References to the "company," "our," "us" or "we" refer to Global Synergy
Acquisition Corp. 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
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 Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of 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
SEC filings.
Overview
We are a blank check company incorporated on February 11, 2020 as a Cayman
Islands exempted company for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses (the "Business Combination"). We are an
emerging growth company and, as such, we are subject to all of the risks
associated with emerging growth companies.
Our sponsor is Global Synergy LLC, a Cayman Islands limited liability company
(the "Sponsor"). The registration statement for our initial public offering (the
"Initial Public Offering") was declared effective on January 7, 2021. On January
12, 2021, we consummated our Initial Public Offering of 25,875,000 units (the
"Units" and, with respect to the Class A ordinary shares included in the Units
being offered, the "Public Shares"), including 3,375,000 additional Units to
cover over-allotments (the "Over-Allotment Units"), at $10.00 per Unit,
generating gross proceeds of approximately $258.8 million, and incurring
offering costs of approximately $14.8 million, inclusive of approximately
$9.1 million in deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, the Company
consummated the private placement ("Private Placement") of 7,600,000 warrants
(each, a "Private Placement Warrant" and collectively, the "Private Placement
Warrants"), at a price of $1.00 per Private Placement Warrant with our Sponsor,
generating gross proceeds of approximately $7.6 million.
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Upon the closing of the Initial Public Offering and the Private Placement,
$258.8 million ($10.00 per Unit) of the net proceeds of the Initial Public
Offering and certain of the proceeds of the Private Placement were placed in a
trust account ("Trust Account"), located in the United States with Continental
Stock Transfer & Trust Company acting as trustee, and invested in United States
"government securities" within the meaning of Section 2(a)(16) of the Investment
Company Act having a maturity of 185 days or less or in money market funds
meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act which invest only in direct U.S. government treasury obligations, as
determined by the Company, until the earlier of: (i) the completion of a
Business Combination and (ii) the distribution of the Trust Account as described
below.
Our management has broad discretion with respect to the specific application of
the net proceeds of our Initial Public Offering and the sale of Private
Placement Warrants, although substantially all of the net proceeds are intended
to be applied generally toward consummating a Business Combination. Our Business
Combination must be with one or more operating businesses or assets with a fair
market value equal to at least 80% of the net assets held in the Trust Account
(excluding the deferred underwriting commissions and taxes payable on the
interest earned on the Trust Account) at the time the Company signs a definitive
agreement in connection with the Business Combination. However, we will only
complete a Business Combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target business or
otherwise acquires a controlling interest in the target business sufficient for
it not to be required to register as an investment company under the Investment
Company Act.
If we are unable to complete a Business Combination within 18 months (or
24 months, as applicable) from the closing of the Initial Public Offering (the
"Combination Period"), 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 earned on the funds held in the Trust Account and
not previously released to us to pay our income taxes, if any (less up to
$100,000 of interest to pay dissolution expenses) divided by the number of the
then-outstanding Public Shares, which redemption will completely extinguish
rights of the holders of the Public Shares (the "Public Shareholders") as
shareholders (including the right to receive further liquidation distributions,
if any); and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining shareholders and the board of
directors, liquidate and dissolve, subject in each case to our obligations under
Cayman Islands law to provide for claims of creditors and the requirements of
other applicable law.
Results of Operations
Our entire activity from inception up to March 31, 2022, was in preparation for
our formation and the Initial Public Offering and, after the Initial Public
Offering, the search for a Business Combination. We will not be generating any
operating revenues until the closing and completion of our Business Combination.
We generate non-operating income in the form of investment income from our
investments held in the Trust Account. We expect to incur increased 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 March 31, 2022, we had net income of approximately
$6.3 million, which consisted of approximately $6.6 million in change in fair
value of derivative warrant liabilities, and approximately $4,000 in investment
income on the Trust Account, partially offset by $258,000 in general and
administrative expense, including approximately $30,000 for related party
administrative fees.
For the three months ended March 31, 2021, we had net income of approximately
$8.9 million, which consisted of approximately $9.9 million in change in fair
value of derivative warrant liabilities, and approximately $41,000 in investment
income on the Trust Account, partially offset by $235,000 in general and
administrative expense, including approximately $26,000 for related party
administrative fees, and $758,000 for financing costs associated with the
warrants.
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Liquidity and Capital Resources
As of March 31, 2022, we had approximately $701,000 in our operating bank
account and working capital of approximately $337,000, compared to approximately
$1.1 million in our operating bank account and working capital of approximately
$1.6 million for the three months ended March 31, 2021. Our liquidity needs to
date have been satisfied through a payment of $25,000 from our Sponsor to cover
certain expenses on our behalf in exchange for our issuance of the founder
shares, a loan of $300,000 from our Sponsor pursuant to the Note, and subsequent
to December 31, 2020, the proceeds from the consummation of the Private
Placement not held in the Trust Account. The Company repaid the Note in full
upon consummation of the Initial Public Offering. In addition, in order to
finance transaction costs in connection with a Business Combination, the Sponsor
or an affiliate of the Sponsor, or certain of our officers and directors may,
but are not obligated to, loan us funds as may be required ("Working Capital
Loans") or extend such loans, if any. To date, the Company had no borrowings
under the Working Capital Loans.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor,
or our officers and directors 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 to pay existing accounts payable,
identifying and evaluating prospective 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. However, in
connection with management's assessment of going concern considerations in
accordance with FASB ASC Topic 205-40, "Presentation of Financial Statements -
Going Concern," we have until the end of the Combination Period, July 12, 2022,
(or 24 months, January 12, 2023) to consummate a Business Combination. It is
uncertain that the Company will be able to consummate a Business Combination by
this time. If a Business Combination is not consummated by this date, there will
be a mandatory liquidation and subsequent dissolution of our Company. Management
has determined that the liquidity condition and mandatory liquidation, should a
Business Combination not occur, and potential subsequent dissolution raises
substantial doubt about our ability to continue as a going concern. No
adjustments have been made to the carrying amounts of assets or liabilities
should we be required to liquidate.
Contractual Obligations
There were no material changes to our contractual obligations reported in our
2021 Annual Report on Form 10-K, filed with the SEC on March 31, 2021, and also
reported in Notes 5 and 6 to the unaudited condensed financial statements of
Part 1 Item 1 of this Quarterly Report.
Critical Accounting Policies and Estimates
The preparation of the unaudited condensed financial statements in accordance
with accounting principles generally accepted in the United States of America
requires management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses. A summary of our
significant accounting policies is included in Note 2 to our condensed financial
statements in Part I, Item 1 of this Quarterly Report. Certain of our accounting
policies are considered critical, as these policies are the most important to
the depiction of our condensed financial statements and require significant,
difficult or complex judgments, often employing the use of estimates about the
effects of matters that are inherently uncertain. Such policies are summarized
in the Management's Discussion and Analysis of Financial Condition and Results
of Operations section in our 2021 Annual Report on Form 10-K filed with the SEC
on March 31, 2022. There have been no significant changes in the application of
our critical accounting policies during the three months ended March 31, 2022.
Recent Accounting Pronouncements
See Note 2 to the unaudited condensed financial statements included in Part I,
Item 1 of this Quarterly Report for a discussion of recent accounting
pronouncements.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an "emerging growth company" under
the JOBS Act and are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We elected to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As a result, our financial statements may not
be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.
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As an "emerging growth company", we are not required to, among other things, (i)
provide an auditor's attestation report on our system of internal controls over
financial reporting pursuant to Section 404, (ii) provide all of the
compensation disclosure that may be required of non-emerging growth public
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act,
(iii) comply with any requirement that may be adopted by the PCAOB regarding
mandatory audit firm rotation or a supplement to the auditor's report providing
additional information about the audit and the financial statements (auditor
discussion and analysis), and (iv) disclose certain executive compensation
related items such as the correlation between executive compensation and
performance and comparisons of the CEO's compensation to median employee
compensation. These exemptions will apply for a period of five years following
the completion of our Initial Public Offering or until we are no longer an
"emerging growth company," whichever is earlier.
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