References to the "Company," "our," "us" or "we" refer to Levere Holdings Corp.
The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the unaudited condensed
financial statements and the notes thereto contained elsewhere in this report.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on January 15, 2021, for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses, or the Business Combination. Our
sponsor is Goggo Network Gmbh, a German company limited by shares, or our
Sponsor.
The registration statement for our initial public offering, or IPO, was declared
effective on March 18, 2021. On March 23, 2021, we consummated the IPO of
25,000,000 Units (as defined below), at $10.00 per Unit, generating gross
proceeds of $250.0 million. The Company granted the Underwriters in the IPO, or
the Underwriters,
a 45-day option
to purchase up to 3,750,000 additional Units to cover over-allotments, if any.
On March 31, 2021, the Underwriters partially exercised the over-allotment
option and purchased an additional 2,128,532 Units, generating an aggregate of
gross proceeds of approximately $21.3 million. Each Unit consists of one Class A
ordinary share,
and one-third of
one redeemable warrant to purchase one Class A ordinary share, or a Public
Warrant, at a price of $11.50 per whole share, or the "Units" and, with respect
to the Class A ordinary shares included in the Units sold, the Public Shares. We
incurred transaction costs for the IPO and over-allotment of approximately
$15.7 million, inclusive of approximately $9.5 million in deferred underwriting
commissions.
Simultaneously with the closing of the IPO, we consummated the private placement
of 4,666,667 warrants at a price of $1.50 per warrant, or the Private Placement
Warrants, and together with the Public Warrants, the Warrants, to the Sponsor,
generating gross proceeds of $7.0 million, or the IPO Private Placement.
Simultaneously with the closing of the exercise of the overallotment option, we
completed the sale of an aggregate of an additional 283,804 Private Placement
Warrants to the Sponsor, at a purchase price of $1.50 per Private Placement
Warrant, generating gross proceeds of approximately $0.4 million, or the
Over-Allotment Private Placement and together with the IPO Private Placement,
the Private Placements.
Upon the closing of the IPO and exercise of the over-allotment option, and the
simultaneous Private Placements, approximately $271.3 million ($10.00 per Unit)
of the net proceeds were placed in a trust account, or Trust Account, located in
the United States with Continental Stock Transfer & Trust Company acting as
trustee, and invested only in U.S. "government securities," within the meaning
of Section 2(a)(16) of the Investment Company Act of 1940, as amended, or the
Investment Company Act, having a maturity of 185 days or less or in money market
funds meeting certain conditions
under Rule 2a-7 promulgated
under the Investment Company Act, which invest only in direct U.S. government
treasury obligations, as determined by us, until the earlier of: (i) the
completion of a Business Combination and (ii) the distribution of the Trust
Account as described below.
If we have not completed a Business Combination within 24 months from the
closing of the IPO, we will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the Public Shares, at
a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest earned on the funds held in the Trust Account and
not previously released to us to pay its taxes (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding Public
Shares, which redemption will completely extinguish stockholders' rights as
stockholders (including the right to receive further liquidating distributions,
if any), and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and our board of
directors, liquidate and dissolve, subject in each case to our obligations under
Delaware law to provide for claims of creditors and the requirements of other
applicable law.
Warrant Accounting
On April 12, 2021, the staff of the Securities and Exchange Commission, or the
SEC, released the "Staff Statement on Accounting and Reporting Considerations
for Warrants Issued by Special Purpose Acquisition Companies", or the Staff
Statement. The Staff Statement addresses certain accounting and reporting
considerations related to warrants of a kind similar to those issued by the
Company at the time of its IPO in March 2021.
The Warrants were classified as equity in our previously issued audited balance
sheet as of March 23, 2021. In light of the Staff Statement and guidance in
Accounting Standards Codification, or
ASC, 815-40, "Derivatives
and Hedging - Contracts in Entity's Own Equity", or
ASC 815-40, in
particular as applicable to certain provisions in the Warrants related to tender
or exchange offer provisions as well as provisions that provided for potential
changes to the settlement amounts dependent upon the characteristics of the
holder of the warrant, we evaluated the terms of the warrant agreement entered
into in connection with our IPO and concluded that our Warrants include
provisions that, based on
ASC 815-40, preclude
the Warrants from being classified as components of equity. The Warrants are not
eligible for an exception from derivative accounting, and therefore should be
classified as a liability measured at fair value, with changes in fair value
reported each period in earnings.

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Results of Operations
For the period from January 15, 2021 to June 30, 2021, we had a net income of
approximately $0.6 million, which included a loss from operations of
$0.2 million, offering cost expense allocated to warrants of $0.6 million, and a
gain from the change in fair value of warrant liabilities of $1.5 million. Our
business activities from inception to June 30, 2021 consisted primarily of our
formation and completing our IPO and, since the completion of our IPO, our
activity has been limited to identifying and evaluating prospective acquisition
targets for a Business Combination.
Liquidity and Capital Resources
As of June 30, 2021, we had approximately $0.6 million in our operating bank
account, and working capital of approximately $0.8 million.
Our liquidity needs up to March 23, 2021 had been satisfied through (i) a
capital contribution from our Sponsor of $25,000 for the 7,187,500 Class B
ordinary shares, par value $0.0001 per share, or the Founder Shares, and
(ii) proceeds from the loan under an unsecured promissory note from our Sponsor
of up to $300,000. Subsequent to the consummation of our IPO, our liquidity
needs have been satisfied through the net proceeds from the Private Placements
not held in the Trust Account. In addition, in order to finance transaction
costs in connection with a Business Combination, our Sponsor or an affiliate of
our Sponsor, or certain of our officers and directors may, but are not obligated
to, provide us working capital loans. As of June 30, 2021, there were no amounts
outstanding under any working capital loan.
Based on the foregoing, our management believes that we will have sufficient
working capital and borrowing capacity to meet our needs through the earlier of
the consummation of a Business Combination or one year from the date of this
filing. During this time period, we will use the funds held outside of the Trust
Account to pay existing accounts payable, identify and evaluating prospective
initial Business Combination candidates, perform due diligence on prospective
initial Business Combination candidates, pay for travel expenditures, and
structure, negotiate and consummate the initial Business Combination.
Contractual Obligations
As of June 30, 2021 we do not have any long-term debt obligations, capital lease
obligations, operating lease obligations, purchase obligations or long-term
liabilities.
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results
of operations is based on our unaudited condensed financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these
unaudited condensed financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses and the disclosure of contingent assets and liabilities in our
unaudited condensed financial statements. On an ongoing basis, we evaluate our
estimates and judgments, including those related to fair value of financial
instruments and accrued expenses. We base our estimates on historical
experience, known trends and events and various other factors that we believe to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
Warrants Liability
We evaluated the Warrants in accordance with
ASC 815-40 and
concluded that a provision in the Warrant Agreement related to certain tender or
exchange offers as well as provisions that provided for potential changes to the
settlement amounts dependent upon the characteristics of the holder of the
warrant, precludes the Warrants from being accounted for as components of
equity. As the Warrants meet the definition of a derivative as contemplated in
ASC 815-40 and
are not eligible for an exception from derivative accounting, the Warrants are
recorded as derivative liabilities on our Balance Sheet and measured at fair
value at inception (on the date of the IPO) and at each reporting date in
accordance with ASC 820, "Fair Value Measurement", with changes in fair value
recognized in our Statement of Operations in the period of change.
Offering Costs Associated with the Initial Public Offering
We comply with the requirements of the
ASC 340-10-S99-1, "Other
Assets and Deferred Costs." Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred through the IPO that were directly
related to the IPO. Offering costs are allocated to the separable financial
instruments issued in the IPO based on a relative fair value basis, compared to
total proceeds received. Offering costs associated with Warrant liabilities are
expensed as incurred, presented
as non-operating expenses
in our Statement of Operations. Offering costs associated with the Class A
ordinary shares were charged to shareholders' equity upon the completion of the
IPO. Transaction costs of the IPO, including the partial exercise of the
over-allotment, amounted to $15,722,172, of which $618,405 were allocated to
expense associated with the Warrant liability.

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Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in
accordance with the guidance in ASC 480 "Distinguishing Liabilities from
Equity." Ordinary shares subject to mandatory redemption is classified as a
liability instrument and is measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares that feature redemption rights that
is either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within the Company's control) is
classified as temporary equity. At all other times, ordinary shares are
classified as shareholders' equity. The Company's ordinary shares feature
certain redemption rights that are considered to be outside of the Company's
control and subject to occurrence of uncertain future events. Accordingly,
ordinary shares subject to possible redemption is presented at redemption value
as temporary equity, outside of the shareholders' equity section of the
Company's condensed balance sheets.
Net Loss Per Share
Net loss per share is computed by dividing net loss by the weighted average
number of ordinary shares outstanding during the period. The Company applies
the two-class method
in calculating earnings per share. Ordinary shares subject to possible
redemption at June 30, 2021, which are not currently redeemable and are not
redeemable at fair value, have been excluded from the calculation of basic net
loss per ordinary share since such shares, if redeemed, only participate in
their pro rata share of the Trust Account earnings.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying unaudited condensed financial statements.
Off-Balance Sheet Arrangements
As of June 30, 2021,
we did not have any off-balance sheet arrangements as defined in
Item 303(a)(4)(ii) of
Regulation S-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by
Rule 12b-2 of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are
not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial and accounting officer,
we conducted an evaluation of the effectiveness of our disclosure controls and
procedures as of the end of the fiscal quarter ended June 30, 2021, as such term
is defined in
Rules 13a-15(e) and 15d-15(e) under
the Exchange Act. Based on this evaluation, and in light of the material
weakness in internal controls described below, our chief executive officer and
chief financial officer have concluded that during the period covered by this
report, our disclosure controls and procedures were not effective.
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal
financial officer or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
Our internal control over financial reporting did not result in the proper
accounting classification of certain of the Warrants we issued in March 2021
which, due to its impact on our financial statements, we determined to be a
material weakness. This mistake in classification was brought to our attention
only when the SEC issued the Staff Statement. The Staff Statement addresses
certain accounting and reporting considerations related to warrants of a kind
similar to those we issued at the time of our IPO in March 2021. In light of
this material weakness, we performed additional analysis as deemed necessary to
ensure that our financial statements were prepared in accordance with U.S.
generally accepted accounting principles. Accordingly, management believes that
the financial statements included in this Quarterly Report on Form 10-Q present
fairly in all material respects our financial position, results of operations
and cash flows for the period presented.
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 quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting,
other than as described herein.
As noted above, our internal control over financial reporting did not result in
the proper accounting classification of certain of the Warrants we issued in
March 2021 which, due to its impact on our financial statements, we determined
to be a material weakness.
To respond to this material weakness, we have devoted, and plan to continue to
devote, significant effort and resources to the remediation and improvement of
our internal control over financial reporting. While we have processes to
identify and appropriately apply applicable accounting requirements, we plan to
enhance our system of evaluating and implementing the complex accounting
standards that apply to our financial statements. Our plans at this time include
providing enhanced access to accounting literature, research materials and
documents and increased communication among our personnel and third-party
professionals with whom we consult regarding complex accounting applications.
The elements of our remediation plan can only be accomplished over time, and we
can offer no assurance that these initiatives will ultimately have the intended
effects.

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