424B3 1 ea176484-424b3_gorillatech.htm PROSPECTUS SUPPLEMENT

Filed pursuant to Rule 424(b)(3)

Registration No. 333-267838 

 

PROSPECTUS SUPPLEMENT NO. 1

(to Prospectus dated March 30, 2023)

 

GORILLA TECHNOLOGY GROUP INC.

 

PRIMARY OFFERING OF

1,273,125 ORDINARY SHARES UNDERLYING WARRANTS

14,000,000 ORDINARY SHARES UNDERLYING THE CONTINGENT VALUE RIGHTS

 

SECONDARY OFFERING OF

71,210,599 ORDINARY SHARES,
1,273,125 WARRANTS TO PURCHASE ORDINARY SHARES
3,000,000 CLASS A CONTINGENT VALUE RIGHTS
OF
GORILLA TECHNOLOGY GROUP INC

 

This prospectus supplement updates and supplements the prospectus dated March 30, 2023 (the “Prospectus”), which forms a part of our registration statement on Form F-1 (No. 333-267838) and declared effective by the Securities and Exchange Commission on March 30, 2023. This prospectus supplement is being filed to update and supplement the information in the Prospectus with information pertaining to the 2022 earnings of Gorilla Technology Group Inc., a Cayman Islands exempted company (“Gorilla”).

 

The Prospectus and this prospectus supplement relate relates to (A) issuance from time to time by Gorilla, of up to (i) 1,273,125 ordinary shares, par value $0.0001 per share (the “ordinary shares”), issuable upon exercise of warrants (the “warrants”) to purchase our ordinary shares at an exercise price of $11.50 per share and (ii) 14,000,000 ordinary shares underlying the CVRs (as defined in the Prospectus) and (B) the resale, from time to time, by the selling securityholders named in the Prospectus (the “Selling Securityholders”), or their pledgees, donees, transferees, or other successors in interest of up to an aggregate of (i) 63,225,599 ordinary shares that were issued to Company shareholders, (ii) 4,985,000 ordinary shares issued to Sponsor (as defined in the Prospectus), certain affiliates of Global, and I-Banker Securities (as defined in the Prospectus) at the closing of the Business Combination (as defined in the Prospectus), (iii) 3,000,000 ordinary shares issued to the PIPE Investor (as defined in the Prospectus), (iv) 1,273,125 warrants to purchase ordinary shares at an exercise price of $11.50 per share and (v) 3,000,000 Class A CVRs (as defined in the Prospectus). Our registration of the Ordinary Shares covered by this prospectus does not mean that either we or the Selling Securityholders will offer or sell, as applicable, any of the Ordinary Shares. The Selling Securityholders may offer and sell the Ordinary Shares covered by this prospectus in a number of different ways and at varying prices. We provide more information about how the Selling Securityholders may sell the Ordinary Shares in the section entitled “Plan of Distribution” in the Prospectus.

 

You should read this prospectus and any prospectus supplement or amendment carefully before you invest in our securities. Our Ordinary Shares and warrants are listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols “GRRR” and “GRRRW,” respectively. On April 3, 2023, the last reported sale price of our Ordinary Shares on Nasdaq was $3.99 per share and the last reported sale price of our warrants on Nasdaq was $0.23.

 

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any subsequent amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus, and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement. The information in this prospectus supplement modifies and supersedes, in part, the information in the Prospectus. Any information in the Prospectus that is modified or superseded shall not be deemed to constitute a part of the Prospectus except as modified or superseded by this prospectus supplement. You should not assume that the information provided in this prospectus supplement or the Prospectus is accurate as of any date other than their respective dates. Neither the delivery of this prospectus supplement, the Prospectus nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date of this prospectus supplement, or that the information contained in this prospectus supplement, the Prospectus is correct as of any time after the date of that information.

 

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.

 

Investing in our securities involves a high degree of risk. See the section entitled “Risk Factors” beginning on page 7 of the Prospectus.

 

Neither the Securities and Exchange Commission nor any other state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this Prospectus Supplement No. 1. Any representation to the contrary is a criminal offense.

 

The date of this Prospectus Supplement is April 4, 2023. 

 

 

 

 

2022 Results Overview

 

Unless noted otherwise, all figures are for the year ended December 31, 2022, and all comparisons are with the corresponding period of 2021.

 

The following table summarizes financial results:

 

   Year Ended 
   December 31 
Items  2022   2021 
   (in thousands) 
Revenue  $22,409   $42,243 
Cost of revenue   (14,072)   (26,469)
Gross Profit   8,337    15,774 
Gross Margin   37.2%   37.3%
Operating expense   94,844    23,932 
Operating loss   (86,507)   (8,158)
Net loss  $(87,537)  $(8,548)

 

The following table shows our EBIT, EBITDA and adjusted EBITDA, together reconciled to the loss for the year ended December 31, 2022 and 2021.

 

   Year Ended
December 31		 
   2022   2021 
   (in thousands) 
Loss for the year   $(87,537)  $(8,548)
Income tax expense (benefit)    430    (238)
Financial expense, net    599    628 
EBIT   $(86,508)   (8,158)
Depreciation expense    5,938    6,386 
Amortization expense    1,688    2,361 
EBITDA   $(78,882)  $589 
Transaction costs    2,814    - 
Share Listing Expense(1)     70,105    - 
Adjusted EBITDA   $(5,963)  $589 

 

(1)Non-cash de-SPAC reverse merger cost.

 

The revenue decline reflects the shift in emphasis to security convergence and a substantial paring of unprofitable or marginally profitable customer accounts. The table below highlights the building traction in convergence while video analytics is rationalized.

 

   Year Ended December 31       
   2022   2021       
   Dollars in Thousands   Percentage of Net Revenue   Dollars in Thousands   Percentage of Net Revenue   Change
$		   Change
%		 
Security Convergence  $12,711    56.7%  $12,055    28.5%  $656    5.4%
Video IoT   $9,698    43.3%  $30,188    71.5%  $(20,490)   -67.9%
Total  $22,409    100.0%  $42,243    100.0%  $(19,834)   -47.0%

 

The gross profit decline tracked the decline in revenue. Gross margin percentage was unchanged versus the previous year.

 

Operating expense growth reflected investment in transforming Gorilla into a global cybersecurity leader, increased cost of being a public company, one-time expenses related to the SPAC merger, and one-time transaction expenses mainly related to the public listing and the SeeQuestor asset acquisition. One-time listing expenses in 2022 were $70 million, reflecting non-cash charges related to accounting for the reverse merger transaction as a capital reorganization. Other transaction-related expenses totaled $2.8 million.

 

Excluding transaction cost and share listing expense, adjusted net loss, a non-GAAP financial measure, was $14.6 million, higher than prior year mainly due to the increase in public company expenses. However, adjusted EBITDA was a loss of $6.0 million and operating cash flow was an outflow of $8.8 million. Capital expenditures were $2.9 million for the year. The company ended the year with $23 million of cash and cash equivalents.

 

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About Gorilla Technologies Group Inc.

 

Gorilla, headquartered in London U.K., is a global solution provider in security intelligence, network intelligence, business intelligence and IoT technology. Gorilla develops a wide range of solutions including Smart Cities, Smart Retail, Enterprise Security, and Smart Media. In addition, Gorilla provides a complete Security Convergence Platform to government institutions, telecom companies and private enterprises with network surveillance and cyber security.

 

Gorilla places an emphasis on offering leading technology, expert service, and precise delivery, and ensuring top-of-the-line, intelligent and strong edge AI solutions that enable clients to improve operational performance and efficiency. With continuous core technology development, Gorilla will deliver edge AI solutions to managed service providers, distributors, system integrators, and hardware manufacturers. For more information go to Gorilla-Technology.com.

 

Forward-Looking Statements

 

This Prospectus Supplement contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Gorilla’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “might” and “continues,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, statements regarding our Nasdaq listing improving our ability to attract the attention of customers and investors alike, our ability to fund operations as we execute a strategic shift to pursue the larger and higher margin opportunities in Security Convergence, our expectations to swing to profit in the quarters ahead, our immediate priorities, Gorilla’s strategic shift to enable it to pursue larger projects with better revenue visibility, along with those other risks described under the heading “Risk Factors” in the Prospectus, and those that are included in any of Gorilla’s future filings with the SEC. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside of the control of Gorilla and are difficult to predict. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Gorilla undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.

 

Non-GAAP Measures

 

Certain of the measures included in this Prospectus Supplement are non-GAAP financial measures, including adjusted EBITDA and adjusted net loss. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Gorilla are not reported by all of their competitors and may not be comparable to similarly titled amounts used by other companies.

 

We believe that the non-GAAP measures such as adjusted EBITDA provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. We present adjusted EBITDA in order to provide more information and greater transparency to investors about our operating results.

 

Adjusted EBITDA represents EBITDA excluding transaction costs and share listing expenses which are one-off expenses for professional services related to the Business Combination, asset acquisition and SOX 404 implementation project which are considered as non-recurring corporate development events, which are added back for calculation of adjusted EBITDA.

 

The final table which shows our EBIT, EBITDA and adjusted EBITDA, together reconciled to the loss for the year ended December 31, 2022 and 2021 in this results announcement has more details on the non-GAAP financial measures and the related reconciliations between these financial measures.

 

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Gorilla Technology Group Inc. and Subsidiaries
Consolidated Statements of Comprehensive Loss
(Unaudited)
(Expressed in United States dollars)

 

Items  For the year
ended December 31,
2022		   For the year
ended December 31,
2021		   For the year
ended December 31,
2020		 
Revenue  $22,408,808   $42,242,863   $45,412,589 
Cost of revenue   (14,071,902)   (26,468,662)   (26,857,201)
Gross profit   8,336,906    15,774,201    18,555,388 
Operating expenses               
Selling and marketing expenses   (3,644,316)   (4,961,639)   (5,331,150)
General and administrative expenses   (9,191,505)   (3,430,230)   (2,932,144)
Share listing expenses   (70,104,989)   -    - 
Research and development expenses   (14,110,408)   (15,053,175)   (14,342,826)
Expected credit losses   -    (404,210)   - 
Other income   983,932    43,819    59,198 
Other gains (losses) – net   1,222,885    (127,025)   (1,702,379)
Total operating expenses   (94,844,401)   (23,932,460)   (24,249,301)
Operating loss   (86,507,495)   (8,158,259)   (5,693,913)
Non-operating income and expenses               
Interest income   235,912    37,869    159,275 
Finance costs   (835,273)   (666,349)   (461,118)
Total non-operating income and expenses   (599,361)   (628,480)   (301,843)
Loss before income tax   (87,106,856)   (8,786,739)   (5,995,756)
Income tax (expense) benefit   (430,368)   238,445    74,903 
Loss for the year  $(87,537,224)  $(8,548,294)  $(5,920,853)
Other comprehensive (loss) income               
Components of other comprehensive income that may not be reclassified to profit or loss               
Remeasurement of defined benefit plans  $7,409   $13,087   $(7,589)
Components of other comprehensive (loss) income that may be reclassified to profit or loss               
Exchange differences on translation of foreign operations  $(1,672,040)  $453,007   $778,758 
Other comprehensive (loss) income for the year, net of tax  $(1,664,631)  $466,094   $771,169 
Total comprehensive loss for the year  $(89,201,855)  $(8,082,200)  $(5,149,684)
                
Loss per share               
Basic loss per share  $(1.78)  $(0.29)  $(0.20)
Diluted loss per share  $(1.78)  $(0.29)  $(0.20)

 

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Gorilla Technology Group Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(Expressed in United States dollars)

 

Items  December 31,
2022		   December 31,
2021		 
Assets        
Current assets        
Cash and cash equivalents  $22,996,377   $9,944,748 
Financial assets at fair value through profit or loss - current   1,073,229    - 
Financial assets at amortized cost - current   6,871,187    9,008,499 
Contract assets   725,441    1,639,893 
Accounts receivable   14,041,611    34,821,818 
Inventories   68,629    152,227 
Prepayments - current   1,266,442    231,531 
Other receivables   648,617    19,930 
Other current assets   61,803    5,971 
Total current assets   47,753,336    55,824,617 
Non-current assets          
Financial assets at amortized cost - non-current   -    50,578 
Property, plant and equipment   16,132,567    34,395,070 
Right-of-use assets   16,675    123,375 
Intangible assets   56,342    3,419,469 
Deferred income tax assets   29,905    410,203 
Prepayments - non-current   612,982    - 
Other non-current assets   659,071    707,391 
Total non-current assets   17,507,542    39,106,086 
Total assets  $65,260,878   $94,930,703 

 

Items  December 31,
2022		   December 31,
2021		 
Liabilities and Equity        
Liabilities        
Current liabilities        
Short-term borrowings  $13,492,935   $22,968,092 
Contract liabilities   58,475    20,194 
Notes payable   602    668 
Accounts payable   6,674,528    8,060,501 
Other payables   3,620,998    4,532,628 
Provisions - current   88,469    152,778 
Lease liabilities - current   16,981    54,588 
Warrant liabilities   2,042,410    - 
Long-term borrowings, current portion   2,108,896    2,077,634 
Other current liabilities, others   152,373    129,356 
Total current liabilities   28,256,667    37,996,439 
Non-current liabilities          
Long-term borrowings   8,251,788    10,751,630 
Provisions - non-current   61,057    105,542 
Deferred income tax liabilities   148,183    78,402 
Lease liabilities - non-current   -    69,587 
Total non-current liabilities   8,461,028    11,005,161 
Total liabilities   36,717,695    49,001,600 
Equity          
Equity attributable to owners of parent          
Share capital          
Ordinary share   7,136    6,191,100 
Preference share   -    5,844,892 
Advance receipts for share capital   -    33,720 
Capital surplus          
Capital surplus   154,730,389    41,301,738 
Retained earnings          
Accumulated deficit   (96,984,380)   (9,454,565)
Other equity interest          
Financial statements translation differences of foreign operations   370,178    2,042,218 
Treasury shares   (29,580,140)   (30,000)
Equity attributable to owners of the parent   28,543,183    45,929,103 
Total equity   28,543,183    45,929,103 
Significant contingent liabilities and unrecognized contract commitments          
Total liabilities and equity  $65,260,878   $94,930,703 

 

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Gorilla Technology Group Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in United States dollars)

 

   Year ended
December 31
2022		   Year ended
December 31
2021		   Year ended
December 31
2020		 
CASH FLOWS FROM OPERATING ACTIVITIES            
Loss before tax  $(87,106,856)  $(8,786,739)  $(5,995,756)
Adjustments               
Adjustments to reconcile profit (loss)               
Expected credit losses   -    404,210    - 
Depreciation expenses   5,938,167    6,385,999    5,307,581 
Amortization expenses   1,687,618    2,361,009    2,897,975 
Loss (gain) on disposal of property, plant and equipment   70,698    (459)   856 
Impairment loss   -    -    1,238,548 
Loss on lease modification   48,488    -    - 
Share listing expenses   70,104,989    -    - 
Share option expenses   346,122    375,941    142,416 
Interest expense   835,273    666,349    461,118 
Interest income   (235,912)   (37,869)   (159,275)
Gains on reversal of accounts and other payables   (960,564)   -    (25,523)
Loss on disposal of subsidiaries   69,335    -    124,441 
Gains on financial assets and liabilities at fair value through profit or loss   (405,008)   -    - 
Changes in operating assets and liabilities               
Changes in operating assets               
Contract assets   914,452    (158,970)   (972,189)
Notes receivable   -    0    3,074,266 
Accounts receivable   3,580,932    (1,579,304)   (5,060,026)
Inventories   83,598    (62,449)   68,568 
Prepayments   (1,245,559)   344,354    (108,164)
Other receivables   (628,687)   (187,708)   79,218 
Other current assets   (55,832)   -    (21,840)
Other non-current assets   55,361    (30,235)   (18,657)
Changes in operating liabilities               
Contract liabilities   38,281    20,194    - 
Notes payable   (66)   (35,835)   (5,850,712)
Accounts payable   (1,378,916)   1,371,017    3,102,523 
Other payables   9,129    1,163,036    31,344 
Provisions   (108,794)   837    103,850 
Other current liabilities   23,017    28,566    (64,222)
Cash (outflow) inflow generated from operations   (8,320,734)   2,241,944    (1,643,660)
Interest received   235,912    37,869    159,275 
Interest paid   (686,841)   (655,673)   (461,118)
Tax paid   (2,174)   (1,167)   - 
Net cash flows (used in) from operating activities   (8,773,837)   1,622,973    (1,945,503)
CASH FLOWS FROM INVESTING ACTIVITIES               
Acquisition of financial assets at fair value through profit or loss   (1,105,540)   -    - 
Acquisition of property, plant and equipment   (2,935,249)   (7,496,271)   (4,121,887)
Proceeds from disposal of property, plant and equipment   -    459    6,180 
Acquisition of intangible assets   (73,093)   (899,005)   (1,404,192)
Disposal in financial assets at amortized cost   2,187,890    135,937    26,483 
Investment in financial assets at amortized cost   -    (1,579,329)   (2,245,333)
Decrease (increase) in guarantee deposits   368    (72,142)   5,087 
Net cash flows used in investing activities   (1,925,624)   (9,910,351)   (7,733,662)
                
CASH FLOWS FROM FINANCING ACTIVITIES               
Proceeds from short-term borrowings   12,492,935    5,000,000    3,508,961 
Repayments of short-term borrowings   (20,089,523)   (327,098)   - 
Proceeds from long-term borrowings   3,447,526    6,146,341    1,184,469 
Repayments of long-term borrowings   (4,899,022)   (4,933,134)   (900,682)
Principal repayment of lease liabilities   (90,549)   (33,864)   (29,716)
Exercise of share options   -    135,520    112,004 
Payment of transaction cost   (292,416)   -    - 
Proceeds from capital reorganization   32,324,004    -    - 
Exercise of warrants   714,230    -    - 
Net cash flows from financing activities   23,607,185    5,987,765    3,875,036 
Effect of foreign exchange rate changes   143,905    91,105    324,900 
Net increase (decrease) in cash and cash equivalents   13,051,629    (2,208,508)   (5,479,229)
Cash and cash equivalents at beginning of year   9,944,748    12,153,256    17,632,485 
Cash and cash equivalents at end of year  $22,996,377   $9,944,748   $12,153,256 

 

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The following table shows our EBIT, EBITDA and adjusted EBITDA, together reconciled to the loss for the year ended December 31, 2022 and 2021 (net of operating expenses and non-operating income and expenses and excluding other comprehensive income).

 

   Year Ended
December 31		 
   2022   2021 
   (in thousands) 
Loss for the year   $(87,537)  $(8,548)
Income tax expense (benefit)    430    (238)
Financial expense, net    599    628 
EBIT   $(86,508)   (8,158)
Depreciation expense    5,938    6,386 
Amortization expense    1,688    2,361 
EBITDA   $(78,882)  $589 
Transaction costs(1)     2,814    - 
Share Listing Expense(2)     70,105    - 
Adjusted EBITDA   $(5,963)  $589 

 

 

(1)Transaction costs are one-off expenses for professional services related to the Business Combination, asset acquisition and SOX 404 implementation project which are considered as one-off corporate development events and added back for calculation of adjusted EBITDA.
(2)Share listing expense represents non-cash IFRS 2 charges recorded in connection with the consummation of the SPAC merger.

 

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