References in this report (the "Quarterly 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 unaudited 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" 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 Quarterly Report
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 annual report on Form 10-K filed with the U.S.
Securities and Exchange Commission (the "SEC") on April 14, 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.
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
June 30, 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.
For the three months ended June 30, 2022, we had a net loss of $153,630, which
resulted from operating and formation costs of $174,912 and franchise tax
expense of $50,000, partially offset by gains on investments held in the Trust
Account of $71,282.
For the three months ended June 30, 2021, we had a net loss of $60 which
resulted entirely from operating and formation costs.
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For the six months ended June 30, 2022, we had a net loss of $314,488, which
resulted from operating and formation costs of $320,651 and franchise tax
expense of $104,153, partially offset by gains on investments held in the Trust
Account of $110,316.
For the period from February 23, 2021 (inception) through June 30, 2021, we had
a net loss of $16,738 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 six months ended June 30, 2022, net cash used in operating activities
was $552,571 which was due to our net loss of $314,488, changes in working
capital of $127,767, and gains on investments held in the Trust Account of
$110,316.
For the period from February 23, 2021 (inception) through June 30, 2021, net
cash used in operating activities was $15,130, which was due to our net loss of
$16,738, partially offset by accrued expenses of $1,608.
For the six months ended June 30, 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 June 30, 2021, we had
no cash flows from investing activities.
For the six months ended June 30, 2022, net cash provided by financing
activities was $88,450,691, 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
$9,606, offset in part by the repayment of the promissory note with our Sponsor
of $183,753.
For the period from February 23, 2021 (inception) through June 30, 2021, net
cash provided by financing activities of $25,000 was the result of proceeds from
the issuance of Class B common stock to our Sponsor of $25,000.
As of June 30, 2022, we had cash of $364,020 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 an intended Initial business combination, our Sponsor or an
affiliate of our Sponsor or certain of our officers and directors may, but are
not obligated to, loan us funds on a non-interest bearing basis as may be
required. 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.
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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.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of June 30, 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
See in Note 2 of the accompanying financial statements.
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