Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations.
References to we, us, our or the Company are to Leo
Holdings Corp., except where the context requires otherwise. The following discussion should be read in conjunction with our condensed interim financial statements and related notes thereto included elsewhere in this report.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly
Report on Form 10-Q includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as
may, should, could, would, expect, plan, anticipate, believe, estimate, continue, or the negative of such terms or other similar
expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.
Overview
We are a blank check company
incorporated on November 29, 2017 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
Although we are not limited to a particular industry or sector for purposes of consummating a Business Combination, we focus our search on companies in the consumer sector. Our Sponsor is Leo Investors Limited Partnership, a Cayman Island exempted
limited partnership.
We consummated our Initial Public Offering on February 15, 2018. If we are unable to complete a Business
Combination within 24 months from the closing of the Initial Public Offering, or the Combination Period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
ten business days thereafter, redeem the public shares, at
a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the
funds held in the Trust Account and not previously released to us to pay its income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely
extinguish public shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the companys remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other
applicable law.
On April 7, 2019, we entered into a Business Combination Agreement (the Transaction Agreement), by and
among Queso Holdings Inc., a Delaware corporation (Queso), AP VIII CEC Holdings, L.P., a Delaware limited partnership (the Seller), pursuant to which we will acquire Queso. On July 29, 2019, the parties jointly
determined to terminate the Transaction Agreement.
Results of Operations
All activity from inception through June 30, 2019 was in preparation for our Initial Public Offering, and since the closing of the
offering, our activity has been limited to the search for a prospective initial business combination, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We have incurred
increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2019, we had net loss of approximately $1.4 million, which consisted of approximately
$2.5 million in general and administrative costs (of which approximately $748,000 was for merger expenses), offset by approximately $1.1 million in interest income.
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