References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Goldenbridge Acquisition Limited. References to our
"management" or our "management team" refer to our officers and directors,
references to the "Sponsor" refer to Cross Wealth Investment Holding Limited.
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 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 in our annual report on Form 10-K for the fiscal year ended June
30, 2022 filed with the SEC on September 30, 2022. 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.
Recent Development
On August 25, 2022, Goldenbridge issued one unsecured promissory note in an
amount of $575,000, to Auto Services Group Limited, a Cayman Islands exempted
company ("SunCar"), in exchange for SunCar depositing such amount into
Goldenbridge trust account in order to extend the amount of time it has
available to complete a business combination for an additional three (3) months
period, from September 4, 2022 to December 4, 2022. The note does not bear
interest and mature upon closing of a business combination by Goldenbridge. In
addition, the note may be converted by the holder into units of Goldenbridge
identical to the units issued in Goldenbridge's initial public offering at a
price of $10.00 per unit.
Overview
We are a blank check company incorporated in the British Virgin Islands on
August 12, 2019 and formed for the purpose of entering into a merger, share
exchange, asset acquisition, share purchase, recapitalization, reorganization or
similar business combination with one or more businesses or entities. We intend
to effectuate our initial business combination using cash from the proceeds of
the initial public offering and the sale of the Private Units, our capital
stock, debt or a combination of cash, stock and debt.
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We presently have no revenue, have had losses since inception from incurring
formation costs and have had no operations other than the active solicitation of
a target business with which to complete a business combination. We have relied
upon the sale of our securities and loans from our officers and directors to
fund our operations.
On March 4, 2021, the Company consummated its initial public offering of
5,000,000 Unit. Subsequently, on March 9, 2021, the underwriters exercised the
option in full of 750,000 units, which was consummated on March 11, 2021. Each
Public Unit consists of one ordinary share of the Company, no par value per
share (the "Public Shares"), one right (the "Public Rights") and one redeemable
warrant (the "Public Warrants"). Each Public Right entitles the holder to
receive one-tenth (1/10) of an ordinary share upon consummation of an initial
Business Combination. Each Public Warrant entitles the holder to purchase
one-half (1/2) of one ordinary share, and each ten rights entitle the holder
thereof to receive one ordinary share at the closing of a business combination.
The Units were sold at an offering price of $10.00 per Unit, generating gross
proceeds of $5,750,000. Simultaneously with the closing of the initial business
combination, the Company consummated a private placement of 350,000 units at a
price of $10.00 per Private Unit, generating total proceeds of $3,500,000 (the
"Private Placement"). A total of $57,500,000 of the net proceeds from the sale
of Public Units in the initial business combination (including the
over-allotment option units) and the Private Placement were placed in a trust
account established for the benefit of the Company's public shareholders. The
Company incurred $1,837,194 in initial public offering related costs, including
$1,437,500 of underwriting fees and $399,694 of initial public offering costs.
We will not issue fractional shares. As a result, one must (1) exercise warrants
in multiples of two warrants, at a price of $11.50 per full share, to validly
exercise the warrants; and (2) hold rights in multiples of 10 in order to
receive shares for all of the rights upon closing of a business combination.
Our management has broad discretion with respect to the specific application of
the net proceeds of the initial business combination and the Private Placement,
although substantially all of the net proceeds are intended to be applied
generally towards consummating a business combination.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our entire activity from inception up to March 4, 2021 was in preparation for
the initial public offering. Since the initial public offering, our activity has
been limited to the evaluation of business combination candidates, and we will
not be generating any operating revenues until the closing and completion of our
initial business combination. We expect to incur increased expenses as a result
of being a public company (for legal, financial reporting, accounting and
auditing compliance, D&O insurance), as well as for due diligence expenses. We
expect our expenses to increase substantially after this period. However, we
cannot assure you that our plans to complete a business combination will be
successful.
For the three months ended September 30, 2022, we had a net income of $686,388,
which was comprised of operating costs of $222,518 and offset by change in the
fair value of the warrant liability of $820,000, dividend income of $8, interest
earned on the marketable securities held in Trust Account of $88,898 and
unrealized gain on marketable securities held in the Trust.
For the three months ended September 30, 2021, we had a net loss of $257,324,
which was comprised of operating costs of $269,268 and offset by change in the
fair value of the warrant liability of $10,000, interest earned on the
marketable securities held in Trust Account of $1,944 and unrealized gain on
marketable securities held in the Trust.
Liquidity and Capital Resources
As of September 30, 2022, we had cash and investments held in the Trust Account
of $59,590,850. Until the consummation of the initial public offering, the
Company's only source of liquidity was an initial purchase of ordinary shares by
the Sponsor, monies loaned by the Sponsor under a certain unsecured promissory
note and advances from the Sponsor.
On March 4, 2021, we consummated the initial public offering of 5,000,000 Public
Units at a price of $10.00 per unit, generating gross proceeds of $50,000,000.
Subsequently, on March 9, 2021, the underwriters exercised the option in full of
750,000 units at a price of $10.00 per unit, generating gross proceeds of
$7,500,000. Simultaneously with the closing of the initial public offering, we
consummated the sale of 350,000 Private Units, at a price of $10.00 per unit,
generating gross proceeds of $3,500,000.
Following the initial public offering and the exercise of the over-allotment
option, a total of $5,750,000 was placed in the Trust Account. We incurred
$1,837,194 in initial public offering related costs, including $1,437,500 of
underwriting fees and $399,694 of initial public offering Costs.
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As of September 30, 2022, we had cash of $38,125 and marketable securities in
the Trust Account of $59,590,850 (including approximately $88,898 of interest
income). We intend to use substantially all of the net proceeds of the initial
public offering, including the funds held in the Trust Account (less taxes
payable and deferred underwriting commissions), to complete our initial business
combination. We may withdraw interest to pay taxes. During the period ended
September 30, 2022, we did not withdraw any of interest income from the Trust
Account to pay for income taxes. To the extent that our capital stock is used in
whole or in part as consideration to effect our initial business combination,
the remaining proceeds held in the Trust Account, as well as any other net
proceeds not expended, will be used as working capital to finance the operations
of the target business. Such working capital funds could be used in a variety of
ways including continuing or expanding the target business' operations, for
strategic acquisitions and for marketing, research and development of existing
or new products. Such funds could also be used to repay any operating expenses
or finders' fees which we had incurred prior to the completion of our business
combination if the funds available to us outside of the Trust Account were
insufficient to cover such expenses.
As of September 30, 2022, we had cash of $38,125 outside of the Trust Account.
We intend to use the funds held outside the Trust Account primarily to identify
and evaluate target businesses, perform business due diligence on prospective
target businesses, travel to and from the offices, plants or similar locations
of prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses,
and structure, negotiate and complete a business combination.
On August 25, 2022, Goldenbridge issued one unsecured promissory note in an
amount of $575,000, to SunCar, in exchange for SunCar depositing such amount
into Goldenbridge trust account in order to extend the amount of time it has
available to complete a business combination for an additional three (3) months
period, from September 4, 2022 to December 4, 2022. The note does not bear
interest and mature upon closing of a business combination by Goldenbridge. In
addition, the note may be converted by the holder into units of Goldenbridge
identical to the units issued in Goldenbridge's initial public offering at a
price of $10.00 per unit.
If the Company does not complete a business combination within 12 months from
the consummation of the Public Offering, it will trigger an automatic winding
up, dissolution and liquidation pursuant to the terms of the amended and
restated memorandum and articles of association. As a result, this has the same
effect as if the Company had formally gone through a voluntary liquidation
procedure under the Companies Law. Accordingly, no vote would be required from
the Company's shareholders to commence such a voluntary winding up, dissolution
and liquidation. However, if the Company anticipates that the Company may not be
able to consummate its initial business combination within 12 months, the
Company may, but is not obligated to, extend the period of time to consummate a
business combination three times by an additional three months each time (for a
total of up to 21 months to complete a business combination). Pursuant to the
terms of the amended and restated memorandum and articles of association and the
trust agreement entered into between the Company and Continental Stock Transfer
& Trust Company, LLC on the effective date of the Registration Statement, in
order to extend the time available for the Company to consummate the initial
business combination, the Company's insiders or their affiliates or designees,
upon five days advance notice prior to the applicable deadline, must deposit
into the trust account $575,000 ($0.10 per share), on or prior to the date of
the applicable deadline. The insiders will receive a non-interest bearing,
unsecured promissory note equal to the amount of any such deposit that will not
be repaid in the event that the Company is unable to close a business
combination unless there are funds available outside the trust account to do so.
Such notes would either be paid upon consummation of the Company's initial
business combination, or, at the lender's discretion, converted upon
consummation of the business combination into additional private units at a
price of $10.00 per unit. The Company's shareholders have approved the issuance
of the private units upon conversion of such notes, to the extent the holder
wishes to so convert such notes at the time of the consummation of the Company's
initial business combination. In the event that the Company receives notice from
the Company's insiders five days prior to the applicable deadline of their
intent to effect an extension, the Company intends to issue a press release
announcing such intention at least three days prior to the applicable deadline.
In addition, the Company intends to issue a press release the day after the
applicable deadline announcing whether or not the funds had been timely
deposited. The Company's insiders and their affiliates or designees are not
obligated to fund the trust account to extend the time for the Company to
complete the initial business combination. To the extent that some, but not all,
of the Company's insiders, decide to extend the period of time to consummate the
Company initial business combination, such insiders (or their affiliates or
designees) may deposit the entire amount required. If the Company is unable to
consummate the Company's initial business combination within such time period,
the Company will, as promptly as possible but not more than ten business days
thereafter, redeem 100% of the Company's outstanding public shares for a pro
rata portion of the funds held in the trust account, including a pro rata
portion of any interest earned on the funds held in the trust account and not
necessary to pay taxes, and then seek to liquidate and dissolve. However, the
Company may not be able to distribute such amounts as a result of claims of
creditors which may take priority over the claims of the Company's public
shareholders. In the event of dissolution and liquidation, the public rights
will expire and will be worthless.
Accordingly, the Company may not be able to obtain additional financing. If the
Company is unable to raise additional capital, it may be required to take
additional measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing operations, suspending the pursuit of a
potential transaction, and reducing overhead expenses. The Company cannot
provide any assurance that new financing will be available to it on commercially
acceptable terms, if at all. These conditions raise substantial doubt about the
Company's ability to continue as a going concern if a Business Combination is
not consummated by December 4, 2022. These audited consolidated financial
statements do not include any adjustments relating to the recovery of the
recorded assets or the classification of the liabilities that might be necessary
should the Company be unable to continue as a going concern.
Off-balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered
off-balance sheet arrangements as of September 30, 2022. We do not participate
in transactions that create relationships with unconsolidated entities or
financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet
arrangements. We have not entered into any off-balance sheet financing
arrangements, established any special purpose entities, guaranteed any debt or
commitments of other entities, or purchased any non-financial assets.
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Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than an agreement to pay our Sponsor
a monthly fee of $10,000 for general and administrative services, including
office space, utilities and administrative services to the Company. We began
incurring these fees on June 1, 2020 and will continue to incur these fees
monthly until the earlier of the completion of the business combination and the
Company's liquidation. Also, we are committed to the below:
Registration Rights
The holders of the Founder Shares, the Private Placement Warrants (and their
underlying securities) and the warrants that may be issued upon conversion of
the Working Capital Loans (and their underlying securities) are entitled to
registration rights pursuant to a registration rights agreement signed on the
effective date of the Public Offering. The holders of a majority of these
securities are entitled to make up to two demands that the Company register such
securities. The holders of the majority of the Founder Shares can elect to
exercise these registration rights at any time commencing three months prior to
the date on which these ordinary shares are to be released from escrow. The
holders of a majority of the Private Placement Warrants and warrants issued in
payment of Working Capital Loans made to the Company (or underlying securities)
can elect to exercise these registration rights at any time after the Company
consummates a Business Combination. In addition, the holders have certain
"piggy-back" registration rights with respect to registration statements filed
subsequent to the completion of a Business Combination. The Company will bear
the expenses incurred in connection with the filing of any such registration
statements.
Private Warrants
The Company classifies the Private Warrants as liabilities at their fair value
and adjusts the Private Warrants to fair value at each reporting period. This
liability is subject to re-measurement at each balance sheet date until
exercised, and any change in fair value is recognized in our statement of
operations. The Private Warrants are valued using a Black Scholes model.
Deferred Underwriting Commission and Transaction Fee
Maxim Group LLC ("Maxim") was engaged by Goldenbridge to act as its financial
advisor in connection with a business combination with a special purpose
acquisition company. For its services, Maxim has agreed to be paid entirely,
other than customary expense reimbursement, in Goldenbridge Ordinary Shares,
issued at the same per share price as issued as consideration in the Business
Combination with SunCar, in an amount of such ordinary shares equal to 0.8% of
the equity value of SunCar (the "Transaction Fee"). Assuming a per share price
of $10 per share, such Transaction Fee payable upon consummation of the Business
Combination would be approximately 640,000 PubCo Ordinary Shares (following
exchange of such shares for Goldenbridge Ordinary Shares in the Business
Combination). Other than piggyback rights to registration, Maxim's shares would
have the same rights as other holders of Goldenbridge Ordinary Shares in the
Business Combination. Furthermore, under the terms of the underwriting agreement
in connection with Goldenbridge's IPO, Goldenbridge owes Maxim a deferred
underwriting fee of $2,012,500 upon the completion of the Business Combination
for its role as underwriter in the IPO (the "Deferred Underwriting Commission").
Maxim has rights to reimbursement of out-of-pocket expenses of to $5,000 in the
aggregate, without prior approval of Goldenbridge, and such expenses upon
invoice are payable only upon the successful closing of a business combination.
On March 5, 2021, Maxim exercised its right to acquire an option to purchase up
to a total of 287,500 units of Goldenbridge sold in its IPO (the "Unit Purchase
Option") for $100, provided that Maxim would be required to pay upon exercise of
such option an exercise price of $11.50 per unit. As of September 30, 2022, the
Unit Purchase Option has not been exercised by Maxim.
Right of First Refusal
According to its financial advisor agreement with Goldenbridge, Maxim has rights
of first refusal, on a non-exclusive basis, to be underwriter or placement agent
in connection with an equity, equity-linked, convertible or debt financing in
connection with the Business Combination, although Maxim has rights to be a
specified lead in such transaction if it so determines. To date, Maxim has not
exercised this right of first refusal.
Subject to certain conditions, the Company granted Maxim, for a period of 15
months after the date of the consummation of the business combination, a right
of first refusal to act as lead underwriters or minimally as a co-manager, with
at least 30% of the economics; or, in the case of a three-handed deal, 30% of
the economics, for any and all future public and private equity and debt
offerings. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first
refusal shall not have a duration of more than three years from the effective
date of the registration statement of which this prospectus forms a part.
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Critical Accounting Policies
The preparation of unaudited condensed consolidated financial statements and
related disclosures in conformity with accounting principles generally accepted
in the United States of America ("GAAP") requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and income and expenses during the periods reported. Actual results
could materially differ from those estimates. The Company has not identified any
significant accounting policies.
Warrants
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 480,
Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and
Hedging ("ASC 815"). The assessment considers whether the warrants are
freestanding financial instruments pursuant to ASC 480, meet the definition of a
liability pursuant to ASC 480, and whether the warrants meet all of the
requirements for equity classification under ASC 815, including whether the
warrants are indexed to the Company's own ordinary shares and whether the
warrant holders could potentially require "net cash settlement" in a
circumstance outside of the Company's control, among other conditions for equity
classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
equity at the time of issuance. For issued or modified warrants that do not meet
all the criteria for equity classification, the warrants are required to be
recorded as liabilities at their initial fair value on the date of issuance, and
each balance sheet date thereafter. Changes in the estimated fair value of the
warrants are recognized as a non-cash gain or loss on the statements of
operations.
Ordinary Shares Subject To Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in
accordance with the guidance in ASC Topic 480 Distinguishing Liabilities from
Equity. Ordinary share subject to mandatory redemption (if any) is classified as
a liability instrument and is measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares that feature redemption rights that
are either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within the Company's control) are
classified as temporary equity. At all other times, ordinary shares are
classified as shareholders' equity. The Company's ordinary shares feature
certain redemption rights that are considered to be outside of the Company's
control and subject to occurrence of uncertain future events.
Net Loss Per Share
The Company calculates net loss per share in accordance with ASC Topic 260,
Earnings per Share. Basic loss per share is computed by dividing the net loss by
the weighted-average number of ordinary shares outstanding during the period,
excluding ordinary shares subject to possible redemption. Diluted loss per share
is computed by dividing net loss by the weighted average number of ordinary
shares outstanding, plus to the extent dilutive, the incremental number of
ordinary shares to settle rights and other ordinary share equivalents (currently
none outstanding), as calculated using the treasury stock method. Ordinary
shares subject to possible redemption at September 30, 2022 and 2021, which are
not currently redeemable and are not redeemable at fair value, have been
excluded from the calculation of basic and diluted loss per share since such
shares, if redeemed, only participate in their pro rata share of the Trust
Account earnings. The Company has not considered the effect of rights that
convert into 287,500 ordinary shares in the unit purchase option sold to the
underwriter, in the calculation of diluted loss per share, since the conversion
of the rights into ordinary shares would be anti-dilutive.
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