References in this report (the "Annual Report") to "we," "us" or the "Company"
refer to Genesis Unicorn Capital Corp. References to our "management" or our
"management team" refer to our officers and directors, and references to the
"Sponsor" refer to Genesis Unicorn Capital, LLC. 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 Annual Report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
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Special Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Form
10-K including, without limitation, statements under "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. When used in
this Form 10-K, words such as "anticipate," "believe," "estimate," "expect,"
"intend" and similar expressions, as they relate to us or the Company's
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of management, as well as assumptions made by, and
information currently available to, the Company's management. 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.
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the 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.
Overview
We are a blank check company formed under the laws of the State of Delaware on
February 23, 2021 for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar business
combination with one or more target businesses. We have not selected any
business combination target and we have not, nor has anyone on our behalf,
initiated any substantive discussions, directly or indirectly, with any business
combination target. We intend to effectuate our initial business combination
using cash from the proceeds of our initial public offering ( the "Initial
Public Offering") and the sale of the private placement units, as well as shares
of 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
and we cannot assure you that our plans to complete a business combination will
be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities for the period from February 23, 2021 (inception) through
December 31, 2022 were organizational activities, those necessary to prepare for
the Initial Public Offering described below, and, since the closing of the
Initial Public Offering, the search for a prospective initial business
combination. We do not expect to generate any operating revenues until after the
completion of our initial business combination. We will generate non-operating
income in the form of interest income on investments held in our trust account
(the "Trust Account") after the Initial Public Offering. 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.
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For the year ended December 31, 2022, we had a net loss of $519,798, which
resulted from operating and formation costs of $1,369,689, income tax expense of
$227,000 and franchise tax expense of $204,153, partially offset by gains on
investments held in the Trust Account of $1,281,044.
For the period from February 23, 2021 (inception) through December 31, 2021, we
had a net loss of $16,778 which resulted entirely from operating and formation
costs.
Liquidity, Going Concern and Capital Resources
On February 17, 2022, we consummated the Initial Public Offering of 8,625,000
units (the "Units" and, with respect to the Class A common stock included in the
Units being offered, the "Public Shares"), including 1,125,000 Units that were
issued pursuant to the underwriters exercise of their over-allotment option in
full, at $10.00 per Unit, generating gross proceeds of $ 86,250,000.
Simultaneously with the consummation of the closing of the Initial Public
Offering, the Company consummated the private placement of an aggregate of
377,331 units (the "Private Placement Units") the Sponsor, at a price of $10.00
per Private Placement Unit, generating total gross proceeds of $3,773,310 (the
"Private Placement").
For the year ended December 31, 2022, net cash used in operating activities was
$1,068,337 which was due to our net loss of $519,798, partially offset by
changes in working capital of $732,505, and gains on investments held in the
Trust Account of $1,281,044.
For the period from February 23, 2021 (inception) through December 31, 2021, net
cash used in operating activities was $16,778, which was due to our net loss of
$16,778.
For the year ended December 31, 2022, net cash used in investing activities of
$87,543,750 was the result of the amount of net proceeds from the Initial Public
Offering being deposited to the Trust Account.
For the period from February 23, 2021 (inception) through December 31, 2021, we
had no cash flows from investing activities.
For the year ended December 31, 2022, net cash provided by financing activities
was $88,700,691, which was due to proceeds from the Initial Public Offering, net
of cash underwriting discounts and offering costs paid of $84,851,528, proceeds
from the sale of the Private Placement Units of $3,773,310 and proceeds from the
issuance of the promissory note with our Sponsor of $259,606, offset in part by
the repayment of the promissory note with our Sponsor of $183,753.
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For the period from February 23, 2021 (inception) through December 31, 2021, net
cash provided by financing activities of $26,428 was the result of proceeds from
the issuance of Class B common stock to our Sponsor of $25,000 and proceeds from
issuance of the promissory note of $1,428.
As of December 31, 2022, we had cash of $98,254 held outside 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.
In order to fund working capital deficiencies or finance transaction costs in
connection with our Initial business combination, we issued an amended and
restated promissory note of $2,000,000 to our Sponsor on March 1, 2023 (the
"2023 Note"). The 2023 Note amended and restated the promissory note dated
October 12, 2022. The 2023 Note bears no interest and the principal balance of
the 2023 Note shall be payable by us on the earlier of: (i) February 17, 2024 or
(ii) the date on which the Company consummates the business combination. We may
request up to Two million ($2,000,000) for costs reasonably related to our
transaction cost and extension fee. If we complete our Initial business
combination, we would repay such loaned amounts. In the event that our initial
business combination does not close, we may use a portion of the working capital
held outside the Trust Account to repay such loaned amounts but no proceeds from
our Trust Account would be used for such repayment. Up to $1,500,000 of such
loans may be convertible into units, at a price of $10.00 per unit at the option
of the lender, upon consummation of our Initial business combination. The units
would be identical to the Placement Units. Other than as described above, the
terms of such loans by our officers and directors, if any, have not been
determined and no written agreements exist with respect to such loans. Prior to
the completion of our business combination, we do not expect to seek loans from
parties other than our Sponsor or an affiliate of our Sponsor as we do not
believe third parties will be willing to loan such funds and provide a waiver
against any and all rights to seek access to funds in our Trust Account.
Moreover, we may need to obtain additional financing either to complete our
initial business combination or because we become obligated to redeem a
significant number of our Public Shares upon completion of our initial business
combination, in which case we may issue additional securities or incur debt in
connection with such business combination. In addition, we intend to target
businesses larger than we could acquire with the net proceeds of the Initial
Public Offering and the sale of the Private Placement Units, and may as a result
be required to seek additional financing to complete such proposed initial
business combination. Subject to compliance with applicable securities laws, we
would only complete such financing simultaneously with the completion of our
initial business combination. If we are unable to complete our initial business
combination because we do not have sufficient funds available to us, we will be
forced to cease operations and liquidate the Trust Account. In addition,
following our initial business combination, if cash on hand is insufficient, we
may need to obtain additional financing in order to meet our obligations.
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Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of December 31, 2022 and
December 31, 2021.
Contractual Obligations
Registration and Shareholder Rights Agreement
The holders of the Founder Shares, as well as the holders of the Private
Placement Units (and underlying securities) and any securities issued in payment
of Working Capital Loans made to the Company, will be entitled to registration
rights pursuant to an agreement signed the effective date of the Initial Public
Offering. The holders of a majority of these securities are entitled to make up
to three demands that the Company register such securities. In addition, the
holders have certain "piggy-back" registration rights with respect to
registration statements filed subsequent to the consummation of a business
combination. The Company will bear the expenses incurred in connection with the
filing of any such registration statements. Notwithstanding anything to the
contrary, under FINRA Rule 5110, the underwriters and/or their designees may
only make a demand registration (i) on one occasion and (ii) during the
five-year period beginning on the effective date of the registration statement
relating to the Initial Public Offering, and the underwriters and/or their
designees may participate in a "piggy-back" registration only during the
seven-year period beginning on the effective date of the registration statement
relating to the Initial Public Offering.
Underwriting Agreement
Simultaneously with the Initial Public Offering, the underwriters fully
exercised the over-allotment option to purchase an additional 1,125,000 Units at
an offering price of $10.00 per Unit for an aggregate purchase price of
$11,250,000.
The underwriters were paid a cash underwriting discount of $0.20 per Unit, or
$1,078,125 in the aggregate, upon the closing of the Initial Public Offering. In
addition, $0.35 per unit, or $2,803,125 in the aggregate will be payable to the
underwriters for deferred underwriting commissions. The deferred fee will become
payable to the underwriters from the amounts held in the Trust Account solely in
the event that the Company completes a business combination, subject to the
terms of the underwriting agreement.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with Generally Accepted Accounting Principles 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. We have not
identified any critical accounting policies.
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Recent Accounting Pronouncements
Management does not believe that any recently issued, but not effective,
accounting standards, if currently adopted, would have a material effect on our
financial statements.
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