UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
or
For the transition period from __________ to __________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
One City Centre | ||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | ||
| Units, each consisting of one Class A Ordinary Share and one-half of one Redeemable Warrant | GOGN.U | The New York Stock Exchange | ||
| Redeemable Warrants, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 | GOGN.WS | The New York Stock Exchange |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As
of May 4, 2023, there were
INDEX TO FINANCIAL STATEMENTS
GoGreen Investments Corporation
| Page | |||
| PART I – FINANCIAL INFORMATION | |||
| Item 1. | Unaudited Financial Statements: | ||
| Condensed Balance Sheets as of March 31, 2023 and December 31, 2022 | F-1 | ||
| Condensed Statements of Operations for the Three Months Ended March 31, 2023 and 2022 | F-2 | ||
| Condensed Statements of Changes in Shareholders’ Equity (Deficit) for the Three Months Ended March 31, 2023 and 2022 | F-3 | ||
| Condensed Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 | F-4 | ||
| Notes to Condensed Financial Statements | F-5 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 1 | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 5 | |
| Item 4. | Controls and Procedures. | 5 | |
| PART II – OTHER INFORMATION | |||
| Item 1. | Legal Proceedings. | 6 | |
| Item 1A. | Risk Factors. | 6 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 6 | |
| Item 3. | Defaults Upon Senior Securities. | 6 | |
| Item 4. | Mine Safety Disclosures. | 6 | |
| Item 5. | Other Information. | 6 | |
| Item 6. | Exhibits. | 7 | |
| Signatures | 8 | ||
i
GOGREEN INVESTMENTS CORPORATION
CONDENSED BALANCE SHEETS
UNAUDITED
March 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Long-term assets: | ||||||||
| Investments held in Trust Account | ||||||||
| Total Assets | $ | |||||||
| LIABILITIES, REDEEMABLE ORDINARY SHARES, AND SHAREHOLDERS’ EQUITY/(DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Note payable to Sponsor | ||||||||
| Extension note payable to Sponsor | ||||||||
| Total current liabilities | ||||||||
| Long-term liability: | ||||||||
| Deferred underwriting commission | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (Note 6) | ||||||||
| Shareholders’ equity (deficit): | ||||||||
| Additional paid-in-capital | ||||||||
| Retained earnings (Accumulated deficit) | ( | ) | ||||||
| Total shareholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities, redeemable ordinary shares, and shareholders’ equity (deficit) | $ | $ | ||||||
See accompanying notes to the unaudited condensed financial statements.
F-1
GOGREEN INVESTMENTS CORPORATION
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| Three Months ended March 31, 2023 | Three Months ended March 31, 2022 | |||||||
| General and administrative expenses | $ | $ | ||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest income on investments held in Trust Account | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| $ | $ | ( | ) | |||||
| $ | $ | ( | ) | |||||
See accompanying notes to the unaudited condensed financial statements.
F-2
GOGREEN INVESTMENTS CORPORATION
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2023
| Retained | ||||||||||||||||||||||||||||
| Ordinary Shares | Additional | Earnings | Shareholders’ | |||||||||||||||||||||||||
| Class A | Class B | Paid-In | (Accumulated | Equity | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit) | (Deficit) | ||||||||||||||||||||||
| Balances, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Waiver of deferred underwriting fees | — | — | ||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balances, March 31, 2023 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2022
| Ordinary Shares | Additional | |||||||||||||||||||||||||||
| Class A | Class B | Paid-In | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balances, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances, March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
See accompanying notes to the unaudited condensed financial statements.
F-3
GOGREEN INVESTMENTS CORPORATION
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| Three Months ended March 31, 2023 | Three Months ended March 31, 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Interest income on investments held in Trust Account | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Cash deposited into Trust Account | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from Sponsor Loan | ||||||||
| Proceeds from Extension Loan from Sponsor | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Waiver of deferred underwriting costs | ( | ) | ||||||
See accompanying notes to the unaudited condensed financial statements.
F-4
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations
GoGreen Investments Corporation (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 17, 2021, 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”).
Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on companies in the clean/renewable energy space. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
All activity through October 25, 2021, relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below. Since the Initial Public Offering, the Company’s activities have been limited to the evaluation of Business Combination candidates, and the Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. On December 13, 2022, The Company and Lifezone Metals Limited, an Isle of Man company (“Lifezone Metals”) entered into a business combination agreement (the “Lifezone Business Combination Agreement”). Since entering into the Lifezone Business Combination Agreement, the Company’s activities will be limited to completing the Business Combination (as described in Note 10).
The
registration statement of the Company’s Initial Public Offering was declared effective on October 20, 2021. On October 25, 2021,
the Company consummated the Initial Public Offering of
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company
must complete one or more initial Business Combinations having an aggregate fair market value of at least
At
October 25, 2021, transaction costs amounted to $
F-5
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations (cont.)
The
Company will provide its holders of the outstanding Public Shares (the “public shareholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder
meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will
seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion.
The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account
(initially $
If
the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules,
the Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such
shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with
respect to more than an aggregate of
The
Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares, Placement Shares and Public Shares held
by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated
Memorandum and Articles of Association (i) that would affect the substance or timing of the Company’s obligation to allow
redemption in connection with a Business Combination or to redeem
If
the Company is unable to complete a Business Combination by July 25, 2023 unless otherwise extended in accordance with the terms of the
Amended and Restated Memorandum and Articles of Association (the “Combination Period”) (as described in Note 11), the Company
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 (less up to $
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares and Placement Shares (any private placement equivalent
securities issued to the Sponsor or its affiliates upon conversion of either Working Capital Loans or extension loans made to the Company)
if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares
in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the
Company fails to complete a Business Combination within the Combination Period. The underwriters had agreed to waive their rights to
their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company did not complete a Business Combination
within the Combination Period and, in such event, such amounts were to be included with the other funds held in the Trust Account that
will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value
of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit of $
F-6
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations (cont.)
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Going Concern
As of March 31, 2023, the Company had cash of $
The
Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $
Furthermore,
if the Company is unable to complete a business combination within the Combination Period, the Company will cease all operations except
for purposes of liquidation. On January 18, 2023, the Sponsor requested that the Company extend the Combination Period from January 25,
2023 to April 25, 2023 (the “First Extension”). In connection with the First Extension, on January 19, 2023, the Company
issued a note (the “First Extension Note”) in the aggregate principal amount of $
Additionally,
on April 10, 2023, the Sponsor requested that the Company extend the Combination Period from April 25, 2023 to July 25, 2023 (the “Second
Extension”). In connection with the Second Extension, on April 10, 2023, the Company issued a note (the “Second Extension
Note”) in the aggregate principal amount of $
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” if the Company is unable to complete a Business Combination by the close of business on July 25, 2023, then the Company will cease all operations except for the purpose of liquidating. This date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
F-7
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC.
The unaudited condensed financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the fiscal year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”). The accompanying condensed balance sheet at December 31, 2022 has been derived from the audited Balance Sheet at December 31, 2022 contained in the Company’s 2022 Form 10-K. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
F-8
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies (cont.)
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash and cash equivalents. The Company did not have any cash equivalents as of March 31, 2023 and December 31, 2022.
Investments Held in Trust Account
The Company’s portfolio of investments held in the Trust Account is comprised solely of cash and investments in money market funds that invest in U.S. government treasury obligations and generally have a readily determinable fair value. Such securities and investments in money market funds are presented on the balance sheet at fair value at the end of each reporting period. Interest earned is paid in kind through the issuance of additional U.S. government treasury obligations and recognized as interest income in the statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
Offering Costs
Offering
costs consist of legal, accounting, underwriting fees and other costs incurred that are directly related to the Initial Public Offering.
Offering costs of $
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Deposit Insurance Corporation limit of $
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements,” approximates the carrying amounts represented in the balance sheets, primarily due to their short-term nature.
F-9
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies (cont.)
Fair Value Measurement
ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.
The three levels of the fair value hierarchy under ASC 820 are as follows:
| ● | Level 1—Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used. |
| ● | Level 2—Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| ● | Level 3—Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation. |
In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, was conducted at the time of warrant issuance and management concluded that the warrants issued in the Units and Placement Units qualified for equity accounting treatment.
Redeemable Shares
All
of the
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares
to equal the redemption value at the end of each reporting period. Such changes are reflected in retained earnings, or in the absence
of retained earnings, in additional paid-in capital. As of December 31, 2021, the Company recorded an adjustment to present the redeemable
Class A ordinary shares at redemption value of $
F-10
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies (cont.)
Redeemable Shares (cont.)
At March 31, 2023, the Class A ordinary shares reflected in the accompanying condensed balance sheet are reconciled in the following table:
| Gross proceeds | $ | |||
| Less: | - | |||
| Proceeds allocated to Public Warrants | ( | ) | ||
| Offering costs attributable to Class A ordinary shares | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Class A ordinary shares subject to possible redemption | $ |
Income Taxes
ASC 740, “Income Taxes,” (“ASC 740”) clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
The Company is considered an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Share Compensation Expense
The Company accounts for share-based compensation expense in accordance with ASC 718, “Compensation — Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.
Net Income (Loss) Per Ordinary Share
The Company’s condensed statements of operations includes a presentation of income (loss) per share for Class A redeemable ordinary shares and income (loss) per share for Class A and Class B non-redeemable shares in a manner similar to the two-class method in calculating net income (loss) per ordinary share. Net income (loss) per ordinary share, basic and diluted, for redeemable ordinary shares is computed by dividing the pro rata net income (loss) between the redeemable ordinary share and the non-redeemable ordinary share by the weighted average number of ordinary shares outstanding for the period, as adjusted for the effects of deemed dividend under the assumption that they represent dividends to the holders of the redeemable ordinary shares. Net income (loss) per ordinary share, basic and diluted, for non-redeemable ordinary shares is computed by dividing the pro rata net income (loss) between the redeemable and non-redeemable ordinary shares by the weighted average number of ordinary shares outstanding for the period.
F-11
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies (cont.)
Net Income (Loss) Per Ordinary Share (cont.)
The calculation of diluted income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the Public Offering since the exercise of the warrants is contingent upon the occurrence of future events. For the period ended March 31, 2023, the Company did not have any dilutive warrants, securities or other contracts that could potentially, be exercised or converted into ordinary shares. As a result, diluted income (loss) per ordinary share is the same as basic ordinary share for the three month periods ended March 31, 2023 and 2022.
A reconciliation of net income (loss) per ordinary share as adjusted for the portion of income (loss) that is attributable to ordinary shares subject to redemption is as follows:
| Three months ended March 31, 2023 | Three months ended March 31, 2022 | |||||||
| Redeemable Class A Ordinary Share: | ||||||||
| Net income (loss) allocable to ordinary shareholders | $ | $ | ( | ) | ||||
| Less: Net income (loss) allocable to Nonredeemable Class A and Class B ordinary shares | ( | ) | ||||||
| Net income (loss) allocable to Redeemable Class A ordinary shares | $ | $ | ( | ) | ||||
| $ | $ | ( | ) | |||||
| Nonredeemable Class A and Class B Ordinary Shares | ||||||||
| Net income (loss) allocable to Nonredeemable Class A and Class B ordinary shares | ( | ) | ||||||
| $ | $ | ( | ) | |||||
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 the Company’s financial statements.
Note 3 — Public Offering
Pursuant
to the Initial Public Offering, the Company sold
Note 4 — Private Placement
The
Sponsor purchased an aggregate of
F-12
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 5 — Related-Party Transactions
Founder Shares
On
April 7, 2021, the Sponsor purchased
The
Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur
of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the
last sale price of the Class A ordinary shares equals or exceeds $
Related-Party Loans
On
March 17, 2021, the Sponsor agreed to loan the Company an aggregate of up to $
In
addition, in order to finance operations and transaction costs in connection with a Business Combination, the Sponsor or an affiliate
of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may
be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working
Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid
only out of funds held outside the Trust Account. 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined
and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business
Combination, without interest, or, at the lender’s discretion, up to $
On
January 18, 2023, the Sponsor requested that the Company effectuate the First Extension. In connection with the First Extension, on January
19, 2023, the Company issued the First Extension Note in the aggregate principal amount of $
Additionally,
on April 10, 2023, the Sponsor requested that the Company effectuate the Second Extension. In connection with the Second Extension, on
April 10, 2023, the Company issued the Second Extension Note in the aggregate principal amount of $
Administrative Support Agreement
The
Company has agreed, commencing on the date the securities of the Company are first listed on the New York Stock Exchange through the
earlier of the Company’s consummation of a Business Combination and its liquidation, to pay an affiliate of the Sponsor a total
of $
F-13
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 6 — Commitments
Registration Rights
The holders of the Founder Shares, Placement Units (including securities contained therein) and units (including securities contained therein) that may be issued upon conversion of extension loans or Working Capital Loans, and any Class A ordinary shares issuable upon the exercise of the Placement Warrants and any Class A ordinary shares and warrants (and underlying Class A ordinary shares) that may be issued upon conversion of units issued as part of the Working Capital Loans and Class A ordinary shares issuable upon conversion of the Founder Shares, will be entitled to registration rights pursuant to a registration rights agreement signed on October 20, 2021, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A ordinary shares). The holders of the majority of these securities are entitled to make up to three demands, excluding short form 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 completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering the Company’s securities.
Underwriting Agreement
The
Company paid the underwriters a cash underwriting discount of $
Placement Agent Agreements
On
June 20, 2022, the Company entered into an agreement with a placement agent in connection with its proposed business combination. Upon
consummation of the proposed business combination, the Company shall pay a transaction fee, payable in cash, of (i) two million dollars
($
On
January 11, 2023, the Company entered into an agreement with a placement agent in connection with its proposed business combination.
Upon consummation of the proposed business combination, the Company shall pay a transaction fee of (i) one million dollars ($
Note 7 — Shareholders’ Equity (Deficit)
Preference
Shares — The Company is authorized to issue
Ordinary Shares
Class A
Ordinary Shares — The Company is authorized to issue
Class B
Ordinary Shares — The Company is authorized to issue
Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders except as required by applicable law.
F-14
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 7 — Shareholders’ Equity (Deficit) (cont.)
The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a
one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are
issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination,
the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders
of a majority of the outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed
issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal,
in the aggregate, on an as-converted basis,
In
connection with the execution of the Lifezone Business Combination, the Sponsor agreed to deposit
Note 8 — Warrants
Warrants
may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole
warrants will trade. The warrants will become exercisable 30 days after the completion of a Business Combination. The warrants will
expire
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue Class A ordinary shares upon exercise of a warrant unless Class A ordinary shares issuable upon such warrant exercise have been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a post-effective amendment to this registration statement or a new registration statement under the Securities Act, covering the Class A ordinary shares issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain the effectiveness of such registration statement and a current prospectus relating thereto until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
Once the warrants become exercisable, the Company may redeem the warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon not less than 30 days’ prior written notice of redemption given after the warrants become exercisable; and |
| ● | if, and only if, the reported last sale price of the Company’s Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. |
F-15
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 8 — Warrants (cont.)
If and when the warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of ordinary shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In
addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of a Business Combination at an issue price or effective issue price of less than $
The Placement Warrants are identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.
Note 9 — Fair Value Measurements
The following tables present information about the Company’s assets and liabilities that are measured on a recurring basis as of March 31, 2023 and December 31, 2022, and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.
| March
31, 2023 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Cash in demand deposit account | ||||||||||||||||
| Investment in United States Treasury money market mutual funds | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| December 31, 2022 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Investment in United States Treasury money market mutual funds | $ | $ | $ | $ | ||||||||||||
F-16
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 10 — Lifezone Business Combination
Business Combination Agreement
On December 13, 2022, the Company, Lifezone Metals, the Company’s Sponsor, Aqua Merger Sub (“Merger Sub”), an entity incorporated in the Caymen Islands and wholly owned subsidiary of Lifezone Metals, Lifezone Holdings Limited (“LHL”), Keith Liddell (solely in the capacity of LHL shareholder representative, the “LHL Shareholders Representative”), and certain LHL shareholders (the “LHL Shareholders”) entered into the Lifezone Business Combination Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Lifezone Business Combination Agreement, the following transactions will occur: (a) the merger of the Company with and into Merger Sub, with Merger Sub surviving the merger and the security holders of the Company (other than the security holders of the Company electing to redeem their ordinary shares or exercising their dissenters’ rights) becoming security holders of Lifezone Metals in accordance with the Companies Act, (b) the automatic conversion and exchange of (i) each issued and outstanding public warrant of the Company for the right to receive one Lifezone Metals public warrant and (ii) each issued and outstanding private warrant of the Company (whether or not a whole warrant) into the right to receive one Lifezone Metals private warrant, (c) the acquisition by Lifezone Metals of all of the issued and outstanding share capital of LHL from the LHL Shareholders in exchange for the issuance of Lifezone Metals ordinary shares and, if applicable, the issuance of Earnout Shares (as defined in the Lifezone Business Combination Agreement), pursuant to which LHL will become a direct wholly owned subsidiary of Lifezone Metals, and (d) the other transactions contemplated by the Lifezone Business Combination Agreement and the Ancillary Documents referred to therein.
In
consideration for the Merger, each shareholder of the Company will receive one Lifezone Metals ordinary share and one Lifezone Metals
warrant for each ordinary share and whole warrant they hold in the Company, respectively, immediately prior to the Merger. In accordance
with the terms and subject to the conditions of the Lifezone Business Combination Agreement, the consideration to be received by the
LHL Shareholders (fully diluted for the exercise and vesting of (i) any outstanding options to purchase LHL ordinary shares, whether
or not exercisable and whether or not vested, granted under the LHL option plan (“LHL Options”) (ii) any restricted stock
units granted by LHL (a) payable in LHL ordinary shares or (b) the value of which is determined with reference to the value of the shares
of LHL, whether or not exercisable and whether or not vested (“LHL RSUs”)) in connection with the Share Acquisition will
be the issuance of an aggregate number of Lifezone Metals ordinary shares equal to (a) $
In connection with the closing of the Share Acquisition (the “Share Acquisition Closing”), unvested LHL options will vest and become exercisable and the vesting of LHL RSUs will accelerate and holders of LHL awards will have the opportunity to exercise their LHL options and settle their LHL RSUs, in each case, subject to full payment of the applicable exercise price or call price. LHL ordinary shares delivered pursuant to the exercise or settlement of a LHL equity award will be treated the same as other LHL ordinary shares in connection with the Share Acquisition Closing. On the Share Acquisition Closing, any unexercised LHL options or LHL RSUs whose call price is not paid in full will lapse for no consideration.
F-17
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 10 — Lifezone Business Combination (cont.)
Sponsor Support Agreement
In connection with the execution of the Lifezone Business Combination Agreement, the Company’s sponsor entered into a support agreement (the “Sponsor Support Agreement”) with the Company, Lifezone Metals and LHL, pursuant to which the Company’s Sponsor has agreed to, among other things, (a) vote at any meeting of the Company’s shareholders to be called for approval of the LHL Transactions all ordinary shares of the Company held of record or thereafter acquired by the Sponsor (collectively, the “Sponsor Securities”) in favor of the Shareholder Approval Matters, (b) be bound by certain other covenants and agreements related to the LHL Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities and warrants exercisable for Sponsor Securities, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement. The Sponsor Support Agreement also provides that the Company’s Sponsor has agreed irrevocably to waive its redemption rights in connection with the consummation of the LHL Transactions with respect to any Sponsor Securities they may hold.
Subject
to the conditions set forth in the Sponsor Support Agreement, the Company’s Sponsor additionally agreed to deposit
Subject
to the conditions set forth in the Sponsor Support Agreement, each LHL Shareholder’s Closing Number of Shares (as defined in the
Lifezone Business Combination) issued at the Share Acquisition Closing shall be increased by a number of Lifezone Metals ordinary shares
equal to the number of Sponsor Securities forfeited pursuant to the Sponsor Support Agreement. The Company’s Sponsor shall forfeit
its shares at a value of $
PIPE Subscription Agreements
Upon
closing of the Lifezone Business Combination, the Company and Lifezone Metals entered into subscription agreements (the “Subscription
Agreements”) with certain institutional and accredited investors, pursuant to which such investors agreed to subscribe for and
purchase, and Lifezone Metals agreed to issue and sell to such investors an aggregate of
F-18
GOGREEN INVESTMENTS CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 10 — Lifezone Business Combination (cont.)
New Registration Rights Agreement
The Lifezone Business Combination Agreement contemplates that, at the Share Acquisition Closing, Lifezone Metals, certain LHL equityholders, certain Company equityholders, the Company’s Sponsor and the Company will enter into the New Registration Rights Agreement, pursuant to which Lifezone Metals will agree to register for resale certain shares of Lifezone Metals ordinary shares and other equity securities of Lifezone Metals that are held by the parties thereto from time to time. Pursuant to the New Registration Rights Agreement, Lifezone Metals will agree to file a shelf registration statement registering the resale of all of the Registrable Securities (as defined in the New Registration Rights Agreement) no later than 30 days of the Share Acquisition Closing. Lifezone Metals also agreed to provide customary “piggyback” registration rights, subject to certain requirements and customary conditions. The New Registration Rights Agreement also provides that Lifezone Metals will pay certain expenses relating to such registrations and indemnify the shareholders against certain liabilities.
Warrant Assumption Agreement
The Lifezone Business Combination Agreement contemplates that, immediately prior to the Merger Effective Time, the Company and Continental will enter into an Assignment, Assumption and Amendment Agreement (the “Warrant Assumption Agreement”), which amends that certain Warrant Agreement, dated as of October 20, 2021, by and between the Company and Continental, as warrant agent (the “Existing Warrant Agreement”), pursuant to which (a) the Company will assign to Lifezone Metals, and Lifezone Metals will assume, all of the Company’s right, title and interest in and to the Existing Warrant Agreement and (b) each warrant of the Company shall be modified to no longer entitle the holder to purchase the Company’s ordinary shares and instead acquire an equal number of Lifezone Metals ordinary shares per warrant of the Company.
Note 11 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the financial statements were available to be issued. Other than as described elsewhere herein, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
F-19
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,” “us,” “our” or “we” refer to GoGreen Investments Corporation. The following discussion and analysis of our unaudited condensed financial information and results of operations should be read in conjunction with our financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report including, without limitation, statements under 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. When used in this Report, 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. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed 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 incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a business combination. We have not selected any specific business combination target. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of the placement units, our shares, debt or a combination of cash, shares and debt.
The issuance of additional ordinary shares in a business combination:
| ● | may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; |
| ● | may subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares; |
| ● | could cause a change of control if a substantial number of our ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
| ● | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
| ● | may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants. |
Similarly, if we issue debt securities, it could result in:
| ● | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
1
| ● | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
| ● | our inability to pay dividends on our ordinary shares; |
| ● | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
As indicated in the accompanying financial statements, at March 31, 2023, we had $1,688 in cash held outside of our trust account. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful.
Recent Developments
On December 13, 2022, the Company, Lifezone Metals Limited, our sponsor, Merger Sub, LHL, the LHL Shareholders Representative and the LHL Shareholders entered into the Lifezone Business Combination Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Lifezone Business Combination Agreement, the following transactions will occur: (a) the merger of the Company with and into Merger Sub, with Merger Sub surviving the merger and the security holders of the Company (other than the security holders of the Company electing to redeem their ordinary shares or exercising their dissenters’ rights) becoming security holders of Lifezone Metals in accordance with the Companies Act, (b) the automatic conversion and exchange of (i) each issued and outstanding public warrant of the Company for the right to receive one Lifezone Metals public warrant and (ii) each issued and outstanding private warrant of the Company (whether or not a whole warrant) into the right to receive one Lifezone Metals private warrant, (c) the acquisition by Lifezone Metals of all of the issued and outstanding share capital of LHL from the LHL Shareholders in exchange for the issuance of Lifezone Metals ordinary shares and, if applicable, the issuance of Earnout Shares (as defined in the Lifezone Business Combination Agreement), pursuant to which LHL will become a direct wholly owned subsidiary of Lifezone Metals, and (d) the other transactions contemplated by the Lifezone Business Combination Agreement and the Lifezone Ancillary Documents referred to therein.
The LHL Transactions will be consummated subject to the deliverables and provisions as further described in the Lifezone Business Combination Agreement.
Results of Operations and Known Trends or Future Events
All activity through October 25, 2021, relates to our formation and the initial public offering. Since the initial public offering, our activities have been limited to the evaluation of business combination candidates. We generate non-operating income in the form of interest income on marketable securities held in the trust account. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combinations
For the three months ended March 31, 2023, we had a net income of $1,301,058, which consists of interest income of $2,604,693 partially offset by operating costs of $1,303,635.
Liquidity, Capital Resources, and Going Concern
Until the consummation of the Initial Public Offering, our only sources of liquidity were an initial purchase of founder shares of $25,000 by the Sponsor, and a total of $375,000 from our Sponsor under an unsecured promissory note which was repaid in full on October 25, 2021.
On October 25, 2021, we consummated our Initial Public Offering in which we sold 27,600,000 Units at a price of $10.00 per unit generating gross proceeds of $276,000,000 before underwriting fees and expenses. Our Sponsor purchased 1,335,000 Placement Units at a price of $10.00 per unit generating $13,350,000 in a private placement that occurred simultaneously with the Initial Public Offering.
In connection with the Initial Public Offering, we incurred offering costs of $15,817,581 (including an underwriting fee of $5,520,000 and deferred underwriting commissions of $9,660,000). Other incurred offering costs consisted principally of preparation fees related to the Initial Public Offering. A total of $281,520,000 ($10.20 per unit sold in the Initial Public Offering) of the net proceeds from the Initial Public Offering and the private placement were deposited in the Trust Account established for the benefit of our public shareholders.
2
As of March 31, 2023, we have available to us $1,688 of cash on our balance sheet. We will use these funds, and additional funds received from our Sponsor in the form of working capital loans, primarily to evaluate target businesses, perform business, legal, and accounting 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 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 at the time of the business combination. The units would be identical to the placement units sold in the private placement. 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. We do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates 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. On June 6, 2022, we issued a Note for borrowing of up to $300,000 from our Sponsor in connection with advances our Sponsor has made, and may make in the future, to the Company for working capital purposes. As of March 31, 2023, the Company has $300,000 outstanding under the Note. On January 19, 2023, we issued a Working Capital Note for borrowings of up to $300,000 from our Sponsor in connection with advances our Sponsor has made, and may make in the future, to the Company for working capital purposes. As of March 31, 2023, the Company has drawn down $300,000 under the Note. On April 10, 2023, we issued a Working Capital Note for borrowings of up to $300,000 from our Sponsor in connection with advances our Sponsor has made, and may make in the future, to the Company for working capital purposes. As of May 4, 2023, the Company has drawn down $200,000 under the Note.
On January 18, 2023, the Sponsor requested that the Company effectuate the First Extension. In connection with the First Extension, on January 19, 2023, the Company issued the First Extension Note in the aggregate principal amount of $2,760,000 to the Sponsor. Also on January 19, 2023, the Sponsor deposited the First Extension Payment of $2,760,000 (representing $0.10 per public share) into the Trust Account. This deposit enabled the Company to implement the First Extension. The First Extension is the first of two three-month extensions permitted under the Company’s governing documents.
Additionally, on April 10, 2023, the Sponsor requested that the Company effectuate the Second Extension. In connection with the Second Extension, on April 10, 2023, the Company issued the Second Extension Note in the aggregate principal amount of $2,760,000 (representing $0.10 per public share) to the Sponsor and Lifezone Limited. On April 12, 2023, Lifezone Limited deposited the Lifezone Extension Payment of $1,380,000 (representing $0.05 per public share) into the Trust Account. On April 13, 2023, the Sponsor deposited the Sponsor Payment of $1,380,000 into the Trust Account. These deposits enabled the Company to implement the Second Extension. In connection with the Lifezone Extension Payment provided by Lifezone Limited, the Sponsor agreed to forfeit the right to receive 41,400 ordinary shares in Lifezone Metals immediately prior to the closing of the Business Combination.
Prior to the completion of our initial business combination, we expect our primary liquidity requirements during that period to include approximately $725,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $325,000 for legal and accounting fees related to regulatory reporting requirements; $185,000 for NYSE and other regulatory fees; $180,000 for office space, administrative and support services for up to 18 months (which may be extended to up to 21 months as described elsewhere in this Report); and approximately $100,000 for general working capital that will be used for miscellaneous expenses and reserves net of estimated interest income.
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
We will need to raise additional funds in order to meet the expenditures required for operating our business. Because our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination were less than the actual amount necessary to do so, we will have insufficient funds available to operate our business prior to our initial business combination. Moreover, we will 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.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements. 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 entered into any non-financial assets.
3
At March 31, 2023, we did not have any capital lease obligations or operating lease obligations.
Commencing on the effective date of the Initial Public Offering through the earlier of the our consummation of a Business Combination and its liquidation, we agreed to pay an affiliate of our Sponsor a total of $10,000 per month for office space, administrative and support services. For the three months ended March 31, 2023, we paid a total of $30,000 under this arrangement.
The underwriters in our initial public offering were paid a cash underwriting fee of 2% of gross proceeds of the initial public offering or $5,520,000. In addition, the underwriters entitled to aggregate deferred underwriting commissions of $9,660,000 consisting of 3.5% of the gross proceeds of the initial public offering. The deferred underwriting commissions were to become payable to the underwriters from the amounts held in the trust account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement. On October 19, 2022, we received a waiver of a portion of the deferred fee from one of our underwriters. As a result of this waiver the deferred fee has been reduced by $4,830,000 leaving a remaining deferred fee of $4,830,000 due at the closing of a Business Combination. Subsequently, on January 26, 2023, the second underwriter waiver their right to the remaining deferred underwriting commissions.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with GAAP requires the Company’s 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. The Company has identified the following as its critical accounting policies:
Ordinary shares subject to possible redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption is presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Income (Loss) Per Common Share
The Company’s statement of operations includes a presentation of income (loss) per share for redeemable ordinary shares and income (loss) per share for Class A and Class B non-redeemable shares in a manner similar to the two-class method in calculating net income (loss) per ordinary share. Net income (loss) per ordinary share, basic and diluted, for redeemable ordinary shares is computed by dividing the pro rata net income (loss) between the redeemable ordinary share and the non-redeemable ordinary share by the weighted average number of ordinary shares outstanding for the period as adjusted for the effects of deemed dividend under the assumption that they represent dividends to the holders of the redeemable ordinary shares. Net income (loss) per ordinary share, basic and diluted, for non-redeemable ordinary shares is computed by dividing the pro rata net income (loss) between the redeemable and non-redeemable ordinary shares by the weighted average number of ordinary shares outstanding for the period.
The calculation of diluted income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the Public Offering since the exercise of the warrants are contingent upon the occurrence of future events. For the three months ended March 31, 2023, the Company did not have any dilutive warrants, securities or other contracts that could potentially, be exercised or converted into ordinary shares. As a result, diluted income (loss) per ordinary share is the same as basic ordinary share for the year ended March 31, 2023.
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 the Company’s financial statements.
Factors That May Adversely Affect Our Results of Operations
Our results of operations and our ability to complete an initial business combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete initial business combination.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Through March 31, 2023, our efforts have been limited to organizational activities, activities relating to our Initial Public Offering and since the Initial Public Offering, the search for a target business with which to consummate an initial Business Combination. We have engaged in limited operations and have not generated any revenues. We have not engaged in any hedging activities since our inception on March 17, 2021. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
The net proceeds of the Initial Public Offering and the sale of the Placement Units held in the Trust Account maintained by Continental Stock Transfer & Trust Company, acting as trustee, have been invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. As of March 31, 2023, $291,015,198 of the funds in our Trust Account were invested in cash and money market funds with a maturity of 185 days or less. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer (together, the “Certifying Officers”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting related to the Company’s controls over reconciliations for accrued expenses during the financial statement close and disclosure review process.
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
In connection with the preparation of this Quarterly Report on Form 10-Q for the three months ended March 31, 2023, an evaluation was performed under the supervision of and with the participation of management, including our CEO and CFO, of the effectiveness of the Company’s disclosure control and procedures. Based on that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were not effective as of March 31, 2023 due to the existence of a material weakness in internal control over financial reporting that was identified in connection with the audits of our financial statements as of December 31, 2022 and for the year then ended, and which we are currently remediating.
Management identified a material weakness related to the financial reporting process, which included not identifying and recording operating accruals and expenses related to the business combination and a lack of review of the Company’s financial statements at each reporting period. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report present fairly in all material respects our financial position, results of operations, and cash flows for the periods presented.
Management has implemented remediation steps to improve our disclosure controls and procedures and our internal control over the financial reporting process. Specifically, the Company has established a process by which all contracts and vendors are reviewed on a regular basis to determine if any expense was incurred and properly recorded. The Company has implemented a review of equity transactions to ensure the appropriate accounting for and valuation, as deemed necessary. The Company has also established a formal review process for its financial statements during which the preparers of financial statements present the financial statements to a group of reviewers within the management team with the results of such review being documented. We plan to further improve this process by implementing additional layers of reviews in the financial close process. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this report. As of the date of this report, other than as set forth below, there have been no material changes with respect to those risk factors previously disclosed in (i) our final prospectus dated October 20, 2021 (“Final Prospectus”) and (ii) our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 24, 2023, except as described below. Any of these factors could materially affect our business, financial position or results of operations. Additional risks could arise that may also affect our business or ability to consummate an initial business combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations, or our prospects.
The funds in our operating account and our trust account are held in banks or other financial institutions. Our cash held in non-interest bearing and interest-bearing accounts would exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, on March 10, 2023, the FDIC announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. Although we did not have any funds in Silicon Valley Bank or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions that hold our funds will not experience similar issues.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us in connection with a potential business combination, or at all, and could have material adverse impacts on our liquidity, our business, financial condition or results of operations, and our prospects. Our business may be adversely impacted by these developments in ways that we cannot predict at this time, there may be additional risks that we have not yet identified, and we cannot guarantee that we will be able to avoid negative consequences directly or indirectly from any failure of one or more banks or other financial institutions. The Company’s operating checking account and its Trust Account are with Citibank, N.A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None. For a description of the use of proceeds generated in the Initial Public Offering and private placement, please see the Company’s Final Prospectus filed with the SEC on October 20, 2021. There has been no material change in the planned use of proceeds from the Company’s Initial Public Offering and private placement as described in the Final Prospectus.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished herewith. |
| ^ | Previously filed |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GOGREEN INVESTMENTS CORPORATION |
| Date: May 4, 2023 | /s/ John Dowd | |
| Name: | John Dowd | |
| Title: | Chief Executive Officer and Chairman | |
| (Principal Executive Officer) | ||
| Date: May 4, 2023 | /s/ Michael Sedoy | |
| Name: | Michael Sedoy | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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