pursuant to the Director Election Proposal.

 

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Q:What happens if the Business Combination Proposal is not approved?

 

A:If the Business Combination Proposal is not approved and we do not consummate a business combination by December 22, 2020, we will be required to dissolve and liquidate our Trust Account.

 

Q:What are the recommendations of the Board?

 

A:The Board believes that the Business Combination Proposal and the other proposals to be presented at the Special Meeting are in the best interest of our stockholders and unanimously recommends that its stockholders vote “FOR” the Business Combination Proposal, “FOR” the Nasdaq Proposal, “FOR” the Charter Approval Proposal, “FOR” each of the Governance Proposals, “FOR” each of the director nominees set forth in the Director Election Proposal, “FOR” the Incentive Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the Special Meeting.

 

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that aside from their interests as stockholders, our Sponsor and certain members of our Board and officers may have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. Please see the section entitled “Proposal No. 1—Approval of the Business Combination — Interests of Certain Persons in the Business Combination” for additional information.

 

Q:How do the LF Capital Restricted Stockholders intend to vote their shares?

 

A:Our LF Capital Restricted Stockholders, other than the BlackRock Holders, are parties to a voting and support agreement pursuant to which they have agreed to vote any Founder Shares held by them and any public shares purchased during or after our initial public offering (our “IPO”) in favor of our Business Combination. Additionally, the parties to the Voting and Support Agreement have agreed to vote any shares of Common Stock owned by them in favor of the other proposals set forth in this proxy statement. As of September 17, 2020, our LF Capital Restricted Stockholders, other than the BlackRock Holders, own approximately 22.6% of our issued and outstanding shares of Common Stock.

 

Q:May the Company, its Sponsor or the Company’s directors or officers or their affiliates purchase shares in connection with the Business Combination?

 

A:In connection with the stockholder vote to approve the proposed Business Combination, our Sponsor, directors or officers or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per-share pro rata portion of the Trust Account. None of our directors or officers or their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such selling stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such selling stockholder to vote such shares in a manner directed by the purchaser. In the event that our Sponsor, directors or officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per-share pro rata portion of the Trust Account.

 

Q:How many votes do I have at the Special Meeting?

 

A:Our stockholders are entitled to one vote on each proposal presented at the Special Meeting for each share of Common Stock held of record as of November 11, 2020, the record date for the Special Meeting. As of the close of business on the record date, there were 16,100,613 outstanding shares of our Common Stock.

 

Q:How do I vote?

 

A:If you were a holder of record of our Common Stock on November 11, 2020, the record date for the Special Meeting, you may vote with respect to the proposals virtually at the Special Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

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Voting by Mail.  By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the Special Meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the Special Meeting so that your shares will be voted if you are unable to attend the Special Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 5:00 p.m. Eastern Time on December 11, 2020.

 

Voting at the Virtual Meeting.  The Special Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020. To be admitted to the virtual Special Meeting, go to the webcast URL and enter your unique 12-digit control number. Registered stockholders received a notice and access instruction form or proxy card from Continental Stock Transfer. Both forms contain instructions on how to attend the virtual annual meeting, along with your control number. Beneficial investors, who own their investments through a bank or broker, will need to contact Continental Stock Transfer to receive a control number. If you do not have your control number, contact Continental Stock Transfer at (917) 262-2373, or via email at proxy@continentalstock.com. For additional information, please see the section entitled “Special Meeting in Lieu of 2020 Annual Meeting of Company Stockholders.”

 

You can pre-register to attend the virtual meeting starting December 10, 2020 at 9:00 a.m. Eastern Time. To pre-register, enter the webcast URL address into your browser and enter your control number, name and email address. Once you pre-register, you may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. Stockholders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. For technical assistance during the meeting, you can contact Continental Stock Transfer for assistance at 917-262-2373, or via email at proxy@continentalstock.com.

 

If you do not have internet capabilities, you can listen only to the meeting by dialing +1 (888) 965-8995 (toll-free), outside the U.S., and Canada +1 (415) 655-0243 (standard rates apply). When prompted enter the pin number 74260910#. The telephone line will be listen-only, and you will not be able to vote or enter questions during the meeting via telephone

 

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Special Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Special Meeting, the chair or secretary of the Special Meeting will convene the meeting at 3:00 p.m. Eastern Time on the date specified above and at the offices of Dechert LLP, Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

Q:What will happen if I abstain from voting or fail to vote at the Special Meeting?

 

A:At the Special Meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, a failure to vote or an abstention will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the Governance Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Adjournment Proposal, while a failure to vote or abstention will have the same effect as a vote ”AGAINST” the Charter Approval Proposal.

 

Q:What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting.

 

Q:If I am not going to attend the virtual Special Meeting, should I return my proxy card instead?

 

A:Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe the proposals presented to the stockholders at this Special Meeting will be considered non-routine and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the Special Meeting. If you do not provide instructions with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the Special Meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

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Q:How will a broker non-vote impact the results of each proposal?

 

Broker non-votes will count as a vote “AGAINST” the Charter Approval Proposal but will not have any effect on the outcome of any other proposals.

 

Q:May I change my vote after I have mailed my signed proxy card?

 

A:Yes. You may change your vote by sending a later-dated, signed proxy card to our Secretary at the address listed herein so that it is received by our Secretary prior to the Special Meeting or attend the Special Meeting virtually and vote. You also may revoke your proxy by sending a notice of revocation to our Secretary, which must be received by our Secretary prior to the Special Meeting.

 

Q:What should I do if I receive more than one set of voting materials?

 

A:You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:How will the Company’s Sponsor, directors and officers vote?

 

A:Prior to our IPO, we entered into agreements with our Sponsor and each of our directors and officers, pursuant to which each agreed to vote any shares of Common Stock owned by them in favor of the Business Combination Proposal. None of our Sponsor, directors or officers has purchased any shares of our Common Stock during or after our IPO and, as of the date of this proxy statement, neither we nor our Sponsor, directors or officers have entered into agreements, and are not currently in negotiations, to purchase shares prior to the consummation of the Business Combination.

 

Additionally, the LF Capital Restricted Stockholders, other than the BlackRock Holders, are parties to a voting and support agreement pursuant to which they have agreed to vote any shares of Common Stock owned by them in favor of the proposals set forth in this proxy statement. As of September 17, 2020, our LF Capital Restricted Stockholders, other than the BlackRock Holders, own 22.6% of our issued and outstanding shares of Common Stock, and will be able to vote all such shares at the Special Meeting.

 

Q:What interests do the Sponsor and the Company’s current officers and directors have in the Business Combination?

 

A:Our Sponsor and the directors and officers of the Company may have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination. These interests include:

 

·the fact that the LF Capital Restricted Stockholders have no right to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

·the fact that our Sponsor has agreed to forfeit up to 500,000 Founder Shares, contingent upon the valuation of the Company’s Class A Stock achieving certain thresholds during the twenty-four month period following the closing of the Business Combination;

 

·the fact that our Sponsor has agreed to transfer to the Seller 2,200,000 shares of Private Placement Warrants immediately prior to the closing of the Business Combination and 500,000 shares of Class A Stock immediately after the closing of the Business Combination (with such Class A Stock subject to the same contingencies noted above);

 

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·the fact that our Sponsor has agreed to forfeit 2,260,000 Private Placement Warrants and 600,000 Founder Shares in connection with a Business Combination;

 

·the fact that our Sponsor has agreed to forfeit an amount of Founder Shares to the Company for retirement and cancellation equal to the total number of Utilization Fee Shares and Additional Fee Shares issued by the Company pursuant to the Forward Purchase Transaction;

 

·the fact that our LF Capital Restricted Stockholders have agreed to waive their rights to certain anti-dilution conversion adjustments with respect to any shares of our Class B Stock they may hold in connection with the consummation of the Business Combination;

 

·the fact that the LF Capital Restricted Stockholders have no rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by December 22, 2020;

 

  · the fact that the LF Capital Restricted Stockholders paid an aggregate of $25,000 for 3,881,250 Founder Shares, which will have a significantly higher value at the time of the Business Combination and if unrestricted and freely tradable would be valued at approximately $41,063,625, based upon the closing trading price of the Class A Stock on November 20, 2020 (but, given the restrictions on such shares, we believe such shares have less value);

  

·the fact that our Sponsor and the BlackRock Holders paid an aggregate of approximately $7,760,000 for their 7,760,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by December 22, 2020;

 

·the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

·if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.20 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

·the anticipated continuation of two (2) of our existing directors, Messrs. Reed and Farhat, as directors of the post-combination company;

 

·the continued indemnification of our existing directors and officers prior to the Business Combination and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

·the fact that our Sponsor, officers and directors may not participate in the formation of, or become a director or officer of, any other blank check company until we have entered into a definitive agreement regarding an initial business combination or fail to complete an initial business combination by December 22, 2020;

 

·the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by December 22, 2020; and

 

·that pursuant to the Demand Registration Rights Agreement, the LF Capital Restricted Stockholders are entitled to registration of the shares of Class A Stock into which the Founder Shares will automatically convert at the time of the consummation of the Business Combination.

 

Q:Did the Company’s Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:No. Our current certificate of incorporation does not require our Board to seek a third-party valuation or fairness opinion in connection with a business combination unless the target business is affiliated with our Sponsor, directors or officers.

 

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Q:What happens if I vote against the Business Combination Proposal?

 

A:If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the affirmative vote of a majority of the outstanding shares of our Common Stock entitled to vote thereon at the Special Meeting, then the Business Combination Proposal will be approved and, assuming the approval of the Nasdaq Proposal and the Charter Approval Proposal and the satisfaction or waiver of the other conditions to closing, the Business Combination will be consummated in accordance with the terms of the Merger Agreement.

 

If you vote against the Business Combination Proposal and the Business Combination Proposal is not approved at the Special Meeting, then the Business Combination Proposal will fail and we will not consummate the Business Combination. If we do not consummate the Business Combination, we may seek to terminate the Merger Agreement in accordance with its terms and continue to try to complete a business combination with a different target business until December 22, 2020. If we fail to complete an initial business combination by December 22, 2020, then we will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

 

Q:Do I have redemption rights?

 

A:If you are a holder of public shares, you may submit your public shares for redemption for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to the Company to pay its franchise and income taxes and total aggregate proceeds from the Forward Purchase Transaction, by (ii) the total number of then-outstanding public shares; provided that the Company will not redeem any shares of Class A Stock issued in the IPO to the extent that such redemption would result in the Company’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) in excess of $5,000,000. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the shares of Class A Stock included in the units sold in our IPO. Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Our Sponsor, directors and officers have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Our LF Capital Restricted Stockholders have also agreed to waive their right to anti-dilution adjustment with respect to any shares of our Founder Shares they may hold in connection with the consummation of the Business Combination. For illustrative purposes, based on the fair value of investment securities held in the Trust Account of $129,126,990.62 as of September 17, 2020, the estimated per share redemption price would have been approximately $10.57 (after giving effect to redemptions in connection with the Business Combination Extension). Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest not previously released to the Company to pay its franchise and income taxes) in connection with the liquidation of the Trust Account, unless we complete an alternative business combination prior to December 22, 2020.

 

Q:If I am a unit holder, can I exercise redemption rights with respect to my units?

 

A:No. Holders of outstanding units must separate the underlying Class A Stock and public warrants prior to exercising redemption rights with respect to the Class A Stock. If you hold units registered in your own name, you must deliver the certificate for such units to Continental Stock Transfer & Trust Company, our transfer agent, with written instructions to separate such units into Class A Stock and public warrants. This must be completed far enough in advance to permit the mailing of the Class A Stock certificates back to you so that you may then exercise your redemption rights upon the separation of the Class A Stock from the units. See “How do I exercise my redemption rights?” below. The address of Continental Stock Transfer & Trust Company is listed under the question “Who can help answer my questions?” below. If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company, our transfer agent. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using DTC’s deposit withdrawal at custodian (DWAC) system, a withdrawal of the relevant units and a deposit of an equal number of Class A Stock and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation.

 

Q:Can the Company’s LF Capital Restricted Stockholders redeem their Founder Shares in connection with consummation of the Business Combination?

 

A:No. Pursuant to our current certificate of incorporation Founder Shares may not be redeemed in connection with the consummation of the Business Combination. Our LF Capital Restricted Stockholders, other than the BlackRock Holders, also have agreed to waive (i) their redemption rights with respect to any Class A Stock they may hold in connection with the consummation of our Business Combination and (ii) their right to an anti-dilution conversion adjustment with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination.

 

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Q:Is there a limit on the number of shares I may redeem?

 

A:Yes. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from exercising redemption rights with respect to more than an aggregate of 20% of the shares sold in our IPO. Accordingly, all shares in excess of 20% owned by a holder or “group” of holders will not be redeemed for cash. On the other hand, a public stockholder who holds less than 20% of the shares of Class A Stock and is not a member of a “group” may redeem all of the public shares held by such stockholder for cash.

 

In no event is your ability to vote all of your shares (including those shares held by you or by a “group” in excess of 20% of the shares sold in our IPO) for or against our Business Combination restricted.

 

We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 20% threshold. Each redemption of shares of Class A Stock by our public stockholders will reduce the amount in our Trust Account, which held cash and investment securities with a fair value of approximately $129,126,990.62 as of September 17, 2020 (after giving effect to redemptions in connection with the Business Combination Extension). The Merger Agreement provides that the Seller and Landsea’s obligation to consummate the Business Combination is conditioned on the amount in the Trust Account equaling or exceeding $90,000,000 after taking into account redemptions of Class A Stock by public stockholders and the aggregate amount of unpaid Parent Transaction Costs and Company Transaction Costs. These conditions to closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Stock by our public stockholders, these conditions are not met (or waived), then the Seller and Landsea may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s failure to have net tangible assets in excess of $5,000,000.

 

Q:Is there a limit on the total number of shares that may be redeemed?

 

A:Yes. Our current certificate of incorporation provides that we may not redeem our public shares in an amount that would result in the Company’s failure to have net tangible assets in excess of $5,000,000 (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the Merger Agreement. Other than this limitation, our current certificate of incorporation does not provide a specified maximum redemption threshold. However, the Merger Agreement provides that our and Seller’s obligations to consummate the Business Combination are conditioned on the amount in the Trust Account equaling or exceeding $90,000,000. In the event the aggregate cash consideration that we would be required to pay for all shares of Class A Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Merger Agreement exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all shares of Class A Stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

Based on the amount of $129,126,990.62 in our Trust Account as of September 17, 2020 (after giving effect to redemptions in connection with the Business Combination Extension), assuming a per share redemption price of $10.57, approximately 1,623,379 shares of Class A Stock may be redeemed and still enable us to have sufficient cash to satisfy the cash closing conditions in the Merger Agreement, assuming there are no unpaid Parent Transaction Costs and Company Transaction Costs. We refer to this as the maximum redemption scenario.

 

Q:How will the absence of a maximum redemption threshold affect the Business Combination?

 

A:The Merger Agreement provides that our and Seller’s obligations to consummate the Business Combination are conditioned on the amount in the Trust Account equaling or exceeding $90,000,000. As a result, we may be able to complete our Business Combination even though a substantial portion of our public stockholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to our Sponsor, directors or officers or their affiliates. As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals (as described in this proxy statement) at the Special Meeting.

 

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Q:Will how I vote affect my ability to exercise redemption rights?

 

A:No. You may exercise your redemption rights whether you vote your shares of Common Stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described by this proxy statement. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of Nasdaq.

 

Q:How do I exercise my redemption rights?
A: In order to exercise your redemption rights, you must (i) if you hold public units, separate the underlying public shares and public warrants, and (ii) prior to 5:00 p.m. Eastern Time on December 10, 2020 (two business days before the Special Meeting), (a) tender your public shares by either physically delivering your share certificate to Continental Stock Transfer & Trust Company, the Transfer Agent, or electronically through DTC’s DWAC system, and (b) submit a request in writing that we redeem your public shares for a pro rata portion of the funds held in the Trust Account to the Transfer Agent, at the following address:

 

Continental Stock Transfer & Trust Company
1 State Street 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com

 

A holder of the public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from exercising redemption rights with respect to more than an aggregate of 20% of the shares of Class A Stock included in the units sold in our IPO. Accordingly, all public shares in excess of the 20% threshold beneficially owned by a public stockholder or group will not be redeemed for cash.

 

Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, we do not have any control over this process and it may take longer than two weeks. Electronic delivery of your public shares generally will be faster than delivery of physical certificates. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

 

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name” are required to either tender their certificates to our Transfer Agent prior to the date set forth in these proxy materials, or up to two business days prior to the vote on the proposal to approve the Business Combination at the Special Meeting, or to deliver their shares to the Transfer Agent electronically using Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. A physical certificate will not be needed if your shares are delivered to our Transfer Agent electronically. The requirement for physical or electronic delivery prior to the Special Meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

 

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

 

Q:What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:The U.S. federal income tax consequences of exercising your redemption rights depend on the particular facts and circumstances. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Material United States Federal Income Tax Considerations for Stockholders Exercising Redemption Rights and Warrant Holders with respect to the Warrant Amendment and Warrant Cash Payment.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

 

Q:If I am a Company warrant holder, can I exercise redemption rights with respect to my public warrants?

 

A:No. The holders of our public warrants have no redemption rights with respect to our public warrants.

 

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Q:Do I have appraisal rights if I object to the proposed Business Combination?

 

A:No. Appraisal rights are not available to holders of our Common Stock in connection with the Business Combination.

 

Q:What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A:The funds held in the Trust Account will be used to: (i) pay Company stockholders who properly exercise their redemption rights; (ii) pay $5,433,750 in deferred underwriting commissions to the underwriters of our IPO, in connection with the Business Combination; (iii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by the Company and other parties to the Merger Agreement in connection with the transactions contemplated by the Merger Agreement, including the Business Combination, and pursuant to the terms of the Merger Agreement; and (iv) in the event that that the warrant holders approve the Warrant Amendment Proposal, pay to the holders of public warrants immediately prior to the closing of the Business Combination the Warrant Cash Payment as soon as reasonably practicable following the consummation of the Business Combination.

 

Q:What happens if the Business Combination is not consummated?

 

A:There are certain circumstances under which the Merger Agreement may be terminated. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement” for information regarding the parties’ specific termination rights.

 

If we do not consummate the Business Combination, we may seek to terminate the Merger Agreement in accordance with its terms and continue to try to complete a business combination with a different target business until December 22, 2020. Unless we amend our current certificate of incorporation (which requires the affirmative vote of 65% of all then outstanding shares of Class A Stock) and amend certain other agreements into which we have entered to extend the life of the Company, if we fail to complete an initial business combination by December 22, 2020, then we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem our public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish our public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the IPO. Please see the section entitled “Risk Factors—Risks Related to the Business Combination.”

 

Holders of our Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, if we fail to complete a business combination by December 22, 2020, there will be no redemption rights or liquidating distributions with respect to our outstanding warrants, which will expire and be worthless. We expect to consummate the Business Combination and do not intend to take any action to extend the life of the Company beyond December 22, 2020.

 

Q:When is the Business Combination expected to be completed?

 

A:The closing of the Business Combination is expected to take place on or prior to the third business day following the satisfaction or waiver of the conditions described below in the subsection entitled “Proposal No. 1—Approval of the Business Combination—Conditions to Closing of the Business Combination.” The closing is expected to occur in the fourth quarter of 2020. The Merger Agreement may be terminated by the Company or the Stockholder Representative if the closing of the Business Combination has not occurred by December 22, 2020.

 

For a description of the conditions to the completion of the Business Combination, see the section entitled “Proposal No. 1—Approval of the Business Combination—Conditions to Closing of the Business Combination.”

 

Q:What do I need to do now?

 

A:You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

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Q:Who will solicit and pay the cost of soliciting proxies for the Special Meeting?

 

A:The Company is soliciting proxies on behalf of its Board. The Company will pay the cost of soliciting proxies for the Special Meeting. The Company has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the Special Meeting. The Company has agreed to pay Morrow Sodali LLC a fee of up to $50,000, plus disbursements, and will reimburse Morrow Sodali LLC for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. The Company will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of the Company’s Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the Company’s Common Stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or virtually. They will not be paid any additional amounts for soliciting proxies.

 

Q:Who can help answer my questions?

 

A:If you have questions about the proposals or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:

 

LF Capital Acquisition Corp.
600 Madison Avenue, Suite 1802
New York, NY 10022
(212) 319-6550
Attention: Scott Reed
Email: sreed@lfcapital.co

 

You may also contact our proxy solicitor at:

 

Morrow Sodali LLC
470 West Avenue
Stamford, CT 06902
Individuals, please call toll-free: (800) 662-5200
Banks and brokerage, please call: (203) 658-9400
Email: LFAC.info@investor.morrowsodali.com

 

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the Special Meeting.

 

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

 

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the Special Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:

 

Continental Stock Transfer & Trust Company
1 State Street 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com

 

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QUESTIONS AND ANSWERS ABOUT THE WARRANT AMENDMENT

 

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the Warrant Holders Meeting, including with respect to the proposed Warrant Amendment. The following questions and answers do not include all the information that is important to our warrant holders. We urge warrant holders to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the proposed Warrant Amendment and the voting procedures for the Warrant Holders Meeting, which will be held on December 14, 2020 at 9:30 a.m. Eastern Time. The Warrant Holder Meeting is a virtual stockholder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

Q:What is the purpose of the amendment for which approval is being sought?

 

A:Approval is being sought from warrant holders as of November 11, 2020 in order to provide that, upon the completion of the Business Combination (i) each of our outstanding public warrants, which currently entitle the holder thereof to purchase one share of our Class A Stock at an exercise price of $11.50 per share, will become exercisable for one-tenth of one share at an exercise price of $1.15 per one-tenth share ($11.50 per whole share) and (ii) each holder of a public warrant immediately prior to the consummation of the Business Combination will be entitled to receive, for each such warrant (in exchange for the reduction in the number of shares for which such warrants are exercisable), a cash payment of $1.85 as soon as reasonably practicable following the consummation of the Business Combination. Amended warrants will be exercisable only for a whole number of shares of common stock.

 

The Board believes that the Warrant Amendment will increase our opportunities and attractiveness to future investors by significantly reducing the dilutive impact of the warrants.

 

Q:When and where will the Warrant Holders Meeting be held?

 

A: The Warrant Holders Meeting will be held prior to the Shareholders Meeting on December 14, 2020 at 9:30 a.m. Eastern Time. Only holders of our public warrant holders at the close of business on November 11, 2020 will be entitled to vote at the Warrant Holders Meeting and at any adjournments and postponements thereof. The Warrant Holder Meeting is a virtual warrant holder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

To be admitted to the virtual Warrant Holder Meeting, go to the webcast URL and enter your unique 12-digit control number. Registered warrant holders received a notice and access instruction form or proxy card from Continental Stock Transfer. Both forms contain instructions on how to attend the virtual annual meeting, along with your control number. Beneficial investors, who own their investments through a bank or broker, will need to contact Continental Stock Transfer to receive a control number. If you do not have your control number, contact Continental Stock Transfer at (917) 262-2373, or via email at proxy@continentalstock.com.

 

You can pre-register to attend the virtual meeting starting December 10, 2020 at 9:00 a.m. Eastern Time. To pre-register, enter the webcast URL address into your browser and enter your control number, name and email address. Once you pre-register, you may vote during the Warrant Holder Meeting by following the instructions available on the meeting website during the meeting. Warrant holders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able to submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. For technical assistance during the meeting, you can contact Continental Stock Transfer for assistance at 917-262-2373, or via email at proxy@continentalstock.com.

 

If you do not have internet capabilities, you can listen only to the meeting by dialing +1 (888) 965-8995 (toll-free), outside the U.S., and Canada +1 (415) 655-0243 (standard rates apply). When prompted enter the pin number 74260910#. The telephone line will be listen-only, and you will not be able to vote or enter questions during the meeting via telephone.

 

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Warrant Holder Meeting to satisfy the requirements for a meeting of warrant holders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Warrant Holder Meeting, the chair or secretary of the Warrant Holder Meeting will convene the meeting at 3:00 p.m. Eastern Time on the date specified above and at the offices of Dechert LLP, Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

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Q:Who is entitled to vote at the Warrant Holders Meeting?

 

A:The Company has fixed November 11, 2020 as the record date, or “record date.” If you were a holder of our public warrants at the close of business on the record date, you are entitled to vote on matters that come before the Warrant Holders Meeting. However, a holder of our public warrants may only vote his, her or its warrants if he, she or it is present virtually or is represented by proxy at the Warrant Holders Meeting.

 

Q:How do I vote?

 

A:If you were a holder of record of our public warrants on November 11, the record date for the Warrant Holder Meeting, you may vote with respect to the proposals virtually at the Warrant Holder Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Voting by Mail.  By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your public warrants at the Warrant Holder Meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the Warrant Holder Meeting so that your public warrants will be voted if you are unable to attend the Warrant Holder Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 5:00 p.m. Eastern Time on December 11, 2020.

 

Voting at the Virtual Meeting.  The Warrant Holders Meeting is a virtual warrant holder meeting conducted exclusively via a live audio webcast at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020. To be admitted to the virtual Warrant Holder Meeting, go to the webcast URL and enter your unique 12-digit control number. Registered warrant holders received a notice and access instruction form or proxy card from Continental Stock Transfer. Both forms contain instructions on how to attend the virtual annual meeting, along with your control number. Beneficial investors, who own their investments through a bank or broker, will need to contact Continental Stock Transfer to receive a control number. If you do not have your control number, contact Continental Stock Transfer at (917) 262-2373, or via email at proxy@continentalstock.com. For additional information, please see the section entitled “Special Meeting of Company Warrant Holders.”

 

You can pre-register to attend the virtual meeting starting December 10, 2020 at 9:00 a.m. Eastern Time. To pre-register, enter the webcast URL address into your browser and enter your control number, name and email address. Once you pre-register, you may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. Warrant holders participating in the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, virtual attendees will be able submit questions before and during the meeting through the virtual meeting portal by typing in the “Submit a question” box. For technical assistance during the meeting, you can contact Continental Stock Transfer for assistance at 917-262-2373, or via email at proxy@continentalstock.com. If your warrants are registered directly in your name, you are considered the warrant holder of record and you have the right to vote virtually at the Warrant Holder Meeting.

 

If you do not have internet capabilities, you can listen only to the meeting by dialing +1 (888) 965-8995 (toll-free), outside the U.S., and Canada +1 (415) 655-0243 (standard rates apply). When prompted enter the pin number 74260910#. The telephone line will be listen-only, and you will not be able to vote or enter questions during the meeting via telephone.

 

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Warrant Holder Meeting to satisfy the requirements for a meeting of warrant holders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Warrant Holder Meeting, the chair or secretary of the Warrant Holder Meeting will convene the meeting at 3:00 p.m. Eastern Time on the date specified above and at the offices of Dechert LLP, Three Bryant Park, 1095 Avenue of the Americas, New York, New York 10036 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020.

 

Q:What if I do not vote my public warrants or if I abstain from voting?

 

A:The approval of the Warrant Amendment Proposal requires the affirmative vote by the holders of at least 65% of our outstanding public warrants. The Warrant Holders Adjournment Proposal, if presented, requires the affirmative vote by the holders of a majority of the outstanding public warrants that are present and entitled to vote at the Warrant Holders Meeting. Abstentions and broker non-votes will have the same effect as a vote against the Warrant Amendment Proposal but, assuming a valid quorum is present, will have no effect on the Warrant Holder Adjournment Proposal, if presented.

 

Q:What do I do if I want to vote against the amendments?

 

A:If you are a holder of our public warrants at the close of business on the record date and you wish to vote against the Warrant Amendment Proposal, you should sign and return your proxy card indicating a vote “AGAINST.” Alternatively, you may vote at the virtual Warrant Holders Meeting. If you are a holder of our public warrants at the close of business on the record date and you do not sign and return your proxy card to your broker or vote virtually at the Warrant Holders Meeting, that will have the same effect as a vote “AGAINST” the Warrant Amendment Proposal.

 

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Q:What will happen to the warrants if the Warrant Amendment Proposal is not approved?

 

A:If the Warrant Amendment Proposal is not approved, the Warrant Amendment will not become effective, and the Warrant Cash Payment will not be paid to the holders of our public warrants.

 

Q:Are the proposals conditioned on one another?

 

A:The Warrant Amendment Proposal is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal at the Special Meeting, but the Warrant Holders Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement.

 

Q:What changes will be made to the terms of the warrants if the Warrant Amendment becomes operative?

 

A:We encourage you to review the substantive text of the proposed Warrant Amendment attached as Annex M to this proxy statement. Please see the section entitled “WARRANT HOLDER PROPOSAL NO. 1 — Approval of The Warrant Amendment Proposal” for additional information.

 

Q:What is the record date?

 

A:The record date will be the close of business on November 11, 2020. All public warrant holders of record at the close of business on this date will be entitled to vote on the Warrant Amendment.

 

Q:What percentage of outstanding warrants must submit written consents for the Warrant Amendment to be approved?

 

A:The Company must receive consents representing 65% of the outstanding public warrants for the Warrant Amendment to be approved.

 

Q:If the Warrant Amendment is approved, when will it become effective?

 

A:The Warrant Amendment will not become effective unless and until the Business Combination is completed.

 

Q:In addition to receiving the necessary approval from public warrant holders, what are the other conditions to the Warrant Amendment?

 

A:All other conditions to the completion of the Business Combination must be satisfied for the Warrant Amendment to become operative. If such conditions are not satisfied or the Business Combination does not occur for any reason, the Warrant Amendment will not become operative.

 

Q:What is the Warrant Cash Payment and will I be entitled to receive the Warrant Cash Payment?

 

A:The Warrant Amendment provides that, upon the completion of the Business Combination, (i) each of our outstanding public warrants, which currently entitle the holder thereof to purchase one share of our Class A Stock at an exercise price of $11.50 per share, will become exercisable for one-tenth of one share at an exercise price of $1.15 per one-tenth share ($11.50 per whole share) and (ii) each holder of a public warrant immediately prior to the consummation of the Business Combination will be entitled to receive, for each such warrant (in exchange for the reduction in the number of shares for which such warrants are exercisable), a cash payment of $1.85 as soon as reasonably practicable following the consummation of the Business Combination (the “Warrant Cash Payment”). If the Warrant Amendment Proposal is approved and the Business Combination is completed, all holders of our public warrants will receive the Warrant Cash Payment in respect of their public warrants.

 

Q:When will I receive any Warrant Cash Payment I am owed?

 

A:Assuming the Warrant Amendment is approved and the Business Combination is completed, all of our public warrant holders will be entitled to receive the Warrant Cash Payment promptly following consummation of the Business Combination. If the Business Combination is not consummated, the Warrant Amendment will not take effect and no Warrant Cash Payment will be paid.

 

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Q:If I am a warrant holder and am not a holder of Common Stock, what are the U.S. federal income tax consequences to me if the Warrant Amendment is approved and the Business Combination is consummated?

 

A:The U.S. federal income tax consequences of the consummation of the Business Combination, the approval of the Warrant Amendment and receipt of the Warrant Cash Payment depend on the particular facts and circumstances. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Material United States Federal Income Tax Considerations for Stockholders Exercising Redemption Rights and Warrant Holders with respect to the Warrant Amendment and Warrant Cash Payment.” We urge you to consult your tax advisors regarding the tax consequences of the consummation of the Business Combination, the approval of the Warrant Amendment and receipt of the Warrant Cash Payment.

 

Q:If I purchase public warrants after the record date, am I entitled to vote on the Warrant Amendment?

 

A:No. Only our public warrant holders on the record date will be eligible to vote on the Warrant Amendment. If you purchase our public warrants after this date, you will not be entitled to vote on the Warrant Amendment, but you will be entitled to receive the Warrant Cash Payment.

 

Q:Who do I call if I have any questions about how to vote or any other questions relating to the Warrant Amendment Proposal or the Warrant Amendment?

 

A:Questions concerning the terms of the Warrant Amendment Proposal should be directed to our proxy agent by telephone at (800) 662-5200, for individuals, or (203) 658-9400, for banks and brokerage. Requests for assistance in voting or requests for additional copies of this proxy statement or other related documents should be directed to our proxy agent by telephone at (800) 662-5200, for individuals, or (203) 658-9400, for banks and brokerage. While each of the proxy agent and the Transfer Agent will be available to answer questions about the Warrant Amendment Proposal, neither of them will make any recommendation as to whether or not holders should vote for or against the Warrant Amendment Proposal.

 

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SUMMARY OF THE PROXY STATEMENT

 

This summary highlights selected information contained in this proxy statement and does not contain all of the information that may be important to you. You should read carefully this entire proxy statement, including the Annexes and accompanying financial statements of the Company and Landsea, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the Special Meeting (as described below). Please see the section entitled “Where You Can Find More Information” beginning on page 258 of this proxy statement.

 

Unless otherwise specified, all share calculations assume (i) no exercise of redemption rights by the Company’s public stockholders; (ii) no inclusion of any shares of Class A Stock issuable upon the exercise of the Company’s warrants or any shares to be issued pursuant to the Incentive Plan at or following the closing of the Business Combination; and (iii) the cancellation of approximately 2,260,000 Private Placement Warrants and 600,000 Founder Shares held by our Sponsor.

 

Parties to the Business Combination

 

The Company

 

The Company is a blank check company incorporated in the state of Delaware on June 29, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

The Company’s securities are currently listed on the Nasdaq Capital Market under the symbols “LFAC,” “LFACW” and “LFACU,” respectively. The Company intends to apply to continue the listing of its publicly-traded Class A Stock, public warrants, and units on Nasdaq under the symbols “LSEA,” “LSEAW” and “LSEAU,” respectively, upon the closing of the Business Combination. In connection with the consummation of the Business Combination, the Company will change its name to Landsea Homes Corporation.

 

The mailing address of the Company’s principal executive office is 600 Madison Avenue, Suite 1802, New York, NY 10022.

 

Merger Sub

 

Merger Sub, a Delaware corporation, is a wholly-owned subsidiary of the Company, formed by the Company on August 20,2020. In the Business Combination, Merger Sub will merge with and into Landsea, with Landsea continuing as the surviving entity.

 

The mailing address of Merger Sub’s principal executive office is 600 Madison Avenue, Suite 1802, New York, NY 10022.

 

Landsea

 

Landsea, a Delaware corporation, is a rapidly growing U.S. homebuilder, primarily engaged in the design, construction, marketing and sale of suburban and urban single-family detached and attached homes in California, Arizona and Metro New York. In the Business Combination, Merger Sub will merge with and into Landsea, with Landsea continuing as the surviving entity. In connection with the merger with Merger Sub, Landsea will change its name to Landsea Homes US Corporation.

 

The mailing address of Landsea’s principal executive office is 660 Newport Center Drive, Suite 300, Newport Beach, California 92660.

 

Seller

 

The Seller, a Delaware corporation, is the direct parent of Landsea.

 

The mailing address of the Seller’s principal executive office is 660 Newport Center Drive, Suite 300, Newport Beach, California 92660.

 

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Landsea’s Business

 

Landsea is a rapidly growing U.S. homebuilder. Headquartered in Newport Beach, California, Landsea is primarily engaged in the design, construction, marketing and sale of suburban and urban single-family detached and attached homes in California, Arizona, and Metro New York. Landsea is a wholly owned indirect U.S. subsidiary of Landsea Green Group Co., Ltd., a leading environmentally focused homebuilding company that operates in the U.S., Germany, and China. While it offers a wide range of properties, Landsea primarily focuses on entry-level and first-time move-up homes. For more information about Landsea, please see the sections entitled “Information About Landsea,” “Landsea’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management after the Business Combination.”

 

The Business Combination Proposal

 

On August 31, 2020, the Company entered into the Merger Agreement, by and among the Company, Merger Sub, Landsea and the Seller. The Merger Agreement provides that, among other things, prior to the closing of the Business Combination contemplated by the Merger Agreement, the parties will undertake the merger of Merger Sub with and into Landsea, with Landsea continuing as the surviving corporation (the “Merger”). For more information about the transactions contemplated by the Merger Agreement, please see the section entitled “Proposal No. 1 – Approval of the Business Combination.” A copy of the Merger Agreement is attached to this proxy statement as Annex A.

 

Consideration to the Seller in the Business Combination

 

Subject to the terms of the Merger Agreement and customary adjustments set forth therein, the aggregate purchase price for the Business Combination and related transactions is approximately $344 million. The Seller will receive approximately $344 million of Stock Consideration, consisting of 32,557,303 newly issued shares of our Class A Stock, which shares will be valued at $10.56 per share for purposes of determining the aggregate number of shares payable to the Seller. The number of shares of Class A Stock issued to the Seller as Stock Consideration is not subject to adjustment. At the closing of the Business Combination, the Seller will receive shares of Class A Stock.

 

Related Agreements

 

Stockholder’s Agreement

 

At the closing of the Business Combination, the Company and the Seller will enter into a Stockholder’s Agreement, a copy of which is attached hereto as Annex D, whereby, among other things, the parties thereto will agree (i) to certain board composition and nomination requirements, including rights to nominate directors in accordance with defined ownership thresholds, establish certain committees and their respective duties and allow for the compensation of directors, (ii) to provide the Seller with certain inspection and visitation rights, access to Company management, auditors and financial information, (iii) provide the Seller with veto rights with respect to certain actions of the Company, (iv) not to, to the extent permitted by applicable law, share confidential information related to the Company, (v) waive their right to jury trial and choose Delaware as the choice of law, and (vi) vote their Common Stock in furtherance of the aforementioned rights, in each case on terms and subject to the conditions set forth therein. In addition, the Seller will also agree to not compete with the Company in the “domestic homebuilding business,” as such term is defined therein, so long as it controls more than 10% of the Company or has a representative serving on the board of directors. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements — Stockholder’s Agreement” for further information.

 

Investor Representation Letter

 

At the closing of the Business Combination, the Seller will deliver an investor representation letter, a copy of which is attached hereto as Annex E, whereby, among other things, the Seller will represent to the Company that it is an accredited investor and is otherwise qualified to receive the Stock Consideration pursuant to a private placement effected in reliance on the exemption from the registration requirements of the Securities Act, provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated under the Securities Act, and exemptions from the qualification requirements of applicable state law. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Investor Representation Letter” for further information.

 

Lock-up Agreements

 

At the closing of the Business Combination, the Seller and Sponsor will each enter into an equity lock-up letter agreement with the Company, copies of which are attached hereto as Annexes G-1 and G-2, providing that each of Seller and Sponsor and their permitted transferees, during the period commencing on the closing of the Business Combination and continuing until the earlier of (i) one year following the closing of the Business Combination and (ii) subsequent to the closing of the Business Combination, (x) if the last sale price of the Class A Stock equals or exceeds $12.00 per share as quoted on Nasdaq (adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days following the closing of the Business Combination or (y) the date following the closing of the Business Combination on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of the Company for cash, securities or other property, will be restricted from transferring or selling their Common Stock or warrants, in each case on terms and subject to the conditions set forth therein. Additionally, each of Sponsor and Seller will be restricted from transferring or selling public warrants and private warrants for 30 days following the Business Combination. Please see the section entitled “Proposal No. 1 — Approval of the Business Combination—Related Agreements—Lock-up Agreements” for further information.

 

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License Agreement

 

At the closing of the Business Combination, an affiliate of the Seller (“Licensor”), the Company, and each of its greater than 50% owned subsidiaries (the “Licensees”), will enter into a License Agreement, pursuant to which, the Licensor will agree, among other things, to grant the Licensees an exclusive license to use the “Landsea” trademark in connection with the “domestic homebuilding business” (as such term is defined in the Stockholder’s Agreement), subject to certain usage standards and the Seller indirectly owning, together with its affiliates, more than 6% of the post-combination company’s Class A Stock, in each case on terms and subject to the conditions set forth therein. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—License Agreement” for further information.

 

Incentive Plan

 

Our Board approved the Incentive Plan on September 17, 2020, subject to stockholder approval of the Incentive Plan at the Special Meeting, to become effective at the closing of the Business Combination. The purpose of the Incentive Plan is to advance promote and closely align the interests of employees, officers, non-employee directors and other service providers of the Company and its stockholders by providing an incentive program that will enable the Company to offer stock-based compensation. The objectives of the Incentive Plan are to attract and retain the best available employees, consultants and directors and to provide them with an equity interest in the Company’s growth and for positions of substantial responsibility and to motivate participants to optimize the profitability of the Company through incentives that are consistent with the Company’s goals and that link the personal interests of participants to those of the Company’s stockholders. These incentives are provided through the grant of stock options, stock appreciation rights, restricted stock, and restricted stock units, performance shares, performance units, other stock-based awards and cash-based awards. For more information about the Incentive Plan, please see the section entitled “Proposal No. 6—Approval of the Incentive Plan, including the Authorization of the Initial Share Reserve under the Incentive Plan—Summary of the Incentive Plan.”

 

Other Agreements

 

Sponsor Surrender Agreement

 

Concurrent with the execution of the Merger Agreement, the Sponsor, the Company, the Seller, and Landsea entered into that certain Sponsor Transfer, Waiver, Forfeiture and Deferral Agreement (the “Sponsor Surrender Agreement”), pursuant to which, the Sponsor has agreed to (i) forfeit to the Company for no consideration 2,260,000 Private Placement Warrants and 600,000 Founder Shares, (ii) forfeit up to 500,000 shares of its converted Founder Shares contingent upon the valuation of the Class A Stock reaching certain thresholds during the twenty-four month period following the closing of the Business Combination, (iii) transfer to the Seller 2,200,000 Private Placement Warrants immediately prior to the closing of the Business Combination and 500,000 shares of Class A Stock immediately after the closing of the Business Combination (with such Class A stock subject to the contingencies noted above), (iv) cancel and forgive all amounts owed to Sponsor pursuant to the Promissory Note, and (v) receive a cash payment in lieu of converting outstanding amounts due under the Convertible Note upon the consummation of the Business Combination, in each case on terms and subject to the conditions set forth therein, a copy of which is attached hereto as Annex I.

 

Founders’ Waiver Agreements

 

Concurrent with the execution of the Merger Agreement, the Company, the Seller, Landsea and each of the LF Capital Restricted Stockholders, other than the BlackRock Holders, entered into those certain Founder Waiver Agreements (collectively, the “Founders’ Waiver Agreements”), pursuant to which, each LF Capital Restricted Stockholder party thereto agreed to (i) waive certain of their anti-dilution, conversion, and redemption rights with respect to their Founder Shares and (ii) convert their Founder Shares into shares of the Company’s Class A Stock on a one-for-one basis, in each case on terms and subject to the conditions set forth therein. Additionally, each of the LF Capital Restricted Stockholders party thereto agreed to waive their redemption rights with respect to any Class A Stock they may own. A copy of the Founders’ Waiver Agreement is attached hereto as Annex J-1.

 

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Additionally, the Company, the Seller, Landsea and the BlackRock Holders entered into a waiver agreement (the “BlackRock Waiver Agreement”), pursuant to which, each BlackRock Holder agreed to (i) waive certain of their anti-dilution and conversion rights with respect to their Founder Shares and (ii) convert their Founder Shares into shares of the Company’s Class A Stock on a one-for-one basis, in each case on terms and subject to the conditions set forth therein. A copy of the BlackRock Waiver Agreement is attached hereto as Annex J-2.

 

Indemnification Agreement

 

Concurrent with the execution of the Merger Agreement, the Company entered into an indemnification agreement with the Seller and the Sponsor (the “Indemnification Agreement”), whereby the Company agreed that it would (i) not amend, waive, terminate or otherwise modify the BlackRock Waiver Agreement without the prior written consent of the Seller and (ii) enforce the obligations thereunder. The Sponsor agreed to (i) indemnify the Company and the Seller for all reasonably documented out-of-pocket costs the Company or Seller may incur in connection with enforcing the Indemnification Agreement and the BlackRock Waiver Agreement and (ii) immediately after the Closing, forfeit such number of Class A Stock of the Company equal to the number of shares of Founder Shares held by the BlackRock Holders that are converted into Class A Stock at or as a result of the closing of the Business Combination less the number of Founder Shares held by the BlackRock Holders immediately prior to the Business Combination. A copy of the Indemnification Agreement is attached hereto as Annex L.

 

Founders’ Voting and Support Agreement

 

Concurrent with the execution of the Merger Agreement, the Seller and the LF Capital Restricted Stockholders, other than the BlackRock Holders, entered into a Voting and Support Agreement with the Company and the Seller (the “Voting and Support Agreement”), a copy of which is attached hereto as Annex K, pursuant to which each of the LF Capital Restricted Stockholders parties thereto will, among other things, vote their Founder Shares and other acquired Common Stock (representing as of September 17, 2020, approximately 22.6% of the voting power of the Company) (i) in favor of the adoption of the Merger Agreement and the accompanying transaction, (ii) against any action, proposals, transaction or agreement that would result in a breach of any representation, warranty, covenant, obligation or agreement of the Company or Merger Sub contained in the Merger Agreement, and (iii) in favor or the proposals set forth in this Proxy Statement. Additionally, each LF Capital Restricted Stockholder party thereto has agreed to certain standstill obligations, in each case on terms and subject to the conditions set forth therein. The Voting and Support Agreement will terminate upon the earlier to occur of, (x) as to each LF Capital Restricted Stockholder party thereto, the mutual written consent of the Seller and such LF Capital Restricted Stockholder, (y) the closing of the Business Combination, and (z) the date of termination of the Merger Agreement.

 

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Organizational Structure

 

The following diagram depicts the current ownership structure of Landsea:

 

 

The following diagram, which is subject to change based upon any redemptions by the Company’s current public stockholders in connection with the Business Combination, illustrates the ownership structure of the post-combination company immediately following the Business Combination:

 

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Redemption Rights

 

Pursuant to our current certificate of incorporation, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to the Company to pay its franchise and income taxes, by (ii) the total number of then-outstanding public shares; provided that the Company will not redeem any shares of Class A Stock issued in the IPO to the extent that such redemption would result in the Company’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) in excess of $5,000,000. As of September 17, 2020, the redemption price would have been approximately $10.57 per share. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the shares of Common Stock included in the units sold in our IPO. We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 20%.

 

If a holder exercises its redemption rights, then such holder will be exchanging its shares of our Class A Stock for cash and will no longer own shares of the post-combination company. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our Transfer Agent in accordance with the procedures described herein. Please see the section entitled “Special Meeting in Lieu of 2020 Annual Meeting of Company Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

 

Impact of the Business Combination on the Company’s Public Float

 

It is anticipated that, upon completion of the Business Combination: (i) the Company’s public stockholders (excluding the LF Capital Restricted Stockholders’ converted Founder Shares) will retain an ownership interest of approximately 25.9% in the post-combination company; (ii) the LF Capital Restricted Stockholders will own approximately 5.3% of the post-combination company with respect to their converted Founder Shares; and (iii) the Seller will own approximately 68.8% of the post-combination company. The ownership percentage with respect to the post-combination company following the Business Combination (a) does not take into account (1) the issuance of any shares upon the exercise of warrants to purchase Class A Stock that will remain outstanding immediately following the Business Combination or (2) the issuance of any shares upon completion of the Business Combination under the Incentive Plan, but (b) does take into account (1) the conversion of 3,056,700 Founder Shares into an equivalent number of shares of Class A Stock at the closing of the Business Combination on a one-for-one basis (even though such shares of Class A Stock will be subject to transfer restrictions), (2) the transfer of 500,000 Founder Shares from the Sponsor to the Seller pursuant to the Sponsor Surrender Agreement and (3) the issuance of 224,550 shares of Class A Stock by the Company pursuant to the Forward Purchase Transaction and corresponding cancellation of an equal number of shares held by the Sponsor pursuant to the Sponsor Surrender Agreement. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders in the post-combination company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

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The following table illustrates ownership levels in the Company based on a no redemption scenario and maximum redemption scenario, immediately after the consummation of the Business Combination:(1)

 

   No Redemption
Scenario
  Maximum
Redemption
Scenario
The Company’s public stockholders   25.9%   23.3%
LF Capital Restricted Stockholders (Converted Founder Shares)   5.3%   5.5%
Seller   68.8%   71.2%
    100%   100%

(1) This table, other than the maximum redemption scenario wherein 1,623,379 shares of Class A Stock are redeemed, reflects the assumptions as set forth in the preceding paragraph.

 

Board of Directors of the Company Following the Business Combination

 

In addition to Messrs. Reed and Wilson, who have each been nominated to serve as directors pursuant to Proposal No. 5, Messrs. Prot, Farhat, Traboulsi, Erwin and Ms. Wendel will serve as directors following this Special Meeting. Pursuant to the terms of the Merger Agreement, immediately prior to the consummation of the Business Combination, Messrs. Prot, Wilson, Traboulsi, and Erwin and Ms. Wendel shall resign as directors of the Company. Mr. Reed (assuming his reelection pursuant to Proposal No. 5) and Mr. Farhat shall continue as directors of the post-combination company, whereby Messrs. Reed and Farhat, pursuant to the Merger Agreement and Second Amended and Restated Charter will reconstitute and appoint a full board of directors. Please see the section entitled “Management after the Business Combination” for additional information.

 

The Charter Approval Proposal

 

Upon the closing of the Business Combination, our current certificate of incorporation will be amended promptly to reflect the Charter Approval Proposal to, among other things:

 

·Change the post-combination company’s name to Landsea Homes Corporation;

 

·Provide that the purpose of the post-combination company to “any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware” and delete a prior provision in Article II pertaining to a blank-check company;

 

·Provide for a single class of common stock of the post-combination company, entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders generally are entitled to vote (other than certain amendments amendment relating to preferred stock) and increase our total number of authorized shares of common stock from 115,000,000 shares to 500,000,000 shares, which would consist of (i) increasing the post-combination company’s authorized Class A Stock from 100,000,000 shares to 500,000,000 shares, (ii) eliminating Class B Common Stock of the Company by decreasing the post-combination company’s authorized Class B Common Stock from 15,000,000 shares to zero shares, (iii) and designating 50,000,000 shares of Preferred Stock;

 

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·Provide that the post-combination board of directors shall consist of a single class of directors elected annually and that subject to the rights of holders of any outstanding series of preferred stock to elect directors under specified circumstances, the number of directors will be determined from time to time exclusively by the post-combination board of directors pursuant to a resolution adopted by the affirmative vote of a majority of the Whole Board;

 

·Provide that that subject to the rights of the holders of any outstanding series of preferred stock, any director, or the entire post-combination board of directors, may be removed, with or without cause, by the affirmative vote of a majority of the voting power of the stock outstanding and entitled to vote thereon;

 

·Allow for stockholder action by written consent in lieu of a meeting of stockholders when the Seller and its affiliates collectively, beneficially own shares representing more than 50% of the outstanding common stock of the post-combination company;

 

·Allow, except as otherwise required by law and subject to the rights of the holders of any outstanding series of preferred stock, for special meetings of stockholders to be called by one or more persons (i) that beneficially own shares representing at least 25% of the voting power of the post-combination company’s stock outstanding and entitled to vote on the matter or matters proposed to be brought before the proposed special meeting as of the record date; and (ii) comply with such procedures for calling a special meeting of stockholders as may be set forth in the post-combination Second Amended and Restated Bylaws;

 

·Provide that the corporation will not be governed by Section 203 of the DGCL and, instead, include a provision in our certificate of incorporation that is similar to Section 203 of the DGCL, but excludes the Seller and its successors and affiliates (the “Excluded Parties”) from the definition of “interested stockholder”;

 

·Delete the prior provisions under Article IX (Business Combination Requirements; Existence) relating to our status as a blank check company;

 

·Provide that in addition to any affirmative vote required by law or by any other provisions of the Second Amended and Restated Certificate of Incorporation, including any preferred stock designation, any merger or consolidation of the post-combination company with any other entity shall require the affirmative vote of the holders of not less than 80% of the outstanding shares of common stock of the post-combination company at any time when the Seller and its affiliates, collectively, beneficially own shares representing more than 20% of the outstanding shares common stock of the post-combination company;

 

·Delete the prior provisions under Article X (Corporate Opportunities), which limited the application of the doctrine of corporate opportunity and provided that the affirmative vote of the holders of not less than 70% of the voting power of the outstanding shares of common stock of the post-combination company shall be required to amend or terminate Section 5.4 of the Stockholder’s Agreement, which among other things, limits the Seller’s participation in the domestic homebuilding business.

 

·Provide that in addition to any other votes required by law or the Second Amended and Restated Certificate of Incorporation, including any preferred stock designation, the affirmative vote of the holders representing at least 70% of the voting power of the stock outstanding and entitled to vote thereon, voting together as a single class, is required to adopt, amend or repeal, or adopt any provision inconsistent with, Articles V (Board of Directors), VI (Stockholder Action), VII (Special Meeting of Stockholders), VIII (Business Combinations with Interested Stockholders), X (Corporate Opportunities), XII (Amendment), XIII (Liability of Directors), and XIV (Forum of Adjudication of Disputes) of the Second Amended and Restated Certificate of Incorporation;

 

·Provide that in addition to any amendment to other votes required by law or the Second Amended and Restated Certificate of Incorporation, stockholders of the post-combination company can adopt, amend or repeal, or adopt any provision of the bylaws of the post-combination company only by the affirmative vote of the holders of at least 70% of the voting power of the stock outstanding common stock outstanding and entitled to vote thereon, voting together as a single class.

 

·Establish that unless the post-combination company, in writing, selects or consents to the selection of an alternative forum, (a) the sole and exclusive forum for any complaint asserting any internal corporate claims is, to the fullest extent permitted by law and subject to applicable jurisdictional requirements, the Delaware Court of Chancery (or, if the Court of Chancery does not have, or declines to accept, jurisdiction, another state court or a federal court located within the State of Delaware); and (b) the sole and exclusive forum for any complaint asserting a cause of action arising under the Securities Act is, to the fullest extent permitted by law, the federal district courts of the United States of America.

 

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Please see the section entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation” for more information.

 

Other Proposals

 

In addition, the stockholders of the Company will be asked to vote on:

 

·a proposal to approve, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock pursuant to the Business Combination (Proposal No. 2);

 

·a separate proposal to approve, on a non-binding advisory basis, certain governance provisions in the Company’s Second Amended and Restated Certificate of Incorporation in accordance with SEC requirements (Proposal No. 4);

 

·a proposal to approve and adopt the Incentive Plan, a copy of which is attached to this proxy statement as Annex F, including the authorization of the initial share reserve under the Incentive Plan (Proposal No. 6); and

 

·a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal (Proposal No. 7).

 

Please see the sections entitled “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination,” “Proposal No. 4 — Approval of Certain Governance Provisions in the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 6— Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve under the Incentive Plan,” and “Proposal No. 7—The Adjournment Proposal” for more information.

 

Date, Time and Place of Special Meeting 

 

The Special Meeting will be held virtually on December 14, 2020 at 10:00 a.m. local time at https://www.cstproxy.com/lfcapitalacquisitioncorp/2020, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

 

Voting Power; Record Date

 

Only Company stockholders of record at the close of business on November 11, 2020, the record date for the Special Meeting, will be entitled to vote at the Special Meeting. You are entitled to one vote for each share of Class A Stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 16,100,613 shares of Common Stock outstanding and entitled to vote, of which 12,219,363 are shares of Class A Stock and 3,881,250 are Founder Shares held by our LF Capital Restricted Stockholders.

 

Accounting Treatment

 

The Business Combination will be accounted for as a reverse recapitalization, in accordance with U.S. generally accepted accounting principles (“GAAP”). Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, the business combination will be treated as the equivalent of Landsea issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination will be those of Landsea.

 

Landsea has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under both the minimum and maximum redemption scenarios:

 

·Seller will have the largest voting interest in the post-combination company;

 

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·The board of directors of the post-combination company will have nine members, and the Seller will have the ability to designate seven members of the board of directors;

 

·Landsea management will hold executive management roles for the post-combination company and be responsible for the day-to-day operations;

 

·Landsea is significantly larger than the Company by assets, revenue, and employees; and.

 

·The purpose and intent of the Business Combination is to create an operating public company through the Company, with management continuing to use Landsea’s platform to grow the business and the combined entity will retain the Landsea name.

 

Appraisal Rights

 

Appraisal rights are not available to our stockholders in connection with the Business Combination.

 

Proxy Solicitation

 

The Company is soliciting proxies on behalf of its Board. Proxies may be solicited by mail. The Company has engaged Morrow Sodali LLC to assist in the solicitation of proxies.

 

If a stockholder grants a proxy, it may still vote its shares virtually if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Special Meeting in Lieu of 2020 Annual Meeting of Company Stockholders – Revoking Your Proxy.”

 

Interests of Certain Persons in the Business Combination

 

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that aside from their interests as stockholders, our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination.

 

These interests include, among other things:

 

·the fact that the LF Capital Restricted Stockholders have no right to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

·the fact that our Sponsor has agreed to forfeit up to 500,000 Founder Shares, contingent upon the valuation of the Company’s Class A Stock achieving certain thresholds during the twenty-four month period following the closing of the Business Combination;

 

·the fact that our Sponsor has agreed to transfer to the Seller 2,200,000 shares of Private Placement Warrants immediately prior to the closing of the Business Combination and 500,000 shares of Class A Stock immediately after the closing of the Business Combination (with such Class A Stock subject to the same contingencies noted above);

 

·the fact that our Sponsor has agreed to forfeit 2,260,000 Private Placement Warrants and 600,000 Founder Shares in connection with a Business Combination;

 

·the fact that our Sponsor has agreed to forfeit an amount of Founder Shares to the Company for retirement and cancellation equal to the total number of Utilization Fee Shares and Additional Fee Shares issued by the Company pursuant to the Forward Purchase Transaction;

 

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·the fact that our LF Capital Restricted Stockholders have agreed to waive their rights to certain anti-dilution conversion adjustments with respect to any shares of our Class B Stock they may hold in connection with the consummation of the Business Combination;

 

·the fact that the LF Capital Restricted Stockholders have no rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by December 22, 2020;

 

  · the fact that the LF Capital Restricted Stockholders paid an aggregate of $25,000 for 3,881,250 Founder Shares, which will have a significantly higher value at the time of the Business Combination and if unrestricted and freely tradable would be valued at approximately $41,063,625, based upon the closing trading price of the Class A Stock on November 20, 2020 (but, given the restrictions on such shares, we believe such shares have less value);

 

·the fact that our Sponsor and the BlackRock Holders paid an aggregate of approximately $7,760,000 for their 7,760,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by December 22, 2020;

 

·the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

·if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.20 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

·the anticipated continuation of two (2) of our existing directors, Messrs. Reed and Farhat, as directors of the post-combination company;

 

·the continued indemnification of our existing directors and officers prior to the Business Combination and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

·the fact that our Sponsor, officers and directors may not participate in the formation of, or become a director or officer of, any other blank check company until we have entered into a definitive agreement regarding an initial business combination or fail to complete an initial business combination by December 22, 2020;

 

·the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by December 22, 2020; and

 

·that pursuant to the Demand Registration Rights Agreement, the LF Capital Restricted Stockholders are entitled to registration of the shares of Class A Stock into which the Founder Shares will automatically convert at the time of the consummation of the Business Combination.

 

Reasons for the Approval of the Business Combination

 

We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We sought to do this by utilizing the networks and industry experience of both our Sponsor and our Board to identify, acquire and operate one or more businesses within or outside of the United States, although we were not limited to a particular industry or sector.

 

In particular, our Board considered the following positive factors, although not weighted or in any order of significance:

 

·Landsea is an established business with potential growth prospects within the homebuilding sector;

 

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·our Board believes the Business Combination will strengthen Landsea’s business throughout the U.S. market by providing additional liquidity and other resources for continued growth and investment in the business;

 

·our Board believes the homebuilding sector is critical to housing and construction, generally, and that Landsea has a fundamental business that has the potential to be scaled for growth;

 

·our Board believes Landsea will be well positioned to grow and develop its business in response to certain demographic and economic factors, including the increase in population growth of cities;

 

·Landsea’s year-on-year total revenue growth across all segments was 67% and 92%, respectively, for each of the years ended December 31, 2019 and December 31, 2018;

 

·the Company’s management conducted extensive meetings and calls with Landsea management regarding Landsea’s operations, financial position and projections;

 

·our Board believes Landsea has a strong management team with significant experience;

 

·senior management of Landsea have indicated their intent to remain with the post-combination company in the capacity of officers and/or directors, which will provide helpful continuity in advancing the Company’s strategic and growth goals;

 

·our Board believes Landsea has a strong financial profile with recurring revenues and strong industry fundamentals;

 

·Landsea has significant activities in California and Arizona and our Board believes is positioned to take advantage of potential state and regional growth opportunities;

 

·Landsea operates primarily in growing homebuilding markets, and our Board believes Landsea offers a product suited to current home buyer demands;

 

·the aggregate value of the consideration payable by the Company pursuant to the Merger Agreement;

 

·the fact that the Company stockholders will retain an ownership stake following the Business Combination, which provides them the opportunity to participate in the potential growth of Landsea following the Business Combination; and

 

·the financial and other terms and conditions of the Merger Agreement and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between the Company and Landsea.

 

Our Board also considered certain potential deterrent factors to the Business Combination, including the following factors, although not weighed or in any order of significance:

 

·The impact of COVID-19 on sales given the lockdown affecting Landsea’s markets as well as buyers’ apprehension to visit properties and/or to invest in a time of crisis.

 

·Key man issues related to John Ho, Chief Executive Officer of Landsea, and Michael Forsum, Chief Operating Officer of Landsea, who are the key drivers behind Landsea’s success since its inception.

 

·Landsea is a controlled company and currently 100% owned and controlled by Public Parent, and will remain majority owned by Public Parent post-merger with the Company.

 

·Land acquisition scarcity and price in the current market. Given the strong demand for suburban houses, land for development may become scarce and/or expensive, which would impact Landsea’s expansion plans.

 

·The Company initially intended to pursue an acquisition of a financial services entity and the Company’s management team has extensive experience in the financial services sector.

 

In addition, the Board considered the following mitigating factors and circumstances, although not weighted or in any order of significance:

 

·The COVID-19 pandemic turned out to be very favorable to homebuilders in general, and to Landsea in particular given the work-from-home approach that most companies adopted during the pandemic (which may remain partially unchanged in some industries for pat of the workforce). In addition, the trend toward houses in suburban areas greatly favors Landsea, which focuses on such communities. Landsea implemented a digital sales process which enables potential buyers to visit homes virtually and minimizes in-person meetings. Since May 2020, actual home sales have had record months for Landsea and for other homebuilders focusing on suburban homes.

 

·Landsea has structured its operations in regional divisions (Northern California, Southern California and Arizona) with fully autonomous teams, supervised and coordinated by HQ. Landsea has a “deep bench” given the high-quality individuals in its various divisions.

 

·Landsea has been operating as a stand-alone entity since its formation as a wholly-owned subsidiary of Public Parent. Landsea’s existing board of directors is composed of Public Parent representatives as well as independent directors. Post-merger, the board will include two members from the Company. Additionally, the terms of the Business Combination incentivize near, medium and long-term alignment between control and non-control investors. Specifically, immediately prior to the closing of the Business Combination, (i) certain Founder Shares will be converted to Class A Stock and transferred to the Seller, contingent upon the valuation of the Company’s Class A Stock achieving certain thresholds during the twenty-four month period following the closing of the Business Combination, and (ii) 2,200,000 Private Placement Warrants will be transferred to the Seller.

 

·Landsea already holds purchase options or contracts on several attractive lots in their target regions. Since the announcement of the Merger, Landsea announced its acquisition of a large tract of land in Arizona. In addition, Landsea has a number of attractive homebuilder acquisition opportunities in Texas and Florida, which would provide the Company access to immediate land and development opportunities in these new target markets.

 

·The Company’s management team has extensive relevant relationships, knowledge and experience in the real estate industry. With respect to real estate, management’s network includes developers, real estate investment platforms, real estate services providers, including property management services, and lenders. For more information about management’s experience in the real estate industry, please see the section entitled “Proposal No. 1 – Approval of the Business Combination – Background of the Business Combination.” In addition, the transaction with Landsea presented less risk than any of the transactions the Company discussed with financial services companies.

 

Our Board concluded that the risks associated with the Business Combination could be managed by the Company, were mitigated by the above factors or were unlikely to have a material impact on the Business Combination or the Company, and that, overall, the potentially negative factors or risks associated with the Business Combination were outweighed by the potential benefits of the Business Combination to the Company and its shareholders. Our Board realized that there can be no assurance about future results, including results considered or expected as disclosed in the foregoing reasons.

  

For more information about our decision-making process, please see the section entitled “Proposal No. 1 – Approval of the Business Combination – The Company’s Board of Directors’ Reasons for the Approval of the Business Combination.”

 

Conditions to Closing of the Business Combination

 

The respective obligations of the parties to the Merger Agreement to consummate and effect the Merger and the other transactions contemplated by the Merger Agreement are subject to the satisfaction, at or prior to the closing of the Business Combination, of each of the following conditions:

 

·the required vote of the Company’s stockholders to approve the Business Combination Proposal, the Nasdaq Proposal, and the Charter Approval Proposal shall have been duly obtained in accordance with the DGCL, the Company’s current certificate of incorporation and bylaws and the rules and regulations of Nasdaq;

 

·the Company shall have net tangible assets of at least $5,000,001 following the exercise of any redemption rights by the Company’s holders of Class A Stock in accordance with the Company’s current certificate of incorporation;

 

·the waiting period applicable to the transactions contemplated by the Merger Agreement under the HSR Act, if required, shall have expired or early termination must have been granted;

 

·there must not be in effect any law or regulation prohibiting, enjoining, restricting or making illegal the consummation of the Business Combination and no temporary, preliminary or permanent restraining order by a court of competent jurisdiction enjoining, restricting or making illegal the consummation of the Business Combination shall be in effect or will be threatened in writing by a governmental entity;

 

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·the shares of Class A Stock to be issued in connection with the closing of the Business Combination shall have been approved for listing upon the closing of the Business Combination on Nasdaq subject to the requirement to have a sufficient number of round lot holders; and

 

·Landsea Green Properties Co., Ltd., an affiliate of Seller and Landsea, has obtained the approval of the Stock Exchange of Hong Kong Limited (“HKSE”), in connection with the Merger and Transactions, in accordance with the applicable requirements of Rules Governing the Listing of Securities on the HKSE and such approval has not been revoked at or prior to the Closing.

 

The obligations of the Company and Merger Sub to consummate and effect the Merger and the other transactions contemplated by the Merger Agreement are subject to the satisfaction, at or prior to the closing of the Business Combination, of certain conditions, any of which may be waived, in writing, exclusively by the Company, including, among others:

 

·Those certain fundamental representations and warranties of Landsea must be true and correct in all material respects on and as of the date of the Merger Agreement and on and as of the closing of the Business Combination (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct as of such earlier date); and all other representations and warranties of Landsea must be true and correct (without giving effect to any limitation as to materiality, material adverse effect or any similar limitation contained therein) on and as of the date of the Merger Agreement and on and as of the closing date of the Business Combination as though made on and as of the closing date of the Business Combination (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct as of such earlier date), except where the failure of such representations and warranties of Landsea to be so true and correct, individually or in the aggregate, has not had and is not reasonably likely to have a material adverse effect.

 

·Landsea must have performed and complied in all material respects with all obligations required to be performed or complied with by it under the Merger Agreement at or prior to closing.

 

·Landsea must have delivered a duly executed closing certificate certifying as to the above two matters.

 

·No material adverse effect has occurred since the date of the Merger Agreement.

 

·Landsea and the Seller have delivered, have caused to be delivered, or are ready to deliver the duly executed and filed Related Agreements, the certificate of merger of Landsea with and into Merger Sub, copies of resolutions and actions taken by Landsea’s boards of directors and stockholder in connection with the approval of the Merger Agreement and the transactions contemplated thereunder, and a copy of IRS Form W-9 from the Seller and Landsea.

 

The obligation of Landsea and the Seller to consummate and effect the Merger and the other transactions contemplated by the Merger Agreement are subject to the satisfaction, at or prior to the closing of the Business Combination, of certain conditions, any of which may be waived, in writing, exclusively by Landsea and the Seller, including, among others:

 

·Those certain fundamental representations and warranties of the Company and Merger Sub must be true and correct in all material respects on and as of the date of the Merger Agreement and on and as of the closing date of the Business Combination (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct as of such earlier date); and all other representations and warranties of the Company and Merger Sub must be true and correct (without giving effect to any limitation as to materiality, material adverse effect or any similar limitation contained therein) on and as of the date of the Merger Agreement and on and as of the closing date of the Business Combination as though made on and as of the closing date of the Business Combination (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct as of such earlier date), except where the failure of such representations and warranties of the Company and Merger Sub to be so true and correct, individually or in the aggregate, has not had and is not reasonably likely to have a material adverse effect.

 

·The Company and Merger Sub must have performed and complied in all material respects with all obligations required to be performed or complied with by them under the Merger Agreement at or prior to closing.

 

·The Company must have delivered a duly executed closing certificate certifying as to the above two matters.

 

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·No material adverse effect has occurred since the date of the Merger Agreement.

 

·Certain of the officers and directors of the Company and Merger Sub shall have resigned.

 

·The amount in the Trust Account, must equal or exceed $90,000,000, after deducting the aggregate amount of Class A Stock redemptions and the aggregate amount of any unpaid Parent Transaction Costs and Company Transaction Costs (each as defined therein).

 

·The Company and Merger Sub have delivered, have caused to be delivered, or are ready to deliver the duly executed Related Agreements, the Second Amended and Restated Certificate of Incorporation of the Company, the Second Amended and Restated Bylaws of the Company and copies of resolutions and actions taken by the Company and Merger Sub’s boards of directors and stockholders in connection with the approval of the Merger Agreement and the transactions contemplated thereunder.

 

·The Surrendered Shares and Surrendered Warrants (each defined in the Sponsor Surrender Agreement) shall have been cancelled by the Company.

 

Please see the section entitled “Proposal No. 1 – Approval of the Business Combination – Conditions to Closing of the Business Combination” for additional information.

 

Regulatory Matters

 

Under the HSR Act and the rules that have been promulgated thereunder by the U.S. Federal Trade Commission (“FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Company and Landsea have determined that the Business Combination is not subject to these requirements. At any time before or after consummation of the Business Combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. We cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.

 

In connection with the consummation of the Business Combination and the transactions contemplated thereby, Landsea Green Properties Co., Ltd., an affiliate of Seller and Landsea, has made certain filings with the Stock Exchange of Hong Kong Limited (“HKSE”), and in accordance with the applicable requirements of Rules Governing the Listing of Securities on the HKSE. Such filings are subject to the consent of the HKSE and are a condition to the consummation of the Business Combination. We cannot assure you that the HKSE will not attempt to challenge the Business Combination, and, if such a challenge is made, we cannot assure you as to its result.

 

Neither the Company nor Landsea is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the consent of the HKSE. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

 

Quorum and Required Vote for Proposals for the Special Meeting

 

A quorum of Company stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if the holders of shares of outstanding Common Stock of the Company representing a majority of the voting power of all outstanding shares of Common Stock of the Company entitled to vote at the Special Meeting are present virtually or represented by proxy at the Special Meeting. Broker non-votes and abstentions from voting will count as present for the purposes of establishing a quorum. The LF Capital Restricted Stockholders, other than the BlackRock Holders, as of September 17, 2020 own approximately 22.6% of the issued and outstanding shares of Common Stock, will count towards this quorum.

 

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The approval of the Business Combination Proposal, the Nasdaq Proposal, the Governance Proposals, which is a non-binding advisory vote, the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. Accordingly, assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting or broker non-vote, will have no effect on the outcome of the Business Combination Proposal, the Nasdaq Proposal, the Governance Proposals, the Incentive Plan Proposal or the Adjournment Proposal.

 

The approval of the Charter Approval Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting or broker non-vote, will have the same effect as a vote “AGAINST” such Charter Approval Proposal.

 

Directors are elected by a plurality of the votes cast by the holders of our outstanding shares of Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. This means that the two director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Accordingly, assuming a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting or broker non-vote, will have no effect on the outcome of the Director Election Proposal.

 

Our LF Capital Restricted Stockholders, other than the BlackRock Holders, are parties to the Voting and Support Agreement pursuant to which they have agreed to vote their Founder Shares and any subsequently acquired public shares in favor of the matters set forth in this proxy statement.

 

Unless waived by the parties to the Merger Agreement, the closing of the Business Combination is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal. Each of the proposals at the Special Meeting, other than the Governance Proposals, Director Election Proposal and the Adjournment Proposal, is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal. The Governance Proposals, the Director Election Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement. With respect to the Warrant Holder Meeting, (i) the Warrant Amendment Proposal is conditioned on the approval of the Business Combination Proposal, the Nasdaq Proposal and the Charter Approval Proposal at the Special Meeting, and (ii) the Warrant Holders Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement. It is important for you to note that in the event that the Business Combination Proposal, the Nasdaq Proposal or the Charter Approval Proposal do not receive the requisite vote for approval at the Special Meeting, subject to waiver by the parties pursuant to the Merger Agreement, we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by December 22, 2020, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to our public stockholders.

 

Recommendation to Company Stockholders

 

Our Board believes that each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Adjournment Proposal to be presented at the Special Meeting is in the best interests of the Company and our stockholders and unanimously recommends that its stockholders vote “FOR” each of the proposals.

 

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal, you should keep in mind that our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from or in addition to (or which may conflict with) your interests as a stockholder. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

 

·the fact that the LF Capital Restricted Stockholders have no right to redeem any of the Founder Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

·the fact that our Sponsor has agreed to forfeit up to 500,000 Founder Shares, contingent upon the valuation of the Company’s Class A Stock achieving certain thresholds during the twenty-four month period following the closing of the Business Combination;

 

·the fact that our Sponsor has agreed to transfer to the Seller 2,200,000 shares of Private Placement Warrants immediately prior to the closing of the Business Combination and 500,000 shares of Class A Stock immediately after the closing of the Business Combination (with such Class A Stock subject to the same contingencies noted above);

 

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·the fact that our Sponsor has agreed to forfeit 2,260,000 Private Placement Warrants and 600,000 Founder Shares in connection with a Business Combination;

 

·the fact that our Sponsor has agreed to forfeit an amount of Founder Shares to the Company for retirement and cancellation equal to the total number of Utilization Fee Shares and Additional Fee Shares issued by the Company pursuant to the Forward Purchase Transaction;

 

·the fact that our LF Capital Restricted Stockholders have agreed to waive their rights to certain anti-dilution conversion adjustments with respect to any shares of our Class B Stock they may hold in connection with the consummation of the Business Combination;

 

·the fact that the LF Capital Restricted Stockholders have no rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by December 22, 2020;

 

  · the fact that the LF Capital Restricted Stockholders paid an aggregate of $25,000 for 3,881,250 Founder Shares, which will have a significantly higher value at the time of the Business Combination and if unrestricted and freely tradable would be valued at approximately $41,063,625, based upon the closing trading price of the Class A Stock on November 20, 2020 (but, given the restrictions on such shares, we believe such shares have less value);

 

·the fact that our Sponsor and the BlackRock Holders paid an aggregate of approximately $7,760,000 for their 7,760,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by December 22, 2020;

 

·the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

·if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.20 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

·the anticipated continuation of two (2) of our existing directors, Messrs. Reed and Farhat, as directors of the post-combination company;

 

·the continued indemnification of our existing directors and officers prior to the Business Combination and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

·the fact that our Sponsor, officers and directors may not participate in the formation of, or become a director or officer of, any other blank check company until we have entered into a definitive agreement regarding an initial business combination or fail to complete an initial business combination by December 22, 2020;

 

·the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by December 22, 2020; and

 

·that pursuant to the Demand Registration Rights Agreement, the LF Capital Restricted Stockholders are entitled to registration of the shares of Class A Stock into which the Founder Shares will automatically convert at the time of the consummation of the Business Combination.

 

Risk Factors

 

In evaluating the Business Combination and the proposals to be considered and voted on at the Special Meeting, you should carefully review and consider the risk factors set forth under the section entitled “Risk Factors” beginning on page 62 of this proxy statement. The occurrence of one or more of the events or circumstances described in that section, alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of the Company, the Seller and Landsea to complete the Business Combination, and (ii) the business, cash flows, financial condition and results of operations of Landsea prior to the consummation of the Business Combination and the post-combination company following consummation of the Business Combination.

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF THE COMPANY

 

The following table contains summary historical financial data for the Company as of and for the nine months ended September 30, 2020 and as of and for the years ended December 31, 2019, December 31, 2018 and as of December 31, 2017 and for the period from June 29, 2017 (inception) through December 31, 2017. Such data as of and for the years ended December 31, 2019, December 31, 2018 and as of December 31, 2017 and for the period from June 29, 2017 (inception) through December 31, 2017 have been derived from the audited financial statements of the Company. The audited financial statements of the Company as of and for the years ended December 31, 2019 and December 31, 2018 are included elsewhere in this proxy statement. The audited financial statements of the Company as of and for the year ended December 31, 2017 and for the period from June 29, 2017 (inception) through December 31, 2017 are contained in the Company’s Form 10-K filed with the SEC on March 5, 2019. Such data as of and for the nine months ended September 30, 2020 have been derived from the unaudited financial statements of the Company included elsewhere in this proxy statement. Results from interim periods are not necessarily indicative of results that may be expected for the entire year. The information below is only a summary and should be read in conjunction with the sections entitled “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Information About the Company” and in our financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement.

 

SELECTED CONSOLIDATED BALANCE SHEET INFORMATION

 

LF ACQUISITION CORP.

 

BALANCE SHEET

 

   As of September
30, 2020
(unaudited)
  As of December
31, 2019
  As of December
31, 2018
  As of December
31, 2017
             
Assets                    
Current assets:                    
Cash and cash equivalents  $173,764   $161,405   $196,804   $19,538 
Prepaid expenses   77,250.0    304,077    43,214    - 
Total current assets   251,014    465,482    240,018    19,538 
Deferred offering costs associated with initial public offering   -    -    -    178,283 
Marketable securities held in Trust Account   129,127,500    162,019,909    159,718,098    - 
Total assets  $129,378,514   $162,485,391   $159,958,116   $197,821 
                     
Liabilities and Stockholders' Equity                    
Current liabilities:                    
Accounts payable  $497,644   $121,516   $108,292   $76,804 
Accrued expenses   678,891    30,610    6,500    18,600 
Convertible note payable - related party   1,500,000    750,000    -    200,000 
Promissory note - related party   1,000,000    -    -    - 
Franchise tax payable   30,050    40,000    200,000    - 
Income tax payable   96,850    -    -    - 
Total current liabilities   3,803,435    942,126    314,792    295,404 
Deferred tax liabilities   -    128,105    -      
Deferred underwriting commissions   5,433,750    5,433,750    5,433,750    - 
Total liabilities   9,237,185    6,503,981    5,748,542    295,404 
                     
Commitments                    
Class A common stock, $0.0001 par value; 10,893,219, 14,461,820, 14,500,444 and -0- shares subject to possible redemption at $10.57, $10.44, $10.29, and -0- per share at September 30, 2020, December 31, 2019, December 31, 2018, and December 31, 2017, respectively   115,141,325    150,981,401    149,209,569    - 
                     
Stockholders' Equity:                    
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at September 30, 2020, December 31, 2019, December 31, 2018, and December 31, 2017   -    -    -    - 
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 1,326,144, 1,063,180, 1,024,556, and -0- shares issued and outstanding (excluding 10,893,219, 14,461,820, 14,500,444 and -0- shares subject to possible redemption) at September 30, 2020, December 31, 2019, December 31, 2018, and December 31, 2017, respectively.   133    106    102    - 
Convertible Class B common stock, $0.0001 par value; 15,000,000 shares authorized; 3,881,250 shares issued and outstanding at September 30, 2020, December 31, 2019, December 31, 2018, and December 31, 2017   388    388    388    388 
Additional paid-in capital   3,881,645    2,757,412    4,529,248    24,612 
Retained earnings   1,117,838    2,242,103    470,267    (122,583)
Total stockholders' equity   5,000,004    5,000,009    5,000,005    (97,583)
Total Liabilities and Stockholders' Equity  $129,378,514   $162,485,391   $159,958,116   $197,821 

 

The accompanying notes are an integral part of these financial statements.

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SELECTED CONSOLIDATED STATEMENT OF OPERATIONS 

 

LF ACQUISITION CORP.

 

STATEMENT OF OPERATIONS 

 

   For the Nine
Months Ended
September 30,
2020 (unaudited)
  For the Years
Ended December
31, 2019
  For the Year
Ended December
31, 2018
  For the period from
June 29, 2017
(inception) through
December 31, 2017
General and administrative expenses  $1,552,735   $826,307   $586,284   $120,488 
Franchise tax expense   150,560    200,000    198,617    2,100 
Loss from operations   (1,703,295)   (1,026,307)   (784,901)   (122,588)
Interest earned on investments and marketable securities   692,927    3,473,997    1,688,934    5 
(Loss) Income before income tax expense   (1,010,368)   2,447,690    904,033    (122,583)
Income tax expense   113,897    675,854    311,183    - 
Net (loss) income  $(1,124,265)  $1,771,836   $592,850   $(122,583)
                     
Weighted average shares outstanding of Class A common stock   14,679,742    15,525,000    15,525,000    - 
Basic and diluted net income per share, Class A  $0.03   $0.17   $0.08   $- 
Weighted average shares outstanding of Class B common stock   3,881,250    3,881,250    3,881,250    3,375,000(1)(2)
Basic and diluted net loss per share, Class B  $(0.40)  $(0.21)  $(0.15)  $(0.04)

 

(1) This number excludes an aggregate of up to 506,250 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. On June 22, 2018, the underwriter exercised its over-allotment option in full, hence, these 506,250 shares were no longer subject to forfeiture.

 

(2) The share amounts have been retroactively restated to reflect the surrender of 431,250 shares from the Sponsor in February 2018.

 

The accompanying notes are an integral part of these financial statements. 

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF LANDSEA HOMES

 

The following table contains summary historical financial data for Landsea Homes as of and for the years ended December 31, 2019, 2018 and 2017. Such data as of and for the years ended December 31, 2019, 2018 and 2017 are derived from Landsea Homes’ consolidated financial statements for such periods which are included elsewhere in this proxy statement. Landsea's historical results may not be indicative of the results that may be achieved in the future. This information should be read in conjunction with “Risk Factors,” “Landsea Management's Discussion and Analysis of Financial Condition and Results of Operations,” and Landsea Homes’ consolidated financial statements and the related notes included elsewhere in this proxy statement.

 

   Year Ended December 31, 
   2019   2018   2017 
   (dollars in thousands) 
Consolidated Statements of Operations:            
Total revenue  $630,988   $378,617   $197,306 
Income (loss) before income tax expense   28,550    41,319    (145)
Net income (loss) to Landsea Homes  $17,200   $29,184   $(413)
Basic and diluted earnings (loss) per share  $17,200   $29,184   $(413)
                
Balance Sheet Data:               
Cash and cash equivalents  $154,043   $99,865   $19,030 
Real estate inventories   598,179    647,153    539,104 
Total assets   839,217    864,641    682,695 
Total notes and other debts payable, net   189,964    232,821    134,455 
Total liabilities   255,847    319,485    199,778 
Total stockholders' equity  $565,478   $532,585   $479,752 
                
Other Operating Information:               
Number of homes delivered   597    289    38 
Average sales price of homes delivered  $953   $1,204   $757 
Backlog at end of period, number of homes   121    145    101 
Backlog at end of period, aggregate sales value  $83,955   $165,446   $133,486 
Average sales price of homes in backlog  $694   $1,141   $1,322 
Net new home contracts   480    333    120 
Average selling communities   17.5    7.6    2.5 

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following summary unaudited pro forma condensed combined financial information (the “summary pro forma information”) gives effect to the Business Combination and related transactions described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Landsea issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost, with no goodwill or other intangible assets recorded. The summary unaudited pro forma condensed combined balance sheet data as of September 30, 2020 gives pro forma effect to the Business Combination and related transactions as if they had occurred on September 30, 2020. The summary unaudited pro forma condensed combined statements of operations data for the nine months ended September 30, 2020 and year ended December 31, 2019 give pro forma effect to the Business Combination and related transactions as if they had been consummated on January 1, 2019.

 

In May 2020, the SEC adopted Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 is effective on January 1, 2021; however, voluntary early adoption is permitted. The Company has elected to early adopt the provisions of Release No. 33-10786, and the unaudited pro forma condensed combined financial information herein is presented in accordance therewith. The summary pro forma information have been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information of the combined company appearing elsewhere in this proxy statement and the accompanying notes. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements of the Company and related notes and the historical financial statements of Landsea and related notes included in this proxy statement. The summary pro forma information have been presented for informational purposes only and are not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the Business Combination and related transactions been completed as of the dates indicated. In addition, the summary pro forma information do not purport to project the future financial position or operating results of the combined company.

 

Upon consummation of the Business Combination, all Class B Stock will convert to Class A Stock. The following table presents summary pro forma information after giving effect to the Business Combination and related transactions, assuming two redemption scenarios as follows:

 

·Assuming No Additional Redemptions: This presentation assumes that no additional shares of Class A Stock are redeemed by the public stockholders in connection with the Business Combination.

 

·Assuming Maximum Redemptions: This presentation assumes that 1,623,427 shares of the Class A Stock are redeemed for an aggregate redemption payment of $17.2 million based on an estimated per share redemption price of approximately $10.57 that was calculated using the $129.1 million of cash in the Trust Account divided by 12,219,363 Company Class A Stock subject to redemption as of September 30, 2020. The maximum redemption scenario is subject to the $90.0 million minimum cash condition per the Merger Agreement.

 

   Pro Forma
Combined
(Assuming No
Additional
Redemptions)
  Pro Forma
Combined
(Assuming
Maximum
Redemptions)
   (in thousands, except share and per share data)
Summary Unaudited Pro Forma Condensed Combined          
Statement of Operations Data Nine Months Ended September 30, 2020          
Revenue  $449,870   $449,870 
Net loss per share of Class A Stock - basic and diluted  $(0.42)  $(0.44)
Weighted average number of shares of Class A Stock outstanding - basic and diluted   47,133,674    45,510,247 
Statement of Operations Data Year Ended December 31, 2019          
Revenue  $630,988   $630,988 
Net income per share of Class A Stock - basic  $0.27   $0.28 
Weighted average number of shares of Class A Stock outstanding - basic   47,057,916    45,434,489 
Net income per share of Class A Stock - diluted  $0.27   $0.28 
Weighted average number of shares of Class A Stock outstanding - diluted   47,081,136    45,457,709 

 

   Pro Forma
Combined
(Assuming No
Additional
Redemptions)
  Pro Forma
Combined
(Assuming
Maximum
Redemptions)
   (in thousands)
Summary Unaudited Pro Forma Condensed Combined          
Balance Sheet Data as of September 30, 2020          
Total assets  $988,809   $971,649 
Total liabilities  $393,610   $393,610 
Total equity  $595,199   $578,039 

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this proxy statement.

 

Introduction

 

The Company is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination. The following unaudited pro forma condensed combined financial information present the combination of the financial information of the Company and Landsea adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2020 combines the historical balance sheet of the Company and the historical balance sheet of Landsea on a pro forma basis as if the Business Combination and related transactions, summarized below, had been consummated on September 30, 2020. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2019 and the nine months ended September 30, 2020, combine the historical statements of operations of the Company and Landsea for such periods on a pro forma basis as if the Business Combination and related transactions, summarized below, had been consummated on January 1, 2019, the beginning of the earliest period presented:

 

·the merger of Merger Sub, a wholly-owned subsidiary of the Company, with and into Landsea, with Landsea surviving the merger as a wholly-owned subsidiary of the Company;

 

·issuance of 32,557,303 shares of Class A Stock of the Company;

 

·impacts of the Sponsor Surrender Agreement, including the forfeiture of 600,000 Founder Shares, forfeiture of 500,000 shares of Sponsor’s converted Founder Shares contingent on the stock reaching certain price thresholds, transfer to Seller of 500,000 shares of Class A Stock immediately after the closing of the Business Combination and forfeiture of such shares in the event the same price thresholds noted above are not met, the cash payment of $1.5 million for the outstanding amounts due under the Convertible Note upon the consummation of the Business Combination, and the forgiveness of $1.0 million for the outstanding amount due under the Promissory Note for no consideration upon the consummation of the Business Combination;

 

·impact of the Forward Purchase Transaction, wherein parties to the agreement agree to purchase up to $35 million in Class A Stock from public stockholders or in the open market or in privately negotiated transactions at or less than $10.56 per share, inclusive of any fees and commissions, not to redeem such shares and vote such shares in favor of the Business Combination. Parties will receive up to 224,550 Class A Stock as an inducement for this commitment, and the Sponsor has agreed to forfeit Founder Shares of the same amount;

 

·conversion of all outstanding Class B Stock to Class A Stock on a one-to-one basis;

 

·payment of $1.85 per public warrant following the consummation of the Business Combination if the Warrant Amendment is approved.

 

The historical financial information of the Company was derived from the unaudited and audited financial statements of the Company as of and for the nine months ended September 30, 2020, and for the year ended December 31, 2019, respectively, which are included elsewhere in this proxy statement. The historical financial information of Landsea was derived from the unaudited and audited consolidated financial statements of Landsea as of and for the nine months ended September 30, 2020, and for the year ended December 31, 2019, respectively, which are included elsewhere in this proxy statement. This information should be read together with the accompanying notes to the unaudited pro forma condensed combined financial statements, the Company’s and Landsea’s unaudited and audited financial statements and related notes, the sections titled “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Landsea’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement.

 

 48 

 

 

The Business Combination will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Landsea issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Landsea.

 

Landsea has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under both the minimum and maximum redemption scenarios:

 

·Seller will have the largest voting interest in the post-combination company;

 

·The board of directors of the post-combination company will have nine members, and the Seller will have the ability to designate seven members of the board of directors;

 

·Landsea management will hold executive management roles for the post-combination company and be responsible for the day-to-day operations;

 

·Landsea is significantly larger than the Company by assets, revenue, and employees; and

 

·The purpose and intent of the Business Combination is to create an operating public company through the Company, with management continuing to use Landsea’s platform to grow the business and the combined entity will retain the Landsea name.

 

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption by the Company’s public stockholders of shares of Class A Stock for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing of the Business Combination) in the Trust Account:

 

·Assuming No Additional Redemptions: This presentation assumes that no additional shares of Class A Stock are redeemed by the public stockholders in connection with the Business Combination.

 

·Assuming Maximum Redemptions: This presentation assumes that 1,623,427 shares of the Class A Stock are redeemed for an aggregate redemption payment of $17.2 million based on an estimated per share redemption price of approximately $10.57 that was calculated using the $129.1 million of cash in the Trust Account divided by 12,219,363 Company Class A Stock subject to redemption as of September 30, 2020. The maximum redemption scenario is subject to the $90.0 million minimum cash condition per the Merger Agreement.

 

Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma condensed combined financial statements are described in the accompanying notes. The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial statements do not purport to project the future operating results or financial position of the Company following the completion of the Business Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

 

 49 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

 

AS OF SEPTEMBER 30, 2020

(in thousands)

 

   LF Capital 
Acquisition 
Corp
(Historical)
  Landsea
(Historical)
  Reclassification
Adjustments
  Transaction 
Accounting
Adjustments
(Assuming No 
Additional 
Redemptions)
  Pro Forma
Combined
(Assuming No
Additional
Redemptions)
  Transaction
Accounting
Adjustments
(Assuming
Maximum
Redemptions)
  Pro Forma
Combined
(Assuming
Maximum
Redemptions)
ASSETS                                   
Cash and cash equivalents  $174   $84,857   $-   $129,128(A)  $166,882   $(17,160)(Q)  $149,722 
                   (6,637)(B)              
                   (1,987)(C)              
                   (5,434)(D)              
                   (1,500)(E)               
                   (2,796)(G)              
                   (75)(H)              
                   (127)(I)              
                   (28,721)(J)              
Cash held in escrow   -    7,503    -    -    7,503    -    7,503 
Restricted cash   -    2,001    -    -    2,001    -    2,001 
Prepaid expenses   77    -    (77)   -    -    -    - 
Marketable securities held in Trust Account   129,128    -    -    (129,128)(A)   -    -    - 
Real estate inventories   -    728,155    -    -    728,155    -    728,155 
Due from affiliates   -    2,506    -    -    2,506    -    2,506 
Investment in and advances to unconsolidated joint ventures   -    26,727    -    -    26,727    -    26,727 
Goodwill   -    20,707    -    -    20,707    -    20,707 
Other assets   -    40,748    77    (6,497)(B)  34,328    -    34,328 
Total assets  $129,379   $913,204   $-   $(53,774)  $988,809   $(17,160)  $971,649 

 

 50 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET (Continued)

 

AS OF SEPTEMBER 30, 2020

(in thousands)

 

   LF Capital
Acquisition
Corp
(Historical)
  Landsea
(Historical)
  Reclassification
Adjustments
  Transaction
Accounting
Adjustments
(Assuming No
Additional
Redemptions)
  Pro Forma
Combined
(Assuming No
Additional
Redemptions)
  Transaction
Accounting
Adjustments
(Assuming
Maximum
 Redemptions)
  Pro Forma
Combined
(Assuming
Maximum
Redemptions)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                   
Accounts payable  $498   $36,998   $-   $(1,234)(B)  $35,081   $-   $35,081 
                   (1,181)(C)               
Accrued expenses and other liabilities   -    49,211    679    (1,967)(G)   47,923    -    47,923 
Accrued expenses   679    -    (679)   -    -    -    - 
Due to affiliates   -    1,447    -    -    1,447    -    1,447 
Convertible note payable - related party   1,500    -    -    (1,500)(E)   -    -    - 
Promissory note  - related party   1,000    -    -    (1,000)(F)  -    -    - 
Notes and other debts payable, net   -    309,159    -    -    309,159    -    309,159 
Franchise tax payable   30    -    -    (30)(I)  -    -    - 
Income tax payable   97    -    -    (97)(I)   -    -    - 
Deferred tax liabilities   -    -    -    -    -    -    - 
Deferred underwriting commissions   5,434    -    -    (5,434)(D)  -    -    - 
Total liabilities   9,238    396,815    -    (12,443)   393,610    -    393,610 
                                    
COMMITMENTS                                   
Class A common stock subject to possible redemption   115,141    -    -    (115,141)(K)   -    -    - 
                                    
STOCKHOLDERS' EQUITY                                   
Class A common stock   -    -    -    1(K)  5    - (Q)   5 
                   3(L)               
                   -(M)               
                   1(N)               
Class B common stock   1    -    -    -(M)   -    -    - 
                   (1)(N)               
                   -(O)               
Preferred stock   -    -    -    -    -    -    - 
Additional paid-in capital   3,881    

493,746

    -    (11,579)(B)   573,701    (17,160)(Q)   

556,541

 
                   115,140(K)               
                   (3)(L)               
                   -(O)               
                   (28,484)(P)               
                   1,000(F)               
Retained earnings   1,118    21,340    -    (321)(B)   20,190    -    20,190 
                   (806)(C)               
                   (829)(G)               
                   (75)(H)               
                   (28,721)(J)               
                   28,484(P)               
Noncontrolling interests   -    1,303    -    -    1,303    -    1,303 
Total stockholders’ equity   5,000    516,389    -    73,810    595,199    (17,160)   578,039 
Total liabilities and stockholders’ deficit  $129,379   $913,204   $-   $(53,774)  $988,809   $(17,160)  $971,649 

 

 51 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in thousands, except share and per share data)

 

   LF Capital 
Acquisition 
Corp
(Historical)
  Landsea
(Historical)
  Reclassification 
Adjustments
  Transaction 
Accounting 
Adjustments
(Assuming No 
Additional 
Redemptions)
  Pro Forma
Combined
(Assuming No 
Additional 
Redemptions)
  Transaction 
Accounting 
Adjustments
(Assuming 
Maximum 
Redemption)
  Pro Forma 
Combined 
(Assuming
Maximum
Redemptions)
Revenue                                   
Home sales  $-   $449,870   $-   $-   $449,870   $-   $449,870 
Total revenue   -    449,870    -    -    449,870    -    449,870 
                                    
Cost of sales                                   
Home sales   -    394,200    -    -    394,200    -    394,200 
Inventory impairments   -    3,413    -    -    3,413    -    3,413 
Total cost of sales   -    397,613    -    -    397,613    -    397,613 
                                    
Gross margin                                   
Home sales   -    52,257    -    -    52,257    -    52,257 
Total gross margin   -    52,257    -    -    52,257    -    52,257 
                                    
Sales and marketing expenses   -    31,523    -    -    31,523    -    31,523 
General and administrative expenses   1,553    31,332    151    (90)(AA)   31,103    -    31,103 
                   600(BB)               
                   (321)(DD)               
                   (1,124)(EE)               
                   (998)(FF)               
Franchise tax expense   151    -    (151)   -    -    -    - 
Total operating expenses   1,704    62,855    -    (1,933)   62,626    -    62,626 
                                    
Loss from operations   (1,704)   (10,598)   -    1,933    (10,369)   -    (10,369)
                                    
Interest earned on investments and marketable securities   693    -    -    (693)(CC)   -    -    - 
Other income (expense), net   -    347    -    -    347    -    347 
Equity in net (loss) income of unconsolidated joint ventures   -    (16,229)   -    -    (16,229)   -    (16,229)
Loss before income taxes   (1,011)   (26,480)   -    1,240    (26,251)   -    (26,251)
                                    
Income tax expense   114    -    (114)   -    -    -    - 
(Benefit) provision for income taxes   -    (6,738)   114    322(HH)   (6,302)   -    (6,302)
                                    
Net loss   (1,125)   (19,742)   -    918    (19,949)   -    (19,949)
Net loss attributed to noncontrolling interests   -    (120)   -    -    (120)   -    (120)
Net loss attributable to Landsea Homes Incorporated  $(1,125)  $(19,622)  $-   $918   $(19,829)  $-   $(19,829)
Weighted average number of shares of Class A Stock outstanding - basic and diluted   14,679,742                   47,133,674         45,510,247 
Net income (loss) per share of Class A Stock - basic and diluted  $0.03                  $(0.42)       $(0.44)
Weighted average number of shares of Class B Stock outstanding - basic and diluted   3,881,250                               
Net loss per share of Class B Stock - basic and diluted  $(0.40)                              

 

 52 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

 

FOR YEAR ENDED DECEMBER 31, 2019

(in thousands, except share and per share data)

 

   LF Capital
Acquisition
Corp
(Historical)
  Landsea 
(Historical)
  Reclassification
Adjustments
  Transaction
Accounting
Adjustments
(Assuming No
Additional
Redemptions)
  Pro Forma
Combined
(Assuming No
Additional
Redemptions)
  Transaction
Accounting
Adjustments
(Assuming
Maximum
Redemption)
  Pro Forma
Combined
(Assuming
Maximum
Redemptions)
                      
Revenue                                   
Home sales  $-   $568,872   $-   $-   $568,872   $-   $568,872 
Lot sales   -    62,116    -    -    62,116    -    62,116 
Total revenue   -    630,988    -    -    630,988    -    630,988 
                                    
Cost of sales                                   
Home sales   -    478,054    -    -    478,054    -    478,054 
Lot sales   -    53,475    -    -    53,475    -    53,475 
Total cost of sales   -    531,529    -    -    531,529    -    531,529 
                                    
Gross margin                                   
Home sales   -    90,818    -    -    90,818    -    90,818 
Lot sales   -    8,641    -    -    8,641    -    8,641 
Total gross margin   -    99,459    -    -    99,459    -    99,459 
                                    
Sales and marketing expenses   -    26,522    -    -    26,522    -    26,522 
General and administrative expenses   826