0000950170-23-062889.txt : 20231113 0000950170-23-062889.hdr.sgml : 20231113 20231113160026 ACCESSION NUMBER: 0000950170-23-062889 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 48 CONFORMED PERIOD OF REPORT: 20230930 FILED AS OF DATE: 20231113 DATE AS OF CHANGE: 20231113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Gores Holdings IX, Inc. CENTRAL INDEX KEY: 0001894630 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-41215 FILM NUMBER: 231398380 BUSINESS ADDRESS: STREET 1: 6260 LOOKOUT ROAD CITY: BOULDER STATE: CO ZIP: 80301 BUSINESS PHONE: 303-531-3100 MAIL ADDRESS: STREET 1: 6260 LOOKOUT ROAD CITY: BOULDER STATE: CO ZIP: 80301 10-Q 1 ghix-20230930.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-41215

 

GORES HOLDINGS IX, INC.

(Exact name of registrant as specified in its Charter)

 

 

Delaware

 

86-1593799

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

6260 Lookout Rd.

 

 

Boulder, CO

 

80301

(Address of principal executive offices)

 

(Zip Code)

 

(310) 209-3010

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Class A Common Stock

GHIX

The Nasdaq Stock Market, LLC

Warrants

GHIXW

The Nasdaq Stock Market, LLC

Units

GHIXU

The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes No

As of November 13, 2023, there were 52,500,000 shares of the Company’s Class A Common Stock, par value $0.0001 per share, and 13,125,000 shares of the Company’s Class F common stock, par value $0.0001 per share, issued and outstanding.


 

 

TABLE OF CONTENTS

Page

PART I—FINANCIAL INFORMATION

 

 

 

 

Item 1.

Interim Financial Statements

 

 

 

 

Condensed Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022

3

 

 

Unaudited Condensed Statements of Operations for the Three Months and Nine Months Ended September 30, 2023 and the Three Months and Nine Months Ended September 30, 2022

4

 

 

Unaudited Condensed Statements of Changes in Stockholders’ Deficit for the Three Months and Nine Months Ended September 30, 2023 and the Three Months and Nine Months Ended September 30, 2022

5

 

 

Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2023 and the Nine Months Ended September 30, 2022

6

 

 

Notes to Unaudited, Interim, Condensed Financial Statements

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21

 

 

 

Item 4.

Controls and Procedures

22

 

 

PART II—OTHER INFORMATION

23

 

 

 

Item 1.

Legal Proceedings

23

 

 

 

Item 1A.

Risk Factors

23

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

24

 

 

 

Item 3.

Defaults Upon Senior Securities

25

 

 

 

Item 4.

Mine Safety Disclosures

25

 

 

 

Item 5.

Other Information

25

 

 

 

Item 6.

Exhibits

26

 

 

 

 

 

 

 

 

 

2


 

GORES HOLDINGS IX, INC.

CONDENSED BALANCE SHEETS

 

 

 

September 30, 2023

 

 

 

 

 

 

 

(Unaudited)

 

 

December 31, 2022

 

ASSETS:

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

 

18,238

 

 

$

 

378,072

 

Prepaid expenses

 

 

 

298,893

 

 

 

 

944,461

 

Total current assets

 

 

 

317,131

 

 

 

 

1,322,533

 

Investments held in Trust Account

 

 

 

550,138,169

 

 

 

 

531,940,494

 

Total assets

 

$

 

550,455,300

 

 

$

 

533,263,027

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accrued expenses, formation and offering costs

 

$

 

145,578

 

 

$

 

27,446

 

State franchise tax accrual

 

 

 

30,000

 

 

 

 

200,000

 

Income tax payable

 

 

 

1,991,124

 

 

 

 

121,667

 

Notes payable - related party

 

 

 

600,000

 

 

 

 

600,000

 

Total current liabilities

 

 

 

2,766,702

 

 

 

 

949,113

 

Public warrants derivative liability

 

 

 

3,500,000

 

 

 

 

3,325,000

 

Private warrants derivative liability

 

 

 

1,666,667

 

 

 

 

1,583,333

 

Deferred income tax payable

 

 

 

361,970

 

 

 

 

509,185

 

Deferred underwriting compensation

 

 

 

18,375,000

 

 

 

 

18,375,000

 

Total liabilities

 

 

 

26,670,339

 

 

 

 

24,741,631

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Class A Common Stock subject to possible redemption, 52,500,000 shares at September 30, 2023 and 52,500,000 shares at December 31, 2022 (at redemption value of $10.43 and $10.12 per share, respectively)

 

 

 

547,625,075

 

 

 

 

531,037,712

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding at September 30, 2023 and December 31, 2022

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

Class A Common Stock, $0.0001 par value; 400,000,000 shares authorized, none issued or outstanding

 

 

 

 

 

 

 

 

Class F Common Stock, $0.0001 par value; 40,000,000 shares authorized, 13,125,000 shares issued and outstanding at September 30, 2023 and December 31, 2022

 

 

 

1,313

 

 

 

 

1,313

 

Additional paid-in-capital

 

 

 

 

 

 

 

 

Accumulated deficit

 

 

 

(23,841,427

)

 

 

 

(22,517,629

)

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

 

(23,840,114

)

 

 

 

(22,516,316

)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$

 

550,455,300

 

 

$

 

533,263,027

 

See accompanying notes to the unaudited, interim, condensed financial statements.

3


 

GORES HOLDINGS IX, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three

 

 

Three

 

 

Nine

 

 

Nine

 

 

Months Ended

 

 

Months Ended

 

 

Months Ended

 

 

Months Ended

 

 

September 30, 2023

 

 

September 30, 2022

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenues

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Professional fees and other expenses

 

 

(367,805

)

 

 

 

(341,798

)

 

 

 

(1,255,586

)

 

 

 

(1,069,443

)

State franchise taxes, other than income tax

 

 

(50,000

)

 

 

 

(50,000

)

 

 

 

(150,000

)

 

 

 

(150,000

)

       Net loss from operations

 

 

(417,805

)

 

 

 

(391,798

)

 

 

 

(1,405,586

)

 

 

 

(1,219,443

)

Gain/(loss) from change in fair value of public and private warrant liabilities

 

 

(775,000

)

 

 

 

2,066,666

 

 

 

 

(258,334

)

 

 

 

7,233,333

 

Allocated expense for warrant issuance cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(617,225

)

Other income - dividend income

 

 

7,074,374

 

 

 

 

2,368,007

 

 

 

 

19,117,072

 

 

 

 

3,128,209

 

       Net income before income taxes

 

 

5,881,569

 

 

 

 

4,042,875

 

 

 

 

17,453,152

 

 

 

 

8,524,874

 

Provision for income tax

 

 

(902,006

)

 

 

 

(51,149

)

 

 

 

(2,189,587

)

 

 

 

(51,149

)

       Net income

$

 

4,979,563

 

 

$

 

3,991,726

 

 

$

 

15,263,565

 

 

$

 

8,473,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding of Class A Common Stock

 

 

52,500,000

 

 

 

 

52,500,000

 

 

 

 

52,500,000

 

 

 

 

50,001,000

 

Net income/(loss) per share, Class A Common Stock

$

 

(0.02

)

 

$

 

0.02

 

 

$

 

(0.11

)

 

$

 

(0.53

)

Weighted average shares outstanding of Class F Common Stock

 

 

13,125,000

 

 

 

 

13,125,000

 

 

 

 

13,125,000

 

 

 

 

13,125,000

 

Net income/(loss) per share, Class F Common Stock

$

 

(0.02

)

 

$

 

0.02

 

 

$

 

(0.11

)

 

$

 

(0.53

)

See accompanying notes to the unaudited, interim, condensed financial statements.

 

4


 

GORES HOLDINGS IX, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

 

 

 

For the Three Months Ended September 30, 2023

 

 

 

Class A Common Stock

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Deficit

 

 

Deficit

 

Balance at July 1, 2023

 

 

-

 

 

 $

 

-

 

 

 

13,125,000

 

 

 $

 

1,313

 

 

 $

 

-

 

 

 $

 

(22,765,887

)

 

 $

 

(22,764,574

)

Net income

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4,979,563

 

 

 

 

4,979,563

 

Increase in redemption value of Class A Common Stock subject to redemption

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(6,055,103

)

 

 

 

(6,055,103

)

Balance at September 30, 2023 (unaudited)

 

 

-

 

 

 $

 

-

 

 

 

13,125,000

 

 

 $

 

1,313

 

 

 $

 

-

 

 

 $

 

(23,841,427

)

 

 $

 

(23,840,114

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2023

 

 

 

Class A Common Stock

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Deficit

 

 

Deficit

 

Balance at January 1, 2023

 

 

-

 

 

 $

 

-

 

 

 

13,125,000

 

 

 $

 

1,313

 

 

 $

 

-

 

 

 $

 

(22,517,629

)

 

 $

 

(22,516,316

)

Net income

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

15,263,565

 

 

 

 

15,263,565

 

Increase in redemption value of Class A Common Stock subject to redemption

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(16,587,363

)

 

 

 

(16,587,363

)

Balance at September 30, 2023 (unaudited)

 

 

-

 

 

$

 

-

 

 

 

13,125,000

 

 

$

 

1,313

 

 

$

 

-

 

 

$

 

(23,841,427

)

 

$

 

(23,840,114

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2022

 

 

 

Class A Common Stock

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Deficit

 

 

Deficit

 

Balance at July 1, 2022

 

 

-

 

 

 $

 

-

 

 

 

13,125,000

 

 

 $

 

1,313

 

 

 $

 

-

 

 

 $

 

(28,049,854

)

 

 $

 

(28,048,541

)

Net income

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

3,991,726

 

 

 

 

3,991,726

 

Increase in redemption value of Class A commont stock subject to redemption

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(2,354,685

)

 

 

 

(2,354,685

)

Balance at September 30, 2022 (unaudited)

 

 

-

 

 

 $

 

-

 

 

 

13,125,000

 

 

 $

 

1,313

 

 

 $

 

-

 

 

 $

 

(26,412,813

)

 

 $

 

(26,411,500

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2022

 

 

 

Class A Common Stock

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Deficit

 

 

Deficit

 

Balance at January 1, 2022

 

 

-

 

 

 $

 

-

 

 

 

15,093,750

 

 

 $

 

1,509

 

 

 $

 

23,491

 

 

 $

 

(6,112

)

 

 $

 

18,888

 

Forfeited Class F Common Stock by Sponsor

 

 

-

 

 

 

 

-

 

 

 

(1,968,750

)

 

 

 

(197

)

 

 

 

197

 

 

 

 

-

 

 

 

 

-

 

Excess of fair value paid by founders for warrants

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

7,250,000

 

 

 

 

-

 

 

 

 

7,250,000

 

Subsequent measurement of Class A Common Stock subject to redemption against additional paid-in capital

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

(7,273,688

)

 

 

 

-

 

 

 

 

(7,273,688

)

Subsequent measurement of Class A Common Stock subject to redemption against accumulated deficit

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(32,525,740

)

 

 

 

(32,525,740

)

Net income

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

8,473,725

 

 

 

 

8,473,725

 

Increase in redemption value of Class A commont stock subject to redemption

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(2,354,685

)

 

 

 

(2,354,685

)

Balance at September 30, 2022 (unaudited)

 

 

-

 

 

$

 

-

 

 

 

13,125,000

 

 

$

 

1,313

 

 

$

 

-

 

 

$

 

(26,412,813

)

 

$

 

(26,411,500

)

See accompanying notes to the unaudited, interim, condensed financial statements.

5


 

GORES HOLDINGS IX, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

Nine Months Ended September 30, 2023

 

 

 

Nine Months Ended September 30, 2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

 

15,263,565

 

 

$

 

8,473,725

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

 

 

Allocated expense for warrant issuance cost

 

 

 

 

 

 

 

617,225

 

Dividends reinvested in the Trust Account

 

 

 

(18,197,674

)

 

 

 

(3,128,209

)

Loss from change in fair value of private and public warrant liabilities

 

 

 

258,334

 

 

 

 

(7,233,333

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

State franchise tax accrual

 

 

 

(170,000

)

 

 

 

145,930

 

Income tax payable

 

 

 

1,869,457

 

 

 

 

51,149

 

Deferred income tax

 

 

 

(147,215

)

 

 

 

 

Prepaid assets

 

 

 

645,567

 

 

 

 

(1,200,968

)

Accrued expenses, formation and offering costs

 

 

 

118,132

 

 

 

 

(145,892

)

Net cash used in operating activities

 

 

 

(359,834

)

 

 

 

(2,420,373

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash deposited in Trust Account

 

 

 

 

 

 

 

(525,000,000

)

Cash withdrawn from Trust Account for tax and regulatory expenses

 

 

 

 

 

 

 

623,524

 

Net cash used in investing activities

 

 

 

 

 

 

 

(524,376,476

)

Cash flows provided by financing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of Units in initial public offering

 

 

 

 

 

 

 

525,000,000

 

Proceeds from sale of Private Placement Warrants to Sponsor

 

 

 

 

 

 

 

12,500,000

 

Proceeds from notes payable – related party

 

 

 

 

 

 

 

600,000

 

Repayment of notes and advances payable – related party

 

 

 

 

 

 

 

(300,000

)

Payment of underwriters’ discounts and commissions

 

 

 

 

 

 

 

(10,500,000

)

Payment of accrued offering costs

 

 

 

 

 

 

 

(179,109

)

Net cash provided by financing activities

 

 

 

 

 

 

 

527,120,891

 

Net change in cash

 

 

 

(359,834

)

 

 

 

324,042

 

Cash at beginning of period

 

 

 

378,072

 

 

 

 

147,160

 

Cash at end of period

 

$

 

18,238

 

 

$

 

471,202

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash financing activities:

 

 

 

 

 

 

 

 

Offering costs included in accrued expenses, formation and offering costs

 

$

 

 

 

$

 

337,544

 

Deferred underwriting compensation

 

$

 

 

 

$

 

18,375,000

 

Supplemental disclosure of income and franchise taxes paid:

 

 

 

 

 

 

 

 

Cash paid for income and state franchise taxes

 

$

 

864,609

 

 

$

 

4,070

 

See accompanying notes to the unaudited, interim, condensed financial statements.

6


 

GORES HOLDINGS IX, INC.

NOTES TO THE UNAUDITED, INTERIM, CONDENSED FINANCIAL STATEMENTS

1. Organization and Business Operations

Organization and General

Gores Holdings IX, Inc. (the “Company”) was incorporated in Delaware on January 19, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). The Company has neither engaged in any operations nor generated any revenue to date. The Company’s management has broad discretion with respect to the Business Combination. The Company’s Sponsor is Gores Sponsor IX, LLC, a Delaware limited liability company (the “Sponsor”).

At September 30, 2023, the Company had not commenced any operations. All activity for the period from July 8, 2021, the date on which operations commenced, through September 30, 2023 relates to the Company’s formation and initial public offering (“Public Offering”) described below and subsequently to the Company's search for a prospective initial Business Combination. The Company subsequently completed the Public Offering on January 14, 2022 (the “IPO Closing Date”). The Company will not generate any operating revenues until after the completion of its Business Combination, at the earliest. Subsequent to the Public Offering, the Company generates non-operating income in the form of interest and/or dividend income from the proceeds derived from the Public Offering and the sale of the Private Placement Warrants (as defined below) held in the Trust Account (as defined below).

 

Financing

Upon the IPO Closing Date and the sale of the Private Placement Warrants, an aggregate of $525,000,000 was placed in a Trust Account with Deutsche Bank Trust Company Americas (the “Trust Account”) acting as Trustee.

The Company intends to finance a Business Combination with the net proceeds from its $525,000,000 Public Offering and its sale of $12,500,000 of Private Placement Warrants.

Trust Account

Funds held in the Trust Account can be invested only in U.S. government treasury bills with a maturity of one hundred and eighty-five (185) days or less or in money market funds meeting certain conditions under Rule 2a‑7 under the Investment Company Act of 1940, (the “Investment Company Act”) as amended, that invest only in direct U.S. government obligations. As of September 30, 2023 and December 31, 2022, the Trust Account consisted of money market funds.

The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to fund regulatory compliance requirements and other costs related thereto (a “Regulatory Withdrawal”) for a maximum 24 months and/or additional amounts necessary to pay franchise and income taxes, if any, none of the funds held in trust will be released until the earliest of: (i) the completion of the Business Combination; or (ii) the redemption of any public shares of common stock properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of such public shares of common stock if the Company does not complete the Business Combination within 24 months from the closing of the Public Offering; or (iii) the redemption of 100% of the public shares of common stock if the Company is unable to complete a Business Combination within 24 months from the closing of the Public Offering, subject to the requirements of law and stock exchange rules.

7


 

Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination. The Business Combination must be with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (less any deferred underwriting commissions and taxes payable on interest income earned) at the time of the Company signing a definitive agreement in connection with the Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable, or (ii) provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its 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 otherwise require the Company to seek stockholder approval, unless a vote is required by law or under Nasdaq rules. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. Currently, the Company will not redeem its public shares of common stock in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its public shares of common stock and the related Business Combination, and instead may search for an alternate Business Combination.

As a result of the foregoing redemption provisions, the public shares of common stock will be recorded at redemption amount and classified as temporary equity, in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) in subsequent periods.

The Company has 24 months from the IPO Closing Date to complete its Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest income, but less taxes payable (less up to $100,000 of such net interest income to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation. The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they waived their rights to participate in any redemption with respect to their Founder Shares (as defined below); however, if the Sponsor or any of the Company’s officers, directors or affiliates acquire public shares of common stock, they will be entitled to a pro rata share of the Trust Account in the event the Company does not complete a Business Combination within the required time period.

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 less than the initial public offering price per Unit in the Public Offering.

8


 

Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startup (“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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

2. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, interim, condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”), and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30 2023 and December 31, 2022 and the results of operations and cash flows for the periods presented. Operating results for the three months and nine months ended September 30, 2023 are not necessarily indicative of results that may be expected for the full year or any other period. The accompanying unaudited, interim, condensed financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2023.

Net Income/(Loss) Per Common Share

The Company has two classes of shares, which are referred to as Class A Common Stock (the “Common Stock”) and Class F Common Stock (the “Founders 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/(loss) per common share is calculated by dividing the net income/(loss) by the weighted average shares of common stock outstanding for the respective period. At September 30, 2023 and December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company under the treasury stock method. As a result, diluted net income/(loss) per common share is the same as basic net income/(loss) per common share for the periods presented. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income/(loss) per share for each class of common stock.

9


 

 

 

 

For the Three Months Ended September 30, 2023

 

 

For the Three Months Ended September 30, 2022

 

 

For the Nine Months Ended September 30, 2023

 

 

For the Nine Months Ended September 30, 2022