0001193125-20-137702.txt : 20200508 0001193125-20-137702.hdr.sgml : 20200508 20200508171431 ACCESSION NUMBER: 0001193125-20-137702 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 42 CONFORMED PERIOD OF REPORT: 20200331 FILED AS OF DATE: 20200508 DATE AS OF CHANGE: 20200508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Leo Holdings Corp. CENTRAL INDEX KEY: 0001725134 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ALLIED TO MOTION PICTURE PRODUCTION [7819] IRS NUMBER: 981399727 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38393 FILM NUMBER: 20861718 BUSINESS ADDRESS: STREET 1: 21 GROSVENOR PLACE CITY: LONDON STATE: X0 ZIP: SW1X7HF BUSINESS PHONE: 442072012281 MAIL ADDRESS: STREET 1: 21 GROSVENOR PLACE CITY: LONDON STATE: X0 ZIP: SW1X7HF 10-Q 1 d833411d10q.htm FORM 10-Q Form 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                     

 

 

LEO HOLDINGS CORP.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Cayman Islands   001-38393   98-1399727

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

21 Grosvenor Place London   SW1X 7HF
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: +44 20 7201 2200

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class:

 

Trading

Symbol:

 

Name of Each Exchange

on Which Registered:

Class A ordinary shares included as part of the units   LHC   New York Stock Exchange
Warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of 11.50   LHC WS   New York Stock Exchange
Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant   LHC.U   New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☒    No  ☐

As of May 8, 2020, 19,312,807 Class A ordinary shares, par value $0.0001 per share, and 5,000,000 Class B ordinary shares, par value $0.0001 per share, were issued and outstanding, respectively.

 

 

 


Table of Contents

LEO HOLDINGS CORP.

Form 10-Q

For the Quarter Ended March 31, 2020

Table of Contents

 

         Page No.  

PART I. FINANCIAL INFORMATION

  

Item 1.

  Financial Statements   
  Condensed Balance Sheets as of March 31, 2020 (Unaudited) and December 31, 2019      1  
  Unaudited Condensed Statements of Operations for the three months ended March 31, 2020 and 2019      2  
  Unaudited Condensed Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2020 and 2019      3  
  Unaudited Condensed Statements of Cash Flows for the three months ended March 31, 2020 and 2019      4  
  Notes to Unaudited Condensed Interim Financial Statements      5  

Item 2.

  Management’s Discussion and Analysis of Financial Condition and Results of Operations      16  

Item 3.

  Quantitative and Qualitative Disclosures About Market Risk      20  

Item 4.

  Controls and Procedures      20  

PART II. OTHER INFORMATION

  

Item 1.

  Legal Proceedings      21  

Item 1A.

  Risk Factors      21  

Item 2.

  Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities      21  

Item 3.

  Defaults Upon Senior Securities      21  

Item 4.

  Mine Safety Disclosures      21  

Item 5.

  Other Information      21  

Item 6.

  Exhibits      22  


Table of Contents

PART - I FINANCIAL INFORMATION

 

Item 1.

Financial Statements

LEO HOLDINGS CORP.

CONDENSED BALANCE SHEETS

 

     March 31, 2020      December 31, 2019  
     (Unaudited)         

Assets

     

Current assets:

     

Cash

   $ 243      $ 243  

Prepaid expenses

     84,992        39,567  
  

 

 

    

 

 

 

Total current assets

     85,235        39,810  

Investments held in Trust Account

     200,693,450        207,190,740  
  

 

 

    

 

 

 

Total Assets

   $  200,778,685      $  207,230,550  
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

     

Current liabilities:

     

Accrued expenses

   $ 3,649,900      $ 2,860,900  

Accrued expenses - related party

     80,000        50,000  

Due to related party

     1,035,809        386,687  

Accounts payable

     1,571,639        1,583,870  
  

 

 

    

 

 

 

Total current liabilities

     6,337,348        4,881,457  

Deferred underwriting commissions

     7,000,000        7,000,000  
  

 

 

    

 

 

 

Total liabilities

     13,337,348        11,881,457  

Commitments

     

Class A ordinary shares, $0.0001 par value; 18,244,133 and 19,034,909 shares subject to possible redemption as of March 31, 2020 and December 31, 2019, respectively

     182,441,330        190,349,090  

Shareholders’ Equity:

     

Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

     —          —    

Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 1,068,674 and 965,091 shares issued and outstanding (excluding 18,244,133 and 19,034,909 shares subject to possible redemption) as of March 31, 2020 and December 31, 2019, respectively

     107        97  

Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,000,000 shares issued and outstanding

     500        500  

Additional paid-in capital

     4,507,338        3,730,127  

Retained earnings

     492,062        1,269,279  
  

 

 

    

 

 

 

Total shareholders’ equity

     5,000,007        5,000,003  
  

 

 

    

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 200,778,685      $ 207,230,550  
  

 

 

    

 

 

 

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

 

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LEO HOLDINGS CORP.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

 

     For the Three Months Ended March 31,  
     2020     2019  

General and administrative expenses

   $ 1,410,466     $ 1,587,728  
  

 

 

   

 

 

 

Loss from operations

     (1,410,466     (1,587,728

Interest income

     633,249       1,125,994  
  

 

 

   

 

 

 

Net loss

   $ (777,217   $ (461,734
  

 

 

   

 

 

 

Basic and diluted weighted average shares outstanding of Class A ordinary shares

     20,000,000       20,000,000  
  

 

 

   

 

 

 

Basic and diluted net income per share, Class A

   $ 0.03     $ 0.06  
  

 

 

   

 

 

 

Basic and diluted weighted average shares outstanding of Class B ordinary shares

     5,000,000       5,000,000  
  

 

 

   

 

 

 

Basic and diluted net loss per share, Class B

   $ (0.28   $ (0.32
  

 

 

   

 

 

 

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

 

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LEO HOLDINGS CORP.

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

 

     For the Three Months Ended March 31, 2020  
     Ordinary Shares      Additional            Total  
     Class A      Class B      Paid-in            Shareholders’  
     Shares      Amount      Shares      Amount      Capital      Retained Earnings     Equity  

Balance - December 31, 2019

     965,091      $ 97        5,000,000      $  500      $  3,730,127      $  1,269,279     $  5,000,003  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Common stock subject to possible redemption (1)

     103,583        10        —          —          777,211        —         777,221  

Net loss

     —          —          —          —          —          (777,217     (777,217
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Balance - March 31, 2020 (unaudited)

     1,068,674      $  107        5,000,000      $ 500      $ 4,507,338      $ 492,062     $ 5,000,007  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

(1) Including the redemption of 687,193 Class A ordinary shares on February 11, 2020     

 

     For the three months ended March 31, 2019  
     Ordinary Shares      Additional            Total  
     Class A      Class B      Paid-in            Shareholders’  
     Shares      Amount      Shares      Amount      Capital      Retained Earnings     Equity  

Balance - December 31, 2018

     833,372      $ 83        5,000,000      $ 500      $ 2,412,951      $ 2,586,468     $ 5,000,002  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Common stock subject to possible redemption

     46,174        5        —          —          461,735        —         461,740  

Net loss

     —          —          —          —          —          (461,734     (461,734
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Balance - March 31, 2019 (unaudited)

     879,546        88        5,000,000        500        2,874,686        2,124,734       5,000,008  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

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

 

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LEO HOLDINGS CORP.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

 

     For the Three Months Ended March 31,  
     2020     2019  

Cash Flows from Operating Activities:

    

Net loss

   $ (777,217   $ (461,734

Adjustments to reconcile net loss to net cash used in operating activities:

    

Interest income held in Trust Account

     (633,249     (1,125,994

Changes in operating assets and liabilities:

    

Prepaid expenses

     (45,425     (39,794

Accounts payable

     (12,231     27,385  

Accrued expenses

     789,000       892,296  

Accrued expenses - related party

     30,000       586,102  

Due to related party

     649,122       —    
  

 

 

   

 

 

 

Net cash used in operating activities

     —         (121,739

Cash Flows from Investing Activities

    

Withdrawal from Trust Account upon redemption

     7,130,539       —    
  

 

 

   

 

 

 

Net cash provided by investing activities

     7,130,539       —    

Cash Flows from Financing Activities:

    

Redemption of Class A ordinary shares

     (7,130,539     —    
  

 

 

   

 

 

 

Net cash used in financing activities

     (7,130,539     —    
  

 

 

   

 

 

 

Net decrease in cash

     —         (121,739

Cash - beginning of the period

     243       550,164  
  

 

 

   

 

 

 

Cash - end of the period

   $ 243     $ 428,425  
  

 

 

   

 

 

 

Supplemental disclosure of noncash investing and financing activities:

    

Decrease in value of Class A ordinary shares subject to possible redemption

   $ 777,221     $ 461,740  

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

 

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LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1. Description of Organization and Business Operations

Leo Holdings Corp. (the “Company”) is a blank check company incorporated in the Cayman Islands on November 29, 2017. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company focuses its search on companies in the consumer sector. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies. As of March 31, 2020, the Company had not commenced any operations. All activity for the period from November 29, 2017 (inception) to March 31, 2020 relates to the Company’s formation, the Initial Public Offering (as defined below), and since the closing of the offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

The Company’s sponsor is Leo Investors Limited Partnership, a Cayman Island exempted limited partnership (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on February 12, 2018. On February 15, 2018, the Company consummated its initial public offering (the “Initial Public Offering”) of 20,000,000 units (each, a “Unit” and collectively, the “Units”) sold to the public at a price of $10.00 per Unit, generating gross proceeds of $200.0 million, and incurring offering costs of approximately $11.9 million, inclusive of $7.0 million in deferred underwriting commissions (Note 5). The underwriter was granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit. The over-allotment option was not exercised prior to its expiration. Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (the “Private Placement”) of 4,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant to the Sponsor, and generating gross proceeds of $6 million (Note 4).

Upon the closing of the Initial Public Offering and Private Placement, $200.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (the “Trust Account”), located in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

The Company will provide holders of its outstanding Class A ordinary shares, par value $0.0001 (“Class A ordinary shares”), sold in the Initial Public Offering (the “public shareholders”) with the opportunity to redeem all or a portion of their Public Shares (as defined below in Note 3) upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially at $10.00 per Public

 

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Table of Contents

LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

Share). The per-share amount to be distributed to public shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of such Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of a Business Combination is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s officers and directors agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Sponsor and the Company’s officers and directors agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.

Notwithstanding the foregoing, the Company’s amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without the prior consent of the Company.

The Sponsor and the Company’s directors and executive officers agreed not to propose an amendment to the Company’s amended and restated memorandum and articles of association that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.

The Company had 24 months from the closing of the Initial Public Offering, or February 15, 2020 to complete a Business Combination. On February 11, 2020, the Company held a special meeting of shareholders (the “General Meeting”) to approve an extension of time for the Company to complete an initial Business Combination through July 31, 2020 (the “Extension”). The Extension was approved, and in connection with the vote to approve the Extension, the holders of 687,193 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.38 per share, for an aggregate redemption amount of approximately $7.13 million.

If the Company is unable to complete a Business Combination by July 31, 2020 (the “Combination Period”), the Company 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 the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its 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 public shareholders’ rights as shareholders (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 the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

 

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LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

The Sponsor and the Company’s officers and directors agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or the Company’s officers and directors acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriter of the Initial Public Offering agreed to waive its rights to its deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, the deferred underwriting commission will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. 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 only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

The DMS Business Combination

On April 23, 2020, the Company entered into a business combination agreement (the “Business Combination Agreement”) by and among the Company, Digital Media Solutions Holdings, LLC (“DMS”), CEP V DMS US Blocker Company, a Delaware corporation (“Blocker Corp”), Prism Data, LLC, a Delaware limited liability company (“Prism”), CEP V-A DMS AIV Limited Partnership, a Delaware limited partnership (“Clairvest Direct Seller”), Clairvest Equity Partners V Limited Partnership, an Ontario, Canada limited partnership (“Blocker Seller 1”), CEP V Co-Investment Limited Partnership, a Manitoba, Canada limited partnership (“Blocker Seller 2”, and together with Prism, Clairvest Direct Seller and Blocker Seller 1, the “Sellers”), Clairvest GP Manageco Inc., an Ontario corporation (“Clairvest”) as a Seller Representative, and, solely for the limited purposes set forth therein, the Sponsor.

The Business Combination Agreement provides for the consummation of the following transactions in the following order (collectively, the “DMS Business Combination”), in each case conditional upon each prior transaction having been consummated: (a) pursuant to the Surrender Agreement (as defined below) the Sponsor will surrender and forfeit 2,000,000 Private Placement warrants and, together with certain other holders, an aggregate of 1,500,000 Class B ordinary shares of the Company (collectively, the “Surrender”); (b) the Company will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which the Company will change its name to “Digital Media Solutions, Inc.” (“New DMS”); (c) the Company will consummate the PIPE Investment (as defined below); and (d) the Company will purchase the equity interests of Blocker Corp and a portion of the units of DMS from the Sellers, which units will be immediately contributed to the capital of Blocker Corp, in exchange for a combination of cash consideration, 2,000,000 Private Placement Warrants that will be issued to the Sellers, shares of Class B common stock, par value $0.001 per share, of New DMS, which will have no economic value but will entitle the holder thereof to one vote per share (the “Class B Shares”), and shares of Class C common stock, par value $0.001 per share, of New DMS (the “Class C Shares”), which are convertible into shares of Class A common stock, par value $0.0001 per share, of New DMS (the “Class A Shares” and, together with the Class B Shares and Class C Shares, the “New DMS Common Stock”) pursuant to a conversion ratio to be determined at the closing of the transactions contemplated by the DMS Business Combination (the “Closing”). Immediately prior to the consummation of Closing, the Company will effect the foregoing transactions, Domestication and the Class A ordinary shares and Class B ordinary shares of the Company will be exchanged for Class A Shares and the outstanding warrants to purchase Class A ordinary shares of the Company will automatically become exercisable for Class A Shares. Clairvest Direct Seller and Prism will continue to hold membership interests in DMS (the “DMS Units”) subject to and in accordance with the Amended Partnership Agreement (as defined below).

Following the DMS Business Combination, the combined company will be organized in an “Up-C” organizational structure, in which substantially all of the assets and business of New DMS will be held by DMS and continue to operate through the subsidiaries of DMS and New DMS’s sole material asset will be equity interests of DMS indirectly held by it. At the Closing, DMS and its current equity holders will amend and restate the limited liability company agreement of DMS in its entirety as the Amended Partnership Agreement to, among other things, recapitalize DMS such that the total number of DMS Units is equal to the total number of issued and outstanding New DMS Class A Common Stock (assuming the conversion of all shares of New DMS Class C Common Stock into shares of New DMS Class A Common Stock in accordance with the Proposed Certificate of Incorporation) and provide Clairvest Direct Seller and Prism the right to redeem their DMS Units for cash or, at New DMS’s option, New DMS may acquire such DMS Units (which DMS Units are expected to be contributed to Blocker Corp) in exchange for cash or shares of New DMS Class A Common Stock, in each case subject to certain restrictions set forth therein. DMS Units acquired by New DMS are expected to be contributed to Blocker Corp.

Concurrent with the Closing, New DMS and Blocker Corp will enter into the tax receivable agreement (the “Tax Receivable Agreement”) with the Sellers. Pursuant to the Tax Receivable Agreement, New DMS will be required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that New DMS and Blocker Corp actually realize as a result of (A) certain existing tax attributes of Blocker Corp acquired in the DMS Business Combination, and (B) increases in Blocker Corp’s allocable share of the tax basis of the tangible and intangible assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions of DMS Units or exchanges of DMS Units for cash or shares of New DMS Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMS and Blocker Corp received during a taxable year beginning within two years after the Closing. All such payments to the Sellers will be New DMS’s obligation, and not that of DMS.

In addition, in connection with the consummation of the transactions contemplated by the Business Combination Agreement, the Company will, among other things, (a) amend and restate its certificate of incorporation and bylaws immediately following the Domestication and (b) enter into, at the Closing, with the applicable Sellers or other parties, (i) a director nomination agreement relating to the composition of the board of directors of New DMS (the “New DMS Board”), (ii) an amended and restated registration rights agreement providing for certain registration rights with respect to the New DMS Common Stock and warrants, and (iii) a lock-up agreement restricting the Sellers from certain transfers of New DMS Common Stock during the lock-up period described therein.

Sponsor Shares and Warrant Surrender Agreement

Concurrent with the execution of the Business Combination Agreement, Sponsor, the Company and certain holders of Class B ordinary shares entered into a Sponsor Shares and Warrant Surrender Agreement (the “Surrender Agreement”), pursuant to which (a) the Surrender will be effectuated in connection with the consummation of the DMS Business Combination and (b) Sponsor and other holders party thereto agreed to waive any adjustment to the conversion ratio set forth in the Company’s amended and restated memorandum and articles of association or any other anti-dilution or similar protection with respect to the Class B ordinary shares held by them.

The PIPE Investment

The Company entered into subscription agreements (the “Subscription Agreements”) with certain investors, pursuant to which, among other things, such investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, including funds managed by Lion Capital LLP, an affiliate of the Sponsor, immediately following the Domestication, an aggregate of 10,000,000 shares of Class A Shares for $10.00 per share, which will generate aggregate proceeds of $100.0 million (the “PIPE Investment”). The closing of the PIPE Investment is contingent upon, among other things, the substantially concurrent consummation of the DMS Business Combination. The Subscription Agreements provide that New DMS will grant the investors in the PIPE Investment certain customary registration rights. The Class A Shares to be offered and sold in connection with the PIPE Investment have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D or Regulation S promulgated thereunder without any form of general solicitation or general advertising.

The consummation of the transactions contemplated by the Business Combination Agreement is subject to the satisfaction or waiver of certain closing conditions. Accordingly, there can be no assurance that the Business Combination will be consummated.

Going Concern Consideration

The accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2020, the Company had approximately $200 in its operating bank account, approximately $693,000 of interest income available in the Trust Account to pay for taxes, and a working capital deficit of approximately $6.3 million. Further, the Company has incurred and expect to continue to incur significant costs in pursuit of its acquisition plans.

Through March 31, 2020, the Company’s liquidity needs have been satisfied through receipt of a $25,000 capital contribution from the Sponsor in exchange for the issuance of the Founder Shares (Note 4) to the Sponsor, $325,000 in loans from the Sponsor, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the loans from the Sponsor on February 20, 2018. The Sponsor also paid for certain general and administrative expenses on behalf of the Company. As of March 31, 2020 and December 31 2019, an aggregate of approximately $1.0 million and approximately $387,000 of these advances were due on demand, non-interest bearing, and were fully outstanding.

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”) of up to $1.5 million (Note 4).

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues

 

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to evolve. The impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be materially adversely affected.

Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the working capital deficit, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after July 31, 2020.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed interim financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, the unaudited condensed interim financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, or any future period. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2020.

Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Net Income (Loss) Per Ordinary Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of 14,000,000 Class A ordinary shares in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted earnings per ordinary share is the same as basic earnings per ordinary share for the periods presented.

 

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LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

The Company’s statements of operations (the “Statements of Operations”) include a presentation of income (loss) per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. Net income per ordinary share, basic and diluted for Class A ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A ordinary shares outstanding for the periods. Net loss per ordinary share, basic and diluted for Class B ordinary shares is calculated by dividing the net income, less income attributable to Class A ordinary shares and any working capital loans, by the weighted average number of Class B ordinary shares outstanding for the periods presented.

Reconciliation of Net Income (Loss) per Ordinary Share

The Company’s net income (loss) is adjusted for the portion of income that is attributable to Class A ordinary shares subject to redemption, as these shares only participate in the earnings of the Trust Account (less applicable taxes) and not the income or losses of the Company. Accordingly, basic and diluted loss per Class A ordinary shares is calculated as follows:

 

     For the Three Months Ended March 31,  
     2020      2019  

Interest income held in Trust Account

   $ 633,249      $ 1,125,994  
  

 

 

    

 

 

 

Net income available to holders of Class A ordinary shares

   $ 633,249      $ 1,125,994  
  

 

 

    

 

 

 

Net loss

   $ (777,217    $ (461,734

Less: Income attributable to Class A ordinary shares

     (633,249      (1,125,994
  

 

 

    

 

 

 

Net loss attributable to holders of Class B ordinary shares

   $ (1,410,466    $ (1,587,728
  

 

 

    

 

 

 

Basic and diluted weighted average shares outstanding of Class A ordinary shares

     20,000,000        20,000,000  
  

 

 

    

 

 

 

Basic and diluted net income per share, Class A

   $ 0.03      $ 0.06  
  

 

 

    

 

 

 

Basic and diluted weighted average shares outstanding of Class B ordinary shares

     5,000,000        5,000,000  
  

 

 

    

 

 

 

Basic and diluted net loss per share, Class B

   $ (0.28    $ (0.32
  

 

 

    

 

 

 

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At March 31, 2020 and December 31, 2019, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed Balance Sheets.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

 

   

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

 

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NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

   

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

 

   

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

ASC Topic 820, Fair Value Measurement and Disclosures, requires all entities to disclose the fair value of financial instruments, both assets and liabilities for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2020 and December 31, 2019, the recorded values of cash, prepaid expenses, accounts payable, and accrued expenses approximate the fair values due to the short-term nature of the instruments.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Offering Costs

Offering costs consisted of legal, accounting, underwriting fees and other costs that were directly related to the Initial Public Offering totaled approximately $11.9 million, inclusive of $7.0 million in deferred underwriting commissions, and were charged to shareholders’ equity upon the completion of the Initial Public Offering.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at March 31, 2020 and December 31, 2019, 18,244,133 and 19,034,909 Class A ordinary shares subject to possible redemption at the redemption amount are presented as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets, respectively.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction; therefore

 

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LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

no income tax has been recorded. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its current tax position.

The Company may be subject to potential examination by U.S. federal, U.S. state or foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Recent Accounting Pronouncements

The Company’s management does not believe that there are any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

Note 3 - Initial Public Offering

On February 15, 2018, the Company sold 20,000,000 Units at a price of $10.00 per Unit in the Initial Public Offering. Each Unit consists of one Class A ordinary share (such Class A ordinary shares included in the Units being offered, the “Public Shares”), and one-half of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6).

Note 4 - Related Party Transactions

Founder Shares

On December 8, 2017, the Sponsor purchased 8,625,000 shares (the “Founder Shares”) of the Company’s Class B ordinary shares, par value $0.0001 (the “Class B ordinary shares”), for an aggregate price of $25,000. In February 2018, the Sponsor effected a surrender of 2,875,000 Founder Shares to the Company for no consideration, resulting in a decrease in the total number of Founder Shares from 8,625,000 to 5,750,000. The Founder Shares will automatically convert into Class A ordinary shares at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in Note 6. The Sponsor had agreed to forfeit up to 750,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriter. On March 29, 2018, the over-allotment option expired and an aggregate of 750,000 shares were subsequently forfeited by the Sponsor.

The Sponsor and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Private Placement Warrants

Concurrently with the closing of the Initial Public Offering, the Sponsor purchased 4,000,000 Private Placement Warrants at $1.50 per Private Placement Warrant, and generating gross proceeds of $6.0 million in the Private Placement.

Each Private Placement Warrant is exercisable for one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the Initial Public Offering and deposited in the Trust Account. If the Company does not complete a Business Combination within the

 

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NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.

The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.

Related Party Loans

The Sponsor and its affiliate had loaned the Company an aggregate of $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note. This loan was non-interest bearing and became payable upon the completion of the Initial Public Offering. The Company repaid $300,000 on February 15, 2018. In addition, the Sponsor and its affiliate loaned the Company another $25,000 for working capital. The Company fully repaid this amount on February 20, 2018.

The Sponsor also paid for certain general and administrative expenses on behalf of the Company. These advances were due on demand and were non-interest bearing. As of March 31, 2020 and December 31, 2019, approximately $1.0 million and $387,000 for these advances were recorded on the accompanying unaudited condensed balance sheets, respectively.

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, lend the Company Working Capital Loans. If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of March 31, 2020 and December 31, 2019, no Working Capital Loans were outstanding.

Administrative Support Agreement—Related Party Expenses

The Company has agreed, commencing on the effective date of the Initial Public Offering through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. During the three months ended March 31, 2020 and 2019, an aggregate of $30,000 for each period in connection with such services was recorded in general and administrative expenses in the accompanying unaudited condensed statements of operations, respectively. As of March 31, 2020 and December 31, 2019, $80,000 and $50,000 was accrued on the accompanying unaudited condensed balance sheets, respectively.

Note 5 - Commitments & Contingencies

Registration Rights

The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to Class A ordinary shares) pursuant to a registration and shareholder rights agreement.

These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

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LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

Underwriting Agreement

The Company granted the underwriter a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. This option expired on March 29, 2018 without being exercised.

The underwriter was entitled to underwriting discounts of $0.20 per Unit, or $4.0 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per Unit, or $7.0 million in the aggregate, will be payable to the underwriter for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

Note 6 - Shareholders’ Equity

Ordinary Shares

Class A Ordinary Shares—The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of March 31, 2020 and December 31, 2019, there were 20,000,000 Class A ordinary shares issued or outstanding, including 18,244,133 and 19,034,909 Class A ordinary shares subject to possible redemption, respectively.

Class B Ordinary Shares—The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share. In December 2017, the Company initially issued 8,625,000 Class B ordinary shares to the Sponsor. In February 2018, in connection with the decrease of the size of the Initial Public Offering, the Sponsor effected a surrender of 2,875,000 Class B ordinary shares to the Company for no consideration, resulting in a decrease in the total number of Class B ordinary shares from 8,625,000 to 5,750,000. Of the 5,750,000 Class B ordinary shares outstanding, up to 750,000 shares were subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriter’s over-allotment option was not exercised in full or in part, so that the Founder Shares would represent 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. On March 29, 2018, the over-allotment option expired and an aggregate of 750,000 shares were subsequently forfeited by the Sponsor. As of March 31, 2020 and December 31, 2019, there were 5,000,000 Class B ordinary shares issued or outstanding.

Holders of Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of shareholders except as required by law.

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of Class A ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the sum of (a) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any warrants issued to the Sponsor upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed by public shareholders in connection with the initial Business Combination.

Preference Shares—The Company is authorized to issue 1,000,000 preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 20202 and December 31, 2019, there were no preference shares issued or outstanding.

 

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LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

Warrants—The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company agreed that as soon as practicable, but in no event later than 20 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants is not effective by the sixtieth day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation and may only be exercised for a whole number of shares.

The Private Placement Warrants are identical to the Public Warrants included in the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Company may call the Public Warrants for redemption:

 

   

in whole and not in part;

 

   

at a price of $0.01 per warrant;

 

   

upon a minimum of 30 days’ prior written notice of redemption; and

 

   

if, and only if, the last reported closing price of the ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of Class A ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrant shares. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

Note 7 - Fair Value Measurements

The following table presents information about the Company’s assets that are measured on a recurring basis as of March 31, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.

 

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LEO HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

March 31, 2020

 

Description

   Quoted
Prices
in Active
Markets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Other
Unobservable
Inputs
(Level 3)
 

Investments held in Trust Account at March 31, 2020

   $ 200,693,450      $ —      $ —  
  

 

 

    

 

 

    

 

 

 

December 31, 2019

 

Description

   Quoted
Prices
in Active
Markets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Other
Unobservable
Inputs
(Level 3)
 

Investments held in Trust Account at December 31, 2019

   $ 207,190,740      $ —      $ —  
  

 

 

    

 

 

    

 

 

 

No cash was held in the Trust Account as of March 31, 2020 and December 31, 2019.

Note 8 - Subsequent Events

Management has performed an evaluation of subsequent events through the date of issuance of the unaudited condensed financial statements, noting no items which require adjustment or disclosure other than those set forth in the preceding notes to the unaudited condensed financial statements.

 

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to “we”, “us”, “our” or the “Company” are to Leo Holdings Corp., except where the context requires otherwise. The following discussion should be read in conjunction with our condensed interim financial statements and related notes thereto included elsewhere in this report.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

We are a blank check company incorporated on November 29, 2017 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although we are not limited to a particular industry or sector for purposes of consummating a business combination, we focus our search on companies in the consumer sector.

We consummated our Initial Public Offering on February 15, 2018. If we are unable to complete a business combination within 24 months from the closing of the Initial Public Offering, or the Combination Period, 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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay its 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 public shareholders’ rights as shareholders (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 the company’s remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

The DMS Business Combination

On April 23, 2020, we entered into the Business Combination Agreement. The DMS Business Combination is expected to close in the second quarter of 2020.

 

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Extension Meeting

On February 11, 2020, we held a special meeting of shareholders to approve an extension of time for us to complete an initial Business Combination through July 31, 2020 (the “Extension”). The Extension was approved, and in connection with the vote to approve the Extension, the holders of 687,193 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.38 per share, for an aggregate redemption amount of approximately $7.13 million.

Results of Operations

All activity through March 31, 2020 was in preparation for our Initial Public Offering, and since the closing of the offering, our activity has been limited to the search for a prospective initial business combination, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended March 31, 2020, we had net loss of approximately $777,000 which consisted of approximately $633,000 in interest income, offset by approximately $1.4 million in general and administrative costs (of which approximately $786,000 was for merger expenses),

For the three months ended March 31, 2019, we had net loss of approximately $462,000, which consisted of approximately $1.1 million in interest income, offset by approximately $1.6 million in general and administrative costs.

Going Concern Consideration

The accompanying unaudited consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2020, we had approximately $200 in our operating bank account, approximately $693,000 of interest income available in the trust account to pay for taxes, and a working capital deficit of approximately $6.3 million. Further, we have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans.

Through March 31, 2020, our liquidity needs have been satisfied through receipt of a $25,000 capital contribution from our sponsor in exchange for the issuance of the founder shares to our sponsor, $325,000 in loans from our sponsor, and the net proceeds from the consummation of the private placement not held in the trust account. We fully repaid the loans from our sponsor on February 20, 2018. Our sponsor also paid for certain general and administrative expenses on behalf of us. As of March 31, 2020 and December 31 2019, an aggregate of approximately $1.0 million and approximately $387,000 of these advances were due on demand, non-interest bearing, and were fully outstanding.

In addition, in order to finance transaction costs in connection with a business combination, our sponsor or an affiliate of our sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (the “Working Capital Loans”) of up to $1.5 million.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income (if any) to pay our income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest income earned on the amount in the trust account (if any) will be sufficient to pay

 

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our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). On March 11, 2020 the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be materially adversely affected.

Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In connection with our assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the working capital deficit, mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after July 31, 2020.

Related Party Transactions

Founder Shares

On December 8, 2017, the sponsor purchased 8,625,000 shares of the company’s Class B ordinary shares, par value $0.0001, for an aggregate price of $25,000. In February 2018, the sponsor effected a surrender of 2,875,000 founder shares to us for no consideration, resulting in a decrease in the total number of founder shares from 8,625,000 to 5,750,000. The founder shares will automatically convert into Class A ordinary shares at the time of our initial business combination and are subject to certain transfer restrictions. The sponsor had agreed to forfeit up to 750,000 founder shares to the extent that the over-allotment option was not exercised in full by the underwriter. On March 29, 2018, the over-allotment option expired and an aggregate of 750,000 shares were subsequently forfeited by the sponsor.

The sponsor and our officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the date on which the company completes a liquidation, merger, share exchange or other similar transaction that results in all of the company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Private Placement Warrants

Concurrently with the closing of the Initial Public Offering, the sponsor purchased 4,000,000 private placement Warrants at $1.50 per private placement warrant, generating gross proceeds of $6.0 million in the private placement. The sponsor had agreed that if the over-allotment option were exercised, the sponsor would have purchased an additional 400,000 private placement warrants at a price of $1.50 per private placement warrant.

Each private placement warrant is exercisable for one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the private placement warrants were added to the proceeds from the Initial Public Offering and deposited in the trust account. If the company does not complete a business combination within the Combination Period, the private placement warrants will expire worthless. The private placement warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees.

 

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The sponsor and our officers and directors had agreed, subject to limited exceptions, not to transfer, assign or sell any of their private placement warrants until 30 days after the completion of the initial business combination.

Related Party Loans

The sponsor and its affiliate had loaned us an aggregate of $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note. This loan was non-interest bearing and became payable upon the completion of the Initial Public Offering. We repaid $300,000 on February 15, 2018. In addition, the sponsor and its affiliate loaned us another $25,000 for working capital. We fully repaid this amount on February 20, 2018.

Our sponsor also paid for certain general and administrative expenses on behalf of our company. These advances were due on demand and were non-interest bearing. As of March 31, 2020 and December 31, 2019, approximately $1.0 million and $387,000 for these advances were recorded on the accompanying unaudited condensed balance sheets, respectively.

In addition, in order to finance transaction costs in connection with a business combination, the sponsor or an affiliate of the sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we would repay the Working Capital Loans out of the proceeds of the trust account released to the company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the trust account. In the event that a business combination does not close, we may use a portion of the proceeds held outside the trust account to repay the Working Capital Loans but no proceeds held in the trust account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a business combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post business combination entity at a price of $1.50 per warrant. The warrants would be identical to the private placement warrants. As of March 31, 2020 and December 31, 2019, no Working Capital Loans were outstanding.

Administrative Support Agreement

We have agreed, commencing on the effective date of the Initial Public Offering in February 2018 through the earlier of our consummation of a business combination and our liquidation, to pay an affiliate of the sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. During the three months ended March 31, 2020 and 2019, an aggregate of $30,000 for each period in connection with such services was recorded in general and administrative expenses in the accompanying unaudited condensed statements of operations. As of March 31, 2020 and December 31, 2019, $80,000 and $50,000 was accrued on the accompanying unaudited condensed balance sheets, respectively.

Critical Accounting Policies and Estimates

This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instrument and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no significant changes in our critical accounting policies as discussed in our 2019 Form 10-K filed with the SEC on March 13, 2020.

Off-Balance Sheet Arrangements and Contractual Obligations

As of March 31, 2020 and December 31, 2019, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

 

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JOBS Act

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

As of March 31, 2020 and December 31, 2019, we were not subject to any market or interest rate risk. Following the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the trust account, were invested in U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we do not believe that there will be an associated material exposure to interest rate risk.

 

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2019, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

To the knowledge of our management, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.

 

Item 1A.

Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, Risk Factors, of our Annual Report for the fiscal year ended December 31, 2019, except for the risk factor updated below:

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” A significant outbreak of COVID-19 and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be adversely affected in a material way.

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

None.

 

Item 3.

Defaults Upon Senior Securities

None.

 

Item 4.

Mine Safety Disclosures

None.

 

Item 5.

Other Information

None.

 

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Item 6.

Exhibits

 

Exhibit
Number

  

Description

31.1    Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a)  under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a)  under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1    Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS    XBRL Instance Document
101.SCH    XBRL Taxonomy Extension Schema Document
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF    XBRL Taxonomy Extension Definition Linkbase Document
101.LAB    XBRL Taxonomy Extension Label Linkbase Document
101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 8th day of May, 2020.

 

LEO HOLDINGS CORP.

/s/ Lyndon Lea

Name:   Lyndon Lea
Title:  

Chairman and Chief Executive Officer

(Principal Executive Officer)

/s/ Robert Darwent

Name:   Robert Darwent
Title:  

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-31.1 2 d833411dex311.htm EX-31.1 EX-31.1

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Lyndon Lea, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 of Leo Holdings Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

 

Date: May 8, 2020     By:  

/s/ Lyndon Lea

      Lyndon Lea
     

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-31.2 3 d833411dex312.htm EX-31.2 EX-31.2

EXHIBIT 31.2

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Robert Darwent, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 of Leo Holdings Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

 

Date: May 8, 2020     By:  

/s/ Robert Darwent

      Robert Darwent
     

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1 4 d833411dex321.htm EX-32.1 EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Leo Holdings Corp. (the “Company”) on Form 10-Q for the quarter ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lyndon Lea, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2020

 

/s/ Lyndon Lea

Name:   Lyndon Lea
Title:  

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-32.2 5 d833411dex322.htm EX-32.2 EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Leo Holdings Corp. (the “Company”) on Form 10-Q for the quarter ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Darwent, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2020

 

/s/ Robert Darwent

Name:   Robert Darwent
Title:  

Chief Financial Officer

(Principal Financial and Accounting Officer)

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max-height: 0px;"></div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> P24M 1 1 1 20000000 20000000 687193 7130539 7130539 687193 10.38 7.13 <div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">Note 4 - Related Party Transactions </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Founder Shares </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">On December&#160;8, 2017, the Sponsor purchased 8,625,000 shares (the &#8220;Founder Shares&#8221;) of the Company&#8217;s Class&#160;B ordinary shares, par value $0.0001 (the &#8220;Class&#160;B ordinary shares&#8221;), for an aggregate price of $25,000. In February 2018, the Sponsor effected a surrender of 2,875,000 Founder Shares to the Company for no consideration, resulting in a decrease in the total number of Founder Shares from 8,625,000 to 5,750,000. The Founder Shares will automatically convert into Class&#160;A ordinary shares at the time of the Company&#8217;s initial Business Combination and are subject to certain transfer restrictions, as described in Note&#160;6. The Sponsor had agreed to forfeit up to 750,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriter. On March&#160;29, 2018, the over-allotment option expired and an aggregate of 750,000 shares were subsequently forfeited by the Sponsor. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Sponsor and the Company&#8217;s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A)&#160;one year after the completion of the initial Business Combination or (B)&#160;subsequent to the initial Business Combination, (x)&#160;if the last sale price of the Class&#160;A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150&#160;days after the initial Business Combination, or (y)&#160;the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company&#8217;s shareholders having the right to exchange their ordinary shares for cash, securities or other property. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Private Placement Warrants </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Concurrently with the closing of the Initial Public Offering, the Sponsor purchased 4,000,000 Private Placement Warrants at $1.50 per Private Placement Warrant, and generating gross proceeds of $6.0&#160;million in the Private Placement. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Each Private Placement Warrant is exercisable for one Class&#160;A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the Initial Public Offering and deposited in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be&#160;non-redeemable&#160;and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Sponsor and the Company&#8217;s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Related Party Loans </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Sponsor and its affiliate had loaned the Company an aggregate of $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note. This loan was non-interest bearing and became payable upon the completion of the Initial Public Offering. The Company repaid $300,000 on February&#160;15, 2018. In addition, the Sponsor and its affiliate loaned the Company another $25,000 for working capital. The Company fully repaid this amount on February&#160;20, 2018. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Sponsor also paid for certain general and administrative expenses on behalf of the Company. These advances were due on demand and were&#160;non-interest&#160;bearing.&#160;As of March&#160;31, 2020 and December&#160;31, 2019, approximately $1.0 <div style="display:inline;">million </div>and $387,000 for these advances were recorded on the accompanying unaudited condensed balance sheets, respectively. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company&#8217;s officers and directors may, but are not obligated to, lend the Company Working Capital Loans. If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender&#8217;s discretion, up to $1.5&#160;million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of March&#160;31, 2020 and December&#160;31, 2019, no Working Capital Loans were outstanding. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Administrative Support Agreement&#8212;Related Party Expenses </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company has agreed, commencing on the effective date of the Initial Public Offering through the earlier of the Company&#8217;s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. During the three months ended March&#160;31, 2020 and 2019, an aggregate of $30,000 for each period in connection with such services was recorded in general and administrative expenses in the accompanying unaudited condensed statements of operations, respectively. As of March&#160;31, 2020 and December&#160;31, 2019, $80,000 and $50,000 was accrued on the accompanying unaudited condensed balance sheets, respectively. </div></div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">Note 6 - Shareholders&#8217; Equity </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Ordinary Shares </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Class&#160;A Ordinary Shares</div></div>&#8212;The Company is authorized to issue 200,000,000 Class&#160;A ordinary shares with a par value of $0.0001 per share. As of March&#160;31, 2020 and December&#160;31, 2019, there were 20,000,000 Class&#160;A ordinary shares issued or outstanding, including 18,244,133 and 19,034,909 Class&#160;A ordinary shares subject to possible redemption, respectively. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Class&#160;B Ordinary Shares</div></div>&#8212;The Company is authorized to issue 20,000,000 Class&#160;B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share. In December&#160;2017, the Company initially issued 8,625,000 Class&#160;B ordinary shares to the Sponsor. In February 2018, in connection with the decrease of the size of the Initial Public Offering, the Sponsor effected a surrender of 2,875,000 Class&#160;B ordinary shares to the Company for no consideration, resulting in a decrease in the total number of Class&#160;B ordinary shares from 8,625,000 to 5,750,000. Of the 5,750,000 Class&#160;B ordinary shares outstanding, up to 750,000 shares were subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriter&#8217;s over-allotment option was not exercised in full or in part, so that the Founder Shares would represent 20% of the Company&#8217;s issued and outstanding ordinary shares after the Initial Public Offering. On March 29, 2018, the over-allotment option expired and an aggregate of 750,000 shares were subsequently forfeited by the Sponsor. As of March&#160;31, 2020 and December&#160;31, 2019, there were 5,000,000 Class&#160;B ordinary shares issued or outstanding. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Holders of Class&#160;A ordinary shares and Class&#160;B ordinary shares vote together as a single class on all matters submitted to a vote of shareholders except as required by law. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Class&#160;B ordinary shares will automatically convert into Class&#160;A ordinary shares at the time of the initial Business Combination at a ratio such that the number of Class&#160;A ordinary shares issuable upon conversion of all Class&#160;B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i)&#160;the total number of Class&#160;A ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii)&#160;the sum of (a)&#160;the total number of Class&#160;A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class&#160;A ordinary shares or equity-linked securities exercisable for or convertible into Class&#160;A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any warrants issued to the Sponsor upon conversion of Working Capital Loans, minus (b)&#160;the number of Public Shares redeemed by public shareholders in connection with the initial Business Combination. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Preference Shares</div></div>&#8212;The Company is authorized to issue 1,000,000 preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company&#8217;s board of directors. 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The Company agreed that as soon as practicable, but in no event later than 20 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class&#160;A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. 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Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, the unaudited condensed interim financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three months ended March&#160;31, 2020 are not necessarily indicative of the results that may be expected for the year ending December&#160;31, 2020, or any future period. 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background-color: rgb(204, 238, 255);;vertical-align:bottom;"></td><td style="font-family: &quot;times new roman&quot;; background-color: rgb(204, 238, 255);;vertical-align:bottom;">&#160;&#160;</td><td style="white-space: nowrap; background-color: rgb(204, 238, 255); border-bottom: 2.25pt double black;;vertical-align:bottom;">$</td><td style="white-space: nowrap; background-color: rgb(204, 238, 255); border-bottom: 2.25pt double black;;text-align:right;;vertical-align:bottom;">&#8212;&#160;&#160;</td><td style="white-space: nowrap; font-family: &quot;times new roman&quot;; padding: 0px; background-color: rgb(204, 238, 255);;vertical-align:bottom;"></td></tr></table><div style="clear: both; max-height: 0px;"></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">No cash was held in the Trust Account as of March&#160;31, 2020 and December&#160;31, 2019.&#160;</div></div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">Note 8 - Subsequent Events </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Management has performed an evaluation of subsequent events through the date of issuance of the unaudited condensed financial statements, noting no items which require adjustment or disclosure other than those set forth in the preceding notes to the unaudited condensed financial statements. </div></div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">Note 1. Description of Organization and Business Operations </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Leo Holdings Corp. (the &#8220;Company&#8221;) is a blank check company incorporated in the Cayman Islands on November&#160;29, 2017. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the &#8220;Business Combination&#8221;). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company focuses its search on companies in the consumer sector. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies. As of March&#160;31, 2020, the Company had not commenced any operations. All activity for the period from November&#160;29, 2017 (inception) to March&#160;31, 2020 relates to the Company&#8217;s formation, the Initial Public Offering (as defined below), and since the closing of the offering,&#160;the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company&#8217;s sponsor is Leo Investors Limited Partnership, a Cayman Island exempted limited partnership (the &#8220;Sponsor&#8221;). The registration statement for the Company&#8217;s Initial Public Offering was declared effective on February&#160;12, 2018. On February&#160;15, 2018, the Company consummated its&#160;initial public offering (the &#8220;Initial Public Offering&#8221;) of 20,000,000 units (each, a &#8220;Unit&#8221; and collectively, the &#8220;Units&#8221;) sold to the public at a price of $10.00 per Unit, generating gross proceeds of $200.0&#160;million, and incurring offering costs of approximately $11.9&#160;million, inclusive of $7.0&#160;million in deferred underwriting commissions (Note&#160;5). The underwriter was granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit. The over-allotment option was not exercised prior to its expiration. Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (the &#8220;Private Placement&#8221;) of 4,000,000 warrants (each, a &#8220;Private Placement Warrant&#8221; and collectively, the &#8220;Private Placement Warrants&#8221;) at a price of $1.50 per Private Placement Warrant to the Sponsor, and generating gross proceeds of $6&#160;million (Note&#160;4). </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Upon the closing of the Initial Public Offering and Private Placement, $200.0&#160;million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and certain of the proceeds of the Private Placement were placed&#160;in a trust account (the &#8220;Trust Account&#8221;), located in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer&#160;&amp; Trust Company acting as trustee, and invested only in U.S. government securities, within the meaning set forth in Section&#160;2(a)(16) of the Investment Company Act of 1940, as amended (the &#8220;Investment Company Act&#8221;), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs&#160;(d)(2), (d)(3) and (d)(4) of Rule&#160;2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i)&#160;the completion of a Business Combination and (ii)&#160;the distribution of the Trust Account as described below. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company&#8217;s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company will provide holders of its outstanding Class&#160;A ordinary shares, par value $0.0001 (&#8220;Class&#160;A ordinary shares&#8221;), sold in the Initial Public Offering (the &#8220;public shareholders&#8221;) with the opportunity to redeem all or a portion of their Public Shares (as defined below in Note&#160;3) upon the completion of a Business Combination either (i)&#160;in connection with a shareholder meeting called to approve the Business Combination or (ii)&#160;by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially at $10.00 per Public Share). The per-share amount to be distributed to public shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note&#160;5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board&#8217;s (&#8220;FASB&#8221;) Accounting Standards Codification (&#8220;ASC&#8221;) Topic&#160;480 &#8220;<div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Distinguishing Liabilities from Equity</div>.&#8221; In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of such Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the &#8220;SEC&#8221;) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of a Business Combination is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company&#8217;s officers and directors agreed to vote their Founder Shares (as defined below in Note&#160;4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Sponsor and the Company&#8217;s officers and directors agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Notwithstanding the foregoing, the Company&#8217;s amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a &#8220;group&#8221; (as defined under Section&#160;13 of the Securities Exchange Act of 1934, as amended (the &#8220;Exchange Act&#8221;)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class&#160;A ordinary shares sold in the Initial Public Offering, without the prior consent of the Company. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Sponsor and the Company&#8217;s directors and executive officers agreed not to propose an amendment to the Company&#8217;s amended and restated memorandum and articles of association that would affect the substance or timing of the Company&#8217;s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public shareholders with the opportunity to redeem their Class&#160;A ordinary shares in conjunction with any such amendment. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company ha<div style="letter-spacing: 0px; top: 0px;;display:inline;">d</div>&#160;24 months from the closing of the Initial Public Offering, or February&#160;15, 2020 to complete a Business Combination. On February&#160;11, 2020, the Company held a special meeting of shareholders (the &#8220;General Meeting&#8221;) to approve an extension of time for the Company to complete an initial Business Combination&#160;through July&#160;31, 2020 (the &#8220;Extension&#8221;). The Extension was approved, and in connection with the vote to approve the Extension, the holders of 687,193 Class&#160;A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.38 per share, for an aggregate redemption amount of approximately $7.13&#160;million. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">If the Company is unable to complete a Business Combination by July&#160;31, 2020 (the &#8220;Combination Period&#8221;), the Company will (i)&#160;cease all operations except for the purpose of winding up, (ii)&#160;as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its 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 public shareholders&#8217; rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)&#160;as promptly as reasonably possible following such redemption, subject to the approval of the Company&#8217;s remaining shareholders and the Company&#8217;s board of directors, dissolve and liquidate, subject in each case to the Company&#8217;s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. </div></div><div style="font-size: 1px; margin-top: 12px; margin-bottom: 0px;"><div style="font-size: 1px; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Sponsor and the Company&#8217;s officers and directors agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or the Company&#8217;s officers and directors acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriter of the Initial Public Offering agreed to waive its rights to its deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, the deferred underwriting commission will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. 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 only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company&#8217;s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.</div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">The DMS Business Combination </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">On April 23, 2020, the Company entered into a business combination agreement (the &#8220;Business Combination Agreement&#8221;) by and among the Company, Digital Media Solutions Holdings, LLC (&#8220;DMS&#8221;), CEP V DMS US Blocker Company, a Delaware corporation (&#8220;Blocker Corp&#8221;), Prism Data, LLC, a Delaware limited liability company (&#8220;Prism&#8221;), CEP V-A DMS AIV Limited Partnership, a Delaware limited partnership (&#8220;Clairvest Direct Seller&#8221;), Clairvest Equity Partners V Limited Partnership, an Ontario, Canada limited partnership (&#8220;Blocker Seller 1&#8221;), CEP V Co-Investment Limited Partnership, a Manitoba, Canada limited partnership (&#8220;Blocker Seller 2&#8221;, and together with Prism, Clairvest Direct Seller and Blocker Seller 1, the &#8220;Sellers&#8221;), Clairvest GP Manageco Inc., an Ontario corporation (&#8220;Clairvest&#8221;) as a Seller Representative, and, solely for the limited purposes set forth therein, the Sponsor. </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Business Combination Agreement provides for the consummation of the following transactions in the following order (collectively, the &#8220;DMS Business Combination&#8221;), in each case conditional upon each prior transaction having been consummated: (a) pursuant to the Surrender Agreement (as defined below) the Sponsor will surrender and forfeit 2,000,000 Private Placement warrants and, together with certain other holders, an aggregate of 1,500,000 Class B ordinary shares of the Company (collectively, the &#8220;Surrender&#8221;); (b) the Company will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the &#8220;Domestication&#8221;), upon which the Company will change its name to &#8220;Digital Media Solutions, Inc.&#8221; (&#8220;New DMS&#8221;); (c) the Company will consummate the PIPE Investment (as defined below); and (d) the Company will purchase the equity interests of Blocker Corp and a portion of the units of DMS from the Sellers, which units will be immediately contributed to the capital of Blocker Corp, in exchange for a combination of cash consideration, 2,000,000 Private Placement Warrants that will be issued to the Sellers, shares of Class B common stock, par value $0.001 per share, of New DMS, which will have no economic value but will entitle the holder thereof to one vote per share (the &#8220;Class B Shares&#8221;), and shares of Class C common stock, par value $0.001 per share, of New DMS (the &#8220;Class C Shares&#8221;), which are convertible into shares of Class A common stock, par value $0.0001 per share, of New DMS (the &#8220;Class A Shares&#8221; and, together with the Class B Shares and Class C Shares, the &#8220;New DMS Common Stock&#8221;) pursuant to a conversion ratio to be determined at the closing of the transactions contemplated by the DMS Business Combination (the &#8220;Closing&#8221;). Immediately prior to the consummation of Closing, the Company will effect the foregoing transactions, Domestication and the Class A ordinary shares and Class B ordinary shares of the Company will be exchanged for Class A Shares and the outstanding warrants to purchase Class A ordinary shares of the Company will automatically become exercisable for Class A Shares. Clairvest Direct Seller and Prism will continue to hold membership interests in DMS (the &#8220;DMS Units&#8221;) subject to and in accordance with the Amended Partnership Agreement (as defined below). </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Following the DMS Business Combination, the combined company will be organized in an &#8220;Up-C&#8221; organizational structure, in which substantially all of the assets and business of New DMS will be held by DMS and continue to operate through the subsidiaries of DMS and New DMS&#8217;s sole material asset will be equity interests of DMS indirectly held by it. At the Closing, DMS and its current equity holders will amend and restate the limited liability company agreement of DMS in its entirety as the Amended Partnership Agreement to, among other things, recapitalize DMS such that the total number of DMS Units is equal to the total number of issued and outstanding New DMS Class A Common Stock (assuming the conversion of all shares of New DMS Class C Common Stock into shares of New DMS Class A Common Stock in accordance with the Proposed Certificate of Incorporation) and provide Clairvest Direct Seller and Prism the right to redeem their DMS Units for cash or, at New DMS&#8217;s option, New DMS may acquire such DMS Units (which DMS Units are expected to be contributed to Blocker Corp) in exchange for cash or shares of New DMS Class A Common Stock, in each case subject to certain restrictions set forth therein. DMS Units acquired by New DMS are expected to be contributed to Blocker Corp<div style="display:inline;">.</div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Concurrent with the Closing, New DMS and Blocker Corp will enter into the tax receivable agreement (the &#8220;Tax Receivable Agreement&#8221;) with the Sellers. Pursuant to the Tax Receivable Agreement, New DMS will be required to pay the Sellers (i) </div></div><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"> 85% </div></div><div style="display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">of the amount of savings, if any, in U.S. federal, state and local income tax that New DMS and Blocker Corp actually realize as a result of (A) certain existing tax attributes of Blocker Corp acquired in the DMS Business Combination, and (B) increases in Blocker Corp&#8217;s allocable share of the tax basis of the tangible and intangible assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions of DMS Units or exchanges of DMS Units for cash or shares of New DMS Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMS and Blocker Corp received during a taxable year beginning within two years after the Closing. All such payments to the Sellers will be New DMS&#8217;s obligation, and not that of DMS. </div></div><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"> </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">In addition, in connection with the consummation of the transactions contemplated by the Business Combination Agreement, the Company will, among other things, (a) amend and restate its certificate of incorporation and bylaws immediately following the Domestication and (b) enter into, at the Closing, with the applicable Sellers or other parties, (i) a director nomination agreement relating to the composition of the board of directors of New DMS (the &#8220;New DMS Board&#8221;), (ii) an amended and restated registration rights agreement providing for certain registration rights with respect to the New DMS Common Stock and warrants, and (iii) a lock-up agreement restricting the Sellers from certain transfers of New DMS Common Stock during the lock-up period described therein. </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Sponsor Shares and Warrant Surrender Agreement </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Concurrent with the execution of the Business Combination Agreement, Sponsor, the Company and certain holders of Class B ordinary shares entered into a Sponsor Shares and Warrant Surrender Agreement (the &#8220;Surrender Agreement&#8221;), pursuant to which (a) the Surrender will be effectuated in connection with the consummation of the DMS Business Combination and (b) Sponsor and other holders party thereto agreed to waive any adjustment to the conversion ratio set forth in the Company&#8217;s amended and restated memorandum and articles of association or any other anti-dilution or similar protection with respect to the Class B ordinary shares held by them. </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">The PIPE Investment </div></div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company entered into subscription agreements (the &#8220;Subscription Agreements&#8221;) with certain investors, pursuant to which, among other things, such investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, including funds managed by Lion Capital LLP, an affiliate of the Sponsor, immediately following the Domestication, an aggregate of 10,000,000 shares of Class A Shares for $10.00 per share, which will generate aggregate proceeds of $100.0 million (the &#8220;PIPE Investment&#8221;). The closing of the PIPE Investment is contingent upon, among other things, the substantially concurrent consummation of the DMS Business Combination. The Subscription Agreements provide that New DMS will grant the investors in the PIPE Investment certain customary registration rights. The Class A Shares to be offered and sold in connection with the PIPE Investment have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D or Regulation S promulgated thereunder without any form of general solicitation or general advertising. </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The consummation of the transactions contemplated by the Business Combination Agreement is subject to the satisfaction or waiver of certain closing conditions. Accordingly, there can be no assurance that the Business Combination will be consummated. </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="font-size: 10pt; letter-spacing: 0px;;font-weight:bold;display:inline;">Going Concern Consideration</div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business.&#160;As of March&#160;31, 2020, the Company had approximately $200 in its operating bank account, approximately $693,000 of interest income available in the Trust Account to pay for taxes, and a working capital deficit of approximately $6.3&#160;million. Further, the Company has incurred and expect to continue to incur significant costs in pursuit of its acquisition plans. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Through March&#160;31, 2020, the Company&#8217;s liquidity needs have been satisfied through receipt of a $25,000 capital contribution from the Sponsor in exchange for the issuance of the Founder Shares (Note 4) to the Sponsor, $325,000 in loans from the Sponsor, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the loans from the Sponsor on February 20, 2018. The Sponsor also paid for certain general and administrative expenses on behalf of the Company. As of March&#160;31, 2020 and December&#160;31 2019, an aggregate of approximately $1.0 <div style="letter-spacing: 0px; top: 0px;;display:inline;">million </div>and approximately $387,000 of these advances were due on demand,&#160;non-interest&#160;bearing, and were fully outstanding. </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company&#8217;s officers and directors may, but are not obligated to, loan the Company funds as may be required (the &#8220;Working Capital Loans&#8221;) of up to $1.5&#160;million (Note&#160;4). </div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">On January&#160;30, 2020, the World Health Organization (&#8220;WHO&#8221;) announced a global health emergency because of a new strain of coronavirus (the &#8220;COVID-19 outbreak&#8221;). <div style="letter-spacing: 0px; top: 0px;;display:inline;">O</div>n March <div style="letter-spacing: 0px; top: 0px;;display:inline;">11, </div>2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company&#8217;s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company&#8217;s results of operations, financial position and cash flows may be materially adversely affected.</div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company&#8217;s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. </div></div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: &quot;times new roman&quot;; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">In connection with the Company&#8217;s assessment of going concern considerations in accordance with FASB Accounting Standards Update (&#8220;ASU&#8221;) 2014-15, &#8220;<div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Disclosures of Uncertainties about an Entity&#8217;s Ability to Continue as a Going Concern</div>,&#8221; management has determined that the working capital deficit, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company&#8217;s ability to continue as a going concern. 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Initial Public Offering - Additional Information (Detail)
Feb. 15, 2018
$ / shares
shares
Subsidiary, Sale of Stock [Line Items]  
Unit price per share | $ / shares $ 10.00
IPO [Member]  
Subsidiary, Sale of Stock [Line Items]  
Sale of units, shares | shares 20,000,000
IPO [Member] | Class A Ordinary Shares [Member]  
Subsidiary, Sale of Stock [Line Items]  
Unit price per share | $ / shares $ 10.00
Number of shares of common stock converted from each warrant (in shares) | shares 1
Warrant exercise price | $ / shares $ 11.50
IPO [Member] | Public Warrants [Member]  
Subsidiary, Sale of Stock [Line Items]  
Number of common shares included in each unit | shares 1

XML 15 R26.htm IDEA: XBRL DOCUMENT v3.20.1
Fair Value Measurements - Summary of Information about Company's Assets Measured on Recurring Basis (Detail) - USD ($)
Mar. 31, 2020
Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents held in Trust Account $ 200,693,450 $ 207,190,740
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets (Level 1) [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents held in Trust Account 200,693,450 207,190,740
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents held in Trust Account 0 0
Fair Value, Measurements, Recurring [Member] | Significant Other Unobservable Inputs (Level 3) [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents held in Trust Account $ 0 $ 0
XML 16 R10.htm IDEA: XBRL DOCUMENT v3.20.1
Initial Public Offering
3 Months Ended
Mar. 31, 2020
Text Block [Abstract]  
Initial Public Offering
Note 3 - Initial Public Offering
On February 15, 2018, the Company sold 20,000,000 Units at a price of $10.00 per Unit in the Initial Public Offering. Each Unit consists of one Class A ordinary share (such Class A ordinary shares included in the Units being offered, the “Public Shares”), and one-half of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6).
XML 17 R14.htm IDEA: XBRL DOCUMENT v3.20.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Note 7 - Fair Value Measurements
The following table presents information about the Company’s assets that are measured on a recurring basis as of March 31, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
 
March 31, 2020
 
Description
  
Quoted

Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Investments held in Trust Account at March 31, 2020
  $200,693,450   $—    $—  
December 31, 2019
 
Description
  
Quoted

Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Investments held in Trust Account at December 31, 2019
  $207,190,740   $—    $—  
No cash was held in the Trust Account as of March 31, 2020 and December 31, 2019. 
XML 18 R18.htm IDEA: XBRL DOCUMENT v3.20.1
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Summary of Information about Company's Assets Measured on Recurring Basis
The following table presents information about the Company’s assets that are measured on a recurring basis as of March 31, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
 
March 31, 2020
 
Description
  
Quoted

Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Investments held in Trust Account at March 31, 2020
  $200,693,450   $—    $—  
December 31, 2019
 
Description
  
Quoted

Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Investments held in Trust Account at December 31, 2019
  $207,190,740   $—    $—  
XML 19 R7.htm IDEA: XBRL DOCUMENT v3.20.1
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Cash Flows from Operating Activities:    
Net loss $ (777,217) $ (461,734)
Adjustments to reconcile net loss to net cash used in operating activities:    
Interest income held in Trust Account (633,249) (1,125,994)
Changes in operating assets and liabilities:    
Prepaid expenses (45,425) (39,794)
Accounts payable (12,231) 27,385
Accrued expenses 789,000 892,296
Accrued expenses - related party 30,000 586,102
Due to related party 649,122  
Net cash used in operating activities   (121,739)
Cash Flows from Investing Activities    
Withdrawal from Trust Account upon redemption 7,130,539  
Net cash provided by investing activities 7,130,539  
Cash Flows from Financing Activities:    
Redemption of Class A ordinary shares (7,130,539)  
Net cash used in financing activities (7,130,539)  
Net decrease in cash   (121,739)
Cash - beginning of the period 243 550,164
Cash - end of the period 243 428,425
Class A Ordinary Shares [Member]    
Supplemental disclosure of noncash investing and financing activities:    
Decrease in value of Class A ordinary shares subject to possible redemption $ 777,221 $ 461,740
XML 20 R3.htm IDEA: XBRL DOCUMENT v3.20.1
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 31, 2020
Dec. 31, 2019
Preference shares, par value $ 0.0001 $ 0.0001
Preference shares, shares authorized 1,000,000 1,000,000
Preference shares, shares issued 0 0
Preference shares, shares outstanding 0 0
Class A Ordinary Shares [Member]    
Ordinary shares subject to possible redemption, par value $ 0.0001 $ 0.0001
Ordinary shares subject to possible redemption, shares 18,244,133 19,034,909
Ordinary shares, par value $ 0.0001 $ 0.0001
Ordinary shares, shares authorized 200,000,000 200,000,000
Ordinary shares, shares issued 1,068,674 965,091
Ordinary shares, shares outstanding 1,068,674 965,091
Class B Ordinary Shares [Member]    
Ordinary shares, par value $ 0.0001 $ 0.0001
Ordinary shares, shares authorized 20,000,000 20,000,000
Ordinary shares, shares issued 5,000,000 5,000,000
Ordinary shares, shares outstanding 5,000,000 5,000,000
XML 21 R19.htm IDEA: XBRL DOCUMENT v3.20.1
Description of Organization and Business Operations - Additional Information (Detail) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Feb. 11, 2020
Feb. 15, 2018
Dec. 08, 2017
Feb. 28, 2018
Mar. 31, 2020
Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Gross proceeds from initial public offering   $ 200,000,000        
Proceeds from sale of private placement units   $ 6,000,000        
Sale of stock price per unit   $ 10.00        
Minimum percentage of fair market value of business acquisition to trust account balance   80.00%        
Minimum ownership percentage to be acquired for not to be registered as an investment company   50.00%        
Net tangible assets   $ 5,000,001        
Shares redemption obligation percentage         100.00%  
Business combination and initial public offering completion period description         If the Company is unable to complete a Business Combination by July 31, 2020 (the “Combination Period”), the Company 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 the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its 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 public shareholders’ rights as shareholders (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 the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.  
Period for business combination from closing of Initial Public Offering         24 months  
Interest to pay dissolution expenses         $ 100,000  
Share redemption price per share         $ 10.00  
Amount available in operating bank account         $ 200  
Interest available         693,000,000,000  
Working capital         $ 6,300,000  
PIPE Investors [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Common stock Issued         10,000,000  
Sale of stock price per unit         $ 10.00  
Receipt from capital contribution         $ 100,000,000  
Tax Receivable Agreement [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Percentage of payments on deposit         85.00%  
DMS [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Refunds of pre-closing taxes         100.00%  
DMS [Member] | Private Placement Warrants [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Common stock Issued on Acquisition         2,000,000  
Sponsor [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Proceeds from sale of private placement units         $ 6,000,000  
Receipt from capital contribution         25,000  
Loans from sponsor         $ 325,000  
Loan repayment date         Feb. 20, 2018  
General and administrative expenses paid by sponsor         $ 1,000,000 $ 387,000
Sponsor [Member] | Maximum [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Loans from sponsor         $ 1,500,000  
Founder [Member] | DMS [Member] | Private Placement Warrants [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Repurchase of warrants surrendered by sponsor         2,000,000  
Class A Ordinary Shares [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Ordinary shares, par value         $ 0.0001 $ 0.0001
EXercised right to redemptions shares 687,193          
Redemption price per share $ 10.38          
Aggregate amount of redemption $ 7.13          
Class A Ordinary Shares [Member] | DMS [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Ordinary shares, par value         0.0001  
Class A Ordinary Shares [Member] | Founder [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Sale of stock price per unit         12.00  
Class B Ordinary Shares [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Repurchase of shares surrendered by sponsor       2,875,000    
Ordinary shares, par value         $ 0.0001 $ 0.0001
Class B Ordinary Shares [Member] | DMS [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Repurchase of shares surrendered by sponsor         1,500,000  
Ordinary shares, par value         $ 0.001  
Class B Ordinary Shares [Member] | Founder [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Common stock Issued     8,625,000      
Sale of stock price per unit     $ 0.0001      
Repurchase of shares surrendered by sponsor       2,875,000    
Receipt from capital contribution     $ 25,000      
Class C Ordinary Shares [Member] | DMS [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Ordinary shares, par value         0.001  
IPO [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Sale of units in initial public offering   20,000,000        
Sale of stock price per unit         $ 10.00  
Offering costs         $ 11,900,000  
Deferred underwriting commissions         $ 7,000,000  
IPO [Member] | Class A Ordinary Shares [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Sale of stock price per unit   $ 10.00        
IPO [Member] | Class A Ordinary Shares [Member] | Maximum [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Shares redemption percentage         15.00%  
Over-Allotment Option [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Sale of stock price per unit   $ 10.00        
Underwriters option granted, period   45 days        
Number of additional units purchased by underwriters   3,000,000        
Private Placement [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Sale of units in initial public offering       4,000,000    
Sale of stock price per unit   $ 1.50        
Initial Public Offering and Private Placement [Member]            
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]            
Gross proceeds from initial public offering   $ 200,000,000        
Sale of stock price per unit   $ 10.00        
XML 22 R11.htm IDEA: XBRL DOCUMENT v3.20.1
Related Party Transactions
3 Months Ended
Mar. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions
Note 4 - Related Party Transactions
Founder Shares
On December 8, 2017, the Sponsor purchased 8,625,000 shares (the “Founder Shares”) of the Company’s Class B ordinary shares, par value $0.0001 (the “Class B ordinary shares”), for an aggregate price of $25,000. In February 2018, the Sponsor effected a surrender of 2,875,000 Founder Shares to the Company for no consideration, resulting in a decrease in the total number of Founder Shares from 8,625,000 to 5,750,000. The Founder Shares will automatically convert into Class A ordinary shares at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in Note 6. The Sponsor had agreed to forfeit up to 750,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriter. On March 29, 2018, the over-allotment option expired and an aggregate of 750,000 shares were subsequently forfeited by the Sponsor.
The Sponsor and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private Placement Warrants
Concurrently with the closing of the Initial Public Offering, the Sponsor purchased 4,000,000 Private Placement Warrants at $1.50 per Private Placement Warrant, and generating gross proceeds of $6.0 million in the Private Placement.
Each Private Placement Warrant is exercisable for one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the Initial Public Offering and deposited in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Related Party Loans
The Sponsor and its affiliate had loaned the Company an aggregate of $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note. This loan was non-interest bearing and became payable upon the completion of the Initial Public Offering. The Company repaid $300,000 on February 15, 2018. In addition, the Sponsor and its affiliate loaned the Company another $25,000 for working capital. The Company fully repaid this amount on February 20, 2018.
The Sponsor also paid for certain general and administrative expenses on behalf of the Company. These advances were due on demand and were non-interest bearing. As of March 31, 2020 and December 31, 2019, approximately $1.0
million
and $387,000 for these advances were recorded on the accompanying unaudited condensed balance sheets, respectively.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, lend the Company Working Capital Loans. If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of March 31, 2020 and December 31, 2019, no Working Capital Loans were outstanding.
Administrative Support Agreement—Related Party Expenses
The Company has agreed, commencing on the effective date of the Initial Public Offering through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. During the three months ended March 31, 2020 and 2019, an aggregate of $30,000 for each period in connection with such services was recorded in general and administrative expenses in the accompanying unaudited condensed statements of operations, respectively. As of March 31, 2020 and December 31, 2019, $80,000 and $50,000 was accrued on the accompanying unaudited condensed balance sheets, respectively.
XML 23 R15.htm IDEA: XBRL DOCUMENT v3.20.1
Subsequent Events
3 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events
Note 8 - Subsequent Events
Management has performed an evaluation of subsequent events through the date of issuance of the unaudited condensed financial statements, noting no items which require adjustment or disclosure other than those set forth in the preceding notes to the unaudited condensed financial statements.
XML 24 R6.htm IDEA: XBRL DOCUMENT v3.20.1
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical)
Feb. 11, 2020
shares
Common Class A [Member]  
Redemption of Common Share 687,193
XML 25 R2.htm IDEA: XBRL DOCUMENT v3.20.1
CONDENSED BALANCE SHEETS - USD ($)
Mar. 31, 2020
Dec. 31, 2019
Current assets:    
Cash $ 243 $ 243
Prepaid expenses 84,992 39,567
Total current assets 85,235 39,810
Investments held in Trust Account 200,693,450 207,190,740
Total Assets 200,778,685 207,230,550
Current liabilities:    
Accrued expenses 3,649,900 2,860,900
Accrued expenses - related party 80,000 50,000
Due to related party 1,035,809 386,687
Accounts payable 1,571,639 1,583,870
Total current liabilities 6,337,348 4,881,457
Deferred underwriting commissions 7,000,000 7,000,000
Total liabilities 13,337,348 11,881,457
Commitments
Shareholders' Equity:    
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding 0 0
Additional paid-in capital 4,507,338 3,730,127
Retained earnings 492,062 1,269,279
Total shareholders' equity 5,000,007 5,000,003
Total Liabilities and Shareholders' Equity 200,778,685 207,230,550
Class A Ordinary Shares [Member]    
Current liabilities:    
Class A ordinary shares, $0.0001 par value; 18,244,133 and 19,034,909 shares subject to possible redemption as of March 31, 2020 and December 31, 2019, respectively 182,441,330 190,349,090
Shareholders' Equity:    
Ordinary shares 107 97
Total shareholders' equity 107 97
Class B Ordinary Shares [Member]    
Shareholders' Equity:    
Ordinary shares 500 500
Total shareholders' equity $ 500 $ 500
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Related Party Transactions - Additional Information (Detail) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Mar. 29, 2018
Feb. 20, 2018
Feb. 15, 2018
Dec. 08, 2017
Feb. 28, 2018
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Related Party Transaction [Line Items]                    
Closing price of common stock     $ 10.00              
Proceeds from sale of private placement units     $ 6,000,000              
Related party accrued expenses           $ 80,000   $ 50,000    
Sponsor [Member]                    
Related Party Transaction [Line Items]                    
Proceeds from issuance of founder shares           25,000        
Proceeds from sale of private placement units           6,000,000        
Related party accrued expenses           1,000,000   387,000    
Sponsor [Member] | Related Party Loans [Member]                    
Related Party Transaction [Line Items]                    
Loan from related party           300,000        
Repayment of loan     $ 300,000              
Sponsor [Member] | Working Capital Loans [Member]                    
Related Party Transaction [Line Items]                    
Repayment of loan   $ 25,000                
Loans convertible in to warrants           $ 1,500,000        
Purchase price of private placement warrants           $ 1.50        
Sponsor [Member] | Administrative Support Agreement [Member]                    
Related Party Transaction [Line Items]                    
Office space, utilities and secretarial and administrative support expenses           $ 10,000        
Related party transaction expense           30,000 $ 30,000      
Related party accrued expenses           $ 80,000   $ 50,000    
Private Placement [Member] | Sponsor [Member]                    
Related Party Transaction [Line Items]                    
Number of warrants purchased           4,000,000        
Price per warrant                 $ 1.50  
Class B Ordinary Shares [Member]                    
Related Party Transaction [Line Items]                    
Repurchase of shares surrendered by sponsor         2,875,000          
Common stock shares outstanding           5,000,000   5,000,000   5,750,000
Maximum number of founder shares agreed to forfeit by sponsor           750,000        
Class B Ordinary Shares [Member] | Founder [Member]                    
Related Party Transaction [Line Items]                    
Number of founder shares purchased by sponsor       8,625,000            
Closing price of common stock       $ 0.0001            
Proceeds from issuance of founder shares       $ 25,000            
Repurchase of shares surrendered by sponsor         2,875,000          
Common stock shares outstanding         8,625,000          
Class A Ordinary Shares [Member]                    
Related Party Transaction [Line Items]                    
Common stock shares outstanding           1,068,674   965,091    
Founder shares, earliest period to transfer, assign or sell           1 year        
Founder shares, threshold trading days           20 days        
Founder shares, threshold consecutive trading days           30 days        
Founder shares, commencement period           150 days        
Class A Ordinary Shares [Member] | Founder [Member]                    
Related Party Transaction [Line Items]                    
Closing price of common stock           $ 12.00        
Maximum number of founder shares agreed to forfeit by sponsor               750,000    
Founder shares forfeited by sponsor 750,000                  
Sale of stock, description of transaction           (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.        
Class A Ordinary Shares [Member] | Private Placement [Member] | Sponsor [Member]                    
Related Party Transaction [Line Items]                    
Number of shares of common stock converted from each warrant           1        
Warrant exercise price           $ 11.50        
Period to complete initial business combination           30 days        
XML 28 R13.htm IDEA: XBRL DOCUMENT v3.20.1
Shareholders' Equity
3 Months Ended
Mar. 31, 2020
Federal Home Loan Banks [Abstract]  
Shareholders' Equity
Note 6 - Shareholders’ Equity
Ordinary Shares
Class A Ordinary Shares
—The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of March 31, 2020 and December 31, 2019, there were 20,000,000 Class A ordinary shares issued or outstanding, including 18,244,133 and 19,034,909 Class A ordinary shares subject to possible redemption, respectively.
Class B Ordinary Shares
—The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share. In December 2017, the Company initially issued 8,625,000 Class B ordinary shares to the Sponsor. In February 2018, in connection with the decrease of the size of the Initial Public Offering, the Sponsor effected a surrender of 2,875,000 Class B ordinary shares to the Company for no consideration, resulting in a decrease in the total number of Class B ordinary shares from 8,625,000 to 5,750,000. Of the 5,750,000 Class B ordinary shares outstanding, up to 750,000 shares were subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriter’s over-allotment option was not exercised in full or in part, so that the Founder Shares would represent 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. On March 29, 2018, the over-allotment option expired and an aggregate of 750,000 shares were subsequently forfeited by the Sponsor. As of March 31, 2020 and December 31, 2019, there were 5,000,000 Class B ordinary shares issued or outstanding.
Holders of Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of shareholders except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of Class A ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the sum of (a) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any warrants issued to the Sponsor upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed by public shareholders in connection with the initial Business Combination.
Preference Shares
—The Company is authorized to issue 1,000,000 preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 20202 and December 31, 2019, there were no preference shares issued or outstanding.
 
Warrants
—The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company agreed that as soon as practicable, but in no event later than 20 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants is not effective by the sixtieth day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation and may only be exercised for a whole number of shares.
The Private Placement Warrants are identical to the Public Warrants included in the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The Company may call the Public Warrants for redemption:
 
  
in whole and not in part;
 
  
at a price of $0.01 per warrant;
 
  
upon a minimum of 30 days’ prior written notice of redemption; and
 
  
if, and only if, the last reported closing price of the ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The exercise price and number of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of Class A ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrant shares. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
XML 29 R17.htm IDEA: XBRL DOCUMENT v3.20.1
Summary of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Loss Per Class A Ordinary Shares Accordingly, basic and diluted loss per Class A ordinary shares is calculated as follows:
   
For the Three Months Ended March 31,
 
   
2020
   
2019
 
Interest income held in Trust Account
  $633,249   $1,125,994 
  
 
 
   
 
 
 
Net income available to holders of Class A ordinary shares
  
$
633,249   
$
1,125,994 
  
 
 
   
 
 
 
Net loss
  
$
(777,217  
$
(461,734
Less: Income attributable to Class A ord
i
nary shares
   (633,249   (1,125,994
  
 
 
   
 
 
 
Net loss attributable to holders of Class B ordinary shares
  $(1,410,466  $(1,587,728
  
 
 
   
 
 
 
Basic and diluted weighted average shares outstanding of Class A ordinary shares
   20,000,000    20,000,000 
  
 
 
   
 
 
 
Basic and diluted net income per share, Class A
  $0.03   $0.06 
  
 
 
   
 
 
 
Basic and diluted weighted average shares outstanding of Class B ordinary shares
   5,000,000    5,000,000 
  
 
 
   
 
 
 
Basic and diluted net loss per share, Class B
  $(0.28  $(0.32
  
 
 
   
 
 
 
XML 30 R4.htm IDEA: XBRL DOCUMENT v3.20.1
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
General and administrative expenses $ 1,410,466 $ 1,587,728
Loss from operations (1,410,466) (1,587,728)
Interest income 633,249 1,125,994
Net loss $ (777,217) $ (461,734)
Class A Ordinary Shares [Member]    
Weighted average shares outstanding 20,000,000 20,000,000
Basic and diluted net income (loss) per share $ 0.03 $ 0.06
Class B Ordinary Shares [Member]    
Weighted average shares outstanding 5,000,000 5,000,000
Basic and diluted net income (loss) per share $ (0.28) $ (0.32)
XML 31 R8.htm IDEA: XBRL DOCUMENT v3.20.1
Description of Organization and Business Operations
3 Months Ended
Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Organization and Business Operations
Note 1. Description of Organization and Business Operations
Leo Holdings Corp. (the “Company”) is a blank check company incorporated in the Cayman Islands on November 29, 2017. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company focuses its search on companies in the consumer sector. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies. As of March 31, 2020, the Company had not commenced any operations. All activity for the period from November 29, 2017 (inception) to March 31, 2020 relates to the Company’s formation, the Initial Public Offering (as defined below), and since the closing of the offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The Company’s sponsor is Leo Investors Limited Partnership, a Cayman Island exempted limited partnership (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on February 12, 2018. On February 15, 2018, the Company consummated its initial public offering (the “Initial Public Offering”) of 20,000,000 units (each, a “Unit” and collectively, the “Units”) sold to the public at a price of $10.00 per Unit, generating gross proceeds of $200.0 million, and incurring offering costs of approximately $11.9 million, inclusive of $7.0 million in deferred underwriting commissions (Note 5). The underwriter was granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit. The over-allotment option was not exercised prior to its expiration. Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (the “Private Placement”) of 4,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant to the Sponsor, and generating gross proceeds of $6 million (Note 4).
Upon the closing of the Initial Public Offering and Private Placement, $200.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (the “Trust Account”), located in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
The Company will provide holders of its outstanding Class A ordinary shares, par value $0.0001 (“Class A ordinary shares”), sold in the Initial Public Offering (the “public shareholders”) with the opportunity to redeem all or a portion of their Public Shares (as defined below in Note 3) upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially at $10.00 per Public Share). The per-share amount to be distributed to public shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “
Distinguishing Liabilities from Equity
.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of such Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of a Business Combination is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s officers and directors agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Sponsor and the Company’s officers and directors agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
Notwithstanding the foregoing, the Company’s amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without the prior consent of the Company.
The Sponsor and the Company’s directors and executive officers agreed not to propose an amendment to the Company’s amended and restated memorandum and articles of association that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
The Company ha
d
 24 months from the closing of the Initial Public Offering, or February 15, 2020 to complete a Business Combination. On February 11, 2020, the Company held a special meeting of shareholders (the “General Meeting”) to approve an extension of time for the Company to complete an initial Business Combination through July 31, 2020 (the “Extension”). The Extension was approved, and in connection with the vote to approve the Extension, the holders of 687,193 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.38 per share, for an aggregate redemption amount of approximately $7.13 million.
If the Company is unable to complete a Business Combination by July 31, 2020 (the “Combination Period”), the Company 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 the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its 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 public shareholders’ rights as shareholders (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 the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
 
The Sponsor and the Company’s officers and directors agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or the Company’s officers and directors acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriter of the Initial Public Offering agreed to waive its rights to its deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, the deferred underwriting commission will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. 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 only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
The DMS Business Combination
On April 23, 2020, the Company entered into a business combination agreement (the “Business Combination Agreement”) by and among the Company, Digital Media Solutions Holdings, LLC (“DMS”), CEP V DMS US Blocker Company, a Delaware corporation (“Blocker Corp”), Prism Data, LLC, a Delaware limited liability company (“Prism”), CEP V-A DMS AIV Limited Partnership, a Delaware limited partnership (“Clairvest Direct Seller”), Clairvest Equity Partners V Limited Partnership, an Ontario, Canada limited partnership (“Blocker Seller 1”), CEP V Co-Investment Limited Partnership, a Manitoba, Canada limited partnership (“Blocker Seller 2”, and together with Prism, Clairvest Direct Seller and Blocker Seller 1, the “Sellers”), Clairvest GP Manageco Inc., an Ontario corporation (“Clairvest”) as a Seller Representative, and, solely for the limited purposes set forth therein, the Sponsor.
The Business Combination Agreement provides for the consummation of the following transactions in the following order (collectively, the “DMS Business Combination”), in each case conditional upon each prior transaction having been consummated: (a) pursuant to the Surrender Agreement (as defined below) the Sponsor will surrender and forfeit 2,000,000 Private Placement warrants and, together with certain other holders, an aggregate of 1,500,000 Class B ordinary shares of the Company (collectively, the “Surrender”); (b) the Company will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which the Company will change its name to “Digital Media Solutions, Inc.” (“New DMS”); (c) the Company will consummate the PIPE Investment (as defined below); and (d) the Company will purchase the equity interests of Blocker Corp and a portion of the units of DMS from the Sellers, which units will be immediately contributed to the capital of Blocker Corp, in exchange for a combination of cash consideration, 2,000,000 Private Placement Warrants that will be issued to the Sellers, shares of Class B common stock, par value $0.001 per share, of New DMS, which will have no economic value but will entitle the holder thereof to one vote per share (the “Class B Shares”), and shares of Class C common stock, par value $0.001 per share, of New DMS (the “Class C Shares”), which are convertible into shares of Class A common stock, par value $0.0001 per share, of New DMS (the “Class A Shares” and, together with the Class B Shares and Class C Shares, the “New DMS Common Stock”) pursuant to a conversion ratio to be determined at the closing of the transactions contemplated by the DMS Business Combination (the “Closing”). Immediately prior to the consummation of Closing, the Company will effect the foregoing transactions, Domestication and the Class A ordinary shares and Class B ordinary shares of the Company will be exchanged for Class A Shares and the outstanding warrants to purchase Class A ordinary shares of the Company will automatically become exercisable for Class A Shares. Clairvest Direct Seller and Prism will continue to hold membership interests in DMS (the “DMS Units”) subject to and in accordance with the Amended Partnership Agreement (as defined below).
Following the DMS Business Combination, the combined company will be organized in an “Up-C” organizational structure, in which substantially all of the assets and business of New DMS will be held by DMS and continue to operate through the subsidiaries of DMS and New DMS’s sole material asset will be equity interests of DMS indirectly held by it. At the Closing, DMS and its current equity holders will amend and restate the limited liability company agreement of DMS in its entirety as the Amended Partnership Agreement to, among other things, recapitalize DMS such that the total number of DMS Units is equal to the total number of issued and outstanding New DMS Class A Common Stock (assuming the conversion of all shares of New DMS Class C Common Stock into shares of New DMS Class A Common Stock in accordance with the Proposed Certificate of Incorporation) and provide Clairvest Direct Seller and Prism the right to redeem their DMS Units for cash or, at New DMS’s option, New DMS may acquire such DMS Units (which DMS Units are expected to be contributed to Blocker Corp) in exchange for cash or shares of New DMS Class A Common Stock, in each case subject to certain restrictions set forth therein. DMS Units acquired by New DMS are expected to be contributed to Blocker Corp
.
Concurrent with the Closing, New DMS and Blocker Corp will enter into the tax receivable agreement (the “Tax Receivable Agreement”) with the Sellers. Pursuant to the Tax Receivable Agreement, New DMS will be required to pay the Sellers (i)
85%
of the amount of savings, if any, in U.S. federal, state and local income tax that New DMS and Blocker Corp actually realize as a result of (A) certain existing tax attributes of Blocker Corp acquired in the DMS Business Combination, and (B) increases in Blocker Corp’s allocable share of the tax basis of the tangible and intangible assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions of DMS Units or exchanges of DMS Units for cash or shares of New DMS Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMS and Blocker Corp received during a taxable year beginning within two years after the Closing. All such payments to the Sellers will be New DMS’s obligation, and not that of DMS.
In addition, in connection with the consummation of the transactions contemplated by the Business Combination Agreement, the Company will, among other things, (a) amend and restate its certificate of incorporation and bylaws immediately following the Domestication and (b) enter into, at the Closing, with the applicable Sellers or other parties, (i) a director nomination agreement relating to the composition of the board of directors of New DMS (the “New DMS Board”), (ii) an amended and restated registration rights agreement providing for certain registration rights with respect to the New DMS Common Stock and warrants, and (iii) a lock-up agreement restricting the Sellers from certain transfers of New DMS Common Stock during the lock-up period described therein.
Sponsor Shares and Warrant Surrender Agreement
Concurrent with the execution of the Business Combination Agreement, Sponsor, the Company and certain holders of Class B ordinary shares entered into a Sponsor Shares and Warrant Surrender Agreement (the “Surrender Agreement”), pursuant to which (a) the Surrender will be effectuated in connection with the consummation of the DMS Business Combination and (b) Sponsor and other holders party thereto agreed to waive any adjustment to the conversion ratio set forth in the Company’s amended and restated memorandum and articles of association or any other anti-dilution or similar protection with respect to the Class B ordinary shares held by them.
The PIPE Investment
The Company entered into subscription agreements (the “Subscription Agreements”) with certain investors, pursuant to which, among other things, such investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, including funds managed by Lion Capital LLP, an affiliate of the Sponsor, immediately following the Domestication, an aggregate of 10,000,000 shares of Class A Shares for $10.00 per share, which will generate aggregate proceeds of $100.0 million (the “PIPE Investment”). The closing of the PIPE Investment is contingent upon, among other things, the substantially concurrent consummation of the DMS Business Combination. The Subscription Agreements provide that New DMS will grant the investors in the PIPE Investment certain customary registration rights. The Class A Shares to be offered and sold in connection with the PIPE Investment have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D or Regulation S promulgated thereunder without any form of general solicitation or general advertising.
The consummation of the transactions contemplated by the Business Combination Agreement is subject to the satisfaction or waiver of certain closing conditions. Accordingly, there can be no assurance that the Business Combination will be consummated.
Going Concern Consideration
The accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2020, the Company had approximately $200 in its operating bank account, approximately $693,000 of interest income available in the Trust Account to pay for taxes, and a working capital deficit of approximately $6.3 million. Further, the Company has incurred and expect to continue to incur significant costs in pursuit of its acquisition plans.
Through March 31, 2020, the Company’s liquidity needs have been satisfied through receipt of a $25,000 capital contribution from the Sponsor in exchange for the issuance of the Founder Shares (Note 4) to the Sponsor, $325,000 in loans from the Sponsor, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the loans from the Sponsor on February 20, 2018. The Sponsor also paid for certain general and administrative expenses on behalf of the Company. As of March 31, 2020 and December 31 2019, an aggregate of approximately $1.0
million
and approximately $387,000 of these advances were due on demand, non-interest bearing, and were fully outstanding.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”) of up to $1.5 million (Note 4).
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”).
O
n March
11,
2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be materially adversely affected.
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “
Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern
,” management has determined that the working capital deficit, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after July 31, 2020.
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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Accounting Policies [Line Items]    
Federal depository insurance coverage $ 250,000  
Unrecognized tax benefits 0 $ 0
Amounts accrued for interest or penalties 0 0
Income tax value recorded 0 $ 0
IPO [Member]    
Accounting Policies [Line Items]    
Offering costs 11,900,000  
Deferred underwriting commissions $ 7,000,000  
Class A Ordinary Shares [Member]    
Accounting Policies [Line Items]    
Diluted securities for net income per share calculation 14,000,000  
Number of shares of ordinary shares subject to possible redemption 18,244,133 19,034,909
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.20.1
Shareholder's Equity - Additional Information (Detail) - $ / shares
1 Months Ended 3 Months Ended
Feb. 28, 2018
Mar. 31, 2020
Dec. 31, 2019
Feb. 15, 2018
Dec. 01, 2017
Stockholders Equity Disclosure [Line Items]          
Preference shares, shares authorized   1,000,000 1,000,000    
Preference shares, shares issued   0 0    
Preference shares, shares outstanding   0 0    
Class A Ordinary Shares [Member]          
Stockholders Equity Disclosure [Line Items]          
Ordinary shares, shares authorized   200,000,000 200,000,000    
Ordinary shares, par value   $ 0.0001 $ 0.0001    
Ordinary shares, shares issued   20,000,000 20,000,000    
Ordinary shares issued or outstanding   20,000,000 20,000,000    
Ordinary shares subject to possible redemption, shares   18,244,133 19,034,909    
Ordinary shares, shares issued   1,068,674 965,091    
Class B Ordinary Shares [Member]          
Stockholders Equity Disclosure [Line Items]          
Ordinary shares, shares authorized   20,000,000 20,000,000    
Ordinary shares, par value   $ 0.0001 $ 0.0001    
Ordinary shares issued or outstanding   5,000,000 5,000,000    
Ordinary shares, shares issued 5,750,000 5,000,000 5,000,000   8,625,000
Ordinary shares, shares outstanding including forfeitures 5,750,000        
Common stock, voting rights   Holders of Class B ordinary shares are entitled to one vote for each share.      
Maximum number of founder shares agreed to forfeit by sponsor   750,000      
Repurchase of shares surrendered by sponsor 2,875,000        
Over-allotment option expiration date   Mar. 29, 2018      
Ownership percentage held by initial shareholders   20.00%      
Public Warrants [Member]          
Stockholders Equity Disclosure [Line Items]          
Warrants, description   The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act).      
Warrants expiration period   5 years      
Price per warrants   $ 0.01      
Redemption period of warrants   30 days      
Closing price of common stock   $ 18.00      
Private Placement [Member]          
Stockholders Equity Disclosure [Line Items]          
Warrants, description   The Private Placement Warrants are identical to the Public Warrants included in the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.      
Closing price of common stock       $ 1.50  
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Summary of Significant Accounting Policies - Schedule of Basic and Diluted Loss Per Class A Ordinary Shares (Detail) - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Interest income held in Trust Account $ 633,249 $ 1,125,994
Net loss (777,217) (461,734)
Common Class A [Member]    
Net income (loss) attributable to holders of ordinary shares 633,249 1,125,994
Less: Net income (loss) attributable to ordinary shares $ (633,249) $ (1,125,994)
Basic and diluted weighted average shares outstanding of ordinary shares 20,000,000 20,000,000
Basic and diluted net income (loss) per share $ 0.03 $ 0.06
Common Class B [Member]    
Net income (loss) attributable to holders of ordinary shares $ (1,410,466) $ (1,587,728)
Less: Net income (loss) attributable to ordinary shares $ 1,410,466 $ 1,587,728
Basic and diluted weighted average shares outstanding of ordinary shares 5,000,000 5,000,000
Basic and diluted net income (loss) per share $ (0.28) $ (0.32)
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Commitments & Contingencies - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Mar. 31, 2020
Feb. 15, 2018
Commitments and Contingencies [Line Items]    
Underwriters option period 45 days  
Underwriters option expiry date Mar. 29, 2018  
Underwriting discount per unit $ 0.20  
Payment for underwriting discount $ 4.0  
Deferred underwriting commissions per unit $ 0.35  
Over-Allotment Option [Member]    
Commitments and Contingencies [Line Items]    
Number of additional shares granted 3,000,000  
Sale price per unit   $ 10.00
IPO [Member]    
Commitments and Contingencies [Line Items]    
Sale price per unit $ 10.00  
Deferred underwriting commission $ 7.0  
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Commitments & Contingencies
3 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments & Contingencies
Note 5 - Commitments & Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to Class A ordinary shares) pursuant to a registration and shareholder rights agreement.
These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
 
Underwriting Agreement
The Company granted the underwriter a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. This option expired on March 29, 2018 without being exercised.
The underwriter was entitled to underwriting discounts of $0.20 per Unit, or $4.0 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per Unit, or $7.0 million in the aggregate, will be payable to the underwriter for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
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Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The accompanying unaudited condensed interim financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, the unaudited condensed interim financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, or any future period. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2020.
Emerging Growth Company
Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Net Income (Loss) Per Ordinary Share
Net Income (Loss) Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “
Earnings Per Share
.” Net income (loss) per ordinary share is computed by dividing net income (loss) applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of 14,000,000 Class A ordinary shares in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted earnings per ordinary share is the same as basic earnings per ordinary share for the periods presented.
 
The Company’s statements of operations (the “Statements of Operations”) include a presentation of income (loss) per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. Net income per ordinary share, basic and diluted for Class A ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A ordinary shares outstanding for the periods. Net loss per ordinary share, basic and diluted for Class B ordinary shares is calculated by dividing the net income, less income attributable to Class A ordinary shares and any working capital loans, by the weighted average number of Class B ordinary shares outstanding for the periods presented.
Reconciliation of Net Income (Loss) per Ordinary Share
Reconciliation of Net Income (Loss) per Ordinary Share
The Company’s net income (loss) is adjusted for the portion of income that is attributable to Class A ordinary shares subject to redemption, as these shares only participate in the earnings of the Trust Account (less applicable taxes) and not the income or losses of the Company. Accordingly, basic and diluted loss per Class A ordinary shares is calculated as follows:
 
   
For the Three Months Ended March 31,
 
   
2020
   
2019
 
Interest income held in Trust Account
  $633,249   $1,125,994 
  
 
 
   
 
 
 
Net income available to holders of Class A ordinary shares
  
$
633,249   
$
1,125,994 
  
 
 
   
 
 
 
Net loss
  
$
(777,217  
$
(461,734
Less: Income attributable to Class A ord
i
nary shares
   (633,249   (1,125,994
  
 
 
   
 
 
 
Net loss attributable to holders of Class B ordinary shares
  $(1,410,466  $(1,587,728
  
 
 
   
 
 
 
Basic and diluted weighted average shares outstanding of Class A ordinary shares
   20,000,000    20,000,000 
  
 
 
   
 
 
 
Basic and diluted net income per share, Class A
  $0.03   $0.06 
  
 
 
   
 
 
 
Basic and diluted weighted average shares outstanding of Class B ordinary shares
   5,000,000    5,000,000 
  
 
 
   
 
 
 
Basic and diluted net loss per share, Class B
  $(0.28  $(0.32
  
 
 
   
 
 
 
Concentration of Credit Risk
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At March 31, 2020 and December 31, 2019, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Financial Instruments
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “
Fair Value Measurements and Disclosures
,” approximates the carrying amounts represented in the
conde
nsed
Balance Sheets.
Fair Value Measurements
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
 
  
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
 
  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
ASC Topic 820,
 Fair Value Measurement and Disclosures
, requires all entities to disclose the fair value of financial instruments, both assets and liabilities for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2020 and December 31, 2019, the recorded values of cash, prepaid expenses, accounts payable, and accrued expenses approximate the fair values due to the short-term nature of the instruments.
Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Offering Costs
Offering Costs
Offering costs consisted of legal, accounting, underwriting fees and other costs that were directly related to the Initial Public Offering totaled approximately $11.9 million, inclusive of $7.0 million in deferred underwriting commissions, and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
Class A Ordinary Shares Subject to Possible Redemption
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “
Distinguishing Liabilities from Equity
.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at March 31, 2020 and December 31, 2019, 18,244,133 and 19,034,909 Class A ordinary shares subject to possible redemption at the redemption amount are presented as temporary equity, outside of the shareholders’ equity section of the Company’s
condensed
balance sheets, respectively.
Income Taxes
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740,
“Income Taxes.”
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction; therefore no income tax has been recorded. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its current tax position.
The Company may be subject to potential examination by U.S. federal, U.S. state or foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
The Company’s management does not believe that there are any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. 
 
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Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Note 2—Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed interim financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, the unaudited condensed interim financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, or any future period. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2020.
Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Net Income (Loss) Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “
Earnings Per Share
.” Net income (loss) per ordinary share is computed by dividing net income (loss) applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of 14,000,000 Class A ordinary shares in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted earnings per ordinary share is the same as basic earnings per ordinary share for the periods presented.
 
The Company’s statements of operations (the “Statements of Operations”) include a presentation of income (loss) per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. Net income per ordinary share, basic and diluted for Class A ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A ordinary shares outstanding for the periods. Net loss per ordinary share, basic and diluted for Class B ordinary shares is calculated by dividing the net income, less income attributable to Class A ordinary shares and any working capital loans, by the weighted average number of Class B ordinary shares outstanding for the periods presented.
Reconciliation of Net Income (Loss) per Ordinary Share
The Company’s net income (loss) is adjusted for the portion of income that is attributable to Class A ordinary shares subject to redemption, as these shares only participate in the earnings of the Trust Account (less applicable taxes) and not the income or losses of the Company. Accordingly, basic and diluted loss per Class A ordinary shares is calculated as follows:
 
   
For the Three Months Ended March 31,
 
   
2020
   
2019
 
Interest income held in Trust Account
  $633,249   $1,125,994 
  
 
 
   
 
 
 
Net income available to holders of Class A ordinary shares
  
$
633,249   
$
1,125,994 
  
 
 
   
 
 
 
Net loss
  
$
(777,217  
$
(461,734
Less: Income attributable to Class A ord
i
nary shares
   (633,249   (1,125,994
  
 
 
   
 
 
 
Net loss attributable to holders of Class B ordinary shares
  $(1,410,466  $(1,587,728
  
 
 
   
 
 
 
Basic and diluted weighted average shares outstanding of Class A ordinary shares
   20,000,000    20,000,000 
  
 
 
   
 
 
 
Basic and diluted net income per share, Class A
  $0.03   $0.06 
  
 
 
   
 
 
 
Basic and diluted weighted average shares outstanding of Class B ordinary shares
   5,000,000    5,000,000 
  
 
 
   
 
 
 
Basic and diluted net loss per share, Class B
  $(0.28  $(0.32
  
 
 
   
 
 
 
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At March 31, 2020 and December 31, 2019, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “
Fair Value Measurements and Disclosures
,” approximates the carrying amounts represented in the
conde
nsed
Balance Sheets.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
 
  
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
 
  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
ASC Topic 820,
 Fair Value Measurement and Disclosures
, requires all entities to disclose the fair value of financial instruments, both assets and liabilities for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2020 and December 31, 2019, the recorded values of cash, prepaid expenses, accounts payable, and accrued expenses approximate the fair values due to the short-term nature of the instruments.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Offering Costs
Offering costs consisted of legal, accounting, underwriting fees and other costs that were directly related to the Initial Public Offering totaled approximately $11.9 million, inclusive of $7.0 million in deferred underwriting commissions, and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “
Distinguishing Liabilities from Equity
.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at March 31, 2020 and December 31, 2019, 18,244,133 and 19,034,909 Class A ordinary shares subject to possible redemption at the redemption amount are presented as temporary equity, outside of the shareholders’ equity section of the Company’s
condensed
balance sheets, respectively.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740,
“Income Taxes.”
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction; therefore no income tax has been recorded. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its current tax position.
The Company may be subject to potential examination by U.S. federal, U.S. state or foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Recent Accounting Pronouncements
The Company’s management does not believe that there are any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. 
 
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UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
Total
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Class A Ordinary Shares [Member]
Class B Ordinary Shares [Member]
Beginning Balance at Dec. 31, 2018 $ 5,000,002 $ 2,412,951 $ 2,586,468 $ 83 $ 500
Beginning Balance (Shares) at Dec. 31, 2018       833,372 5,000,000
Common stock subject to possible redemption 461,740 461,735   $ 5  
Common stock subject to possible redemption (Shares)       46,174  
Net loss (461,734)   (461,734)    
Ending Balance at Mar. 31, 2019 5,000,008 2,874,686 2,124,734 $ 88 $ 500
Ending Balance (Shares) at Mar. 31, 2019       879,546 5,000,000
Beginning Balance at Dec. 31, 2019 5,000,003 3,730,127 1,269,279 $ 97 $ 500
Beginning Balance (Shares) at Dec. 31, 2019       965,091 5,000,000
Common stock subject to possible redemption [1] 777,221 777,211   $ 10  
Common stock subject to possible redemption (Shares) [1]       103,583  
Net loss (777,217)   (777,217)    
Ending Balance at Mar. 31, 2020 $ 5,000,007 $ 4,507,338 $ 492,062 $ 107 $ 500
Ending Balance (Shares) at Mar. 31, 2020       1,068,674 5,000,000
[1] Including the redemption of 687,193 Class A ordinary shares on February 11, 2020
XML 43 R1.htm IDEA: XBRL DOCUMENT v3.20.1
Cover Page - shares
3 Months Ended
Mar. 31, 2020
May 08, 2020
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2020  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q1  
Entity Registrant Name Leo Holdings Corp.  
Entity Central Index Key 0001725134  
Entity Filer Category Accelerated Filer  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Emerging Growth Company true  
Entity Small Business true  
Entity Shell Company true  
Entity Ex Transition Period false  
Entity Address, Country KY  
Entity Interactive Data Current Yes  
Document Quarterly Report true  
Document Transition Report false  
Class A Ordinary Shares [Member]    
Document Information [Line Items]    
Trading Symbol LHC  
Title of 12(b) Security Class A ordinary shares included as part of the units  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding   19,312,807
Class B Ordinary Shares [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   5,000,000
Warrant [Member]    
Document Information [Line Items]    
Trading Symbol LHC WS  
Title of 12(b) Security Warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of 11.50  
Security Exchange Name NYSE  
Capital Units [Member]    
Document Information [Line Items]    
Trading Symbol LHC.U  
Title of 12(b) Security Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant  
Security Exchange Name NYSE