Business Context and Reporting Period
This Form 8-K was filed by Leo Holdings III Corp. on March 2, 2021. Although the request identifies Local Bounti Corporation, the filing is for Leo Holdings III Corp., a Cayman Islands special purpose acquisition company (SPAC), and does not mention Local Bounti.
The filing reports the consummation of Leo Holdings III Corp.’s initial public offering (IPO), related private placement, trust-account arrangements, governance agreements, and amended organizational documents.
Key Financial Metrics and Capitalization
- The company sold 27,500,000 units at $10.00 per unit, generating gross IPO proceeds of $275.0 million.
- Each unit included one Class A ordinary share and one-fifth of a redeemable warrant.
- Each whole public warrant is exercisable for one Class A ordinary share at $11.50 per share, subject to the warrant agreement.
- The sponsor purchased 5,333,333 private placement warrants at $1.50 per warrant, generating approximately $8.0 million of proceeds.
- Net proceeds from the IPO and specified private placement proceeds are to be held in a trust account.
- The filing does not provide revenue, profit, cash flow, margins, debt, total liquidity after offering expenses, or other operating financial metrics.
Material Changes Versus the Prior Comparable Period
The filing text does not provide comparative financial statements or a prior-period operating comparison. The material changes reported are the completion of the IPO and private placement, establishment of the trust account, and adoption or execution of related agreements and amended organizational documents.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- The company is a SPAC and had not reported an operating business or revenue in this filing.
- The company is required to pursue an initial business combination. The letter agreement provides for liquidation and winding up if a business combination is not consummated within 24 months.
- The sponsor and the company’s officers and directors agreed to vote their Class A ordinary shares in favor of the initial business combination, subject to the agreement’s terms.
- The company agreed not to enter into a definitive business-combination agreement without the sponsor’s prior consent.
- The sponsor will provide office space and administrative services for $10,000 per month until the earlier of the initial business combination or liquidation.
- Private placement warrants generally have different redemption, exercise, and transfer provisions from public warrants, including potential cashless exercise and transfer restrictions.
- The filing does not provide guidance regarding revenue, earnings, cash flow, or a specific acquisition target.
Investor Verification Items
- Verify that this filing belongs to Leo Holdings III Corp., not Local Bounti Corporation.
- Review the trust-account terms and determine the net amount deposited after underwriting discounts and offering expenses.
- Confirm the deadline and conditions applicable to completion of the initial business combination and any related redemption rights.
- Review the public and private placement warrant terms, including exercise price, redemption provisions, adjustment features, and transfer restrictions.
- Assess the sponsor’s conflicts, consent rights, voting commitments, registration rights, and potential dilution from the warrants.
- Review the $10,000 monthly administrative-services fee and the amended memorandum and articles of association.