References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Gesher I Acquisition Corp. References to our "management" or
our "management team" refer to our officers and directors. The following
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Quarterly Report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act")
and Section 21E of the Exchange Act that are not historical facts, and involve
risks and uncertainties that could cause actual results to differ materially
from those expected and projected. All statements, other than statements of
historical fact included in this Form 10-Q including, without limitation,
statements in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations" regarding the Company's financial position, business
strategy and the plans and objectives of management for future operations, are
forward-looking statements. Words such as "expect," "believe," "anticipate,"
"intend," "estimate," "seek" and variations and similar words and expressions
are intended to identify such forward-looking statements. Such forward-looking
statements relate to future events or future performance, but reflect
management's current beliefs, based on information currently available. A number
of factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in the
forward-looking statements. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the
forward-looking statements, please refer to the Risk Factors section of the
Company's final prospectus for its Initial Public Offering filed with the U.S.
Securities and Exchange Commission (the "SEC"). The Company's securities filings
can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except
as expressly required by applicable securities law, the Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
Overview
We are a blank check company formed under the laws of the Cayman Islands on
February 23, 2021. We were formed for the purpose of entering into a merger,
share exchange, asset acquisition, stock purchase, recapitalization,
reorganization or other similar business combination with one or more businesses
or entities, which we refer to as a "target business." Our efforts to identify a
prospective target business will not be limited to a particular industry or
geographic location, although we intend to focus our search for target
businesses in the cannabis industry. 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
As of March 31, 2022, we have neither engaged in any operations nor generated
any revenues. All activity for the period from February 23, 2021 (inception)
through March 31, 2022 relates to our formation and the initial public offering.
We will not generate any operating revenues until after the completion of our
initial business combination, at the earliest. We 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.
For the three months ended March 31, 2022, we had a net loss of $697,217, which
was resulted from formation and operating costs amounting to $707,476, partially
offset by the interest income amounting to $10,259.
For the six months ended March 31, 2022, we had a net loss of $866,781, which
was resulted from formation and operating costs amounting to $924,052, partially
offset by the interest income amounting to $12,721 and change in fair value of
over-allotment amounting to $44,550.
For the period from February 23, 2021 (inception) through March 31, 2021, we had
a net loss of $6,827, which was resulted from formation and operating costs.
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Liquidity and Going Concern
As of March 31, 2022, we had $322,960 in cash and working capital deficit of
$32,366.
Prior to the completion of the Initial Public Offering, our liquidity needs had
been satisfied through a payment from the sponsor of $25,000 for the founder
shares to cover certain offering costs, and the loan under an unsecured
promissory note from the sponsor of $182,127. The promissory note was paid in
full on October 18, 2021. Subsequent to the consummation of the initial public
offering and private placement, our liquidity needs have been satisfied through
the proceeds from the consummation of the private placement not held in the
trust account.
On March 15, 2022, the company entered into a promissory note agreement with the
Sponsor in the amount of $450,000. The promissory note would either be repaid
upon consummation of a Business Combination, without interest, or, at the
lender's discretion, convertible into warrants of the post-Business Combination
entity at a price of $1.00 per warrant. The warrants would be identical to the
Private Placement Warrants. The conversion feature was analyzed under ASC
470-20, "Debt with Conversion or Other Options", the note did not include any
premium or discounts. The conversion option did not include elements that would
require bifurcation under ASC 815-40, "Derivatives and Hedging."
On March 18, 2022, the company entered into a promissory note agreement with the
Sponsor in the amount of up to $64,945 for expenses paid by the Sponsor on
behalf of the Company. As of March 31, 2022, the expenses paid by Sponsor on
behalf of the Company totaled $53,609. The promissory note would either be
repaid upon consummation of a Business Combination, without interest, or, at the
lender's discretion, convertible into warrants of the post-Business Combination
entity at a price of $1.00 per warrant. The warrants would be identical to the
Private Placement Warrants. The conversion feature was analyzed under ASC
470-20, "Debt with Conversion or Other Options", the note did not include any
premium or discounts. The conversion option did not include elements that would
require bifurcation under ASC 815-40, "Derivatives and Hedging."
As of March 31, 2022 and September 30, 2021, the Company had $503,609 and $0
borrowings under the Working Capital Loans.
In addition, in order to finance transaction costs in connection with a business
combination, the sponsor, initial shareholders, officers, directors or their
affiliates may, but are not obligated to, provide us working capital loans. As
of March 31, 2022, there were no amounts outstanding under any Working Capital
Loans.
In connection with the Company's assessment of going concern considerations in
accordance with Financial Accounting Standards Board's Accounting Standards
Codification Topic 205-40, "Presentation of Financial Statements - Going
Concern," the Company has until April 14, 2023, to consummate an initial
business combination. It is uncertain that the Company will be able to
consummate an initial business combination by this time. If an initial business
combination is not consummated by this date, there will be a mandatory
liquidation and subsequent dissolution of the Company. Management has determined
that the liquidity condition and the mandatory liquidation, should an initial
business combination not occur, and potential subsequent dissolution raises
substantial doubt about the Company's ability to continue as a going concern. No
adjustments have been made to the carrying amounts of assets or liabilities
should the Company be required to liquidate after April 14, 2023.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of March 31, 2022.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities.
Critical Accounting Policies
Net Loss Per Ordinary Share
We have two categories of shares, which are referred to as redeemable ordinary
shares and non-redeemable ordinary shares. Earnings and losses are shared pro
rata between the two categories of shares.
Ordinary Shares Subject to Possible Redemption
All of the 11,500,000 ordinary shares sold as part of the units contain a
redemption feature which allows for the redemption of such public shares in
connection with our liquidation, if there is a shareholder vote or tender offer
in connection with the business combination and in connection with certain
amendments to the our amended and restated memorandum and articles of
association. In accordance with ASC 480-10-S99, redemption provisions not solely
within the control of us require ordinary shares subject to redemption to be
classified outside of permanent equity. Therefore, all 11,500,000 ordinary
shares were classified outside of permanent equity as of March 31, 2022.
We recognized changes in redemption value immediately as they occur upon the IPO
and will adjust the carrying value of redeemable ordinary shares to equal the
redemption value at the end of each reporting period. Increases or decreases in
the carrying amount of redeemable ordinary shares are affected by charges
against additional paid in capital and accumulated deficit.
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