SEC Filing Summary: Leisure Acquisition Corp. (LACQ)
Business Context and Reporting Period
This Form 8-K, dated November 30, 2020, reports material events for Leisure Acquisition Corp., a Special Purpose Acquisition Company (SPAC). The filing addresses the extension of the company's deadline to consummate a business combination, which was originally set for December 1, 2020. Stockholders approved the extension on November 24, 2020, moving the deadline to June 30, 2021.
Key Financial Metrics and Liquidity
- Trust Account Balance: Approximately $12.8 million remains in the Trust Account following shareholder redemptions.
- Redemptions: Holders of 38,015 shares redeemed their shares for an aggregate amount of approximately $0.4 million.
- Deferred Underwriting Fee: Underwriters waived $250,000 of the deferred fee. The remaining deferred discount is $6,750,000.
- Working Capital Financing: The company increased the maximum aggregate amount of advances available under its Expense Advancement Agreement to $1,300,000 (from $1,200,000). A specific tranche of promissory notes (A&R Promissory Notes) covers a maximum of $300,000, with an initial drawdown of $75,000.
- Debt Terms: The A&R Promissory Notes bear no interest and are convertible into warrants at $1.00 per warrant at the option of the funding parties.
Material Changes and Corporate Actions
- Extension of Combination Deadline: The company extended the date to complete a business combination from December 1, 2020, to June 30, 2021.
- Amendments to Agreements: The Investment Management Trust Agreement and Expense Advancement Agreement were amended to reflect the extension and increased funding capacity.
- Shareholder Vote Results:
- Extension Proposal: 5,830,720 votes FOR; 900 AGAINST; 10 ABSTAIN.
- Trust Amendment Proposal: 5,830,720 votes FOR; 900 AGAINST; 10 ABSTAIN.
- Director Elections: A. Lorne Weil and Daniel B. Silvers were elected with overwhelming support.
- Auditor Ratification: Marcum LLP was ratified with 5,958,505 votes FOR.
Outlook, Risks, and Contingencies
- Nasdaq Delisting Risk: The company received a notice from Nasdaq stating it was not in compliance with Listing Rule IM-5101-2 (failure to complete a business combination within 36 months) and Rule 5550(a)(4) (minimum publicly held shares requirement of 500,000).
- Delisting Hearing: The company intends to request a hearing before an independent Hearings Panel to stay any suspension or delisting action. There is no assurance the hearing will be successful.
- Future Equity Dilution: If the full $300,000 of the A&R Promissory Notes is drawn and converted, 300,000 private placement warrants will be issued.
Investor Verification Checklist
- Verify the outcome of the Nasdaq hearing regarding the delisting notice.
- Confirm the exact cash balance in the Trust Account post-redemption ($12.8 million stated).
- Monitor the utilization of the $300,000 A&R Promissory Notes and potential warrant conversion.
- Review the status of the search for a target business combination given the new June 30, 2021 deadline.