The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-K.
Special Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Annual
Report including, without limitation, statements under this "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding our financial position, business strategy and the plans
and objectives of management for future operations, are forward looking
statements. When used in this Annual Report, words such "may," "should,"
"could," "would," "expect," "plan," "anticipate," "believe," "estimate,"
"continue," or the negative of such terms or other similar expressions, as they
relate to us or our management, identify forward looking statements. Factors
that might cause or contribute to such a discrepancy include, but are not
limited to, those described in our other SEC filings. Such forward looking
statements are based on the beliefs of management, as well as assumptions made
by, and information currently available to, our management. No assurance can be
given that results in any forward-looking statement will be achieved, and actual
results could be affected by one or more factors, which could cause them to
differ materially. The cautionary statements made in this Annual Report should
be read as being applicable to all forward-looking statements whenever they
appear in this Annual Report. For these statements, we claim the protection of
the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act. Actual results could differ materially from
those contemplated by the forward-looking statements as a result of certain
factors detailed in our filings with the SEC. All subsequent written or oral
forward-looking statements attributable to us or persons acting on our behalf
are qualified in their entirety by this paragraph.
Overview
We are a blank check company incorporated in Delaware on April 13, 2021. We were
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 (the "Business Combination"). We are an emerging growth
company and, as such, the Company is subject to all of the risks associated with
emerging growth companies. We intend to effectuate our Business Combination
using cash from the proceeds of the IPO 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
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from inception to December 31, 2022 were organizational
activities, those necessary to prepare for the IPO, conducting the IPO and
identifying a target company for a business combination. The Company will not
generate any operating revenues until after the completion of its initial
Business Combination, at the earliest. The Company will generate non-operating
income in the form of interest income on cash and cash equivalents from the
proceeds derived from the IPO We incur 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 year ended December 31, 2022, we had a net loss of $1,848,123 which
consisted of realized gain on marketable securities held in our Trust Account of
$802,841 offset by formation and operational costs of $2,369,751, franchise tax
of $200,050 and provision for income tax of $81,163.
16
Liquidity and Capital Resources
On August 16, 2021, the Company consummated its IPO of 5,000,000 units (the
"Units" and, with respect to the Class A common stock included in the Units
being offered, the "Public Shares"), at $10.00 per Unit, generating gross
proceeds of $50,000,000, and incurring offering costs of $3,153,369, of which
$1,750,000 was for deferred underwriting commissions (see Note 6).
Simultaneously with the consummation of the closing of the Offering, the Company
consummated the private placement of an aggregate of 270,900 units (the "Private
Placement Units") to Global Link Investment LLC, the sponsor of the Company (the
"Sponsor"), at a price of $10.00 per Private Placement Unit, generating total
gross proceeds of $2,709,000 (the "Private Placement") (see Note 4).
Subsequently, on August 19, 2021, the Company consummated the closing of the
sale of 750,000 additional units at a price of $10 per unit (the "Units") upon
receiving notice of the underwriters' election to fully exercise their
overallotment option ("Overallotment Units"), generating additional gross
proceeds of $7,500,000 and incurred additional offering costs of $412,500, of
which 262,500 are for deferred underwriting commissions. Each Unit consists of
one share of Class A common stock of the Company, par value $0.0001 per share
("Class A Common Stock"), one-half of one Class A redeemable warrant of the
Company ("Warrant"), with each whole Warrant entitling the holder thereof to
purchase one share of Class A Common Stock for $11.50 per share, and one Right
("Right"), with each Right entitling the holder to receive one-tenth of one
share of Class A Common Stock, subject to adjustment, pursuant to the Company's
registration statement on Form S-1 (File No. 333-256840).
Simultaneously with the exercise of the overallotment, the Company consummated
the Private Placement of an additional 22,500 Private Placement Units to Global
Link Investment LLC, a Delaware limited liability company (the "Sponsor"),
generating gross proceeds of $225,000.
Transaction costs of the IPO with the exercise of the overallotment amounted to
$3,565,869 consisting of $1,150,000 of cash underwriting fees, $2,012,500 of
deferred underwriting fees and $403,369 of other costs.
As of December 31, 2022, we have available to us $24,927 of cash on our balance
sheet and a working capital of $13,259,991. We intend to use the funds held
outside of the Trust Account for identifying and evaluating prospective
acquisition candidates, performing business due diligence on prospective target
businesses, traveling to and from the offices, plants or similar locations of
prospective target businesses, reviewing corporate documents and material
agreements of prospective target businesses, selecting the target business to
acquire and structuring, negotiating and consummating the Business Combination.
The interest income earned on the investments in the Trust Account are
unavailable to fund operating expenses.
In order to finance transaction costs in connection with a Business Combination,
the Company's Sponsor or an affiliate of the Sponsor, or the Company's officers
and directors may, but are not obligated to, loan the Company funds as may be
required ("Working Capital Loans"). Such Working Capital Loans would be
evidenced by promissory notes. The notes would either be repaid upon
consummation of a Business Combination, without interest, or, at the lender's
discretion, up to $1,500,000 of notes may be converted upon consummation of a
Business Combination into additional Placement Units at a price of $10.00 per
Unit. In the event that a Business Combination does not close, the Company may
use a portion of proceeds held outside the Trust Account to repay the Working
Capital Loans, but no proceeds held in the Trust Account would be used to repay
the Working Capital Loans. As December 31, 2022, the Company has borrowed
$662,787 under such loans.
If the Company anticipates that it may not be able to consummate the initial
Business Combination within 12 months, the Company may, by resolution of the
board if requested by the Sponsor, extend the period of time to consummate a
Business Combination up to two times, each by an additional three months (for a
total of up to 18 months to complete a Business Combination), subject to the
Sponsor depositing additional funds into the trust account as set out below.
Pursuant to the terms of the Amended and Restated Certificate of Incorporation
and the trust agreement to be entered into between the Company and Continental
Stock Transfer & Trust Company, in order for the time available for the Company
to consummate the initial Business Combination to be extended, the Sponsor or
its affiliates or designees, must deposit into the Trust Account $575,000 with
the underwriters' over-allotment option exercised in full ($0.10 per unit in
either case), on or prior to the date of the applicable deadline, for each of
the available three month extensions, providing a total possible Business
Combination period of 18 months at a total payment value of $575,000 with the
underwriters' over-allotment option exercised in full ($0.10 per unit). Any such
payments would be made in the form of a loan. Any such loans will be
non-interest bearing and payable upon the consummation of a Business Combination
out of the proceeds of the trust account released to it. On August 8, 2022, the
Company entered into a loan and transfer agreement with the Sponsor, according
to which on August 15, 2022, the Company's Sponsor has deposited into the
Company's trust account $575,000 representing $0.10 per public share) to extend
the period of time it has to consummate its initial business combination by
three months from August 16, 2022 to November 16, 2022 (the "Extension"). On
November 16, 2022, the Company's Sponsor has further deposited into the
Company's trust account $575,000 (representing $0.10 per public share) to extend
the period of time it has to consummate its initial business combination by
three months from November 16, 2022 to February 16, 2023.
17
Going Concern Consideration
The Company expects to incur significant costs in pursuit of its financing and
acquisition plans. In connection with the Company's assessment of going concern
considerations in accordance with Accounting Standards Update ("ASU") 2014-15,
"Disclosures of Uncertainties about an Entity's Ability to Continue as a Going
Concern," management has determined that if the Company is unsuccessful in
consummating an initial business combination within the prescribed period of
time from the closing of the IPO, the requirement that the Company cease all
operations, redeem the public shares and thereafter liquidate and dissolve
raises substantial doubt about the ability to continue as a going concern. The
balance sheet does not include any adjustments that might result from the
outcome of this uncertainty. Management has determined that the Company has
funds that are sufficient to fund the working capital needs of the Company until
the consummation of an initial business combination or the winding up of the
Company as stipulated in the Company's amended and restated memorandum of
association. The accompanying financial statement has been prepared in
conformity with generally accepted accounting principles in the United States of
America ("GAAP"), which contemplate continuation of the Company 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 December 31, 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.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities. The underwriter is entitled to a deferred
fee of three point five percent (3.50%) of the gross proceeds of the Offering
upon closing of the Business Combination, or $2,012,500. The deferred fee will
be paid in cash upon the closing of a Business Combination from the amounts held
in the Trust Account, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of audited financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America 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 audited financial statements, and income and
expenses during the periods reported. Actual results could materially differ
from those estimates. As of December 31, 2022, there was no critical accounting
policies.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
our audited financial statements.
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