References to the "Company," "Goldenstone" "our," "us" or "we" refer to
Goldenstone Acquisition Limited. The following discussion and analysis of the
Company's financial condition and results of operations should be read in
conjunction with the unaudited interim 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.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K 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 Securities and
Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated on September 9, 2020 as a Delaware
corporation and formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses.
On March 21, 2022, we consummated our IPO of 5,750,000 units at $10.00 per unit
(the "Units"). The units sold included the full exercise of the underwriters'
over-allotment. Each Unit consists of one share of our common stock (the "Public
Shares"), one redeemable warrant to purchase one-half of one share of our common
stock at a price of $11.50 per whole share and one right. Each right entitles
the holder thereof to receive one-tenth (1/10) of one share of our common stock
upon the consummation of the Business Combination.
Simultaneously with the closing of the IPO and the over-allotment, we
consummated the issuance of 351,250 private placement units (the "Private
Placement Units") for aggregate cash proceeds of $3,512,500. Each Private
Placement Unit consists of one share of our common stock, one redeemable warrant
to purchase one-half of one share of our common stock at a price of $11.50 per
whole share and one right. Each right entitles the holder thereof to receive
one-tenth (1/10) of one share of our common stock upon the consummation of our
Business Combination. Our management has broad discretion with respect to the
specific application of the net proceeds of the IPO and the Private Placement
Units, although substantially all of the net proceeds are intended to be
generally applied toward consummating our Business Combination.
Upon the closing of the initial public offering on March 21, 2022, a total of
$58,362,500 of the net proceeds from the IPO, the Over-Allotment and the Private
Placement were deposited in a trust account established for the benefit of our
public stockholders.
If we have not completed our initial business combination within 12 months
(unless extended), 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 (which interest shall be net of taxes payable, and
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 stockholders' rights as stockholders (including the right to
receive further liquidation distributions, if any), subject to applicable law,
and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors,
dissolve and liquidate, subject in each case to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable
law.
We cannot assure you that our plans to complete our initial business combination
will be successful.
Results of Operations
Our entire activity since inception up to June 30, 2022 was in connection with
our initial public offering and our search for a target for our initial business
combination. We will not generate any operating revenues until the closing and
completion of our initial business combination, at the earliest.
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For the three months ended June 30, 2022, we incurred a net loss of $247,329,
which consisted of formation and operating costs of $326,786 and franchise tax
expense of $2,000, partially offset by interest income on the trust account of
$81,457.
For the three months ended June 30, 2021, we incurred a net loss of $14,654
which was all attributable to formation and operating costs.
Liquidity and Capital Resources
As of June 30, 2022, we had $615,787 in cash in our operating account as
compared to cash of $959,964 at March 31, 2022 and working capital of $621,081
as compared to working capital of $949,866 at March 31, 2022. The decrease in
liquidity is attributable to net cash used in operating activities of $344,177.
Prior the completion of the IPO, our liquidity needs had been satisfied through
a capital contribution from the Sponsors of $25,874 for common stock and from
loans from a Sponsor and related parties in order to pay offering costs. In
addition, in order to finance transaction costs in connection with a business
combination, our sponsors or an affiliate of our sponsors or certain of our
officers and directors may, but are not obligated to, provide us working capital
loans. As of June 30, 2022, there was no amounts outstanding under any Working
Capital, Sponsors or related party loans.
Based on the foregoing, 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 this filing. Over this
time period, we will be using these funds for paying existing accounts payable,
identifying and evaluating prospective initial business combination candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the business combination.
Critical Accounting Policies and Estimates
The preparation of these financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates. We have identified the following as our critical accounting policies:
Common Stock Subject to Redemption
We account for our common stock subject to possible redemption in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Common stock subject to mandatory
redemption is classified as a liability instrument and is measured at fair
value. Conditionally redeemable common stock (including common stock 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,
common stock is classified as stockholders' equity. Our common stock features
certain redemption rights that are considered to be outside of our control and
subject to occurrence of uncertain future events. Accordingly, common stock
subject to possible redemption is presented at redemption value as temporary
equity, outside of the stockholders' equity section of our balance sheet.
We have made a policy election in accordance with ASC 480-10-S99-3A and
recognizes changes in redemption value in additional paid-in capital (or
accumulated deficit in the absence of additional paid-in capital) over an
expected 12-month period leading up to a Business Combination.
Deferred Offering Costs
We comply with the requirements of FASB ASC Topic 340-10-S99-1, "Other Assets
and Deferred Costs - SEC Materials" ("ASC 340-10-S99") and SEC Staff Accounting
Bulletin Topic 5A, "Expenses of Offering". Offering costs were $4,331,021
consisting principally of underwriting, legal, accounting and other expenses
that are directly related to the IPO and charged to stockholders' equity upon
the completion of the IPO.
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Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2020-06, Debt - "Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in
Entity's Own Equity" (Subtopic 815-40) ("ASU 2020-06") to simplify accounting
for certain financial instruments. ASU 2020-06 eliminates the current models
that require separation of beneficial conversion and cash conversion features
from convertible instruments and simplifies the derivative scope exception
guidance pertaining to equity classification of contracts in an entity's own
equity. The new standard also introduces additional disclosures for convertible
debt and freestanding instruments that are indexed to and settled in an entity's
own equity. ASU 2020-06 amends the diluted earnings per share guidance,
including the requirement to use the if-converted method for all convertible
instruments. ASU 2020-06 is effective April 1, 2022 and should be applied on a
full or modified retrospective basis, with early adoption permitted beginning on
April 1, 2021. The Company adopted ASU 2020-06 as of April 1, 2022.
Management does not believe that any other recently issued, but not yet
effective, accounting pronouncements, if currently adopted, would have a
material effect on the Company's financial statements.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations
Registration Rights
Pursuant to a registration rights agreement entered into on March 17, 2022, the
holders of the founder shares, the private placement units and private placement
units that may be issued upon conversion of working capital loans will be
entitled to registration rights pursuant to a registration rights agreement to
be signed prior to or on the closing date of this offering requiring us to
register such securities for resale. The holders of these securities are
entitled to make up to three demands, excluding short form demands, that we
register such securities. In addition, the holders have certain "piggy-back"
registration rights with respect to registration statements filed subsequent to
the completion of our initial business combination. We will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriters Agreement
We granted the underwriters a 45-day option from the date of the initial public
offering to purchase up to an additional 750,000 units to cover over-allotments,
if any at the initial public offering price less the underwriting discounts and
commissions. This option was fully exercised at the time of the IPO.
The underwriters received a cash underwriting discount of 2% of the gross
proceeds of the IPO, or $1,150,000, upon closing of the IPO. In addition the
underwriters are entitled to a deferred underwriting discount of 3.5% of the
gross proceeds of the sale of Units in the IPO, or $2,012,500, which is
currently held in the trust account and would be payable upon the completion of
the initial Business Combination subject to the terms of the underwriting
agreement.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
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