The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our audited financial statements
and the notes related 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. 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
"Cautionary Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors"
and elsewhere in this report.
Overview
We are a blank check company incorporated on March 31, 2021 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 or entities. We intend to effectuate our initial business
combination using cash from the proceeds of the Initial Public Offering and the
placement of the Private Placement Warrants, the proceeds of the sale of our
shares in connection with our initial business combination (pursuant to any
forward purchase agreements or backstop agreements we may enter into following
the consummation of the Initial Public Offering or otherwise), shares issued to
the owners of the target, debt issued to bank or other lenders or the owners of
the target, or a combination of the foregoing or other sources.
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Results of Operations and Known Trends or Future Events
Our only activities since inception up to December 31, 2021 were in preparation
for our formation and the Initial Public Offering, and since the Initial Public
Offering up to December 31, 2022, our search for a prospective target for our
business combination. We will not generate any operating revenues until after
completion of our initial business combination, at the earliest. We are
generating non-operating income in the form of interest income on cash and cash
equivalents. There has been no significant change in our financial or trading
position and no material adverse change has occurred since the date of our
audited financial statements. Since the date of the Initial Public Offering, we
have incurred substantially 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 year ended December 31, 2022, we had a loss from operations of
$2,459,464, all consisting of general and administrative expenses, offset by a
change in fair value of derivative warrant liabilities of $4,851,300, gains on
marketable securities (net), dividends and interest, held in Trust Account of
$3,438,403, loss on transaction costs allocation to derivative warrant
liabilities of $215,039, resulting in a net income of $5,615,200 for the year
ended December 31, 2022.
For the period from March 31, 2021 (inception) through December 31, 2021, we had
a net loss of $39,954, all consisting of formation and operating costs.
Liquidity and Capital Resources
As of December 31, 2022, we had cash of $640,582 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 and structure, negotiate and complete a Business
Combination.
Our liquidity needs have been satisfied prior to the completion of the Initial
Public Offering through (i) $25,000 paid by our initial shareholders to cover
certain of our offering costs in exchange for the issuance of the founder shares
to our initial shareholders and (ii) the receipt of loans to us of up to
$300,000 by the Sponsor under an unsecured amended and restated promissory note.
We borrowed approximately $250,000 under the amended and restated promissory
note with the Sponsor. The outstanding note was repaid upon the closing of the
Initial Public Offering out of the offering proceeds and such note is no longer
available to be drawn.
Upon the closing of the Initial Public Offering and the Private Placement on
February 15, 2022, $234.6 million of the net proceeds of the sale of the Units
in the Initial Public Offering and the Private Placement was placed in the Trust
Account. We intend to use substantially all of the funds held in the Trust
Account, including any amounts representing interest earned on the Trust
Account, if any (less taxes payable), to complete our initial business
combination. We may withdraw interest income (if any) to pay taxes, if any. Our
annual tax obligations will depend on the amount of interest and other income
earned on the amounts held in the Trust Account. We expect the interest income
earned on the amount in the Trust Account (if any) will be sufficient to pay our
taxes. To the extent that our equity or debt is used, in whole or in part, as
consideration to complete our initial business combination, the remaining
proceeds held in the Trust Account will be used as working capital to finance
the operations of the target business or businesses, make other acquisitions and
pursue our growth strategies.
Prior to the completion of our initial business combination, we will have
available to us the $640,582 of proceeds held outside the Trust Account, as well
as certain funds from loans from the Sponsor, its affiliates or members of our
management team. We will use these funds to primarily 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.
We do not believe we will need to raise additional funds following the Initial
Public Offering in order to meet the expenditures required for operating our
business prior to our initial business combination, other than funds available
from loans from the Sponsor, its affiliates or members of our management team.
However, if our estimates of the costs of identifying a target business,
undertaking in-depth due diligence and negotiating an initial business
combination are less than the actual amount necessary to do so, we may have
insufficient funds available to operate our business prior to our initial
business combination. In order to fund working capital deficiencies or finance
transaction costs in connection with an intended initial 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. If we
complete our initial business combination, we may repay such loaned amounts out
of the proceeds of the Trust Account released to us. 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 Warrants of the post-business
combination entity at a price of $1.00 per Warrant at the option of the lender.
The Warrants would be identical to the Private Placement Warrants. The terms of
such loans, if any, have not been determined and no written agreements exist
with respect to such loans. Prior to the completion of our initial business
combination, we do not expect to seek loans from parties other than the Sponsor,
its affiliates or our management team 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 to complete our initial
business combination, either because the transaction requires more cash than is
available from the proceeds held in our Trust Account, or because we become
obligated to redeem a significant number of our public shares upon completion of
the business combination, in which case we may issue additional securities or
incur debt in connection with such business combination. If we have not
consummated our initial business combination within the required time period
because we do not have sufficient funds available to us, we will be forced to
cease operations and liquidate the Trust Account.
Off-balance Sheet Arrangements
As of December 31, 2022 and 2021, we did not have any off-balance sheet
arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Commitments and Contractual Obligations
Administrative Services Agreement
Commencing on February 10, 2022, we agreed to pay the Sponsor or an affiliate of
the Sponsor a total of $10,000 per month for office space, secretarial and
administrative services, research and other services provided to us and to
reimburse the Sponsor for any out-of-pocket expenses related to identifying,
investigating and completing an initial business combination. Upon completion of
the initial business combination or our liquidation, we will cease paying these
monthly fees. For the year ended December 31, 2022 and for the period from
March 31, 2021 (inception) through December 31, 2021, the Company incurred and
paid $110,000 and $0, respectively, for these services.
Registration Rights
The holders of the founder shares, Private Placement Warrants and any Warrants
that may be issued upon conversion of working capital loans (and any Class A
Ordinary Shares issuable upon the exercise of the Private Placement Warrants and
Warrants that may be issued upon conversion of working capital loans) are to
registration rights pursuant to a registration and shareholder rights agreement.
The holders of these securities are entitled to make up to three demands,
excluding short form demands, that we register such securities. In addition, the
holders have certain "piggy-back" registration rights with respect to
registration statements filed subsequent to our completion of our initial
business combination. We will bear the expenses incurred in connection with the
filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the final prospectus relating
to the Initial Public Offering to purchase up to 3,000,000 additional units to
cover over-allotments, if any, at the Initial Public Offering price less the
underwriting discounts and commissions. On February 11, 2022, the underwriters
fully exercised the over-allotment option.
The Company granted the underwriters a discount of $0.20 per Unit, $4,600,000 in
the aggregate. An additional fee of $0.35 per Unit, or approximately $8,050,000
in the aggregate would be payable to the underwriters for deferred underwriting
commissions. Each of the underwriters in our Initial Public Offering waived its
deferred underwriting discount in the aggregate amount of $8,050,000, such that
we now do not expect to pay any deferred underwriting fees in connection with
closing of our initial business combination. On February 24, 2023 and March 21,
2023, we received a formal letter from Barclays Capital Inc. and Citigroup
Global Markets Inc., respectively, formally waiving any entitlement to its
respective portion of the deferred underwriting discount. The deferred
underwriting fee was agreed between us, Barclays Capital Inc. and Citigroup
Global Markets Inc. in the Initial Public Offering underwriting agreement signed
by the parties on February 10, 2021 and was earned in full upon completion of
the Initial Public Offering but the payment of deferred underwriting fees was
conditioned upon closing of our business combination such that the waivers were
given by Barclays Capital Inc. and Citigroup Global Markets Inc. on a gratuitous
basis without any consideration to Barclays Capital Inc. and Citigroup Global
Markets Inc. from us. Aside from general dialogue between our representatives
and representatives of Barclays Capital Inc. and Citigroup Global Markets Inc.
(and other investment banking professionals) about sourcing targets and broader
SPAC market conditions in the ordinary course, subsequent to our Initial Public
Offering, Barclays Capital Inc. and Citigroup Global Markets Inc. have had no
involvement in the proposed business combination with GLAAM (other than
periodically discussing broader market conditions with our representatives in
the ordinary course), and Barclays Capital Inc. and Citigroup Global Markets
Inc. were not retained in any role after our Initial Public Offering. In
particular, Barclays Capital Inc. and Citigroup Global Markets Inc. did not
assist in (i) procuring GLAAM as a target business, (ii) developing any
financial models or other target evaluation materials while we were pursuing a
business combination with GLAAM, (iii) marketing the transaction,
(iv) preparation or review of this proxy statement / prospectus or any of its
underlying disclosure, or (v) any other role in the business combination. Due to
the lack of any role by Barclays Capital Inc. and Citigroup Global Markets Inc.
in the proposed business combination, we obtained the waiver from Barclays
Capital Inc. and Citigroup Global Markets Inc.
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Critical Accounting Policies and Estimates
The preparation of 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 financial statements, and expenses during the
period reported. Actual results could materially differ from those estimates. We
have identified the following critical accounting estimates effecting our
financial statements:
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A Ordinary Shares subject to possible redemption in
accordance with the guidance in FASB ASC Topic 480. Class A Ordinary Shares
subject to mandatory redemption are classified as a liability instrument and are
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 our control) are classified as temporary equity. At all
other times, ordinary shares are classified as shareholders' equity. Our Class A
Ordinary Shares feature certain redemption rights that are considered to be
outside of our control and subject to occurrence of uncertain future events.
Accordingly, the Class A Ordinary Shares subject to possible redemption are
presented as temporary equity, outside of the shareholders' deficit section of
our balance sheets.
Net Income or Loss per Share
Net income (loss) per ordinary share is computed by dividing net income (loss)
applicable to shareholders by the weighted average number of ordinary shares
outstanding during the period, plus, to the extent dilutive, the incremental
number of shares of ordinary shares to settle Warrants, as calculated using the
treasury stock method. For the year ended December 31, 2022, the inclusion of
the securities and other contracts that could potentially be exercised or
converted into ordinary shares and then share in the earnings of the Company is
contingent on a future event. For the period from March 31, 2021 (inception)
through December 31, 2021, the Company did not have any dilutive securities and
other contracts that could, potentially, be exercised or converted into ordinary
shares and then share in the earnings of the Company. As a result, diluted
income (loss) per share is the same as basic income (loss) per share for the
periods presented.
The Company has two classes of shares, which are referred to as Class A Ordinary
Shares and Class B Ordinary Shares. Income (losses) are shared pro rata between
the two classes of shares on the assumption that the consummation of the initial
business combination is the most likely outcome. Accretion associated with the
redeemable Class A Ordinary Shares is excluded from income (loss) per share as
the redemption value approximates fair value.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
our financial statements.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an
"emerging growth company" and may take advantage of complying with new or
revised accounting pronouncements based on the effective date for private (not
publicly traded) companies. We are electing 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.
Subject to certain conditions set forth in the JOBS Act, if, as an "emerging
growth company," we choose to rely on such exemptions we may not be 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 of the
Sarbanes-Oxley Act, (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 principal executive officer'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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