UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
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The aggregate market value of the registrant’s common stock outstanding
at June 30, 2023, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing
price for common stock on such date, as reported on The Nasdaq Stock Market LLC, was $
As of March 6, 2024
DOCUMENTS INCORPORATED BY REFERENCE
None.
Table of Contents
i
CERTAIN TERMS
References to the “Company,” “GGAA,” “our,” “us” or “we” refer to Genesis Growth Tech Acquisition Corp., a blank check company incorporated on March 17, 2021 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this Annual Report on Form 10-K as our “initial business combination.” References to our “Sponsor” refer to Genesis Growth Tech LLC, a Cayman Islands limited liability company. References to “equity-linked securities” are to any securities of the Company or any of our subsidiaries which are convertible into, or exchangeable or exercisable for, equity securities of the Company or such subsidiary, including any securities issued by the Company or any of our subsidiaries which are pledged to secure any obligation of any holder to purchase equity securities of the Company or any of our subsidiaries. References to the “SEC” are to the U.S. Securities and Exchange Commission. References to our “Initial Public Offering” refer to our initial public offering, which closed on December 13, 2021 (the “IPO Closing Date”). References to “Class A Ordinary Shares” are to our Class A ordinary shares, par value $0.0001, and references to “public shares” are to our Class A Ordinary Shares sold as part of the units in our Initial Public Offering. References to “public shareholders” are to the holders of our public shares.
FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report on Form 10-K may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual Report on Form 10-K may include, for example, statements about:
| ● | our ability to select an appropriate target business or businesses; |
| ● | our ability to complete our initial business combination; |
| ● | our expectations around the performance of the prospective target business or businesses; |
| ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
| ● | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
| ● | our potential ability to obtain additional financing to complete our initial business combination; |
| ● | our pool of prospective target businesses; |
| ● | our ability to consummate our initial business combination due to the direct and indirect impacts of the COVID-19 pandemic, including related economic impacts, and other events (such as terrorist attacks, natural disasters or other significant outbreaks of infectious diseases); |
| ● | the ability of our officers and directors to generate a number of potential acquisition opportunities; |
| ● | our public securities’ potential liquidity and trading; |
| ● | the lack of a market for our securities; |
| ● | the use of proceeds not held in the Trust Account described below or available to us from interest income on the Trust Account balance; |
| ● | the Trust Account not being subject to claims of third parties; or |
| ● | our financial performance. |
The forward-looking statements contained in this Annual Report on Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under “Part I, Item 1A. Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
ii
PART I
Item 1. Business.
Introduction
We are a blank check company incorporated on March 17, 2021 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.
On May 26, 2021, our Sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001 (the “Founder Shares”). The per share price of the Founder Shares was determined by dividing the amount contributed to us by the number of Founder Shares issued. On September 20, 2021, our Sponsor surrendered an aggregate of 1,437,500 Founder Shares to the Company’s capital for no consideration, resulting in the Sponsor holding an aggregate of 5,750,000 Founder Shares. On December 3, 2021, our Sponsor agreed to transfer to Nomura Securities International, Inc. (“Nomura”) an aggregate of 431,250 Founder Shares at the Sponsor’s original purchase price. On December 8, 2021, we effected a share capitalization pursuant to which we issued an additional 575,000 Founder Shares to our Sponsor and we also agreed to transfer to Nomura an additional 43,125 Founder Shares. As a result, our Sponsor holds 5,850,625 Founder Shares and Nomura holds 474,375 Founder Shares.
On the IPO Closing Date, we consummated our upsized Initial Public Offering of 22,000,000 units (the “units”). The units consist of one public share and one-half of one warrant (the “public warrants”). Each public warrant entitles the holder thereof to purchase one of our Class A ordinary shares at a price of $11.50 per share, subject to adjustment, and only whole warrants are exercisable. On December 21, 2021, we issued an additional 3,300,000 units in connection with the closing of the underwriters’ full exercise of their over-allotment option (the “Over-Allotment Option”). The units were sold at a price of $10.00 per unit, generating aggregate gross proceeds to us from the Initial Public Offering and the Over-Allotment Option of approximately $253 million.
On the IPO Closing Date, we completed the private sale of 8,050,000 private placement warrants (the “private placement warrants”, and, together with the public warrants, the “warrants”) at a purchase price of $1.00 per private placement warrant to our Sponsor. Each private placement warrant entitles the holder to purchase one of our Class A ordinary shares at $11.50 per share. The private placement warrants (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination. On December 21, 2021, we issued an additional 825,000 private placement warrants to our Sponsor in connection with the closing of the Over-Allotment Option. In total, the sales of the private placement warrants in connection with our Initial Public Offering and the Over-Allotment Option generated aggregate gross proceeds to us of approximately $8.8 million.
The warrants will become exercisable 30 days after the completion of our initial business combination; provided that we have an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their public warrants on a cashless basis under the circumstances specified in the warrant agreements), and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation.
Approximately $253 million of the net proceeds from our Initial Public Offering, the Over-Allotment Option and the sale of the private placement warrants in connection with our Initial Public Offering and the Over-Allotment Option was deposited in a trust account established for the benefit of our public shareholders (the “Trust Account”). The approximately $253 million of net proceeds deposited in the Trust Account included approximately $13.9 million of deferred underwriting discounts and commissions that was to be released to Nomura, as the underwriters of our Initial Public Offering, upon completion of our initial business combination. On January 26, 2023, Nomura waived its right to receive such $13.9 million of deferred underwriting commissions. Of the gross proceeds from our Initial Public Offering, the Over-Allotment Option and the sale of the private placement warrants in connection with our Initial Public Offering and the Over-Allotment Option that were not deposited in the Trust Account, approximately $2.5 million was used to pay underwriting discounts and commissions in connection with our Initial Public Offering, approximately $0.47 million was used to repay loans and advances from our Sponsor, and the balance was reserved to pay accrued offering and formation costs, business, legal and accounting due diligence expenses on prospective acquisitions and continuing general and administrative expenses.
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The Founder Shares that we issued prior to the IPO Closing Date will automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis, subject to adjustment for share sub-division, share dividends, reorganizations, recapitalizations and the like. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in our Initial Public Offering and related to the closing of the initial business combination, the ratio at which the Founder Shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Founder 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 issued and outstanding Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion of our Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination).
On January 31, 2022, we announced that, commencing on January 31, 2022, holders of the units sold in our Initial Public Offering and Over-Allotment Option may elect to separately trade the public shares and public warrants included in the units.
Recent Developments
Contribution and Business Combination Agreement
On November 20, 2023, Genesis Growth Tech Acquisition Corp., a Cayman Islands exempted company (“GGAA”), entered into that certain Contribution and Business Combination Agreement (the “Agreement”), by and between GGAA and Genesis Growth Tech LLC, a Cayman Islands limited liability company (“Sponsor”), pursuant to which, among other things, (a) Sponsor will contribute, transfer, convey, assign and deliver to GGAA all of Sponsor’s rights, title and interest in and to a portfolio of patents acquired by Sponsor pursuant to that certain Patent Purchase Agreement, effective as of September 21, 2023 (as amended by the First Amendment to Patent Sale Agreement dated November 14, 2023 and as it may be further amended from time to time, the “Patent Purchase Agreement”), by and between Sponsor and MindMaze Group SA, a Swiss corporation (“MindMaze”), and which includes (i) the Assigned Patent Rights, including the Additional Rights, as such terms are defined in the Patent Purchase Agreement, and (ii) all other intellectual property rights acquired by the Sponsor under the Patent Purchase Agreement, and (b) GGAA will pay to Sponsor one thousand dollars ($1,000) and will assume and agree to perform and discharge all of Sponsor’s obligations under the Patent Purchase Agreement, including the obligation to pay to MindMaze a purchase price of $21 Million (the “MindMaze IP Purchase Price”) on or prior to May 31, 2024 and the obligation to share certain revenues with MindMaze, on the terms and subject to the conditions set forth in the Patent Purchase Agreement (collectively, the “Transaction”).
Sponsor is the sponsor of GGAA, and currently owns 6,325,000 Class B ordinary shares of GGAA, representing approximately 98.7% of the outstanding ordinary shares of GGAA, and 8,875,000 warrants to purchase 8,875,000 Class A ordinary shares at $11.50 per share.
Pursuant to the Agreement, each of the parties to the Agreement has made customary representations, warranties and covenants in the Agreement, including covenants by Sponsor not to dispose of or otherwise encumber the assets to be sold to GGAA.
Consummation of the Transaction is subject to customary conditions, including, among other things (a) the absence of any law, order or action restraining or prohibiting the Transaction, (b) approval of the shareholders of GGAA, (c) GGAA receiving a fairness opinion that the Transaction is fair to GGAA from a financial point of view, (d) MindMaze executing an extension for the payment of the MindMaze IP Purchase Price, (e) Sponsor having caused MindMaze to execute a consent to assignment of the Patent Purchase Agreement from Sponsor to GGAA, (f) GGAA having filed amended and restated memorandum and articles of association deleting the various provisions applicable only to special purpose acquisition companies (the “Amended SPAC Articles”), and (g) GGAA having executed a warrant exchange agreement for the exchange of the private warrants owned by GGAA for ordinary shares of GGAA.
The Agreement may be terminated by GGAA and Sponsor under certain circumstances, including, among others, (a) by mutual written agreement of GGAA and Sponsor, (b) by either GGAA or Sponsor if the closing has not occurred on or before on or before the latest of (i) December 13, 2024 and (ii) if one or more extensions to a date following December 13, 2024 are obtained at the election of GGAA, with GGAA shareholder vote, in accordance with the GGAA’s amended and restated memorandum and articles of association, the last date for GGAA to consummate a Business Combination pursuant to such extensions and (c) by either GGAA or Sponsor if the Transaction is prohibited or made illegal by a final, nonappealable governmental order or law.
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The board of directors of GGAA has unanimously (a) approved and declared advisable the Agreement and the transactions contemplated by the Agreement, (ii) determined that the Transaction constitutes a “Business Combination” (as such term is defined in the amended and restated memorandum and articles of association of GGAA), and (b) resolved to recommend approval of the Agreement and related matters by GGAA’s shareholders.
GGAA expects to file proxy materials as promptly as practicable after the date of the Agreement for the purpose of soliciting proxies from holders of GGAA’s ordinary shares sufficient to obtain shareholder approval of the Agreement and the transactions contemplated by the Agreement, and the Amended SPAC Articles, at a meeting of holders of GGAA’s ordinary shares to be called and held for such purpose. The closing is expected to occur following the fulfillment or waiver of the closing conditions set forth in the Agreement.
A copy of the Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the foregoing description of the Agreement is qualified in its entirety by reference thereto. The Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. GGAA and Sponsor do not believe that these schedules contain information that is material to an investment decision.
Notice of Delisting
The Nasdaq Stock Market LLC (the “Exchange”) has determined to remove from listing the securities of Genesis Growth Tech Acquisition Corp. (the “Company” or “GGAA”), effective at the opening of the trading session on November 30, 2023. A Form 25 was filed with the SEC on November 20, 2023.
Based on review of information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rules 5452(a)(1) and 5452(a)(2)(C).
The Company was notified of the Staff determination on July 14, 2023.
On July 21, 2023, the Company exercised its right to appeal the Staff determination to the Listing Qualifications Hearings Panel (“Panel”) pursuant to Rule 5815. A Panel hearing was held on September 14, 2023. On October 2, 2023, upon review of the information provided by the Company, the Panel issued a decision denying the Company continued listing and notified the Company that trading in the Company securities would be suspended on July 25, 2023.
The Company did not appeal the Panel decision to the Nasdaq Listing and Hearing Review Council (“Council”) and the Council did not call the matter for review. The Staff determination to delist the Company became final on November 16, 2023.
The Company’s units, ordinary shares and warrants now trade on the OTC under the symbols OTCPK: GGAUF, GGAAF and GGAWF, respectively.
Extraordinary General Meeting
On February 22, 2023, GGAA held an extraordinary general meeting of shareholders (the “Extraordinary General Meeting”), at which holders of 25,309,185 ordinary shares in GGAA were present virtually or by proxy, representing approximately 80.0% of the voting power of the 31,625,000 ordinary shares issued and outstanding entitled to vote at the Extraordinary General Meeting at the close of business on January 27, 2023, which was the record date for the Extraordinary General Meeting. At the meeting, the shareholders approved an amendment to the amended and restated memorandum and articles of association to extend the deadline to complete an initial Business Combination from March 13, 2023 to September 13, 2023 (the “Extension Amendment Proposal”).
In connection with the Extension Amendment Proposal shareholders elected to redeem 25,198,961 Class A ordinary shares in GGAA, representing approximately 99.6% of the issued and outstanding Class A ordinary shares in GGAA, for a pro rata portion of the funds in GGAA’s trust account. As a result, approximately $263,325,414 (approximately $10.45 per share) will be debited from GGAA’s trust account to pay such holders.
On August 31, 2023, GGAA held a second extraordinary general meeting of shareholders at which holders of 5,883,786 ordinary shares in the Company were present virtually or by proxy, representing approximately 92% of the voting power of the 6,426,039 ordinary shares issued and outstanding entitled to vote at the Extraordinary General Meeting at the close of business on August 7, 2023, which was the record date for the Extraordinary General Meeting. In connection with the Second Extension Amendment Proposal, Shareholders holding an aggregate of 19,519 Class A ordinary shares of GGAA, representing approximately 0.3% of the issued and outstanding Class A ordinary shares in GGAA, elected to redeem such shares for a pro rata portion of the funds in GGAA’s trust account. As a result, approximately $246,605 (approximately $12.63 per share) was debited from the Company’s trust account to pay such holders. At this meeting shareholders of the Company also proposed and approved an additional extension proposal extending the timeline in which the Company can consummate a business combination from September 13, 2023, to December 13, 2024.
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Termination of Previously Planned Merger Agreement
On May 22, 2023, the Company, GGAC Merger Sub, Inc., a Florida corporation and newly formed wholly-owned subsidiary of GGAA (“Merger Sub”); NextTrip Holdings, Inc., a Florida corporation (“NextTrip”); and William Kerby, solely in his capacity as the representative for NextTrip’s shareholders as discussed in the Plan of Merger entered into an Agreement and Plan of Merger (the “Plan of Merger”) with the Company.
The Plan of Merger had contemplated that the Company and NextTrip would engage in a series of transactions pursuant to which, among other transactions, Merger Sub would merge with and into NextTrip, with NextTrip continuing as the surviving entity upon the closing of the transactions contemplated by the Plan of Merger, and becoming a wholly-owned subsidiary of the Company.
Effective as of August 16, 2023 and in accordance with Section 7.1(a) of the Plan of Merger, GGAA and NextTrip mutually agreed to terminate the Plan of Merger, pursuant to the terms of a termination agreement entered into by and between each of the parties to the Plan of Merger (the “Termination Agreement”). Additionally, under the Termination Agreement, each of GGAA, Merger Sub and the Purchaser Representative, released NextTrip, the Seller Representative, and each of their representatives, affiliates, agents and assigns, and each of NextTrip and the Seller Representative released GGAA, Merger Sub, the Purchaser Representative, and each of their representatives, affiliates, agents and assigns, for any claims, causes of action, liabilities or damages, except for certain liabilities that survive the termination pursuant to the terms of the Plan of Merger, or for breaches of the Termination Agreement.
Our Company
We are a blank check company incorporated as a Cayman Islands exempt company on March 17, 2021 and whose business purpose is to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this Annual Report as our initial business combination.
Although we may pursue an initial business combination in any industry or geographic region, we intend to focus our efforts on identifying attractively positioned technology companies operating primarily within the Consumer Internet industry with a substantial portion of its activities in Europe, Israel, the United Arab Emirates or the United States. We believe that our management team’s decades of experience operating, acquiring and investing in technology companies coupled with its deep global network, including direct relationships with the founders, executives and investors of many leading high-growth Consumer Internet companies, provide us with unique sourcing and targeting capabilities as we pursue a broad range of opportunities across these focus sectors and geographies.
We expect to favor potential target companies with specific industry and business characteristics where we can offer advice on strategic direction, M&A strategy, access to debt and equity capital markets and potential improvements in governance and enhancements to operations. Key target industry characteristics include compelling long-term growth prospects, large and expanding addressable markets, high barriers to entry, consolidation opportunities and favorable, long-term market trends. Key business characteristics may include high-growth or steady, long-term revenue growth, an attractive competitive position, unique products or services and potential for margin expansion and long-term free cash flow. Our objective is to consummate our initial business combination with such a business and enhance shareholder value by working closely with potential target companies on operational and strategic initiatives.
We will seek to capitalize on the key secular industry and geographical themes that are present across the technology company landscape and within the Consumer Internet industry specifically. According to Cisco, the number of internet users globally is projected to grow from $4.7 billion in 2021 to $5.3 billion in 2023, representing a CAGR of 6.2% and a 65%+ global internet penetration rate. Furthermore, COVID-19 lockdowns and mobility restrictions worldwide drove record gains in internet penetration, pointing to the resiliency and long-term growth prospects of the Consumer Internet industry. We expect companies in this industry to continue to benefit from these permanent changes in consumer purchasing habits and the global acceleration of consumers’ time spent online, and will lead to an abundance of target business combination opportunities.
We believe there are many potential target companies within our focus industries and geographies that are both attractive merger candidates and positioned to deliver substantial value to shareholders in the public markets. We believe many companies in the Consumer Internet industry could benefit from access to the public markets but have been inhibited by several factors, including the time it takes to conduct a traditional initial public offering, market volatility and pricing uncertainty.
Management, Our Sponsor and Board of Directors
Our management team is led by Michael Lahyani, a member and Co-Executive Chairman of our Board of Directors, our Chief Strategy Officer and our President and Eyal Perez, a member and Chairman of our Board of Directors, our Chief Executive Officer and Chief Financial Officer.
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Michael Lahyani has been a member and Co-Executive Chairman of our Board of Directors, our Chief Strategy Officer and our President since March 2021, and is the founder and Chief Executive Officer of Property Finder, the first and leading digital real estate and classifieds portal in MENA. Mr. Lahyani also serves as the Chairman of the Board of Directors of Dubicars.com and as a member of the Board of Directors of Hosco.com, Zingat.com and Foxstone.ch, all of which operate in the Consumer Internet industry. Mr. Lahyani began his career at PricewaterhouseCoopers in Geneva, Switzerland in 2002. In 2005, Mr. Lahyani founded Property Finder in Dubai and competed against major newspaper Gulf News, which maintained a dominant position within the real estate classifieds space in the region. In 2007, Mr. Lahyani sold a 51% interest in Property Finder to the ASX-listed REA Group, after which he remained CEO and pivoted the business model towards online channels, creating the first digital real estate marketplace in the MENA region. In 2009, during the Global Financial Crisis, Mr. Lahyani bought out REA Group’s interest in Property Finder and became the sole owner of Property Finder. He eventually led the company to become the number one destination for real estate listings, overtaking Gulf News and well-funded online competitor Dubizzle, which is backed by Euronext-listed Naspers Ltd, a global internet and entertainment group. Mr. Lahyani then helped drive Property Finder’s expansion into Qatar, Bahrain, Egypt, Saudi Arabia and Turkey through organic and inorganic channels. Mr. Lahyani closed a total of five strategic acquisitions, securing the number one position in four of the six markets in which Property Finder operates. In 2019, Mr. Lahyani raised $120 million for Property Finder from General Atlantic at an enterprise valuation of nearly $500 million and is on track to continue growing revenues greater than 30% annually. Property Finder today is EBITDA positive and employs over 450 professionals, including former senior executives from Facebook, Google, Pepsi, P&G and McKinsey & Company. Property Finder has been named Arabian Business Start-Up ‘SME of the Year’, SME ‘Online Business of the Year’, the winner of the Frost & Sullivan Middle East Customer Value award and winner/placing in ‘Dubai SME 100’. Mr. Lahyani is also a limited partner in General Atlantic, Sprints Capital and BECO Capital, giving him unique access to their portfolio companies and Founders. Additionally, Mr. Lahyani invests in startup technology companies directly or through Merro, an investment vehicle he co-founded with two partners that invests in online marketplace businesses globally. Mr. Lahyani co-invested alongside General Atlantic when they acquired Hemnet, a proptech company that recently conducted an IPO on the Nasdaq Stockholm stock exchange, and, more recently, Fresha, a well-funded beauty and wellness booking platform and marketplace. Mr. Lahyani was also an early investor in Quinto Andar, a leading rental platform in Brazil recently valued at $4 billion, and Kitopi, a managed cloud kitchen platform in the United Arab Emirates that raised $400 million in July 2021. Mr. Lahyani is a regular speaker at the Harvard Business Conference and the first Endeavor Entrepreneur of the UAE Chapter, a non-profit organization that supports entrepreneurship. He was awarded Middle East CEO of the year in 2016 by CEO Magazine. Mr. Lahyani holds a Bachelor and Master in Business Administration in Finance from HEC Lausanne.
Eyal Perez has been a member and Chairman of our Board of Directors, our Chief Executive Officer and our Chief Financial Officer since March 2021, and is currently the Principal and Founder of Genesis Advisors. Mr. Perez began his career at Bedrock Advisors as a research analyst and portfolio manager running investment portfolios in excess of $3 billion across multiple asset classes. He rose to the level of Executive Vice President and founded Bedrock Group’s asset management arm while driving and overseeing significant growth across the firm’s alternative asset management activities. In this capacity, he oversaw several significant technology-focused pre-IPO investments, including Snapchat (IPO in March 2017), Dropbox (IPO in March 2018), Hortonworks (IPO in December 2014; merger with Cloudera in January 2019) and later-stage investments, including Adyen (IPO in June 2018) and Slack (IPO in June 2019, acquisition by Salesforce in July 2021). After Bedrock Advisors, Mr. Perez founded Genesis Advisors, a hedge fund advisory and seeding firm focusing on special situation investing, alternative asset management and growth equity. At Genesis Advisors, Mr. Perez has raised $1.5 billion in capital from prominent alternative asset allocators acting as Sponsor of various investment vehicles over a five year period. As a prolific proponent of liquid alternatives, he also structured and seeded the first alternative UCITS vehicle for each of TCW Group and Advent Capital Management. Through his extensive network, Mr. Perez has cultivated deep relationships with unique pockets of institutional capital that have shown an appetite to invest across the entire capital structure continuum, from the front-end IPO to later stage PIPE transactions. Mr. Perez holds a Bachelor of Science in Business Administration from HEC Geneva, a Master of Science in Finance from the University of Geneva and is a CAIA® Charterholder.
Cem Habib has served as an independent member of our Board of Directors since December 13, 2021, and has been running his own investment portfolio and advising some of the largest family offices in the world on their global investments since 2016. Mr. Habib has also invested in a number of late-stage online marketplace companies over the past few years that have experienced successful IPOs, including Amwell, AirBNB, DIDI and others. Previously, he was CEO of SB Capital UK Limited, the FCA regulated UK affiliate of Skybridge, a leading boutique investment bank in Central Asia that has executed some of the largest financial advisory and capital markets transactions in the region. He was previously a Partner at Cheyne Capital Management, one of the largest alternative investment managers in Europe, until 2010. Cheyne Capital had acquired AltEdge Capital (UK) Limited, a fund of hedge funds manager, where Mr. Habib was a Principal, Portfolio Manager, Head of Research, Director and member of the Investment Committee. Mr. Habib was one of the founding members of AltEdge in 2001 and has extensive experience in the alternative investment management industry. He started his career in 1996 at the Millburn Corporation, a hedge fund that started trading in 1971 and is one of the longest running alternative investment managers. At Millburn Corporation, Mr. Habib focused on computerized trading systems, holding various positions during his five year tenure at the company. Mr. Habib holds a Bachelor of Arts in International Business and a Bachelor of Science in Finance from the Kogod School of Business, American University in Washington, D.C.
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We are confident that the combined experience of our management team and board members positions us well to identify, source, evaluate, negotiate, structure and execute an initial business combination with an attractive company in our targeted industries and geographies. The vast and global network of executives, investors and advisors accessible to our management team and board members will enable us to source business combination opportunities from private and growth equity firms, family-owned businesses or divisions of larger corporations. We will employ a disciplined and highly selective investment process and expect to add value to a target company through advice on strategic direction, add-on acquisitions, optimization of its capital structure and potential improvements to operations.
Business Combination Criteria
Our objective is to generate attractive returns for shareholders by identifying a high-quality target, negotiating favorable terms for a business combination and creating the foundation for long-term financial success. We will focus our efforts on sectors, geographies and opportunities where we feel our management team’s collective industry knowledge and geographical networks will provide us with unique sourcing and targeting advantages and where we are best situated to enhance the value of the business after completion of the initial business combination. After our initial business combination, we envision that the combined company’s strategy may include additional mergers and acquisitions with a focus on generating attractive risk-adjusted returns for our shareholders.
Our management team has developed strong domain knowledge and proprietary networks within certain Consumer Internet industries, including online marketplaces, digital classifieds and consumer-facing proptech and fintech sectors, as well as certain geographies, including Europe, Israel, the United Arab Emirates and the United States. Additionally, our management team and members of our Board of Directors have an extensive network of senior contacts within the industries and sectors we intend to target, including founders, corporate executives, investment banking professionals, private equity, growth equity, venture capital funds and other financial Sponsors and owners of private businesses. We believe these proprietary networks will differentiate us in our ability to source attractive business combination targets that meet our criteria, and that the reputation and expertise of our management team in the Consumer Internet industry will make us a preferred partner for potential business combination counterparties, especially in the geographic locations in which we intend to pursue a target.
Our management team’s expertise has been developed over decades through our founders’ demonstrated success in operating, acquiring and investing in businesses across a variety of industries and geographies, which has enabled us to develop a set of capabilities, including:
| ● | deep operational and strategic expertise within our sectors of focus; |
| ● | significant M&A deal experience, including originating, crafting and executing complex transactions; |
| ● | the ability to source, structure, acquire and sell businesses and achieve synergies to create shareholder value; |
| ● | setting and executing on organic and inorganic growth strategies; |
| ● | addressing business and technological changes in an evolving global technology and Consumer Internet landscape; |
| ● | fostering relationships with sellers, capital providers and target management teams; |
| ● | the ability to advise management teams in the transition from private to public markets, including from a board and governance perspective; |
| ● | developing unique sourcing channels that will enable access to attractive, proprietary deal flow and an efficient methodology for screening targets globally; |
| ● | an extensive history of accessing the debt and equity capital markets across various business cycles, including financing businesses and assisting companies with transition to public ownership; and |
| ● | a proven ability to close on transactions under all economic and financial market conditions. |
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This diversity of operational, M&A and investment experience will enable us to evaluate opportunities across multiple sectors within the Consumer Internet industry, including online marketplaces, digital classifieds and consumer-facing proptech and fintech businesses. We believe that this experience will enable us to enhance the strategic and operational performance of the assets and businesses that we acquire to maximize value for shareholders. This may include improving operating efficiencies, margins and profitability, driving revenue growth, investing in organic growth projects, pursuing future strategic acquisitions or divestitures and optimizing the capital structure. We believe our expertise in identifying and sourcing undervalued investment opportunities combined with our operational proficiency in unlocking value provides a competitive advantage relative to other strategic and financial buyers.
Our strategy is to identify and complete our initial business combination with specific industry and business characteristics. We expect to distinguish ourselves with our ability to:
| ● | source targets outside of formal sale or financing processes; |
| ● | source targets in attractive, underrepresented geographies such as Europe, Israel and the United Arab Emirates alongside established markets like the United States; |
| ● | recognize situations, given our history and experience interacting with SPACs as business operators, where a blank check company could be a superior solution to the needs of a target company and its current owners; |
| ● | recognize situations where companies are well positioned to penetrate new geographies by replicating proven playbooks; |
| ● | help develop companies and enable them to reach their full potential by optimizing their strategy around product, operations, M&A, geographic expansion, capital structure and activating new channels for growth; and |
| ● | exploit opportunities in the COVID-19 environment by providing a publicly-listed currency to facilitate access to capital for growth, hiring and geographic diversification. |
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, market surveys to evaluate the B2C and B2B brand equity, inspection of facilities and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital planning, legal review and technology and systems review experience.
Following our initial business combination, we also intend to develop and implement corporate strategies and initiatives to provide financial and operating flexibility so that the company can improve its growth prospects, profitability and long-term value. In doing so, the management team anticipates evaluating corporate governance, opportunistically accessing capital markets and other opportunities to enhance liquidity, identifying acquisition and divestiture opportunities and properly aligning management and board incentives with growing shareholder value.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our officers or directors, we, or a committee of independent directors, may obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Each of our directors and officers, directly or indirectly, own Founder Shares and/or private placement warrants and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, such officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
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Our Sponsor, officers, directors, and any of their respective affiliates may sponsor or form, and, in the case of individuals, serve as a director or officer of, other blank check companies similar to ours during the period in which we seek an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
Our Board of Directors is currently comprised of three members, including one independent director--Mr. Cem Habib. Mr. Habib serves on the Audit, Compensation and nominating committees and he has been designated as the audit committee’s financial expert.
Initially, we sought to generally comply with the general Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. However, in light of the above resignations and to ensure continued compliance with Nasdaq’s corporate governance rules, we have adopted the following home country practices in accordance with Nasdaq Listing Rule 5615(a)(3). Nasdaq determined to remove from listing our securities effective at the opening of the trading session on November 30, 2023. Our units, ordinary shares and warrants now trade on the OTC under the symbols OTCPK: GGAUF, GGAAF and GGAWF, respectively. If we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with the Nasdaq rules:
| ● | audit committee: As a foreign private issuer we are required to have an audit committee meeting the requirements of Listing Rules 5605(c)(3) and 5605(c)(2)(A)(ii). Listing Rule 5605(c)(3) requires the audit committee to have specified authority and responsibilities and Listing Rule 5605(c)(2)(A)(ii) requires each member to meet the requisite independence standards but neither requires that the audit committee have more than one member. In addition, we intend to add at least one additional audit committee member meeting the requisite independence standards. |
| ● | compensation committee: Rule 5615(a)(3) exempts foreign private issuers from all compensation committee requirements, including the requirement that compensation committee have at least two independent directors each of whom meets the requisite independence standards. We intend to maintain our compensation committee and add an additional member meeting the requisite independence standards. |
| ● | Majority Independent Directors: Subject to possible changes in the composition of our Board of Directors, we are relying on the provisions of Listing Rule 5615(a)(3) to exempt us from the requirement that on or after December 13, 2022 (the one-year anniversary of our Initial Public Offering) a majority of our Board of Directors be comprised of independent directors. |
An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which, in the opinion of the company’s Board of Directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.
We have filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriter or other advisors. Our management team and Board of Directors are regularly made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally and following termination of the BCA as described above, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
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Initial Business Combination
Nasdaq determined to remove from listing our securities effective at the opening of the trading session on November 30, 2023. Our units, ordinary shares and warrants now trade on the OTC under the symbols OTCPK: GGAUF, GGAAF and GGAWF, respectively. If we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with the Nasdaq rules. So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest and other income earned on the Trust Account) at the time of signing a definitive agreement in connection with our initial business combination. If our Board of Directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or an independent valuation or appraisal firm with respect to the satisfaction of such criteria.
It is unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses. However, our board may be unable to do so if it is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis.
Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our Sponsor. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net asset test.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
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The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Other Considerations
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our Sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our Sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
In addition, certain of our officers and directors presently have, and any of them in the future may have fiduciary and contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our Second A&R Articles provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Our Sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we do not currently expect that any such other blank check company would materially affect our ability to complete our initial business combination. In addition, our Sponsor, officers and directors, are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost-effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
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Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to 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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.235 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following our Initial Public Offering. We intend to effectuate our initial business combination using cash from the proceeds of our Initial Public Offering and the private 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 agreement or backstop agreements we may enter into following the consummation of our 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. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
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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. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination.
Other than the potential availability of the backstop arrangement with our Sponsor, we are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital planning experience. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or their respective affiliates, for services rendered to or in connection with our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our Sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
| ● | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and |
| ● | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
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Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our Second A&R Articles. However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may decide to seek shareholder approval for business or other reasons.
Nasdaq determined to remove from listing our securities effective at the opening of the trading session on November 30, 2023. Our units, ordinary shares and warrants now trade on the OTC under the symbols OTCPK: GGAUF, GGAAF and GGAWF, respectively. If we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with the Nasdaq rules. Under the Nasdaq’s listing rules, shareholder approval would typically be required for our initial business combination if, for example:
| ● | We issue ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then-outstanding (other than in a public offering); |
| ● | Any of our directors, officers or 5% or greater shareholder has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target company or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 5% or more; or |
| ● | The issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
The decision as to whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and reasons, which include a variety of factors, including, but not limited to:
| ● | the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; |
| ● | the expected cost of holding a shareholder vote; |
| ● | the risk that the shareholders would fail to approve the proposed business combination; |
| ● | other time and budget constraints of the company; and |
| ● | additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders. |
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Permitted Purchases and Other Transactions with Respect to Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our Sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase public shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transaction could be to (i) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (iii) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our Sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our Sponsor, officers, directors or their affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent that our Sponsor, officers, directors, advisors or their affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem their shares for a pro rata share of the Trust Account or vote against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our Sponsor, executive officers, directors, advisors or their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Our Sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
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Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial business combination, including interest and other income earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the Trust Account was approximately $10.39 per public share as of December 31, 2022. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Further, we will not proceed with redeeming our public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close. Our Sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve any amendment to our memorandum and articles of association then existing (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 13, 2024 or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Limitations on Redemptions
The proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our Second A&R Articles would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on the Nasdaq, we will be required to comply with the Nasdaq rules.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our Second A&R Articles:
| ● | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
| ● | file proxy materials with the SEC. |
In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.
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If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our Sponsor and each member of our management team have agreed to vote their Founder Shares and public shares in favor of our initial business combination, and Nomura has agreed to vote its Founder Shares in favor of our initial business combination. As a result, we would not need any of the public shares that remain outstanding to be voted in favor of an initial business combination in order to have our initial business combination approved. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our Second A&R Articles:
| ● | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
| ● | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our Sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Second A&R Articles 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 Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our Initial Public Offering, which we refer to as “Excess Shares,” without our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our Initial Public Offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our Sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in our Initial Public Offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
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Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless otherwise agreed to by us or as otherwise provided in the proxy statement. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until December 13, 2024.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our Second A&R Articles provides that we will have until December 13, 2024 to consummate an initial business combination. If we have not consummated an initial business combination by that date, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest and other income earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination by December 13, 2024. Our Second A&R Articles provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
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Our Sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if we fail to consummate an initial business combination by December 13, 2024 (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if we fail to complete our initial business combination by that date).
Our Sponsor, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our memorandum and articles of association then existing (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 13, 2024 or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest and other income earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our Sponsor, any executive officer, director, or any other person.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded solely from amounts designated for dissolution expenses. There are $100,000 available from the Trust Account, as specified in the trust agreement, to cover dissolution expenses. However, we cannot assure you that there will be sufficient funds for such purposes, beyond those allocated for dissolution expenses.
If we were to expend all of the net proceeds of our Initial Public Offering and the sale of the private placement warrants, other than the proceeds deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by shareholders upon our dissolution would be $11.64 as of December 31, 2023. The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than approximately $11.64. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including, but not limited, to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third-party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third-party’s engagement would be significantly more beneficial to us than any alternative. An example of possible instances where we may engage a third-party that refuses to execute a waiver includes the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. In order to protect the amounts held in the Trust Account, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party for services rendered or products sold to us (other than our independent registered public accounting firm), or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third-party, our Sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor’s only assets are securities of the company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
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In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our income tax obligations, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent director would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent director in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per public share.
We will seek to reduce the possibility that our Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Our Sponsor will also not be liable as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. We have access to up to $0 and $1,200,595 as of December 31, 2022, and 2023, respectively, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000.) In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our Trust Account could be liable for claims made by creditors, however such liability will not be greater than the amount of funds from our Trust Account received by any such shareholder.
If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account, we cannot assure you we will be able to return $10.39 per public share to our public shareholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination by December 13, 2024, (ii) in connection with a shareholder vote to amend our Second A&R Articles (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 13, 2024 or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination by December 13, 2024, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the Trust Account. Such shareholder must have also exercised its redemption rights described above. These provisions of our Second A&R Articles, like all provisions of our Second A&R Articles, may be amended with a shareholder vote.
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Employees
We currently have two officers. Members of our management team are not obligated to devote any specific number of hours to our business but they intend to devote as much of their time as they deem necessary to our affairs until we complete an initial business combination.
Website
Our corporate website address is www.genesisgrowthtech.com. Information contained on our website is not part of this Annual Report on Form 10-K.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments and exhibits to these reports, filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act, are available on our website, free of charge, as soon as reasonable practicable after such reports are filed with, or furnished to, the SEC. Alternatively, you may access these reports at the SEC’s website at www.sec.gov.
Item 1A. Risk Factors.
As a smaller reporting company we are not required to make disclosures under this item.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. Properties.
Our executive offices are located at Bahnhofstrasse 3, 6052 Hergiswil, Nidwalden, Switzerland. The cost for our use of this space is included in the $10,000 per month fee we pay to an affiliate of our Sponsor for office space, administrative and support services. We consider our current office space adequate for our current operations.
Item 3. Legal Proceedings.
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our units began trading on The Nasdaq Global Market under the symbol “GGAAU” on December 9, 2021. Commencing on January 31, 2022, holders of the units could elect to separately trade the Class A ordinary shares and public warrants comprising the units. The Nasdaq Stock Market LLC (the “Exchange”) determined to remove from listing our securities effective at the opening of the trading session on November 30, 2023. Our units, ordinary shares and warrants now trade on the OTC under the symbols OTCPK: GGAUF, GGAAF and GGAWF, respectively.
Holders
At March 6, 2024, there was 1 holder of record of our units, 1 holder of record of our Class A ordinary shares, 2 holders of record of our Founder Shares, 1 holder of record of our public warrants and 1 holder of record of our private placement warrants.
Dividends
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In December 2021, we declared a share dividend, resulting in our Sponsor holding an aggregate of 5,850,625 Founder Shares. Our board of directors is not currently contemplating and does not anticipate declaring any other share dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings
There were no unregistered securities to report which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “Genesis Growth Tech Acquisition Corp.,” “our,” “us” or “we” refer to Genesis Growth Tech Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K (this “Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions.
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Overview
We are a blank check company incorporated on March 17, 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 our Initial Public Offering and the private placement of the Private Placement Warrants, the proceeds of the sale of our shares in connection with our initial Business Combination (pursuant to forward purchase agreements or backstop agreements we may enter into), 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.
The issuance of additional shares in a business combination:
| ● | may significantly dilute the equity interest of investors in our Initial Public Offering, 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 Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
| ● | could cause a change in control if a substantial number of our Class A 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; |
| ● | may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and |
| ● | may not result in adjustment to the exercise price of our warrants. |
| Similarly, if we issue debt or otherwise incur significant debt, 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 is payable on demand; |
| ● | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
| ● | our inability to pay dividends on our Class A 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 Class A 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 consolidated financial statements, as of December 31, 2023, we had a working capital deficit of approximately $5.3 million. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
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Recent Developments
Extraordinary General Meeting
On February 22, 2023, GGAA held an extraordinary general meeting of shareholders (the “Extraordinary General Meeting”), at which holders of 25,309,185 ordinary shares in GGAA were present virtually or by proxy, representing approximately 80.0% of the voting power of the 31,625,000 ordinary shares issued and outstanding entitled to vote at the Extraordinary General Meeting at the close of business on January 27, 2023, which was the record date for the Extraordinary General Meeting. At the meeting, the shareholders approved an amendment to the amended and restated memorandum and articles of association to extend the deadline to complete an initial Business Combination from March 13, 2023 to September 13, 2023 (the “Extension Amendment Proposal”).
In connection with the Extension Amendment Proposal shareholders elected to redeem 25,198,961 Class A ordinary shares in GGAA, representing approximately 99.6% of the issued and outstanding Class A ordinary shares in GGAA, for a pro rata portion of the funds in GGAA’s trust account. As a result, approximately $263,325,413.52 (approximately $10.45 per share) will be debited from GGAA’s trust account to pay such holders.
On August 31, 2023, GGAA held a second extraordinary general meeting of shareholders at which holders of 5,883,786 ordinary shares in the Company were present virtually or by proxy, representing approximately 92% of the voting power of the 6,426,039 ordinary shares issued and outstanding entitled to vote at the Extraordinary General Meeting at the close of business on August 7, 2023, which was the record date for the Extraordinary General Meeting. In connection with the Second Extension Amendment Proposal, Shareholders holding an aggregate of 19,519 Class A ordinary shares of GGAA, representing approximately 0.3% of the issued and outstanding Class A ordinary shares in GGAA, elected to redeem such shares for a pro rata portion of the funds in GGAA’s trust account. As a result, approximately $246,605.40 (approximately $12.63 per share) was debited from the Company’s trust account to pay such holders. At this meeting shareholders of the Company also proposed and approved an additional extension proposal extending the timeline in which the Company can consummate a business combination from September 13, 2023, to December 13, 2024.
Termination of Previously Planned Merger Agreement
As previously announced, on May 22, 2023, the Company, GGAC Merger Sub, Inc., a Florida corporation and newly formed wholly-owned subsidiary of GGAA (“Merger Sub”); NextTrip Holdings, Inc., a Florida corporation (“NextTrip”); and William Kerby, solely in his capacity as the representative for NextTrip’s shareholders as discussed in the Plan of Merger entered into an Agreement and Plan of Merger (the “Plan of Merger”) with the Company.
The Plan of Merger had contemplated that the Company and NextTrip would engage in a series of transactions pursuant to which, among other transactions, Merger Sub would merge with and into NextTrip, with NextTrip continuing as the surviving entity upon the closing of the transactions contemplated by the Plan of Merger, and becoming a wholly-owned subsidiary of the Company
Effective as of August 16, 2023 and in accordance with Section 7.1(a) of the Plan of Merger, GGAA and NextTrip mutually agreed to terminate the Plan of Merger, pursuant to the terms of a termination agreement entered into by and between each of the parties to the Plan of Merger (the “Termination Agreement”). Additionally, under the Termination Agreement, each of GGAA, Merger Sub and the Purchaser Representative, released NextTrip, the Seller Representative, and each of their representatives, affiliates, agents and assigns, and each of NextTrip and the Seller Representative released GGAA, Merger Sub, the Purchaser Representative, and each of their representatives, affiliates, agents and assigns, for any claims, causes of action, liabilities or damages, except for certain liabilities that survive the termination pursuant to the terms of the Plan of Merger, or for breaches of the Termination Agreement.
Results of Operations
Our entire activity since inception up to December 31, 2023, was in preparation for our formation and our Initial Public Offering, and, subsequent to our Initial Public Offering, identifying a target company for a Business Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest.
For the year ended December 31, 2023, we had a net income of approximately $421,000, which consisted of income from investments held in the Trust Account of approximately $1.7 million, offset by general and administrative expenses of approximately $1.1 million and approximately $120,000 in general and administrative expenses for related party.
For the year ended December 31, 2022, we had net income of approximately $338,000, which consisted of income from investments held in the Trust Account of approximately $3.6 million, offset by general and administrative expenses of approximately $3.2 million and $120,000 in general and administrative expenses for related party.
23
Proposed Business Combination
On November 20, 2023, the Company, entered into that certain Contribution and Business Combination Agreement (the “Agreement”), by and between the Company and the Sponsor pursuant to which, among other things, (a) the Sponsor will contribute, transfer, convey, assign and deliver to the Company all of the Sponsor’s rights, title and interest in and to a portfolio of patents acquired by the Sponsor pursuant to that certain Patent Purchase Agreement, effective as of September 21, 2023 (as amended by the First Amendment to Patent Sale Agreement dated November 14, 2023 and as it may be further amended from time to time, the “Patent Purchase Agreement”), by and between the Sponsor and MindMaze Group SA, a Swiss corporation (“MindMaze”), and which includes (i) the Assigned Patent Rights, including the Additional Rights, as such terms are defined in the Patent Purchase Agreement, and (ii) all other intellectual property rights acquired by the Sponsor under the Patent Purchase Agreement, and (b) the Company will pay to the Sponsor one thousand dollars ($1,000) and will assume and agree to perform and discharge all of the Sponsor’s obligations under the Patent Purchase Agreement, including the obligation to pay to MindMaze a purchase price of $21 Million (the “MindMaze IP Purchase Price”) on or prior to May 31, 2024 and the obligation to share certain revenues with MindMaze, on the terms and subject to the conditions set forth in the Patent Purchase Agreement (collectively, the “Transaction”).
The Sponsor of the Company, currently owns 6,325,000 Class B ordinary shares of the Company, representing approximately 98.7% of the outstanding ordinary shares of the Company, and 8,875,000 warrants to purchase 8,875,000 Class A ordinary shares at $11.50 per share.
Pursuant to the Agreement, each of the parties to the Agreement has made customary representations, warranties and covenants in the Agreement, including covenants by the Sponsor not to dispose of or otherwise encumber the assets to be sold to the Company.
Consummation of the Transaction is subject to customary conditions, including, among other things (a) the absence of any law, order or action restraining or prohibiting the Transaction, (b) approval of the shareholders of The Company, (c) The Company receiving a fairness opinion that the Transaction is fair to the Company from a financial point of view, (d) MindMaze executing an extension for the payment of the MindMaze IP Purchase Price, (e) The Sponsor having caused MindMaze to execute a consent to assignment of the Patent Purchase Agreement from The Sponsor to The Company, (f) The Company having filed amended and restated memorandum and articles of association deleting the various provisions applicable only to special purpose acquisition companies (the “Amended SPAC Articles”), and (g) The Company having executed a warrant exchange agreement for the exchange of the private warrants owned by The Company for ordinary shares of the Company.
The Agreement may be terminated by the Company and the Sponsor under certain circumstances, including, among others, (a) by mutual written agreement of The Company and The Sponsor, (b) by either The Company or The Sponsor if the closing has not occurred on or before on or before the latest of (i) December 13, 2024 and (ii) if one or more extensions to a date following December 13, 2024 are obtained at the election of The Company, with The Company shareholder vote, in accordance with the the Company’s amended and restated memorandum and articles of association, the last date for The Company to consummate a Business Combination pursuant to such extensions and (c) by either The Company or The Sponsor if the Transaction is prohibited or made illegal by a final, nonappealable governmental order or law.
The board of directors of the Company has unanimously (a) approved and declared advisable the Agreement and the transactions contemplated by the Agreement, (ii) determined that the Transaction constitutes a “Business Combination” (as such term is defined in the amended and restated memorandum and articles of association of The Company), and (b) resolved to recommend approval of the Agreement and related matters by the Company’s shareholders.
The Company expects to file proxy materials as promptly as practicable after the date of the Agreement for the purpose of soliciting proxies from holders of the Company’s ordinary shares sufficient to obtain shareholder approval of the Agreement and the transactions contemplated by the Agreement, and the Amended SPAC Articles, at a meeting of holders of the Company’s ordinary shares to be called and held for such purpose. The closing is expected to occur following the fulfillment or waiver of the closing conditions set forth in the Agreement.
24
Liquidity and Capital Resources
At December 31, 2023, we have $0 cash and a working capital deficit of $5,339,011.
For the year ended December 31, 2023, we had net cash used in operating activities of $1,071,084, compared to $896,328 for the year ended December 31, 2022, which for the 2023 period was mainly due to $1,660,450 of paid-in-kind interest income on investments held in the trust account and $421,353 of net income and $168,013 for other operating activities, and for the 2022 period was mainly due to $3,634,473 of paid-in-kind interest income on investments held in the trust account and $337,873 of net income and $2,400,272 for other operating activities.
We had net cash provided by investing activities of $264,772,614 for the year ended December 31, 2023, compared to $1,405,595 for the year ended December 31, 2022, which for the 2023 period was mainly due to $263,572,019 of cash withdrawn from the trust account in connection with redemptions and $1,200,595 operating expenses being paid by a related party and 2022 was due to $2,530,000 Investment of cash in trust account and $1,124,405 operating expenses paid by a related party.
We had $263,701,530 of net cash used in financing activities for the year ended December 31, 2023, compared to $2,301,923 for the year ended December 31, 2022. During 2023, cash flows from financing activities consisted of a $530,000 repayment of the Note Payable to a related party, proceeds of $400,489 from note payable to a related party and redemption of Ordinary Shares of $263,572,019. During 2022, cash flows from financing activities consisted of a $228,077 repayment of note payable to a related party and $2,530,000 of proceeds received from a note payable of a related party.
Prior to the completion of our Initial Public Offering, our liquidity needs were satisfied through (i) $25,000 paid by our Sponsor to cover certain expenses in exchange for the issuance of the Founder Shares to our Sponsor and (ii) the receipt of a loan of up to $500,000 from our Sponsor under the Note. Prior to the completion of our Initial Public Offering, we borrowed approximately $453,000 under the Note, which was fully repaid in March 2022. The net proceeds from (i) the sale of the units in our Initial Public Offering, after deducting non-reimbursed offering expenses of approximately $738,000, underwriting commissions of $2,530,000, and (ii) the sale of the Private Placement Warrants for a purchase price of $8,875,000, was $258,645,000. Of that amount, $257,148,600 was initially placed in the Trust Account. In connection with the Extension EGM and as a result of the redemption of public shares by our public shareholders, approximately $1.2 million remained in the Trust Account as of December 31, 2023. The proceeds held in the Trust Account are invested only in U.S. government treasury obligations 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.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest and other income earned on the Trust Account (less taxes payable), to complete our initial Business Combination. We may withdraw interest income (if any) to pay income taxes, if any. Our annual income 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 income 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.
As of March 6, 2024 we have no cash held outside the Trust Account.
We do not believe we will need to raise additional funds to meet the expenditures required for operating our business prior to our initial Business Combination, other than funds available from loans from our Sponsor, its affiliates or members of our management team. However, if our estimates of the costs of completing the Merger 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 any 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. 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 our 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.
25
We expect our primary liquidity requirements during that period to include approximately $300,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $100,000 for legal and accounting fees related to regulatory reporting obligations; $800,000 for directors and officers insurance premiums; $120,000 for office space, administrative and support services; $100,000 for Nasdaq and other regulatory fees; and $430,000 for general working capital that will be used for miscellaneous expenses and reserves. These amounts are estimates and may differ materially from our actual expenses.
As a result of our public shareholders electing to exercise their redemption rights for approximately 99.6% of our public shares in connection with the Extension EGM, we will need to obtain additional financing to complete our initial 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 by December 13, 2024, because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. The Company currently expects to hold another extraordinary general meeting of shareholders to seek approval from our public shareholders to further extend the date by which we have to consummate a business combination, provided that no definitive plans regarding a further extension have been agreed to by the Board of Directors, and any further extension may not be approved by shareholders.
Based on the foregoing, we believe that we will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors to meet our needs through the consummation of a Business Combination. However, in connection with our assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have determined that liquidity needs, the mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after December 14, 2024. The consolidated financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
The underwriter of our Initial Public Offering, Nomura, was entitled to an underwriting discount of $0.10 per Unit, or $2.5 million in the aggregate (including over-allotment), of which $2.2 million was paid upon the closing of the Initial Public Offering and $0.3 million was paid upon the exercise of the over-allotment option. In addition, $0.55 per unit, or $13.9 million in the aggregate, was to be payable to Nomura for deferred underwriting commissions. On January 26, 2023, Nomura waived its right to receive such $13.9 million of deferred underwriting commissions.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Recent Accounting Pronouncements
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual consolidated financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.
Our management does not believe that any other recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the accompanying consolidated financial statements.
26
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (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 under the JOBS Act are allowed to comply 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, the consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. 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, (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 consolidated financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined in Item 10 of Regulation S-K and are not required to provide the information otherwise required by this item.
27
Item 8. Consolidated financial statements and Supplementary Data.
All consolidated financial statements and supplementary data required by this Item are listed in Part IV, Item 15 of this Annual Report on Form 10-K (or are incorporated therein by reference) and are presented beginning on Page F-1.
GENESIS
GROWTH TECH ACQUISITION CORP.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Genesis Growth Tech Acquisition Corp.
Opinion on the Consolidated financial statements
We have audited the accompanying balance sheets of Genesis Growth Tech Acquisition Corp. (the “Company”) as of December 31, 2023 and 2022, and the related statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the year ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Matter
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the consolidated financial statements, the Company’s business plan is dependent on the completion of a business combination within a prescribed period of time and if not completed will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
| /s/ |
www.malonebailey.com
We have served as the Company’s auditor since 2023.
March 6, 2024
F-2
GENESIS
GROWTH TECH ACQUISITION CORP.
BALANCE SHEETS
| December 31, 2023 | December
31, 2022 | |||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Due from related party | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Investments held in Trust Account | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable & accrued expenses | $ | $ | ||||||
| Note payable - related party | ||||||||
| Deferred underwriting commissions | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Class A ordinary shares subject to possible redemption; | ||||||||
| Shareholders’ Deficit: | ||||||||
| Preference shares, $ | ||||||||
| Class A ordinary shares, $ | ||||||||
| Class B ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
GENESIS
GROWTH TECH ACQUISITION CORP.
STATEMENTS OF OPERATIONS
| For Year Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| General and administrative expenses | $ | $ | ||||||
| General and administrative expenses - related party | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Paid-in-kind interest income on investments held in Trust Account | ||||||||
| Total other income | ||||||||
| Net income | $ | $ | ||||||
| $ | $ | |||||||
| $ | $ | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
GENESIS
GROWTH TECH ACQUISITION CORP.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance – January 1, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Increase in redemption value of Class A ordinary shares subject to possible redemption | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance - December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Waiver of deferred underwriting fee | - | - | ||||||||||||||||||||||||||
| Increase in redemption value of Class A ordinary shares subject to possible redemption | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance - December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
GENESIS
GROWTH TECH ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
| For
the Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Paid-in-kind interest income on investments held in Trust Account | ( | ) | ( | ) | ||||
| Changes in operating assets: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable & accrued expenses | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Due from related party | ||||||||
| Deposits in Trust Account | ( | ) | ||||||
| Cash withdrawn from Trust Account in connection with redemption | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Repayment of note payable to related party | ( | ) | ( | ) | ||||
| Proceeds from note payable to related party | ||||||||
| Redemption of ordinary shares | ( | ) | ||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net change in cash | ||||||||
| Cash - beginning of the period | ||||||||
| Cash - end of the period | $ | $ | ||||||
| Supplemental disclosure of noncash financing activities: | ||||||||
| Waiver of deferred underwriting fee | $ | $ | ||||||
| Extension funds attributable to common stock subject to redemption | $ | $ | ||||||
| Accretion of common share subject to redemption | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
NOTE 1 - DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN
Genesis
Growth Tech Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on
As of December 31, 2023, the Company had not commenced any operations. All activity for the period from March 17, 2021 (inception) through December 31, 2023, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income from the proceeds derived from the Initial Public Offering and placed in a Trust Account (as defined below).
The
Company’s sponsor is Genesis Growth Tech LLC, a Cayman Islands limited liability company (the “Sponsor”). The registration
statement for the Company’s Initial Public Offering was declared effective on December 8, 2021. On December 13, 2021, the Company
consummated its Initial Public Offering of
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of
Upon
the closing of the Initial Public Offering, the over-allotment and the Private Placement, $
F-7
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering,
the over-allotment and the sale of Private Placement Warrants. Although substantially all of the net proceeds are intended to be applied
generally towards 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
The
Company will provide holders (the “Public Shareholders”) of its Public Shares, 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 general 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 all or a portion of their Public Shares upon the completion of the initial Business Combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to
the consummation of the initial Business Combination, including interest and other income earned on the funds held in the Trust Account
and not previously released to the Company to pay the Company’s income taxes, if any, divided by the number of the then-outstanding
Public Shares, subject to the limitations described herein. As of December 31, 2023, the amount in the Trust Account was approximately
$
All of the Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the liquidation, if there is a shareholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to the Company’s memorandum and articles of association then in existence. In accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”), paragraph 10-S99, redemption provisions not solely within the control of a company require ordinary shares subject to redemption to be classified outside of permanent equity. Accordingly, all of the Public Shares are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. Given that the Public Shares were issued with other freestanding instruments (i.e., public warrants), the initial carrying value of Class A ordinary shares classified as temporary equity was the allocated amount of the proceeds. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company will elect to recognize the changes in redemption value immediately. The change in redemption value was recognized as a one-time charge against additional paid-in capital (to the extent available) and accumulated deficit. The Public Shares are redeemable and are classified as such on the balance sheet until such date that a redemption event takes place. Additionally, each Public Shareholder may elect to redeem its Public Shares irrespective of whether it votes for or against the proposed transaction or vote at all. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (as defined below) agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination.
Notwithstanding
the foregoing, the Company’s second amended and restated memorandum and articles of association (the “Second A&R Articles”)
provide 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 in 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
F-8
Pursuant
to the terms of the Company’s memorandum and articles of association then existing, in order to extend the period of time to consummate
an initial Business Combination, the Sponsor deposited $
In
connection with the Extension Amendment Proposal, shareholders elected to redeem
The
Company’s Sponsor, executive officers, directors and director nominees (the “initial shareholders”) agreed not to propose
any amendment to the Second A&R Articles (A) that would modify the substance or timing of the Company’s obligation to provide
holders of the Class A ordinary shares the right to have their shares redeemed in connection with the Company’s initial Business
Combination or to redeem
The
Sponsor, officers and directors agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete
a Business Combination within the Combination Period. However, if the initial shareholders or members of the Company’s management
team acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust
Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The
underwriter agreed to waive their rights to their deferred underwriting commission (see Note 5) held in the Trust Account in the event
the Company does not complete a Business Combination within the Combination Period and, in such event, such amount will 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 residual assets remaining available for distribution (including Trust Account assets)
will be only $
On
August 31, 2023, GGAA held a second extraordinary general meeting of shareholders at which holders of
F-9
Terminated Business Combination
On August 22, 2022, the Company, and Biolog-ID, a société anonyme organized under the laws of France (“Biolog-id”), signed a memorandum of understanding (the “MoU”) with respect to the contemplated merger of the Company with and into Biolog-id (the “Biolog Merger”) with Biolog-id as the continuing company following closing of the Merger and related transactions pursuant to the Business Combination Agreement in the form attached to the MoU. Under French law, no commitment with respect to the proposed Biolog Merger could be agreed prior to Biolog-id completing the consultation process with its social and economic committee (comité social et économique) (the “Works Council”). Biolog-id completed the Works Council consultation process and on August 26, 2022, the Company and Biolog-id entered into a Business Combination Agreement (the “BCA”).
By virtue of the Biolog-id Merger, each Company ordinary share issued and outstanding immediately prior to the effective time of the Biolog Merger (after giving effect to specified events) would be automatically cancelled and extinguished and exchanged for a number of ordinary shares of Biolog-id (received in the form of American Depositary Shares), as determined in accordance with the exchange ratio described in the BCA.
Effective March 6, 2023 and in accordance with Section 7.1(a) of the BCA, the Company and Biolog-id mutually agreed to terminate the BCA, pursuant to a termination agreement by and between the Company and Biolog-id (the “Termination Agreement”). Under the Termination Agreement, the Company waived and released all claims, obligations, liabilities and losses against Biolog-id and its Company Non-Party Affiliates (as defined therein), and Biolog-id waived and released all claims, obligations, liabilities and losses against the Company and its SPAC Non-Party Affiliates (as defined therein), arising or resulting from or relating to, directly or indirectly, the BCA, any other transaction documents, any of the transactions contemplated by the BCA or any other transaction documents, except for any terms, provisions, rights or obligations that expressly survive the termination of the BCA or set forth in the Termination Agreement.
Proposed Business Combination
On
November 20, 2023, the Company, entered into that certain Contribution and Business Combination Agreement (the “Agreement”),
by and between the Company and the Sponsor pursuant to which, among other things, (a) the Sponsor will contribute, transfer, convey,
assign and deliver to the Company all of the Sponsor’s rights, title and interest in and to a portfolio of patents acquired by
the Sponsor pursuant to that certain Patent Purchase Agreement, effective as of September 21, 2023 (as amended by the First Amendment
to Patent Sale Agreement dated November 14, 2023 and as it may be further amended from time to time, the “Patent Purchase Agreement”),
by and between the Sponsor and MindMaze Group SA, a Swiss corporation (“MindMaze”), and which includes
The
Sponsor of the Company, currently owns
Pursuant to the Agreement, each of the parties to the Agreement has made customary representations, warranties and covenants in the Agreement, including covenants by the Sponsor not to dispose of or otherwise encumber the assets to be sold to the Company.
F-10
The Agreement may be terminated by the Company and the Sponsor under certain circumstances, including, among others, (a) by mutual written agreement of The Company and The Sponsor, (b) by either The Company or The Sponsor if the closing has not occurred on or before on or before the latest of (i) December 13, 2024 and (ii) if one or more extensions to a date following December 13, 2024 are obtained at the election of The Company, with The Company shareholder vote, in accordance with the the Company’s amended and restated memorandum and articles of association, the last date for The Company to consummate a Business Combination pursuant to such extensions and (c) by either The Company or The Sponsor if the Transaction is prohibited or made illegal by a final, nonappealable governmental order or law.
The board of directors of the Company has unanimously (a) approved and declared advisable the Agreement and the transactions contemplated by the Agreement, (ii) determined that the Transaction constitutes a “Business Combination” (as such term is defined in the amended and restated memorandum and articles of association of The Company), and (b) resolved to recommend approval of the Agreement and related matters by the Company’s shareholders.
The Company expects to file proxy materials as promptly as practicable after the date of the Agreement for the purpose of soliciting proxies from holders of the Company’s ordinary shares sufficient to obtain shareholder approval of the Agreement and the transactions contemplated by the Agreement, and the Amended SPAC Articles, at a meeting of holders of the Company’s ordinary shares to be called and held for such purpose. The closing is expected to occur following the fulfillment or waiver of the closing conditions set forth in the Agreement.
Going Concern Consideration
As of December
31, 2023, the Company had a working capital deficit of approximately $
The
Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, members of the Company’s founding team or any of their affiliates may, but are not obligated to, loan the Company funds under the Working Capital Loans (as defined and described in Note 4) as needed.
However, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) No. 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company’s liquidity needs, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after December 13, 2024. The consolidated financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
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 auditor 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.
F-11
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 an emerging growth 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 an 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 the comparison of the Company’s consolidated financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of consolidated 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 consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ 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 equivalents.
As of December 31, 2023 and 2022, the Company had
Investments Held in Trust Account
The
Company’s portfolio of investments held in the Trust Account is comprised of U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that
invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s
investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities.
When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at
fair value. Trading securities and investments in money market funds are presented on the balance sheets at fair value at the end of
each reporting period. Interest is received through the issuance of additional U.S. government treasury obligations and recorded as paid-in-kind
interest income in the accompanying statements of operations. The estimated fair values of investments held in the Trust Account are
determined using available market information. The balance shown in the Trust Account at December 31, 2023 and 2022 is inclusive of $
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate the carrying amounts represented in the balance sheets, primarily due to their short-term nature.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. 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). These tiers consist of:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
F-12
Derivative Financial Instruments
The Company evaluates its equity-linked financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). For derivative financial instruments that are classified as liabilities, the derivative instrument is initially recognized at fair value with subsequent changes in fair value recognized in the statements of operations each reporting period.
The
Company accounted for the
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of FASB ASC 340-10-S99-1. Offering costs consisted of legal, accounting, underwriting commissions and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Deferred underwriting commissions are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible Redemption
The
Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary
shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally
redeemable Class A ordinary shares (including Class A 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 the Company’s control) are classified
as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ deficit. The Company’s Class
A ordinary shares feature certain redemption rights that are considered to be outside of its control and subject to the occurrence of
uncertain future events. In connection with the Extension Amendment Proposal, shareholders elected to redeem
On
August 31, 2023, GGAA held a second extraordinary general meeting of shareholders at which holders of
Under ASC 480-10-S99, the Company has to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount. The change in the carrying value of redeemable shares of Class A ordinary shares is treated as a deemed dividend, which results in charges against additional paid-in capital and accumulated deficit.
F-13
| Class A ordinary shares subject to possible redemption as of December 31, 2022 | ||||
| Less: | ||||
| Redemption of ordinary shares | ( | ) | ||
| Plus: | ||||
| Increase in redemption value of Class A ordinary shares subject to possible redemption | ||||
| Class A ordinary shares subject to possible redemption as of December 31, 2023 | $ |
Net Income Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares, which assumes a business combination as the most likely outcome. Net income per ordinary share is calculated by dividing the net income by the weighted average number of ordinary shares outstanding for the respective period.
Net
income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the
period, excluding ordinary shares subject to forfeiture. The calculation of diluted net income does not consider the effect of the warrants
underlying the Units sold in the Initial Public Offering (including the consummation of the Over-allotment) and the private placement
warrants to purchase an aggregate of
| For the Year December 31, | ||||||||||||||||
| 2023 | 2022 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic and diluted net income per ordinary share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net income | $ | $ | $ | $ | ||||||||||||
| Denominator: | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
Income Taxes
The Company follows the guidance for accounting for income taxes under FASB ASC 740, “Income Taxes,” which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. There were no unrecognized tax benefits as of December 31, 2023 and 2022. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be 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 of America. As such, the Company’s tax provision was zero for the period presented. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman Islands income tax regulations, income taxes are not levied on the Company but rather on the individual owners. United States (“U.S.”) taxation would occur on the individual owners if certain tax elections are made by U.S. owners and the Company were treated as a passive foreign investment company. Additionally, U.S. taxation could occur to the Company itself if the Company is engaged in a U.S. trade or business. The Company is not expected to be treated as engaged in a U.S. trade or business at this time. Consequently, income taxes are not reflected in the Company’s consolidated financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next 12 months.
F-14
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU No. 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual consolidated financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.
The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the accompanying consolidated financial statements.
NOTE 3 - INITIAL PUBLIC OFFERING
On
December 13, 2021, the Company consummated its Initial Public Offering of
Each
Unit consists of one Class A ordinary share, par value $
NOTE 4 - RELATED PARTY TRANSACTIONS
Founder Shares
On
May 26, 2021, the Sponsor paid $
The Company determined that the excess of the fair value of the Founder Shares acquired by Nomura from the Sponsor over the price paid by Nomura should be recognized as an offering cost by the Company in accordance with SEC Staff Accounting Bulletin (“SAB”) Topic 5A, “Expenses of Offerings.” The allocated portion of the additional offering cost associated with the Class A ordinary shares was charged to the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering.
Private Placement Warrants
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of
Each
warrant is exercisable to purchase
The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
F-15
Promissory Note - Related Party
The
Sponsor agreed to loan the Company up to $
On
December 9, 2022, in connection with the extension of the deadline for the Company to complete its initial business combination to March
13, 2023, the Sponsor funded an extension payment for $
Working Capital Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
or certain of 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 it. 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. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $
Administrative Support Agreement
On
December 8, 2021, the Company entered into an agreement with the Sponsor, pursuant to which the Company agreed to reimburse the Sponsor
for office space, secretarial and administrative services provided to the Company in the amount of $
Due from Related Party
On
June 20, 2023, the Company was paid the $
As
of December 31, 2023 and 2022, the Company had a balance of and $
F-16
NOTE 5 - COMMITMENTS AND CONTINGENCIES
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 entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon the effective date of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up periods with respect to such securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The
underwriter was entitled to an underwriting discount of $
On January 26, 2023, Nomura Securities International, Inc. (“Nomura”) the underwriter for the initial public offering of the Company, pursuant to a letter dated as of the same date, waived its entitlement to the payment of the deferred underwriting discount then payable to Nomura in connection with the initial public offering and pursuant to the prior underwriting agreement between Nomura and the Company dated December 8, 2021. Other than such waiver, the letter did not waive any rights or obligations of the Company or Nomura which survive the termination of the underwriting agreement.
Risks and Uncertainties
Management also continues to evaluate the impact of the volatility and disruptions in the financial markets caused by, among other things, the ongoing conflict in Ukraine, rising interest rates and mounting inflationary cost pressures and recessionary fears. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these consolidated financial statements.
Termination of Previously Planned Merger Agreement
As previously announced, on May 22, 2023, the Company., GGAC Merger Sub, Inc., a Florida corporation and newly formed wholly-owned subsidiary of GGAA (“Merger Sub”); NextTrip Holdings, Inc., a Florida corporation (“NextTrip”); and William Kerby, solely in his capacity as the representative for NextTrip’s shareholders as discussed in the Plan of Merger entered into an Agreement and Plan of Merger (the “Plan of Merger”) with the Company.
The Plan of Merger had contemplated that the Company and NextTrip would engage in a series of transactions pursuant to which, among other transactions, Merger Sub would merge with and into NextTrip, with NextTrip continuing as the surviving entity upon the closing of the transactions contemplated by the Plan of Merger, and becoming a wholly-owned subsidiary of the Company.
Effective as of August 16, 2023 and in accordance with Section 7.1(a) of the Plan of Merger, GGAA and NextTrip mutually agreed to terminate the Plan of Merger, pursuant to the terms of a termination agreement entered into by and between each of the parties to the Plan of Merger (the “Termination Agreement”). Additionally, under the Termination Agreement, each of GGAA, Merger Sub and the Purchaser Representative, released NextTrip, the Seller Representative, and each of their representatives, affiliates, agents and assigns, and each of NextTrip and the Seller Representative released GGAA, Merger Sub, the Purchaser Representative, and each of their representatives, affiliates, agents and assigns, for any claims, causes of action, liabilities or damages, except for certain liabilities that survive the termination pursuant to the terms of the Plan of Merger, or for breaches of the Termination Agreement.
F-17
On
November 20, 2023, the Company, entered into that certain Contribution and Business Combination Agreement (the “Agreement”),
by and between the Company and the Sponsor pursuant to which, among other things, (a) the Sponsor will contribute, transfer, convey,
assign and deliver to the Company all of the Sponsor’s rights, title and interest in and to a portfolio of patents acquired by
the Sponsor pursuant to that certain Patent Purchase Agreement, effective as of September 21, 2023 (as amended by the First Amendment
to Patent Sale Agreement dated November 14, 2023 and as it may be further amended from time to time, the “Patent Purchase Agreement”),
by and between the Sponsor and MindMaze Group SA, a Swiss corporation (“MindMaze”), and which includes (i) the Assigned Patent
Rights, including the Additional Rights, as such terms are defined in the Patent Purchase Agreement, and (ii) all other intellectual
property rights acquired by the Sponsor under the Patent Purchase Agreement, and (b) the Company will pay to the Sponsor one thousand
dollars ($
NOTE 6 - SHAREHOLDERS’ DEFICIT
Preference
shares - The Company is authorized to issue
Class
A Ordinary shares - The Company is authorized to issue
Class
B Ordinary shares - The Company is authorized to issue
Holders of the Class A ordinary shares and holders of the Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders, except as required by law or stock exchange rule; provided that only holders of the Class B ordinary shares have the right to vote on the appointment of the Company’s directors prior to the initial Business Combination.
The
Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion
will not have redemption rights or be entitled to liquidating distributions from the Trust Account if the Company does not consummate
an initial Business Combination) at the time of the Company’s initial Business Combination or earlier at the option of the holders
thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the
aggregate, on an as-converted basis,
Warrants
- As of December 31, 2023 and 2022,
The
Public Warrants will become exercisable at $
The
warrants will expire
F-18
The
exercise price and number of 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. 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 the initial Business
Combination at an issue price or effective issue price of less than $
Except as described below, the Private Placement Warrants are identical to those of the warrants being sold as part of the Units in the Initial Public Offering. The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination and they will not be redeemable by the Company. Holders of the Company’s private placement warrants have the option to exercise the Private Placement Warrants on a cashless basis.
Redemption
of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $
Once the warrants become exercisable, the Company may call the Public Warrants for redemption (except with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon a minimum of |
| ● | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ |
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreements. Additionally, in no event will the Company be required to net cash settle any Warrants. If the Company is unable to complete the initial 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.
F-19
NOTE 7 - Fair Value Measurements
The Company determines the level in the fair value hierarchy within which each fair value measurement falls based on the lowest level input that is significant to the fair value measurement and performs an analysis of the assets and liabilities at each reporting period end.
December 31, 2023
| Description | Quoted
Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
| Assets: | ||||||||||||
| Investments held in Trust Account - Money Market Fund | $ | $ | $ | |||||||||
December 31, 2022
| Description | Quoted
Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
| Assets: | ||||||||||||
| Investments held in Trust Account - Money Market Fund (1) | $ | $ | $ | |||||||||
| (1) |
Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and 3 during the period from March 17, 2021 (inception) through December 31, 2023.
Level 1 assets include investments in money market funds that invest solely in U.S. government securities. The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
NOTE 8 - Subsequent Events
The Company evaluated subsequent events and transactions that occurred through the date the consolidated financial statements were available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustments or disclosure in the consolidated financial statements.
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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are 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 company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, Management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023. Based upon their evaluation, Management concluded that our disclosure controls and procedures were not effective as of December 31, 2023, due to the material weaknesses in our internal controls due to inadequate segregation of duties within account processes due to limited personnel and insufficient written policies and procedures for related party bank accounts.
Management’s Annual Report on Internal Controls over Financial Reporting
As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
| (1) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, |
| (2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and |
| (3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our assessments and those criteria, management determined that our internal controls over financial reporting were not effective as of December 31, 2023.
This Annual Report on Form 10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Our current officers and directors are as follows:
| Name | Age | Position | ||
| Eyal Perez | 39 | Chairman of the Board, Chief Executive Officer and Chief Financial Officer | ||
| Michael Lahyani | 43 | Co-Executive Chairman of the Board, Chief Strategy Officer and President | ||
| Cem Habib | 50 | Director |
Eyal Perez has been a member and Chairman of our Board of Directors, our Chief Executive Officer and our Chief Financial Officer since March 2021, and is currently the Principal and Founder of Genesis Advisors. Mr. Perez began his career at Bedrock Advisors as a research analyst and portfolio manager running investment portfolios in excess of $3 billion across multiple asset classes. He rose to the level of Executive Vice President and founded Bedrock Group’s asset management arm while driving and overseeing significant growth across the firm’s alternative asset management activities. In this capacity, he oversaw several significant technology-focused pre-IPO investments, including Snapchat (IPO in March 2017), Dropbox (IPO in March 2018), Hortonworks (IPO in December 2014; merger with Cloudera in January 2019) and later-stage investments, including Adyen (IPO in June 2018) and Slack (IPO in June 2019, acquisition by Salesforce in July 2021). After Bedrock Advisors, Mr. Perez founded Genesis Advisors, a hedge fund advisory and seeding firm focusing on special situation investing, alternative asset management and growth equity. At Genesis Advisors, Mr. Perez has raised $1.5 billion in capital from prominent alternative asset allocators acting as Sponsor of various investment vehicles over a five year period. As a prolific proponent of liquid alternatives, he also structured and seeded the first alternative Undertakings for the Collective Investment in Transferable Securities (“UCITS”) vehicle for each of TCW Group and Advent Capital Management. Through his extensive network, Mr. Perez has cultivated deep relationships with unique pockets of institutional capital that have shown an appetite to invest across the entire capital structure continuum, from the front-end IPO to later stage PIPE transactions. Mr. Perez holds a Bachelor of Science in Business Administration from HEC Geneva, a Master of Science in Finance from the University of Geneva and is a Chartered Alternative Investment Analyst (“CAIA®”) Charterholder.
We believe that Mr. Perez is qualified to serve as a director due to his significant public market experience in sourcing, structuring, fundraising and investing.
Michael Lahyani has been a member and Co-Executive Chairman of our Board of Directors, our Chief Strategy Officer and GGAA’s President since March 2021, and is the founder and Chief Executive Officer of Property Finder, the first and leading digital real estate and classifieds portal in MENA. Mr. Lahyani also serves as the Chairman of the Board of Directors of Dubicars.com and as a member of the Board of Directors of Hosco.com, Zingat.com and Foxstone.ch, all of which operate in the Consumer Internet industry. Mr. Lahyani began his career at PricewaterhouseCoopers in Geneva, Switzerland in 2002. In 2005, Mr. Lahyani founded Property Finder in Dubai and competed against major newspaper Gulf News, which maintained a dominant position within the real estate classifieds space in the region. In 2007, Mr. Lahyani sold a 51% interest in Property Finder to the ASX-listed REA Group, after which he remained CEO and pivoted the business model towards online channels, creating the first digital real estate marketplace in the MENA region. In 2009, during the Global Financial Crisis, Mr. Lahyani bought out REA Group’s interest in Property Finder and became the sole owner of Property Finder. He eventually led the company to become the number one destination for real estate listings, overtaking Gulf News and well-funded online competitor Dubizzle, which is backed by Euronext-listed Naspers Ltd, a global internet and entertainment group. Mr. Lahyani then helped drive Property Finder’s expansion into Qatar, Bahrain, Egypt, Saudi Arabia and Turkey through organic and inorganic channels. Mr. Lahyani closed a total of five strategic acquisitions, securing the number one position in four of the six markets in which Property Finder operates. In 2019, Mr. Lahyani raised $120 million for Property Finder from General Atlantic at an enterprise valuation of nearly $500 million and is on track to continue growing revenues greater than 30% annually. Property Finder today is EBITDA positive and employs over 450 professionals, including former senior executives from Facebook, Google, Pepsi, P&G and McKinsey & Company. Property Finder has been named Arabian Business Start-Up ‘SME of the Year’, SME ‘Online Business of the Year’, the winner of the Frost & Sullivan Middle East Customer Value award and winner/placing in ‘Dubai SME 100’.
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Mr. Lahyani is also a limited partner in General Atlantic, Sprints Capital and BECO Capital, giving him unique access to their portfolio companies and Founders. Additionally, Mr. Lahyani invests in startup technology companies directly or through Merro, an investment vehicle he co-founded with two partners that invests in online marketplace businesses globally. Mr. Lahyani co-invested alongside General Atlantic when they acquired Hemnet, a proptech company that recently conducted an IPO on the Nasdaq Stockholm stock exchange, and, more recently, Fresha, a well-funded beauty and wellness booking platform and marketplace. Mr. Lahyani was also an early investor in Quinto Andar, a leading rental platform in Brazil recently valued at $4 billion, and Kitopi, a managed cloud kitchen platform in the United Arab Emirates that raised $400 million in July 2021.
Mr. Lahyani is a regular speaker at the Harvard Business Conference and the first Endeavor Entrepreneur of the UAE Chapter, a non-profit organization that supports entrepreneurship. He was awarded Middle East CEO of the year in 2016 by CEO Magazine. Mr. Lahyani holds a Bachelor and Master in Business Administration in Finance from HEC Lausanne.
We believe that Mr. Lahyani is qualified to serve as a director due to his significant leadership experience, operating experience and investment experience.
Cem Habib has served as a member of our Board of Directors since December 13, 2021, and has been running his own investment portfolio and advising some of the largest family offices in the world on their global investments since 2016. Mr. Habib has also invested in a number of late-stage online marketplace companies over the past few years that have experienced successful IPOs, including Amwell, AirBNB, DIDI and others. Previously, he was CEO of SB Capital UK Limited, the FCA regulated UK affiliate of Skybridge, a leading boutique investment bank in Central Asia that has executed some of the largest financial advisory and capital markets transactions in the region. He was previously a Partner at Cheyne Capital Management, one of the largest alternative investment managers in Europe, until 2010. Cheyne Capital had acquired AltEdge Capital (UK) Limited, a fund of hedge funds manager, where Mr. Habib was a Principal, Portfolio Manager, Head of Research, Director and member of the Investment Committee. Mr. Habib was one of the founding members of AltEdge in 2001 and has extensive experience in the alternative investment management industry. He started his career in 1996 at the Millburn Corporation, a hedge fund that started trading in 1971 and is one of the longest running alternative investment managers. At Millburn Corporation, Mr. Habib focused on computerized trading systems, holding various positions during his five year tenure at the company. Mr. Habib holds a Bachelor of Arts in International Business and a Bachelor of Science in Finance from the Kogod School of Business, American University in Washington, D.C.
We believe that Mr. Habib is qualified to serve as a director due to his extensive experience in hedge funds, venture capital and private equity investing.
Advisory Board
From time to time we may utilize the services of certain advisors and/or form an advisory board consisting of individuals whom we believe will help us execute our business strategy.
Number and Terms of Office of Officers and Directors
Our board of directors is divided into three classes, with only one class of directors being appointed in each year, and with each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term. The term of office of the first class of directors, consisting of Mr. Habib, will expire at our first annual general meeting. There are currently no directors in the second class of directors. The term of office of the third class of directors, consisting of Mr. Perez and Mr. Lahyani, will expire at our third annual general meeting.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our Founder Shares. In addition, prior to the completion of an initial business combination, holders of a majority of our Founder Shares may remove a member of the board of directors for any reason.
Pursuant to an agreement entered into at the IPO Closing Date, our Sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the Sponsor holds any securities covered by the registration and shareholder rights agreement.
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Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our Second A&R Articles as it deems appropriate. Our Second A&R Articles provide that our officers may consist of one or more chairman of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Executive Officer and Director Compensation
None of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities were first listed on the Nasdaq and through the earlier of the consummation of our initial business combination and our liquidation, we will reimburse an affiliate of our Sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month. In addition, our Sponsor, executive officers and directors, or their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, executive officers or directors, or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our Sponsor, executive officers and directors, or their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Our board of directors has three standing committees: an audit committee, a nominating committee and a compensation committee.
Audit Committee
Our board of directors has determined that Mr. Habib is independent under the Nasdaq listing standards and applicable SEC rules that Mr. Habib qualifies as an “audit committee financial expert” as defined in applicable SEC rules. As a foreign private issuer we are required to have an audit committee meeting the requirements of Listing Rules 5605(c)(3) and 5605(c)(2)(A)(ii). Listing Rule 5605(c)(3) requires the audit committee to have specified authority and responsibilities and Listing Rule 5605(c)(2)(A)(ii) requires each member to meet the requisite independence standards but neither requires that the audit committee have more than one member.
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We have adopted an audit committee charter, which details the purpose and responsibilities of the audit committee, including:
| ● | appointing or replacing a firm to serve as the independent registered public accounting firm to audit our consolidated financial statements; |
| ● | meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems; |
| ● | monitoring the independence of the independent registered public accounting firm; |
| ● | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; |
| ● | developing procedures for employees to anonymously submit concerns about questionable accounting or audit matters; and; |
| ● | pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; and |
| ● | considering the adequacy of our internal accounting controls and audit procedures. |
Nominating Committee
We have established a nominating committee of our board of directors. Mr. Habib remains the sole member of the nominating committee. Nasdaq determined to remove from listing our securities effective at the opening of the trading session on November 30, 2023. Our units, ordinary shares and warrants now trade on the OTC under the symbols OTCPK: GGAUF, GGAAF and GGAWF, respectively. If we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with the Nasdaq rules. Under the Nasdaq listing standards, we are required to have a nominating committee composed entirely of independent directors. Our board of directors has determined that Mr. Habib is independent.
The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, shareholders and others.
We have adopted a nominating committee charter, which details the purpose and responsibilities of the nominating committee, including:
| ● | identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board, and recommending to the board of directors candidates for nomination for appointment at the annual general meeting or to fill vacancies on the board of directors; |
| ● | developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines; |
| ● | coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and |
| ● | reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. |
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The nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors.
Compensation Committee
Mr. Habib remains as the sole member and chairman of the compensation committee.
Rule 5615(a)(3) exempts foreign private issuers from all compensation committee requirements, including the requirement that compensation committee have at least two independent directors each of whom meets the requisite independence standards. Our board of directors has determined that Mr. Habib is independent. We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s compensation, evaluating our chief executive officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our chief executive officer based on such evaluation; |
| ● | reviewing and making recommendations to our board of directors with respect to the compensation, and any incentive compensation and equity based plans that are subject to board approval of all of our other officers; |
| ● | reviewing our executive compensation policies and plans; |
| ● | implementing and administering our incentive compensation equity-based remuneration plans; |
| ● | assisting management in complying with our proxy statement and annual report disclosure requirements; |
| ● | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
| ● | producing a report on executive compensation to be included in our annual proxy statement; and |
| ● | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Ethics
We have adopted a Code of Ethics and Business Conduct (“Code of Ethics”) applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
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Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
| ● | duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; |
| ● | duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; |
| ● | directors should not improperly fetter the exercise of future discretion; |
| ● | duty to exercise powers fairly as between different sections of shareholders; |
| ● | duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and |
| ● | duty to exercise independent judgment. |
In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the Second A&R Articles or alternatively by shareholder approval at general meetings.
Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to other entities. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our Second A&R Articles provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties, contractual obligations or other material management relationships:
| Individual | Entity | Entity’s Business | Affiliation | |||
| Michael Lahyani | Property Finder | Real Estate Classifieds | Chief Executive Officer | |||
| Dubicars.com | Consumer Internet | Chairman | ||||
| Hosco.com | Consumer Internet | Director | ||||
| Zingat.com | Consumer Internet | Director | ||||
| Foxstone.ch | Consumer Internet | Director | ||||
| Merro | Investment Management | Co-Founder | ||||
| Eyal Perez | Genesis Advisors GmbH | Investment Management | President and Chief Investment Officer | |||
| Cem Habib | Septema DMCC | Management Consulting | Director | |||
| Bella Blue Creations DMCC | Trading | Founder |
| (1) | Includes certain of its funds and other affiliates. |
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Potential investors should also be aware of the following other potential conflicts of interest:
| ● | Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. |
| ● | Our Sponsor has purchased private placement warrants in a transaction that closed on the IPO Closing Date. |
| ● | Our Sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our memorandum and articles of association then existing (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 13, 2024 or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Additionally, our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its Founder Shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless. Except as described herein, pursuant to a letter agreement that our Sponsor and each member of our management team have entered into with us, our Sponsor and each member of our management team have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Except as described herein, the private placement warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and directors will own ordinary shares or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. |
| ● | Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination. In addition, our Sponsor, officers and directors may Sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. |
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our Sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership with our Sponsor, directors of officers. In the event we seek to complete our initial business combination with a company that is affiliated with our Sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Furthermore, in no event will our Sponsor or any of our existing officers or directors, or their respective affiliates, be paid by us any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination. Further, commencing on the date that our securities were first listed on the Nasdaq and through the earlier of the consummation of our initial business combination and our liquidation, we will reimburse an affiliate of our Sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month.
We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our Sponsor and each member of our management team have agreed to vote their Founder Shares and public shares in favor of our initial business combination.
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Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our Second A&R Articles provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We have entered into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our Second A&R Articles. We have purchased a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination.
Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our shares of common stock and other equity securities. These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons.
Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner.
Item 11. Executive Compensation.
None of our officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities were first listed on Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we have agreed to pay an affiliate of our Sponsor up to $10,000 per month for office space, utilities, secretarial support and administrative services. In addition, our Sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our Sponsor, officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our Sponsor, officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation or tender offer materials (as applicable) furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
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We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 6, 2024 by:
| ● | each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares; |
| ● | each of our named executive officers and directors that beneficially owns our ordinary shares; and |
| ● | all our executive officers and directors as a group. |
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the public warrants or the private placement warrants.
| Name of Beneficial Owner | Number
of Shares Beneficially Owned | Percentage
of Issued and Outstanding Ordinary Shares | ||||||
| Executive Officers and Directors: | ||||||||
| Eyal Perez(2)(3)(4) | 5,850,625 | 91.3 | % | |||||
| Michael Lahyani | — | — | ||||||
| Cem Habib | — | — | ||||||
| All directors and executive officers as a group (3 individuals) | 5,850,625 | 91.3 | % | |||||
| Five Percent or More Holders: | ||||||||
| Genesis Growth Tech LLC(2)(3)(4) | 5,850,625 | 91.3 | % | |||||
| Olivier Plan(4) | 1,500,000 | 23.3 | % | |||||
| Nomura Securities | 474,375 | 7.4 | % | |||||
| (1) | This table is based on 6,406,520 shares of Public Shares and Founder Shares outstanding as of March 6, 2024. Beneficial ownership is determined in accordance with the rules of the SEC. Except as described in the footnotes below and subject to applicable community property laws and similar laws, GGAA believes that each person listed above has sole voting and investment power with respect to such shares. Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is Bahnhofstrasse 3, 6052 Hergiswil, Nidwalden, Switzerland. |
| (2) | Represents Founder Shares that are automatically convertible into Class A Ordinary Shares at the Closing, subject to adjustment, unless earlier converted into Class A Ordinary Shares at the option of the holder thereof. The Founder Shares will automatically convert into Class A Ordinary Shares (which such Class A Ordinary Shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A Ordinary Shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of our IPO, plus (ii) the total number of Class A Ordinary Shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of our initial business combination, excluding any Class A Ordinary Shares or equity-linked securities exercisable for or convertible into Class A Ordinary Shares issued, deemed issued, or to be issued, to any seller in our initial business combination and any private placement warrants issued to our Sponsor, any of its affiliates or any members of our management team upon conversion of working capital loans. In no event will the Founder Shares convert into Class A Ordinary Shares at a rate of less than one-to-one. Percentage ownership assumes all shares are converted to Class A Ordinary Shares on a one-for-one basis. |
| (3) | Represents the interests directly held by Genesis Growth Tech LLC, our Sponsor. Mr. Eyal Perez is the managing member of our Sponsor. As such, he may be deemed to have beneficial ownership of the Founder Shares held directly by the Sponsor. Mr. Perez disclaims any beneficial ownership of the Founder Shares other than to the extent of any pecuniary interest he may have therein, directly or indirectly. |
| (4) | Mr. Olivier Plan, a business associate of Mr. Perez, has provided operational and other funding to the Sponsor. Although Mr. Plan is neither a shareholder nor an officer or director of either the Sponsor or our Company, pursuant to an understanding between the Sponsor and Mr. Plan, Mr. Plan may be deemed to have an indirect beneficial interest in up to 1,500,000 Founder Shares held by the Sponsor. Mr. Plan’s business address is One Monte-Carlo, Place du Casino, 98000 Monaco. |
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Our Sponsor will have the right to appoint all of our directors prior to our initial business combination. Holders of our public shares will not have the right to elect any directors to our board of directors prior to our initial business combination. Our Sponsor may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination.
Our Sponsor has agreed (a) to vote any Founder Shares and public shares held by it in favor of any proposed business combination and (b) not to redeem any Founder Shares or public shares held by it in connection with a shareholder vote to approve a proposed initial business combination.
Our Sponsor is deemed to be our “promoter” as such term is defined under the federal securities laws.
Transfers of Founder Shares and Private Placement Warrants
The Founder Shares, private placement warrants and any Class A ordinary shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreement entered into by our Sponsor and management team. Our Sponsor and each member of our management team have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (a) one year after the completion of our initial business combination and (b) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. The private placement warrants and the respective Class A ordinary shares underlying such warrants are not transferable or saleable until 30 days after the completion of our initial business combination. The foregoing restrictions are not applicable to transfers (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members or partners of our Sponsor or their affiliates, any affiliates of our Sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of a business combination at prices no greater than the price at which the Founder Shares, private placement warrants or Class A ordinary shares, as applicable, were originally purchased; (f) by virtue of our Sponsor’s organizational documents upon liquidation or dissolution of our Sponsor; (g) to the company for no value for cancellation in connection with the consummation of our initial business combination; (h) in the event of our liquidation prior to the completion of our initial business combination; or (i) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Founder Shares
On May 26, 2021, our Sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Founder Shares, par value $0.0001. On September 20, 2021, our Sponsor surrendered an aggregate of 1,437,500 Founder Shares to the Company’s capital for no consideration, resulting in the Sponsor holding an aggregate of 5,750,000 Founder Shares. On December 3, 2021, our Sponsor agreed to transfer to Nomura an aggregate of 431,250 Founder Shares at the Sponsor’s original purchase price. On December 8, 2021, we effected a share capitalization pursuant to which we issued an additional 575,000 Founder Shares to our Sponsor and we also agreed to transfer to Nomura an additional 43,125 Founder Shares. As a result, our Sponsor holds 5,850,625 Founder Shares and Nomura holding 474,375 Founder Shares. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the issued and outstanding shares upon completion of our Initial Public Offering. The Founder Shares (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Promissory Note - Related Party
The Sponsor agreed to loan the Company up to $500,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note, dated May 26, 2021, and amended on October 26, 2021, (the “Note”). This loan was non-interest bearing and payable on the earlier of March 31, 2022, or the completion of the Initial Public Offering. As of the date of the Initial Public Offering, the Company had borrowed approximately $453,000 under the Note. In December 2021, subsequent to the Initial Public Offering, the Company repaid $200,000 on the Note and also offset the $25,000 receivable related to the Private Placement Warrants against the Note. As a result, as of December 31, 2021, the Company had approximately $228,000 outstanding on the Note, which was due upon demand. In March 2022, the Company repaid the remaining balance of the Note to the Sponsor. As of December 31, 2023 and 2022, the Company had no outstanding balance under the Note.
On December 9, 2022, in connection with the extension of the deadline for the Company to complete its initial business combination to March 13, 2023, the Sponsor funded an extension payment for $2,530,000 into the Trust Account. This amount is non-interest bearing and payable on the completion of the Business Combination. The funds were deposited directly into the trust account. As of December 31, 2023 and 2022 the balance of the loan was $2,400,489 and $2,530,000, respectively.
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Private Placement Warrants
Our Sponsor has purchased an aggregate of 8,875,000 private placement warrants for a purchase price of $1.00 per whole warrant in a private placement that occurred at the IPO Closing Date. As such, our Sponsor’s interest in us is valued at $8,875,000. Each private placement warrant entitles the holder to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. The private placement warrants (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination.
Conflicts of Interest
As more fully discussed in the section of this Annual Report entitled “Part III, Item 10. Directors, Executive Officers and Corporate Governance-Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Administrative Services Agreement
We currently maintain our executive offices at Bahnhofstrasse 3, 6052 Hergiswil, Nidwalden, Switzerland. Commencing on the date that our securities were first listed on Nasdaq and through the earlier of the consummation of our initial business combination and our liquidation, we will reimburse an affiliate of our Sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month.
No compensation of any kind, including finder’s and consulting fees, will be paid to our Sponsor, officers and directors, or their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, officers, directors or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Related Party Loans and Advances
Prior to the IPO Closing Date, our Sponsor agreed to loan us up to $500,000 to be used for a portion of the expenses of our Initial Public Offering. As of December 31, 2021, we had approximately $228,000 outstanding under the promissory note with our Sponsor. These loans were non-interest bearing, unsecured and were due at the earlier of March 31, 2022 and the IPO Closing Date. In March 2022, we repaid the remaining balance of the promissory note to our Sponsor. As of December 31, 2023, we had no outstanding balance under such promissory note.
In addition, in order to 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 an initial business combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that the 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 at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. 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, 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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After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
On December 9, 2022, in connection with the extension of the deadline for us to complete our initial business combination to March 13, 2023, the Sponsor funded an extension payment for $2,530,000 into the Trust Account. The funds were deposited directly into the Trust Account.
Due from Related Party
On June 20, 2023, the Company was paid the $1,057,397 due from related party in full and the amount owed to the Company was transferred into the Company’s operating bank account.
As of December 31, 2023 and 2022, the Company had a balance of $0 and $1,200,595, respectively, due from a related party to support the Company’s operations. The balance was unsecured and non-interest bearing.
Registration Rights
We have entered into a registration and shareholder rights agreement pursuant to which our Sponsor and Nomura are entitled to certain registration rights with respect to the private placement warrants, the warrants issuable upon conversion of working capital loans (if any) and the Class A ordinary shares issuable upon exercise of the foregoing and upon conversion of the Founder Shares, and, upon consummation of our initial business combination, to nominate three individuals for election to our board of directors, as long as the Sponsor holds any securities covered by the registration and shareholder rights agreement.
Policy for Approval of Related Party Transactions
The audit committee of our board of directors has adopted a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
Director Independence
We are relying on the provisions of Listing Rule 5615(a)(3) to exempt us from the requirement that on or after December 13, 2022 (the one-year anniversary of our Initial Public Offering) a majority of our Board of Directors be comprised of independent directors. An “independent director” is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, shareholders or officer of an organization that has a relationship with the company). Our Board of Directors is currently comprised of three members. Mr. Cem Habib serves on the Audit, Compensation and nominating committees and he has been designated as the audit committee’s financial expert.
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Item 14. Principal Accountant Fees and Services.
Fees for professional services provided by our independent registered public accounting firm since inception include:
| For
The Year Ended December 31, 2023 | For
The Year Ended December 31, 2022 | |||||||
| Audit Fees(1) | $ | 79,000 | $ | 22,500 | ||||
| Audit-Related Fees(2) | - | - | ||||||
| Tax Fees(3) | - | - | ||||||
| All Other Fees(4) | - | - | ||||||
| Total | $ | 79,000 | $ | 22,500 | ||||
| (1) | Audit Fees. Audit fees consist of fees billed for professional services rendered by our independent registered public accounting firm for the audit of our annual consolidated financial statements and review of consolidated financial statements included in our Quarterly Reports on Form 10-Q or services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements. |
| (2) | Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. |
| (3) | Tax Fees. Tax fees consist of fees billed for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice, and tax planning. |
| (4) | All Other Fees. All other fees consist of fees billed for all other services. |
Policy on Board Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Auditors
The audit committee is responsible for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the audit committee shall review and, in its sole discretion, pre-approve all audit and permitted non-audit services to be provided by our independent registered public accounting firm as provided under the audit committee charter.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this Annual Report on Form 10-K:
Consolidated financial statements: See “Index to Consolidated financial statements” at “Item 8. Consolidated financial statements and Supplementary Data” herein.
(b) Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K. Exhibits not incorporated by reference to a prior filing are designated by an asterisk (*); all exhibits not so designated are incorporated by reference to a prior filing as indicated.
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Item 16. Form 10-K Summary.
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: March 6, 2024 | GENESIS GROWTH TECH ACQUISITION CORP. |
| By: | /s/ Eyal Perez | |
| Eyal Perez | ||
| Chief Executive Officer,
Chief Financial Officer and Director |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
| Name | Title | Date | ||
| /s/ Eyal Perez | Chief Executive Officer, Chief Financial Officer and | March 6, 2024 | ||
| Eyal Perez | Chairman of the Board of Directors | |||
| (Principal Executive Officer) (Principal Financial Officer and Principal Accounting Officer) | ||||
| /s/ Michael Lahyani | Executive Chairman of the Board, Chief Strategy Officer and | March 6, 2024 | ||
| Michael Lahyani | President | |||
| /s/ Cem Habib | Director | March 6, 2024 | ||
| Cem Habib |
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