UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the fiscal year ended
Commission file number:
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Securities registered pursuant to Section 12(b) of the Act: |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 | ☐ |
☒ | 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The aggregate market value of the units registrants outstanding Class A ordinary shares and units, other than shares and units held by persons who may be deemed affiliates of the registrant, computed by reference to the closing price for the shares and units on June 30, 2022, the last business day of the registrants second fiscal quarter of 2022, as reported on the Nasdaq Global Market was $
As of June 8, 2023,
TABLE OF CONTENTS
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PART I
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS; SUMMARY OF RISK FACTORS
This Annual Report contains statements that constitute forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Some of the statements in this Annual Report constitute forward-looking statements because they relate to future events or our future performance or future financial condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our company, our industry, our beliefs and our assumptions. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual Report may include, for example, statements about:
| ● | our ability to select an appropriate target business or businesses; |
| ● | our ability to complete our initial business combination; |
| ● | our expectations around the performance of the prospective target business or businesses; |
| ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
| ● | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
| ● | our potential ability to obtain additional financing to complete our initial business combination; |
| ● | our pool of prospective target businesses; |
| ● | the ability of our officers and directors to generate a number of potential acquisition opportunities; |
| ● | our disclosure controls and procedures and internal control over financial reporting and any material weaknesses of the foregoing; |
| ● | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
| ● | the trust account not being subject to claims of third parties; or |
| ● | our financial performance. |
The forward-looking statements contained in this Annual Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the section of this Annual Report entitled “Risk Factors”. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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We use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates,” “targets” and similar expressions to identify forward-looking statements. The forward-looking statements contained in this Annual Report involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Part I — Item 1A. Risk Factors” in this Annual Report.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statements in this Annual Report should not be regarded as a representation by us that our plans and objectives will be achieved.
We have based the forward-looking statements included in this Annual Report on information available to us on the date of this Annual Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements in this Annual Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we may file in the future with the Securities and Exchange Commission (the “SEC”), including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Summary of Risk Factors
An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:
| ● | Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination. |
| ● | If we seek stockholder approval of our initial business combination, our initial stockholders and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders’ vote. |
| ● | Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
| ● | The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. |
| ● | The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. |
| ● | The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares. |
| ● | The requirement that we complete an initial business combination within the period to consummate the initial business combination may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders. |
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| ● | We may not be able to complete an initial business combination within the period to consummate the initial business combination, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.15 per unit, or less than such amount in certain circumstances. |
| ● | If we seek stockholder approval of our initial business combination, our initial stockholders, directors, executive officers, advisors and their respective affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock. |
| ● | If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination or fails to comply with the procedures for tendering its shares, such shares may not be redeemed. |
| ● | You will not be entitled to protections normally afforded to investors of many other blank check companies. |
| ● | Subsequent to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment. |
| ● | The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. |
| ● | Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business. |
| ● | We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate. |
| ● | Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business. |
| ● | Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. |
| ● | Our sponsor paid an aggregate of $25,000, or approximately $0.009 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of the shares of our Class A common stock. |
| ● | Since our sponsor paid only approximately $0.009 per share for the founder shares, our officers and directors could potentially make a substantial profit even if we acquire a target business that subsequently declines in value. |
| ● | We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. |
| ● | Past performance by our sponsor and our management team including their affiliates and including the businesses referred to herein, may not be indicative of future performance of an investment in us or in the future performance of any business that we may acquire. |
| ● | Our sponsor, Liberty Fields LLC, is controlled by non-U.S. person and has substantial ties to non-U.S. persons in Malaysia. As much, we may not be able to complete an initial business combination with a U.S. target company since such initial business combination may be subject to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), and ultimately prohibited. |
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PART I
ITEM 1. BUSINESS
In this Annual Report on Form 10-K (the “Form 10-K”), references to the “Company” and to “we,” “us,” “our” and refer to Liberty Resources Acquisition Corp.
Overview
Formation.
We are a blank check company incorporated in Delaware on April 22, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies. We believe that there are many target companies that could become attractive public companies we intend to focus on industries that complement our management team’s background, and to capitalize on the ability of our management team to identify and acquire a business, focusing on the oil and gas sectors, where our management team has extensive experience.
Our management team is led by our Chief Executive Officer, Dato’ Maznah Binti Abdul Jalil, who has over 30 years of investment banking experience in a merchant Bank and DRB-HICOM Berhad Group of Companies. She is currently working as a director at several companies, including: Malayan Flour Mill Berhad (“MFLOUR”), since November 2019, Boustead Heavy Industrial Corporation Berhad (“BHIC”), since August 2019, Innature Berhad (“INNATURE”), since March 2019, Lembaga Angkatan Tentera (“LTAT”), since November 2018, Opus Asset Management SDN. BHD, since November 2017, and Pavilion REIT Management SDN. BHD, since July 2011. From December 2012 until April 2019, she was the Executive Director and Chief Financial Officer of Sona Petroleum Berhad. From 2007 to 2011 she held two positions, one as Executive Vice President at Kenanga Investment Bank Berhad and as Head of Corporate Finance at Hong Leong Financial Group. Prior to that she worked 14 years as Senior Group Director in Corporate Finance & Advisory at DRB-HICOM BERHAD (From June 1992 to July 2005) where she was responsible of corporate finance & advisory work for Master-Carriage Group and DRB-HICOM Group including restructuring proposals of companies’ mergers and acquisitions floatation of companies and overseeing investment related activities of the Group. She previously held several directorships in publicly listed companies as well as non-listed companies.
Business Combination Agreement with Liberty Onshore Energy.
On December 22, 2022, we entered into a definitive Business Combination Agreement effective December 15, 2022 (the “Business Combination Agreement”) with Liberty Onshore Energy B.V., a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) (“PubCo”), Liberty Onshore Resources B.V., a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid (“HoldCo”), LIBY Merger Sub LLC, a Delaware limited liability company (“Merger Sub”), and Markmore Energy (Labuan) Limited (“Markmore”). The Company and Markmore are collectively referred to herein as the “Parties” and individually as a “Party.”
The Business Combination Agreement provides that on the Closing Date (i) Merger Sub will merge with and into the Company (the “Merger”), with Liberty Resources Acquisition Corp. being the Surviving Company of the Merger (the “Surviving Company”) and ultimately a wholly owned subsidiary of PubCo, (ii) as a result of the Merger (a) each Liberty Common Share issued and outstanding immediately prior to the Merger Effective Time will be converted into the right to receive one B Share (“B Shares”), and (b) each Liberty Warrant outstanding immediately prior to the Merger Effective Time will be assumed by PubCo and, subject to the terms of the Warrant Agreement and any amendments thereto, thereafter exercisable to purchase one (1) B Share; and (iii) PubCo will pay to the former holders Markmore Ordinary Shares outstanding immediately prior to the Share Exchange Effective Time the Cash Consideration. As a result of the Merger, we shall provide an opportunity to Liberty Shareholders to have their outstanding Liberty Common Shares redeemed on the terms and subject to the conditions set forth in this Agreement and Liberty’s Organizational Documents in connection with obtaining the Liberty Shareholder Approval.
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Initial Public Offering.
The Company’s sponsor is Liberty Fields LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on November 3, 2021. On November 8, 2021, the Company consummated its Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $115,000,000, including the full exercise of the underwriters’ option to purchase additional Units.
Simultaneously with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of 530,275 units (the “Placement Units”) to the Sponsor at a price of $10.00 per Placement Unit, generating total gross proceeds of $5,302,750 (the “Private Placement”). The Placement Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transactions did not involve a public offering.
A total of $116,725,000, comprised of the proceeds from the Offering and the proceeds of private placements that closed on November 8, 2021, net of the underwriting commissions, discounts, and offering expenses, was deposited in a trust account established for the benefit of our public stockholders.
First Amendment to Acquisition Letter.
On August 5, 2022, we entered into a binding amendment to the previously executed nonbinding acquisition letter dated May 16, 2022, by and among the Company, Caspi Oil Gas LLP (“Caspi”) and Caspi’s owner, Markmore Energy (Labuan) Limited (“Markmore”) that, among other things, made a previously executed nonbinding acquisition letter (as amended, the “Acquisition Letter”) for a transaction (the “Transaction”) that will result in Caspi becoming a publicly traded company into a binding agreement. Under the Acquisition Letter, Caspi would not engage in discussions relating to, or enter into any agreement for, any merger, financing, or similar transaction until after 5:00 p.m., New York Time on September 15, 2022 (the “exclusivity period”), and the parties would use their reasonable best efforts to execute a business combination agreement for the Transaction on or before the termination of the exclusivity period.
Second Amendment to Acquisition Letter.
On September 21, 2022, we entered into a Second Amendment to the Acquisition Letter which extended the “Due Diligence Period” and the “Exclusivity Period” for a transaction under the Acquisition Letter (the “Transaction”) to October 15, 2022.
Third Amendment to Acquisition Letter.
On October 21, 2022, we entered into a Third Amendment to the Acquisition Letter which extended the “Due Diligence Period” and the “Exclusivity Period” for a transaction under the Acquisition Letter (the “Transaction”) to November 15, 2022.
Fourth Amendment to Acquisition Letter.
On November 22, 2022, we entered into a Fourth Amendment to the Acquisition Letter which extended the “Due Diligence Period” and the “Exclusivity Period” for a transaction under the Acquisition Letter (the “Transaction”) to December 15, 2022 and increased the aggregate “Transaction Consideration” to $463.7 million.
Merger Consideration.
Pursuant to the Business Combination Agreement, by virtue of the Merger and without any further action on the part of any Party or the holders of any securities of the Company:
| ● | The business combination values Caspi at a $463.7 million enterprise value and at a pro forma market capitalization of approximately $633 million, assuming a $10.00 per share price and no redemptions by our stockholders. The Transaction will provide a minimum of $30 million of net proceeds to the company after payment of Transaction expenses and certain liabilities of Caspi, assuming no redemptions. As part of the Transaction, at least one (1) day before the Exchange, the Company will use proceeds from the Financing to assume certain debts of COG up to a total of $50.0 million, the proceeds of which will be used as follows: (1) an amount of $17 million to COG’s “rehab” creditor at Closing, $10 million to other remaining creditors of COG at Closing, and $23 million in assumption of other debts of COG at Closing. We will also make a payment of $50.0 million to the Export-Import Bank of Malaysia on behalf of and at the direction of Markmore and PubCo. Markmore and PubCo will cause EXIM Bank to promptly use such proceeds to release the Pledge of Rights over COG’s Rakushechnoye Oil & Gas |
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| fields. PubCo will issue $327.7 million shares of common stock and $36 million of a new series of preferred stock that will be redeemable by the company at any time for (i) cash in the amount of $36 million, (ii) non-cash product such as gas produced up to the value to be determined by PubCo and Markmore or (iii) a combination thereof. Both classes of stock will be valued at $10.00 per share. |
| ● | Prior to and as a condition for the transactions, we will receive financing in a minimum amount of $120 million(the “Financing”). As of the date of the Business Combination Agreement, the Company has received non-binding offers for funding totaling $120 million. We will take all steps reasonable and necessary to assist to convert these to binding commitments prior to signing of the Registration on Form F-4. |
| ● | Upon completion of Central Processing Complex (CPC) and commencement of commercial production of gas and condensate, PubCo will pay the current owner of Caspi 50% of annual net revenue (after deduction of costs and capital expenditures) derived from sale of gas attributed to us over the period of commercial production of gas, 40% of condensate revenue derived from sale of condensate attributed to PubCo over the period of commercial production condensate. PubCo is committed to pay a seller a minimum payment of US$15M annually from the date of commencement of commercial production of gas or condensate or the total royalty payment on the basis as described above, whichever is higher. |
Markmore Support Agreement.
In connection with entry into the Business Combination Agreement, the Parties entered into a voting agreement pursuant to which Markmore, in its capacity as the sole shareholder of PubCo prior to the Share Exchange and controlling shareholder of PubCo following the Share Exchange, in each case as applicable, has agreed to (a) approve by written resolution all of its Markmore Shares in favor of the approval of the Share Exchange; (b) execute such documents or certificates evidencing such agreement as Liberty may reasonably request in connection therewith, and to approve at PubCo’s general meeting for the PubCo Reorganization, and the Merger; (c) to vote and to cause PubCo to vote (in PubCo’s capacity as the controlling equity interest holder in HoldCo and Merger Sub), in favor of the Share Exchange and Merger, respectively, and any other matter reasonably necessary to the consummation of the transactions contemplated by the Business Combination Agreement and considered and voted upon by the interest holders of Markmore, PubCo, Holdco, Markmore Central Asia B.V. (“MCA”), Markmore Onshore B.V. (“MO”), or Merger Sub; and (d) cause each of the Markmore Shareholders to execute and deliver a Lock-Up Agreement to PubCo in accordance with the Business Combination Agreement.
Sponsor Support Agreement.
In connection with entry into the Business Combination Agreement, Sponsor entered into a voting agreement with the Parties pursuant to which Sponsor has agreed to execute such documents or certificates evidencing such agreement as Liberty and/or Markmore may reasonably request in connection therewith to vote at the Sponsor Special Meeting and any meeting of the equity interest holders of Sponsor, and in any action by written consent of the equity interest holders of Sponsor, to approve the Business Combination Agreement, all of the shares (a) in favor of the approval and adoption of the Business Combination Agreement, the transactions contemplated by the Business Combination Agreement and the Business Combination Agreement, (b) in favor of any other matter reasonably necessary to the consummation of the transactions contemplated by the Business Combination Agreement and considered and voted upon by the equity interest holders of Sponsor, (c) for the appointment, and designation of classes, of the members of the board of directors and (d) against any action, agreement or transaction (other than the Business Combination Agreement or the transactions contemplated thereby) or proposal that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of Sponsor under the Business Combination Agreement or that would reasonably be expected to result in the failure of the transactions contemplated by the Business Combination Agreement from being consummated.
Extension of Deadline to Complete the Company’s Initial Business Combination.
As of the date of this Annual Report, the Company has exercised its right to extend the deadline to complete its initial business combination one time by depositing or causing to be deposited into the Trust Account $150,000 for the extension.
On May 3, 2023, the Company deposited $150,000 into the Company’s Trust account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from May 8, 2023 to June 8, 2023. This deposit marked the first of nine-monthly extensions permitted under the Company’s governing documents.
The current deadline is June 2, 2024. The Company has 8 remaining 1-month extensions under the Charter Amendment (as defined below).
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Our Business Strategy
We believe that acquiring a leading high-growth company or assets in the natural resources, oil, or gas industry will provide a platform to fund consolidation and fuel growth for our company. There is no restriction in the geographic location of targets we can pursue, although we intend to initially prioritize Central Asia as the geographical focus. Our aim is to become a mid-size independent operator targeting producing onshore assets with attractive fiscal regimes and offers a high dividend policy
We believe that there is a large pool of quality initial business combination targets looking for exit opportunities with an increasing number of private equity (or PE) and venture capital (or VC) activities in the certain regions, which provides us opportunities given what we believe are the limited exit options for mid-market companies in the region. We believe that there are many resources in Central Asia that have been left stranded because domestic investors have less access to cheap capital. This is reflected in the high interest rates in a number of prospective regions, as indicated below:
Kazakhstan |
| 16.75 | % |
Uzbekistan |
| 14.0 | % |
Azerbaijan |
| 8.5 | % |
Tajikistan |
| 13.0 | % |
Kyrgyzstan |
| 13.0 | % |
In addition, these same countries face volatile exchange rates, further increasing the difficulty in securing foreign funding / loans.
As noted, we believe that the natural resources industry, specifically the oil and gas sectors, represent a particularly attractive deal sourcing environment that will allow us to leverage our team’s skill sets and experience to identify an initial business combination which can potentially serve as a strong platform for future add-on acquisitions. Our investment thesis is supported by what we believe are the following trends in our target sectors:
Strong Core Industry Fundamental: Despite the uncertainties, we believe that the U.S. oil and gas sectors can be profitably developed and/or produced at low break-even costs. As such, drilling and other exploration and production focused investments will continue to present viable opportunities to investors in 2021. Additionally, we believe that natural gas is generally viewed as a bridge fuel to more sustainable and environmentally friendly forms of electrical generation. The U.S. has recently become a leader in natural gas resource development and is a growing LNG exporter. We believe that investors have fundamentally changed their investment criteria for the exploration and production industry from high production growth targets to disciplined growth, focusing primarily on total returns and returns of cash to investors. The U.S. upstream sector is in a period of evolutionary change. We believe that the operators that accept the new climate and evolve to meet the challenges of 2021 and beyond will emerge successfully, strengthened by their resilient business models in the face of commodity price fluctuations, and serve a vital role in providing for the world’s energy needs.
Targeting of Fastest Growing Industries. The main industry we are targeting is the natural resources industry, specifically the oil and gas sectors. This is not just a function of our expertise in these fields, but it is also because these sectors are highly fragmented with hundreds of companies ranging from large established corporations to smaller start-ups. Many non-investment grade companies have struggled with excess leverage and have been forced to restructure their operations, while other companies have sought to reduce their leverage through asset sales. Historically, the exploration and production industry has used asset sales as one of its key sources of funding. The lack of access to capital and an active M&A market lead us to believe that many companies within our target industries currently lack the financial health and operating capabilities to succeed in today’s environment.
Lack of Competition. Recent sustained low commodity prices have deeply impacted the financial health and access to capital for both public and private companies within our target sectors. We believe the exodus of capital providers and changing market sentiments have created an opportunity for natural resources focused SPACs to fill the void and pursue acquisition targets in a buyer’s market.
Operator-Led SPACs outperform their Sectors: According to McKinsey & Company, SPACs that are led by executives with past C-Suite experience tend to outperform other SPACs (by about 40%) and their industry peers (by about 10%) after at least 18 months of publicly available trading data.
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Our Acquisition Criteria
Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We have used these criteria and guidelines in evaluating acquisition opportunities, though, if the Business Combination Agreement with Liberty Onshore Energy does not close, we may decide to enter into our initial business combination with:
| ● | Target Size: Consistent with our investment thesis as described above, we plan to target businesses with total enterprise values ranging from $200.0 million to $2.0 billion in the natural resources industry, specifically within the oil and gas sectors. |
| ● | Ownership: Liberty plans to outsource most of its downstream activities and prefers to use cash for dividends payments or new fields acquisition. We also propose to pursue an asset light policy while maintaining an optimal asset ownership plan. But at the same time, we will maintain a high degree of management control over the assets within acquired fields. Such an asset light strategy offers higher profit and greater flexibility for the Company. |
| ● | Businesses with Revenue and Earnings Growth Potential. We will seek to acquire one or more businesses that have the potential for significant revenue and earnings growth through a combination of increased production capacity, expense reduction, and synergistic follow-on acquisitions resulting in increased operating leverage. |
| ● | Businesses with Potential for Strong Free Cash Flow Generation. We will seek to acquire one or more businesses that have the potential to generate strong, stable, and increasing free cash flow. We intend to focus on one or more businesses that have predictable revenue streams and definable low working capital and capital expenditure requirements. We may also seek to prudently leverage this cash flow in order to enhance stockholder value. |
| ● | Strong Management. We will seek companies with strong management teams already in place. We will spend significant time assessing a company’s leadership and human fabric and maximizing its efficiency over time. |
| ● | Benefit from Being a Public Company. We intend to acquire one or more businesses that will benefit from being publicly traded and can effectively utilize the broader access to capital and the public profile that are associated with being a publicly traded company. |
| ● | Appropriate Valuations and Upside Potential. We intend to apply rigorous, criteria-based, disciplined, and valuation-centric metrics. We intend to acquire a target on terms that we believe provide significant upside potential while seeking to limit risk to our investors. |
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that from time to time our management may deem relevant.
Our Acquisition Process
In evaluating a potential target business, we believe we have conducted a comprehensive due diligence review to seek to determine a company’s quality and its intrinsic value. That due diligence review included, among other things, financial statement analysis, detailed document reviews, technology diligence, multiple meetings with management, consultations with relevant industry and academic experts, competitors, customers and suppliers, as well as a review of additional information that we obtained as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from either an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (“FINRA”) or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. Furthermore, in the event that we seek such a business combination, we expect that the independent members of our board of directors would be involved in the process for considering and approving the transaction.
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Members of our management team, including our officers and directors, directly or indirectly own our securities and, accordingly, may have a conflict of interest in determining whether a particular target company is an appropriate business with which to effectuate our initial business combination. Each of our officers and directors, as well as our management team, may have a conflict of interest with respect to evaluating a particular business combination, including if the retention or resignation of any such officers, directors, and management team members was included by a target business as a condition to any agreement with respect to such business combination.
We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
Each of our directors, director nominees and officers presently have and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to identify and pursue business combination opportunities or complete our initial business combination.
Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our founder, sponsor, officers, and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination and their respective participation in any such companies may present additional conflicts of interest in respect of determining to which such company a particular business combination opportunity should be presented, particularly in the event there is overlap among the investment mandates of such companies. Additionally, one of our directors, Mr. Stein, has invested in other blank check companies. We do not believe Mr. Stein’s investments would affect our ability to identify and pursue business opportunities or complete our initial business combination.
Moreover, because our management team has significant experience in identifying and executing multiple acquisition opportunities simultaneously and we are not limited by industry or geography in terms of the acquisition opportunities we can pursue, except with respect to our prohibition from seeking target acquisitions in China and Hong Kong. In addition, our founder, sponsor, officers, and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Initial Business Combination
Nasdaq rules require that we complete one or more initial business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market value of our initial business combination.
If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.
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We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business for the post-acquisition company to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target or assets sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act of 1940, as amended.
Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for the purposes of a tender offer or for seeking stockholder approval, as applicable.
The net proceeds of our Initial Public Offering and the sale of the placement units released to us from the trust account upon the closing of our initial business combination may be used as consideration to pay the sellers of a target business with which we complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. In addition, we may be required to obtain additional financing in connection with the closing of our initial business combination to be used following the closing for general corporate purposes as described above.
There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise. None of our sponsors, officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination.
Our amended and restated certificate of incorporation provides that, prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the trust account; or (ii) vote as a class with our public shares: (a) on any initial business combination, or (b) to approve an amendment to our amended and restated certificate of incorporation to: (x) extend the time we have to consummate a business combination, or (y) amend the foregoing provisions, unless (in connection with any such amendment to our amended and restated certificate of incorporation) we offer our public stockholders the opportunity to redeem their public shares.
Corporate Information
Our executive offices are located at 10 East 53rd St. Suite 3001 New York, New York 10022, and our telephone number is 1-305-809-7217.
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Item 1A. Risk Factors
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item. Factors that could cause our actual results to differ materially from those in this Annual Report are any of the risks described in our final prospectus for our Initial Public Offering filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Annual Report, there have been no material changes to the risk factors disclosed in our final prospectus for our Initial Public Offering filed with the SEC and declared effective by the SEC on November 3, 2021 or as disclosed in our Form 10-K for the year ended December 31, 2021, the Company’s Form 8-K filed with the SEC on April 25, 2022, the Company’s Quarterly Reports on Form 10-Q filed with the SEC on May 16, 2022, August 9, 2022, and November 17, 2022, the Company’s Form 10-K/A for the year ended December 31, 2021 filed with the SEC on January 3, 2023, and the Company's definitive proxy statement filed with the SEC on April 3, 2022. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Corporate Information
Our executive offices are located at 10 East 53rd St. Suite 3001 New York, New York 10022, and our telephone number is 1-305-809-7217.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
Our executive offices are located at 10 East 53rd St. Suite 3001 New York, New York 10022 and our telephone number is 1-305-809-7217. We have agreed to pay Liberty Fields LLC, a total of $10,000 per month for office space, utilities and secretarial and administrative support and the use of this office location is included in such $10,000 monthly payment. From November 8, 2021 to December 31, 2022, $140,000 has been paid. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. We consider our current office space adequate for our current operations.
Item 3. Legal Proceedings
From time to time, we may become involved in legal proceedings relating to claims arising from the ordinary course of business. Our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows.
Item 4. Mine Safety Disclosures
Not Applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
Our units, public shares and public warrants are each traded on the Nasdaq Global Market under the symbols “LIBYU,” “LIBY,” and “LIBYW,” respectively. Our units commenced public trading on November 3, 2021, and our public shares and public warrants commenced separate public trading on December 23, 2021. Our Class B common stock is not listed on any exchange.
As of December 31, 2022, there was one holder of record of shares of our common stock and one holder of record of our public warrants. A substantially greater number of holders of common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. As a result, we are unable to estimate the total number of stockholders represented by the record holders of our common stock.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Use of Proceeds from the Initial Public Offering
As previously reported, on November 8, 2021, we completed our Initial Public Offering of 11,500,000 units (“Units”). Each Unit consists of one share of Class A common stock and one redeemable warrant. Each Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $115,000,000.
On November 8, 2021, simultaneously with the sale of the Units, the Company consummated the private sale of 530,275 Placement Units, generating gross proceeds of $5,302,750. The Placement Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transactions did not involve a public offering.
No payments for our expenses were made in the offering described above directly or indirectly to (i) any of our directors, officers or their associates, (ii) any person(s) owning 10% or more of any class of our equity securities or (iii) any of our affiliates, except in connection with the repayment of outstanding loans and pursuant to the administrative support agreement disclosed herein which we entered into with our sponsor. There has been no material change in the planned use of proceeds from our offering as described in our final prospectus filed with the SEC pursuant to Rule 424(b) related to the Initial Public Offering.
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Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Overview
We are a blank check company incorporated in Delaware on April 22, 2021. We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies. We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Warrants, our capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception to December 31, 2022 were organizational activities, those necessary to prepare for the Initial Public Offering (“Initial Public Offering”), conducting the Initial Public Offering and identifying a target company for a business combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering We incur 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 year ended December 31, 2022, we had a net income of $400,163, which consisted of formation and operating costs of $754,339, interest earned on investments held of $1,690,069, franchise tax $200,250 and income tax $335,317.
For the period from April 22, 2021 (inception) through December 31, 2021, we had a net loss of $418,021 which consisted of realized gain on marketable securities held in our Trust Account of $6,221 offset by unrealized loss of $5,627, formation and operational costs of $418,615, and franchise tax of $144,160.
Liquidity and Capital Resources
As of December 31, 2022, and 2021, we had cash of $97,513 and $521,655 outside of the Trust Account, respectively. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete our initial business combination.
For the year ended December 31, 2022, cash used in operating activities was $687,339.
For the period from April 22, 2021 (inception) through December 31, 2021, cash used in operating activities was $330,559.
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As of December 31, 2022, and 2021, we had investments of $119,572,819 and $116,732,749 held in the Trust Accounts, respectively. We intend to use substantially all of the funds held in the Trust Accounts, including any amounts representing interest earned on the Trust Accounts (less taxes paid and deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Accounts will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. At December 31, 2022, substantially all of the assets held in the Trust Account were held in US treasury bills.
The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. There is no assurance that the Company’s plans to consummate an initial Business Combination will be successful within the combination period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management plans to address this uncertainty during the period leading up to the business combination; however, this cannot be guaranteed.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. The underwriter is entitled to a deferred fee of three point five percent (3.50%) of the gross proceeds of the Offering upon closing of the Business Combination, or $4,025,000. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of audited financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the audited financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. As of December 31, 2022, there were no critical accounting policies.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our audited financial statements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not required for smaller reporting companies.
Item 8. Financial Statements and Supplementary Data
This information appears following Item 15 of this Report and is included herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
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Item 9A. Controls and Procedures
None.
Evaluation of Disclosure Controls and Procedures
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 (“Our Certifying Officers”), as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Certifying Officers and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures for the fiscal year ended December 31, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our Certifying Officers have concluded that during the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to a material weakness in internal controls over financial reporting related to the Company’s accounting for complex financial instruments, which was initially identified at December 31, 2022.
To address this material weakness, management has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes to better evaluate its research and understanding of the nuances of the complex accounting standards that apply to its audited financial statements. We plan to include providing enhanced access to accounting literature, research materials and documents and increased communication among its personnel and third-party professionals with whom it consults regarding complex accounting applications.
Management’s Report on Internal Controls Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for us. Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. A control system, no matter how well designed and operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met. Because of these inherent limitations, management does not expect that our internal control over financial reporting will prevent all error and all fraud. Under the supervision and with the participation of our Certifying Officers, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022 based on criteria specified in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, our management, including our Certifying Officers, concluded that, as of December 31, 2022 and as of December 31, 2021 the Company’s internal control over financial reporting was effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal period that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors and Executive Officers of the Registrant
Directors and Executive Officers
Our current directors and executive officers are as follows:
Name |
| Age |
| Position |
Dato’ Maznah Binti Abdul Jalil |
| 70 |
| Chairman, Chief Executive Officer and Director |
Dato’ Khalid Ahmad |
| 69 |
| Chief Financial Officer and Secretary |
Garry Richard Stein |
| 77 |
| Director |
Mohamad Faizal Bin Abd Jabbar |
| 52 |
| Director |
Mohamed Zahed Bin Hashim | 64 | Director | ||
Dato’ Sri Chee Hong Leong | 59 | Director |
Dato’ Maznah Binti Abdul Jalil, Chairman, Chief Executive Officer and Director
Dato’ Maznah Binti Abdul Jalil has been our Chairman, Chief Executive Officer and Director since our inception. She has over 30 years of investment banking experience in a merchant Bank and DRB-HICOM Berhad Group of Companies. She is currently working as a director at several companies, including Malayan Flour Mill Berhad (“MFLOUR”), since November 2019, Boustead Heavy Industrial Corporation Berhad (“BHIC”), since August 2019, Innature Berhad (“INNATURE”), since March 2019, Lembaga Angkatan Tentera (“LTAT”), since November 2018, Opus Asset Management SDN. BHD, since November 2017, and Pavilion REIT Management SDN. BHD, since July 2011. From December 2012 until April 2019, she was the Executive Director and Chief Financial Officer of Sona Petroleum Berhad. From 2007 to 2011 she held two positions, one as Executive Vice President at Kenanga Investment Bank Berhad and as Head of Corporate Finance at Hong Leong Financial Group. Prior to that she worked 14 years as Senior Group Director in Corporate Finance & Advisory at DRB-HICOM BERHAD (From June 1992 to July 2005) where she was responsible of corporate finance & advisory work for Master-Carriage Group and DRB-HICOM Group including restructuring proposals of companies’ mergers and acquisitions floatation of companies and overseeing investment related activities of the Group. She previously held several directorships in publicly listed companies as well as non-listed companies.
Dato’ Khalid Ahmad, Chief Financial Officer and Secretary
Dato’ Khalid Ahmad has been our Chief Financial Officer and our Secretary since inception. He is a highly experienced financial and accounting professional with an extensive background in publishing, television, film and all aspects of the media business. He has been working as Chairman of Universiti Sultan Azlan Shah (USAS) Berhad since March 2021 and, at the same time, he has acted as an advisor and consultant to the Malaysian audit firm of FMSalleh & Co. Dato’ Khalid also holds executive and board positions in firms involved in the natural resources and power industries. He was also responsible for the launch of The KL Options and Financial Futures Exchange, now part of the BURSA MALAYSIA. He was a commissioner of Public Land Transport Commission of Malaysia, Director of Technology Park Malaysia, and was also an adjunct professor and adviser to several universities. As a Past President of The Malaysia Advisory Committee of the Association of Chartered Certified Accountants (ACCA) in Malaysia (after serving for eight years as President), Dato’ Khalid has served in many volunteer positions and government appointed boards, including the ACCA World Council in London, the National Unity Council, the Financial Reporting Foundation in Malaysia, the Malaysian Multimedia Development Corporation and the National Sports Council. Dato’ Khalid is a Fellow in the Association of Chartered Certified Accountants.
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Garry Richard Stein, Independent Director
Garry Richard Stein has served on our board of directors since November 8, 2021. Mr. Stein is a seasoned executive with strong management, analytical and strategic skills and a track record of success and innovation. He has been serving as Executive Vice President & Director of Ghana based at Hope Gold Limited since July 2019. He has also been serving as Chief Financial Officer of PHP Acquisition Corp. since April 2021. Mr. Stein has over fifty years of experience in executive roles in banking, investment management, mergers & acquisitions, private equity, natural resources, technology, and strategic planning. He has been actively involved for many years in both in international commodity, mining, and finance communities and has been successful in raising and investing substantial funds for various investment projects across a wide range of industries, particularly in natural resources. He has served as an advisor, senior executive and in board roles for a number of public and private companies in North America, Hong Kong, China, throughout Southeast Asia and Africa. He was recently a responsible officer for development of the technology design for the global trade settlement platform was instrumental in the strategic planning, design concepts and implementation of modern distributed ledger and related technologies to the issues of global trade. In the past, he has been involved as an investor and senior executive in several oil and gas exploration and development companies in Canada, the USA, China and Central Asia.
Dato’ Sri Chee Hong Leong, Independent Director
Dato’ Seri Hong Leong Chee has served on our board of directors since July 29, 2022. He is the Executive Director of SYF Resources Bhd., a position he has held since 2003, and President of St. John’s Ambulance Association Malaysia, a position he has held since 2013. He is currently an independent director of Kairous Acquisition Corp. Ltd, a Nasdaq-listed special purpose acquisition company, and Micolink Solutions Bhd. He is also a director of twenty other private limited companies in Malaysia. From 1998 – 2002 he was Executive Director of Tanco Resort Bhd. and was the founder and Chief Executive Officer of Canary Infoport Sdn. Bhd., Canary Homes Sdn. Bhd., and Canary Dry Cleaning Sdn. Bhd from 1992 – 1998. Dato’ Seri Hong Leong Chee was Corporate Planning Executive of Leisure Holidays Sdn. Bhd from 1990 – 1992. He received his bachelor’s degree in Engineering with a focus in computers, and his Master of Business Administration with a focus in finance, from McMaster University.
Mohamed Zahed Bin Hashim, Independent Director
Mohamed Zahed Bin Hashim has served on our board of directors since July 29, 2022. He is the Vice President of the Malaysia Qatar Business counsel, a non-profit organization that promotes business between Malaysian and Qatari companies, a position he has held since 2019. From 2006 to 2020 he worked for Qatar Petroleum, where he served as Auditor on the Executive Committee responsible for safety and integrity, design and operations, and regulatory compliance. From 1999 – 2005 Mohamed Zahed Bin Hashim founded and owned Column Maintenance Services, Ltd a plant shutdown specialist contractor. He began his career with the Petronas Group of Companies, where he worked from 1983 - 1999. He received his bachelor’s degree in Mechanical Engineering from University of Dundee, Scotland and is the author of four publications relating to natural gas facilities and processing.
Mohammad Faizal bin Abd Jabbar, Independent Director
Mohammad Faizal bin Abd Jabbar has served on our board of directors since November 8, 2021. He has extensive experience in the legal, capital markets and the business sector in Malaysia. He graduated with a law degree (LLB (Hons)) from the International Islamic University in 1993, LLM(Hons) University of Cambridge UK in 1994 and the Institute of Chartered Secretaries and Administrators (ICSA) UK in 1995. He practiced corporate and finance law in two of Malaysia’s largest law firms Messrs Shearn Delamore and Zul Rafique & Partners. He was involved in major legal projects namely the construction of the KL International Airport, the Federal Administrative Capital Putrajaya and the financing of the iconic Kuala Lumpur City Centre better known as the Twin Towers. He has been on the board of several subsidiaries of the UBS Malaysia group of companies since 2000 and currently is an independent non-executive director of UBS Securities Malaysia since 2005 and served as the Chairman of the board from 2019 to 2021. He also has experience in the property investment services and the renewable energy industry in Malaysia.
Number and Terms of Office of Officers and Directors
We have six directors. Our board of directors is divided into three classes, with only one class of directors being elected in each year and with each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq.
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The term of office of the first class of directors, consisting of Mr. Stein will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Mohammad Faizal bin Abd Jabbar, will expire at the second annual meeting of stockholders. The term of office of the third class of directors, consisting of Dato’ Sri Chee Hong Leong, Mohamed Zahed Bin Hashim, and Dato’ Maznah Binti Abdul Jalil, will expire at the third annual meeting of stockholders.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to nominate persons to the offices set forth in our amended and restated certificate of incorporation as it deems appropriate. Our amended and restated certificate of incorporation provides that our officers may consist of one or more chairman of the board of directors, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors determined that all of our directors, other than Dato’ Maznah Binti Abdul Jalil are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Executive Officer and Director Compensation
None of our officers have received any cash compensation for services rendered to us. Commencing on the date of our Initial Public Offering, we have agreed to pay Liberty Fields LLC, our sponsor, a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. No compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our sponsor, officers or directors or any affiliate of our sponsor, officers or directors, prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed initial business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed initial business combination because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
Committees of the Board of Directors
Our board of directors has three standing committees: an audit committee, a compensation committee and a corporate governance and nominating committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors.
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Audit Committee
We have established an audit committee of the board of directors. Garry Richard Stein, Dato’ Sri Chee Hong Leong, and Mohammad Faizal bin Abd Jabbar will serve as members of our audit committee, and Mr. Stein chairs the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. Each of Messrs. Garry Richard Stein, Dato’ Sri Chee Hong Leong, and Mohammad Faizal bin Abd Jabbar meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.
Each member of the audit committee is financially literate and our board of directors has determined that Mr. Stein qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We will adopt an audit committee charter, which will detail the principal functions of the audit committee, including:
| ● | the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us; |
| ● | pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
| ● | setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations; |
| ● | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
| ● | obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence; |
| ● | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
| ● | reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
Compensation Committee
We have established a compensation committee of our board of directors. Messrs. Garry Richard Stein and Mohammad Faizal bin Abd Jabbar serve as members of our compensation committee. Mohammad Faizal bin Abd Jabbar chairs the compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent. Each of Messrs. Garry Richard Stein and Mohammad Faizal bin Abd Jabbar are independent.
We adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
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| ● | reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers; |
| ● | reviewing on an annual basis our executive compensation policies and plans; |
| ● | implementing and administering our incentive compensation equity-based remuneration plans; |
| ● | assisting management in complying with our proxy statement and annual report disclosure requirements; |
| ● | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; |
| ● | if required, producing a report on executive compensation to be included in our annual proxy statement; and |
| ● | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Notwithstanding the foregoing, as indicated above, other than the payment to Liberty Fields LLC, our sponsor, of $10,000 per month, for up to 18 months, for the office space, utilities, and secretarial and administrative support, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.
The charter provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Corporate Governance and Nominating Committee
We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605 of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. Our independent directors will participate in the consideration and recommendation of director nominees. In accordance with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.
The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders
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Code of Ethics
We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics and our audit committee charter as exhibits to the registration statement for our Initial Public Offering. You can review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Item 11. Executive Compensation
None of our executive officers or directors have received any cash compensation for services rendered to us. No compensation of any kind, including finders, consulting, or other similar fees, will be paid to any of our existing stockholders, officers, directors or and of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination. However, our initial stockholders, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no limit on the amount of out-of-pocket expenses reimbursable by us.
After our initial business combination, members of our management team who remain with us may be paid consulting, management, or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. The amount of such compensation may not be known at the time of a stockholder meeting held to consider an initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC.
Since our formation, we have not granted any stock options or stock appreciation rights or any other awards under long-term incentive plans to any of our executive officers or directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The following table sets forth information regarding the beneficial ownership of our common stock as of June 8, 2023 by:
| ● | each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
| ● | each of our executive officers and directors that beneficially owns shares of common stock; and |
| ● | all our executive officers and directors as a group. |
In the table below, percentage ownership is based on 7,211,460 shares of our common stock, consisting of (i) 4,336,460 shares of our Class A common stock, and (ii) 2,875,000 shares of our Class B common stock, issued and outstanding as of June 8, 2023. On all matters to be voted upon, holders of the shares of Class A common stock and shares of Class B common stock vote together as a single class. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this Report.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our common stock beneficially owned by them.
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On July 28, 2021, our sponsor paid an aggregate of $25,000, or approximately $0.009 per share, in exchange for the issuance of 2,875,000 shares of our Class B common stock. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The per unit price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued.
| Class A |
| Class B |
| Approximate |
| |||||
Common Stock | Common Stock | Percentage |
| ||||||||
Number of | Number of | of | |||||||||
Shares | Approximate | Shares | Approximate | Outstanding | |||||||
Name and Address of Beneficial | Beneficially | Percentage | Beneficially | Percentage | Common | ||||||
Owner (1) |
| Owned |
| of Class |
| Owned(2) |
| of Class |
| Stock | |
Liberty Fields LLC(1)(2) | 530,275 | 4.41 | % | 2,725,000 | 94.78 | % | 37.79 | % | |||
Dato’ Maznah Binti Abdul Jalil (1)(2)(3) | — | * | 2,790,000 | 97.04 | 38.67 |
| |||||
Dato’ Khalid Ahmad (1) | — | * | 25,000 | * | * |
| |||||
Garry Richard Stein (1)(2)(4) |
| — |
| * |
| 2,790,000 |
| 97.04 |
| 38.67 | |
Mohamed Zahed Bin Hashim | — | — | — | — | — | ||||||
Dato’ Sri Chee Hong Leong | — | — | — | — | — | ||||||
Mohammad Faizal Bin Abd Jabbar(1) |
| — |
| * |
| 10,000 |
| * |
| * | |
All executive officers and directors as a group (six individuals) |
| 530,275 |
| 4.41 | % | 2,865,000 |
| 99.65 | % | 39.73 | % |
5% Holders | |||||||||||
Lighthouse Investment Partners, LLC (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
MAP 136 Segregated Portfolio, a segregated portfolio of LMAP SPC (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
MAP 214 Segregated Portfolio, a segregated portfolio of LMC SPC (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
LHP Ireland Fund Management Limited (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
MAP 501, a sub-trust of LMA Ireland (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
LMAP 909, a sub-fund of LMAP Ireland ICAV (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
LMAP 910, a sub-fund of LMAP Ireland ICAV (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
Shaolin Capital Partners SP, a segregated portfolio of PC MAP SPC (5)(9) | 723,857 | 16.69 | % | — | — | 10.03 | |||||
Saba Capital Management, L.P. (6)(9) | 1,045,000 | 24.10 | % | — | — | 14.49 | |||||
Boaz R. Weinstein (6)(9) | 1,045,000 | 24.10 | % | — | — | 14.49 | |||||
Saba Capital Management GP, LLC (6)(9) | 1,045,000 | 24.10 | % | — | — | 14.49 | |||||
Hudson Bay Capital Management LP (7)(9) | 891,356 | 20.55 | % | — | — | 12.36 | |||||
Sander Gerber (7)(9) | 891,356 | 20.55 | % | — | — | 12.36 | |||||
Highbridge Capital Management, LLC (8)(9) | 1,123,127 | 25.90 | % | — | — | 15.57 | |||||
* | Less than 1% |
| (1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o Liberty Resources Acquisition Corp. 10 East 53rd St. Suite 3001 New York, New York 10022 |
| (2) | Liberty Fields LLC, our sponsor, is the record holder of the securities reported herein. Dato’ Maznah Binti Abdul Jalil, our Chairman and Chief Executive Officer, is a member of our sponsor and Garry Richard Stein, our director, is the manager of our sponsor. By virtue of this relationship, Ms. Jalil and Mr. Stein may be deemed to share beneficial ownership of the securities held of record by our sponsor. Ms. Jalil and Mr. Stein each disclaims any such beneficial ownership except to the extent of his pecuniary interest. |
| (3) | Interest shown consists of 2,725,000 shares held by Liberty Fields LLC as referenced in footnote 2 and 40,000 shares held directly by Ms. Jalil. |
| (4) | Interest shown consists of 2,725,000 shares held by Liberty Fields LLC as referenced in footnote 2 and 40,000 shares held directly by Mr. Stein. |
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| (5) | The beneficial ownership is based on the latest available filing made with the SEC on Schedule 13G on February 14, 2023 and consists of 723,857 shares of Liberty Class A common stock. To the best of Liberty’s knowledge, Lighthouse Investment Partners, LLC (“Lighthouse”), MAP 136 Segregated Portfolio, a segregated portfolio of LMA SPC (“MAP 136”), Cayman Islands, MAP 214 Segregated Portfolio, a segregated portfolio of LMA SPC (“MAP 214”), Cayman Islands, LHP Ireland Fund Management Limited (“LHP Ireland”), Ireland, MAP 501, a sub-trust of LMA Ireland (“MAP 501”), Ireland, LMAP 909, a sub-fund of LMAP Ireland ICAV (“LMAP 909”), Ireland, LMAP 910, a sub-fund of LMAP Ireland ICAV (“LMAP 910”), Ireland, Shaolin Capital Partners SP, a segregated portfolio of PC MAP SPC (“Shaolin“), Cayman Islands each own and control 6.29% of the outstanding Public Shares. The address of the Reporting Persons is 3801 PGA Boulevard, Suite 500, Palm Beach Gardens, FL 33410 32 Molesworth Street, Dublin, D02 Y512, Ireland. |
| (6) | The beneficial ownership is based on the latest available filing made with the SEC on Schedule 13G/A on February 14, 2023 and consists of 1,045,000 shares of Liberty Class A common stock. To the best of Liberty’s knowledge, Saba Capital Management, L.P., Boaz R. Weinstein, and Saba Capital Management GP, LLC each own and control 8.7% of the outstanding Public Shares. The address of the Reporting Persons is 405 Lexington Avenue, 58th Floor, New York, New York 10174. |
| (7) | The beneficial ownership is based on the latest available filing made with the SEC on Schedule 13G on February 9, 2023 and consists of 891,356 shares of Liberty Class A common stock. To the best of Liberty’s knowledge, Hudson Bay Capital Management LP and Sander Gerber each own and control 7.41% of the outstanding Public Shares. The address of the Reporting Persons is 28 Havemeyer Place, 2nd Floor, Greenwich, CT 06830. |
| (8) | The beneficial ownership is based on the latest available filing made with the SEC on Schedule 13G on February 2, 2023 and consists of 1,123,127 shares of Liberty Class A common stock. To the best of Liberty’s knowledge, Highbridge Capital Management, LLC owns and controls 8.54% of the outstanding Public Shares. The address of the Reporting Persons is 77 Park Avenue, 23rd Floor, New York, New York 10172. |
| (9) | The beneficial ownership is based on the latest available filings made with the SEC before the Extension Special Meeting (as defined below). In connection with the Extension Special Meeting, holders of 7,693,815 of our public shares exercised their right to redeem those shares for a pro rata portion of the funds in the Trust Account leaving 4,336,460 of our public shares outstanding. As of the date of this filing, the shareholder has not updated its filing with the SEC on Schedule 13G. |
The founder shares held by our initial stockholders represent 37.78% of our outstanding shares of common stock. Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all other matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions including our initial business combination. Holders of our public shares do not have the right to appoint an directors to our board of directors prior to our initial business combination.
Each holder of the founder shares has agreed (a) to vote any founder shares owned by it in favor of any proposed business combination and (b) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination. Our sponsor and our executive officers and directors are deemed to be our “promoters” as such term is defined under the federal securities laws.
Item 13. Certain Relationships and Related Transactions, and Director Independence
On July 28, 2021, the Company issued an aggregate of 2,875,000 shares of Class B common stock to the Sponsor for an aggregate purchase price of $25,000 in cash. Such Class B common stock includes an aggregate of up to 375,000 shares that were subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Sponsor will collectively own at least 20% of the Company’s issued and outstanding shares after the Offering (assuming the initial stockholders did not purchase any Public Shares in the Offering and excluding the Placement Units and underlying securities). The underwriters exercised the over-allotment option in full so those shares are no longer subject to forfeiture.
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The initial stockholders have agreed not to transfer, assign or sell any of the Class B common stock (except to certain permitted transferees) until the earlier of (i) six months after the date of the consummation of a Business Combination, or (ii) the date on which the closing price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing six months a Business Combination, or earlier, in each case, if, subsequent to a Business Combination, the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property.
On April 22, 2021, the Sponsor committed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and was payable on the earlier of December 31, 2021 or the completion of the Initial Public Offering. Upon IPO, the Company had borrowed $95,120 under the Note. A total of $95,120 under the promissory note was repaid on November 16, 2021.
In order to finance transaction costs in connection with a Business Combination, the Sponsor may provide us with a loan to the Company up to $1,500,000 as may be required (“Working Capital Loans”). Such Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such loans may be converted upon consummation of a Business Combination into additional Placement Units at a price of $10.00 per Unit. In the event that a Business Combination does not close, the Company may use a portion of 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. As of December 31, 2022, there was $263,198 and $1,150,000 outstanding in Working Capital Loans and extension loan.
Item 14. Principal Accounting Fees and Services
The following is a summary of fees paid or to be paid to Adeptus Partners, LLC, or Adeptus Partners, for services rendered.
Audit Fees. Audit fees consist of fees for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Adeptus Partners in connection with regulatory filings. The aggregate fees of Adeptus Partners for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 8-K for the respective periods and other required filings with the SEC for the year ended December 31, 2022 and the period from April 22, 2021 (date of inception) to December 31, 2021 were approximately $52,000 and $99,000, respectively. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.
Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. During the year ended December 31, 2022 and the period from April 22, 2021 (inception) to December 31, 2021, we did not pay Adeptus Partners any audit-related fees.
Tax Fees. For the year ended December 31, 2022 and for the period from April 22, 2021 (inception) to December 31, 2021, we did not pay Adeptus Partners for tax return services, planning and tax advice.
All Other Fees. For the year ended December 31, 2022 and for the period from April 22, 2021 (inception) to December 31, 2021, we did not pay Adeptus Partners for any other services.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
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PART IV
ITEM 15. Exhibits and Financial Statement Schedules
| (a) | The following documents are filed as part of this Form 10-K: |
| (1) | Financial Statements: |
| (2) | Financial Statement Schedules: |
All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes beginning on page F-1 of this Report.
| (3) | Exhibits |
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporate herein by reference can be obtained on the SEC website at www.SEC.gov.
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|
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Liberty Resources Acquisition Corp. Opinion on the Financial Statements We have audited the accompanying balance sheets of Liberty Resources Acquisition Corp. (the Company) as of December 31, 2022 and 2021, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the year ended December 31, 2022 and the period of April 22, 2021 (inception) to December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 and the period of April 22, 2021 (inception) to December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has negative working capital and an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
We have served as the Company’s auditor since 2021. June 6, 2023 PCAOB ID: |
F-1
LIBERTY RESOURCES ACQUISITION CORP.
BALANCE SHEETS
| December 31, 2022 |
| December 31, 2021 | |||
ASSETS |
| |||||
Current Assets |
|
| ||||
Cash |
| $ | | $ | | |
Total Current Assets | | | ||||
|
|
|
| |||
Cash and Marketable Securities held in trust account | | | ||||
Total Assets | $ | | $ | | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
| ||
Current liabilities | ||||||
Accrued expenses | $ | | $ | | ||
Account payables | | — | ||||
Franchise tax payable | | | ||||
Income tax payable | | — | ||||
Working capital loan |
| |
| — | ||
Extension loan |
| |
| — | ||
Total Current Liabilities |
| |
| | ||
|
| |||||
Deferred underwriter commission |
| |
| | ||
Total Liabilities | | | ||||
Commitments and Contingencies | ||||||
Redeemable Class A common stock, |
| |
| | ||
|
| |||||
Stockholders' Deficit |
|
|
|
| ||
Preferred stock, $ |
|
| ||||
Class A common stock, $ |
| |
| | ||
Class B common stock, $ |
| |
| | ||
Additional paid-in capital |
| — |
| — | ||
Accumulated deficit |
| ( |
| ( | ||
Total Stockholders’ Deficit |
| ( |
| ( | ||
Total Liabilities and Stockholders’ Deficit | $ | | $ | | ||
The accompanying notes are an integral part of these financial statement.
F-2
LIBERTY RESOURCES ACQUISITION CORP.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 22, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021 AND FOR THE YEAR
ENDED DECEMBER 31, 2022
| ||||||
For the Period from | ||||||
April 22, 2021 | ||||||
| For The Year Ended |
| (Inception) Through | |||
December 31, | December 31, | |||||
| 2022 | 2021 | ||||
Formation and operating costs | $ | ( | $ | ( | ||
Franchise tax | ( | ( | ||||
Loss from Operations | ( | ( | ||||
|
|
| ||||
Other Income |
|
| ||||
Interest earned on marketable securities held in trust account | | | ||||
Net Income (Loss) before income tax | $ | | $ | ( | ||
Income tax | ( | — | ||||
Net Income (Loss) | | ( | ||||
|
|
|
| |||
Weighted average shares outstanding of Class A common stock |
| |
| | ||
Basic and diluted net income (loss) per common stock | | ( | ||||
Weighted average shares outstanding of Class B common stock |
| |
| | ||
Basic and diluted net income (loss) per common stock | ( | ( | ||||
The accompanying notes are an integral part of these financial statements.
F-3
LIBERTY RESOURCES ACQUISITION CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE PERIOD FROM APRIL 22, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021
AND FOR THE YEAR ENDED DECEMBER 31, 2022
Class A | Class B | Additional | Total | ||||||||||||||||
Common Stock | Common Stock | Paid in | Accumulated | Stockholders’ | |||||||||||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | ||||||
Balance — April 22, 2021 (inception) | | $ | | | $ | | $ | | $ | | $ | | |||||||
Issuance of Class B Common stock to Sponsor | — | — | | | | — | | ||||||||||||
Sale of Units in Initial Public Offering, net of offering costs | | | — | — | | — | | ||||||||||||
Class A Common Stock subject to possible redemption | ( | ( | — | — | ( | — | ( | ||||||||||||
Sale of Private Placement Units | | | — | — | | — | | ||||||||||||
Deferred underwriting commission | — | — | — | — | ( | — | ( | ||||||||||||
Re-classification | — | — | — | — | | ( | — | ||||||||||||
Net loss |
| — |
| — | — | — |
| — |
| ( |
| ( | |||||||
Balance —December 31, 2021 | | $ | | | $ | | $ | | $ | ( | $ | ( | |||||||
Net Income (Loss) | — | — | — | — | — | | | ||||||||||||
Additional amount deposited into trust ($ | — | — | — | — | — | ( | ( | ||||||||||||
Balance – December 31, 2022 |
| | $ | | | $ | | $ | — | $ | ( | $ | ( | ||||||
The accompanying notes are an integral part of these financial statements
F-4
LIBERTY RESOURCES ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM APRIL 22, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021 AND FOR THE YEAR
ENDED DECEMBER 31, 2022
| For the | |||||
Period from | ||||||
April 22, | ||||||
For The Year | 2021 (Inception) | |||||
Ended | Through | |||||
December 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Cash flows from operating activities: | ||||||
Net income (loss) | $ | | $ | ( | ||
Adjustments to reconcile net income(loss) to net cash used in operating activities: |
|
|
|
| ||
Interest earned on marketable securities held in Trust Account | ( | ( | ||||
Changes in operating assets and liabilities: |
| |||||
Accrued expense | ( | — | ||||
Accounts payable and accrued offering costs | | | ||||
Franchise tax payable | | |||||
Income tax payable | | — | ||||
Net cash used in operating activities |
| ( |
| ( | ||
Cash flows from investing activities: | ||||||
Investment of cash in Trust Account |
| ( |
| ( | ||
Net cash used in investing activities | ( |
| ( | |||
| ||||||
Cash flows from financing activities: | ||||||
Working capital loan | | — | ||||
Extension loan |
| |
| — | ||
Proceeds from issuance of Class B common stock to Sponsor |
| — |
| | ||
Proceeds from sale of Units, net of underwriting discount paid |
| — |
| | ||
Proceeds from sale of private placement units |
| — |
| | ||
Payment of offering costs |
| — |
| ( | ||
Net cash provided by financing activities |
| |
| | ||
| ||||||
Net change in cash | ( | | ||||
Cash at the beginning of the period |
| |
| — | ||
Cash at the end of the period | $ | | $ | | ||
Supplemental disclosure of non-cash investing and financing activities: | ||||||
Deferred underwriting fee payable | $ | — | $ | | ||
Initial Classification of Class A common stock subject to redemption | $ | — | $ | | ||
Proceeds from promissory note and repayment | $ | — | $ | | ||
The accompanying notes are an integral part of these financial statements
F-5
Note 1 — Description of Organization and Business Operations
Liberty Resources Acquisition Corp. (the “Company”) is a blank check company incorporated in the State of Delaware on April 22, 2021. The Company was formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with
As of December 31, 2022, the Company had not commenced any operations. All activity for the period from April 22, 2021 (inception) through December 31, 2022 relates to the Company’s formation and the Offering (as defined below). The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Offering. The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Liberty Resources LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on November 3, 2021.
On November 8, 2021, the Company consummated its Initial Public Offering of
Simultaneously with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of
Additionally, on November 8, 2021, the Company consummated the closing of the sale of
Simultaneously with the exercise of the overallotment, the Company consummated the Private Placement of an additional
A total of $
F-6
Note 1 - Description of Organization and Business Operations (Continued)
Transaction costs of the Initial Public Offering with the exercise of the overallotment amounted to $
Following the closing of the Initial Public Offering and full exercise of underwriter's over-allotment option, $
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 the Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $
The Company will have until November 8, 2022 (or up to May 8, 2023, as applicable) to consummate a Business Combination. If the Company is unable to complete a Business Combination within
F-7
Note 1 - Description of Organization and Business Operations (Continued)
On November 8, 2022, the Company caused to be deposited $
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than the independent public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $
Liquidity and Management’s Plans
As of December 31, 2022 and 2021, we had cash of $
For the year ended December 31, 2022, cash used in operating activities was $
For the period from April 22, 2021 (inception) through December 31, 2021, cash used in operating activities was $
As of December 31, 2022 and 2021, we had investments of $
The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. There is no assurance that the Company’s plans to consummate an initial Business Combination will be successful within the combination period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management plans to address this uncertainty during the period leading up to the business combination; however, this cannot be guaranteed.
F-8
Note 1 - Description of Organization and Business Operations (Continued)
Acquisition Letter
On August 5, 2022, the Company, Caspi Oil Gas LLP (“Caspi”) and Caspi’s owner, Markmore Energy (Labuan) Limited (“Markmore”), entered into a binding amendment that, among other things, made a previously executed nonbinding acquisition letter (as amended, the “Acquisition Letter”) for a transaction (the “Transaction”) that will result in Caspi becoming a publicly traded company into a binding agreement. Under the Acquisition Letter, Caspi will not engage in discussions relating to, or enter into any agreement for, any merger, financing, or similar transaction until after 5:00 p.m., New York Time on September 15, 2022 (the “exclusivity period”), and the parties will use their reasonable best efforts to execute a business combination agreement for the Transaction on or before the termination of the exclusivity period. The exclusivity period may be extended by mutual agreement of the parties. On October 21, 2022, the Company, Caspi, and Markmore, entered into a Third Amendment to Acquisition Letter (the “Third Amendment”), dated as of October 21, 2022, which further amends that Acquisition Letter, dated May 16, 2022, between the Company and Markmore, as amended by the First Amendment to Acquisition Letter, dated August 5, 2022, between Liberty, Caspi and Markmore, and Second Amendment to Acquisition Letter, dated September 21, 2022, between Liberty, Caspi and Markmore (as so amended, the “Acquisition Letter”). The Third Amendment extends the “Due Diligence Period” and the “Exclusivity Period” for a transaction under the Acquisition Letter (the “Transaction”) to November 15, 2022. A description of the Acquisition Letter is set forth in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 10, 2022. On November 22, 2022, we entered into a Fourth Amendment to the Acquisition Letter which extended the “Due Diligence Period” and the “Exclusivity Period” for a transaction under the Acquisition Letter (the “Transaction”) to December 15, 2022, and increased the aggregate “Transaction Consideration” to $
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in U.S. Dollars and conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of 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 a 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 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 which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
F-9
Note 2 - Summary of Significant Accounting Policies (Continued)
Use of Estimates
The preparation of financial statements in conformity with GAAP requires 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 revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic 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 the financial statement. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Additionally, as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. Further, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The Company had $
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
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 the United States is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no liabilities for uncertain tax positions as of December 31, 2022 and 2021.
The provision for income taxes was $
F-10
Note 2 - Summary of Significant Accounting Policies (Continued)
Class A Common Stock Subject to Possible Redemption
All of the Class A common stock sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with ASC 480, conditionally redeemable Class A common stock (including shares of Class A common stock 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. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $
Net Loss Per Share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock shares outstanding for the period. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the Initial Public Offering and warrants issued as components of the Private Placement Units (the “Placement Warrants”) since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
Net income (loss) per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net income (loss), adjusted for income attributable to Class A redeemable common stock shares, by the weighted average number of Class A and Class B non-redeemable common stock shares outstanding for the period. Non-redeemable Class A and Class B common stock shares includes the Founder Shares and non-redeemable common stock shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
FOR THE PERIOD | ||||||
FOR YEAR ENDED | FROM APRIL 22, | |||||
DECEMBER 31, | 2021 (INCEPTION) | |||||
| 2022 |
| DECEMBER 31, 2021 | |||
Class A common stock |
|
|
|
| ||
Numerator: net income (loss) allocable to Class A common shares | $ | | $ | | ||
Denominator: weighted average number of Class A common shares |
| |
| | ||
Basic and diluted net income (loss) per Class A common share | | | ||||
Non-redeemable Class B common shares |
|
|
|
| ||
Numerator: net income (loss) allocable to non-redeemable Class B common stock | $ | ( | $ | ( | ||
Denominator: weighted average number of non-redeemable Class B common shares |
| |
| | ||
Basic and diluted net income (loss) per non-redeemable Class B common shares | ( | |||||
F-11
Note 2 - Summary of Significant Accounting Policies (Continued)
Fair Value of Financial Instruments
The 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 (unadjusted) for identical instruments in active markets. This is the level that the Marketable Securities Held in Trust Account are considered being as of December 31, 2022 and $ |
| ● | 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. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Recently Issued Accounting Standards
Management does not believe that 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 — Public Offering
Pursuant to the Initial Public Offering, the Company sold
Note 4 — Private Placement
Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an aggregate of
A portion of the proceeds from the Private Placement Units was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the combination period, the proceeds from the sale of the Private Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Units will be worthless.
The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until after the completion of an Initial Business Combination, subject to certain exceptions.
F-12
Note 5 — Related Party Transactions
Class B Common Stock
During the period ended December 31, 2022, the Sponsor purchased
Promissory Note — Related Party
On April 22, 2021, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $
Related Party Loans
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 (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $
Administrative Support Agreement
Commencing on the date the Units are first listed on the Nasdaq, the Company has agreed to pay the Sponsor a total of $
Extension Deposit
On November 8, 2022, the Company caused to be deposited $
F-13
Note 6 — Commitments and Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Units and warrants that may be issued upon conversion of Working Capital Loans (and any shares of ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A ordinary shares). The holders of these securities will be entitled to make up to
Underwriters Agreement
The Company granted the underwriters a
The underwriters were entitled to a cash underwriting discount of $
On November 8, 2021, the underwriters purchased an additional
Right of First Refusal
For a period beginning on the closing of this offering and ending 12 months from the closing of a business combination (or up to 18 months from the closing of this offering at the election of the Company in two separate three month extensions subject to satisfaction of certain conditions, including the deposit of up to $
Note 7 — Stockholders’ Equity
Preferred Shares— The Company is authorized to issue
Class A Common Stock— The Company is authorized to issue
F-14
Note 7 — Stockholders’ Equity (Continued)
Class B Common Stock— The Company is authorized to issue
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our stockholders except as otherwise required by law. In connection with our initial business combination, we may enter into a stockholders agreement or other arrangements with the stockholders of the target or other investors to provide for voting or other corporate governance arrangements that differ from those in effect upon completion of this offering.
The shares of Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B ordinary shares shall convert into shares of Class A ordinary shares will be adjusted (unless the holders of a majority of the then-outstanding shares of Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A ordinary shares issuable upon conversion of all shares of Class B ordinary shares will equal, in the aggregate, on an as-converted basis,
Warrants— Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a)
The Company will not be obligated to deliver any shares of Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A ordinary shares is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.
The Company has agreed that as soon as practicable, but in no event later than
F-15
Note 7 — Stockholders’ Equity (Continued)
Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon a minimum of |
| ● | if, and only if, the last reported sale price of the Class A Common Stock equals or exceeds $ |
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. 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 Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering.
Note 8 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date. Based upon this review the Company did not identify any subsequent events, except as noted below, that would have required adjustment or disclosure in the financial statements.
On February 8, 2023, the Company caused to be deposited $
On April 4, 2023, Liberty Fields, LLC and Garry Richard Stein entered into a Share Purchase Agreement by which Liberty Fields, LLC transferred
On April 4, 2023, Liberty Fields, LLC and Dato’ Maznah Binti Abdul Jalil entered into a Share Purchase Agreement by which Liberty Fields, LLC transferred
On April 4, 2023, Liberty Fields, LLC and Dato’ Khalid Ahmad entered into a Share Purchase Agreement by which Liberty Fields, LLC transferred
F-16
Note 8 — Subsequent Events (Continued)
In a special meeting held on April 18, 2023, (“Extension Special Meeting”) shareholders approved the First Amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Charter Amendment”), changing the structure and cost of our right to extend the date (the “Termination Date”) by which we must either (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “business combination”), or else (ii)(a) cease all operations except for the purpose of winding up, (b) as promptly as reasonably possible but not more than ten business days thereafter, redeem the shares of Common Stock, 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 (less up to $
The Charter Amendment allowed us to extend the Termination Date by up to nine (9) one-month extensions to February 8, 2024 (each of which we refer to as an “Extension”, and such later date, the “Extended Deadline”). To obtain each 1-month extension, our sponsor or any of their affiliates or designees must deposit into our Trust Account the lesser of (x) $
On May 3, 2023, the Company deposited $
F-17
EXHIBIT INDEX
29
* | Filed herewith. |
** | Furnished herewith. |
| (1) | Incorporated by reference to the Company’s Form S-1, filed with the SEC on September 3, 2021. |
| (2) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on November 9, 2021. |
| (3) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on August 10, 2022. |
| (4) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on September 26, 2022. |
| (5) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on October 26, 2022. |
| (6) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on November 25, 2022. |
| (7) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on December 22, 2022. |
| (8) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on December 30, 2022. |
| (9) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on April 28, 2023. |
| (10) | Incorporated by reference to the Company’s Form S-1, filed with the SEC on October 5, 2021. |
| (11) | Incorporated by reference to the Company’s 10-K filed with the SEC on March 31, 2022. |
30
SIGNATURES
Pursuant to the requirements of the Section 13 or 15 or 15(d) 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 the 8th day of June, 2023.
| LIBERTY RESOURCES ACQUISITION CORP. | |
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| By: | /s/ Dato’ Maznah Binti Abdul Jalil |
|
| Dato’ Maznah Binti Abdul Jalil |
|
| Chief Executive Officer |
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name |
| Position |
| Date |
|
|
|
|
|
/s/ Dato’ Maznah Binti Abdul Jalil |
| Chief Executive Officer |
| June 8, 2023 |
Dato’ Maznah Binti Abdul Jalil |
| (Principal Executive Officer) |
|
|
|
|
|
|
|
/s/ Dato’ Khalid Ahmad |
| Chief Financial Officer |
| June 8, 2023 |
Dato’ Khalid Ahmad |
| (Principal Financial Officer) |
|
|
/s/ Garry Richard Stein | Independent Director | June 8, 2023 | ||
Garry Richard Stein | ||||
/s/ Dato’ Sri Chee Hong Leong | Independent Director | June 8, 2023 | ||
Dato’ Sri Chee Hong Leong | ||||
/s/ Mohammad Faizal Bin Abd Jabbar | Independent Director | June 8, 2023 | ||
Mohammad Faizal Bin Abd Jabbar | ||||
/s/ Mohamed Zahed Bin Hashim | Independent Director | June 8, 2023 | ||
Mohamed Zahed Bin Hashim |
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