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 quarter ended June 30, 2023

 

 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: 001-41381

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter) 

 

Delaware   87-2045077
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

6555 Sanger Road, Suite 200

Orlando, Florida 32827

(Address of principal executive offices)

 

(407) 720-9250

(Issuer’s telephone number)

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which
registered
Common Stock, par value $0.0001 per share   GBBK   The NASDAQ Stock Market LLC
Redeemable warrants, each warrant exercisable for one share of common stock at an exercise price of $11.50 per whole share   GBBKW   The NASDAQ Stock Market LLC
Rights, each entitling the holder to receive one-tenth of one share of common stock   GBBKR   The NASDAQ Stock Market LLC

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 definitions 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 August 14, 2023, there were  7,191,880 shares of common stock, par value $0.0001 per share, issued and outstanding. 

 

 

 

 

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023 

 

TABLE OF CONTENTS

 

  Page
Part I. Financial Information  
Item 1. Interim Financial Statements 1
Condensed Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022 1
Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2023 and 2022 2
Unaudited Condensed Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022 3
Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2023 and 2022 4
Notes to Unaudited Condensed Financial Statements 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk 19
Item 4. Controls and Procedures 19
Part II. Other Information  
Item 1. Legal Proceedings 20
Item 1A. Risk Factors 20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Mine Safety Disclosures 20
Item 5. Other Information 20
Item 6. Exhibits 21
Part III. Signatures 22

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Interim Financial Statements.

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.

CONDENSED BALANCE SHEETS

 

   June 30,   December 31, 
   2023   2022 
   (Unaudited)      
ASSETS          
Current assets          
Cash  $1,007,688   $765,243 
Prepaid expenses   359,787    528,415 
Due from related party   32,900    22,740 
Total Current Assets   1,400,375    1,316,398 
           
Marketable securities held in Trust Account   180,288,751    177,564,388 
TOTAL ASSETS  $181,689,126   $178,880,786 
           
LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accrued offering costs and expenses  $193,282   $240,602 
Income taxes payable   678,349    486,593 
Total Liabilities   871,631    727,195 
           
Commitments and contingencies   
 
      
Common stock subject to possible redemption, $0.0001 par value; 17,250,000 shares at redemption value of $10.44 and $10.26 as of June 30, 2023 and December 31, 2022, respectively   180,005,623    176,918,016 
           
Stockholders’ Equity          
Common Stock, $0.0001 par value, 100,000,000 shares authorized; 4,762,500 shares issued and outstanding, excluding 17,250,000 shares subject to possible redemption, as of June 30, 2023 and December 31, 2022, respectively   476    476 
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding   
    
 
Additional paid-in capital   
    10,482 
Retained earnings   811,396    1,224,617 
Total Stockholders’ Equity   811,872    1,235,575 
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY  $181,689,126   $178,880,786 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

1

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

 

   For the Three Months Ended June 30,  

For the Six Months Ended

June 30,

 
   2023   2022   2023   2022 
                 
Formation and operational costs  $224,797   $233,774   $523,703   $241,764 
Loss from operations   (224,797)   (233,774)   (523,703)   (241,764)
                     
Other income:                    
Interest earned on marketable securities held in Trust Account   2,109,817    174,724    4,008,363    174,724 
Total other income   2,109,817    174,724    4,008,363    174,724 
                     
Income (loss) before provision for income taxes   1,885,020    (59,050)   3,484,660    (67,040)
Provision for income taxes   (432,561)   (25,993)   (820,756)   (25,993)
Net income (loss)  $1,452,459   $(85,043)  $2,663,904   $(93,033)
                     
Weighted average shares outstanding of redeemable shares   17,250,000    9,453,297    17,250,000    4,752,762 
Basic and diluted net income (loss) per common share, redeemable shares
  $0.07   $(0.01)  $0.12   $(0.01)
                     
Weighted average shares outstanding of non-redeemable shares   4,762,500    4,295,192    4,762,500    4,025,625 
Basic and diluted net income (loss) per common share, non-redeemable shares
  $0.07   $(0.01)  $0.12   $(0.01)

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

2

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023

 

   Common Stock   Additional
Paid in
   Retained   Total
Stockholders’
 
   Shares   Amount   Capital   Earnings   Equity 
Balance – December 31, 2022   4,762,500   $476   $10,482   $1,224,617   $1,235,575 
Accretion of stock subject to redemption amount       
    (10,482)   (1,449,869)   (1,460,351)
Net income       
    
    1,211,445    1,211,445 
Balance – March 31, 2023 (unaudited)   4,762,500    476    
    986,193    986,669 
Accretion of stock subject to redemption amount       
    
    (1,627,256)   (1,627,256)
Net income       
    
    1,452,459    1,452,459 
Balance – June 30, 2023 (unaudited)   4,762,500   $476   $
   $811,396   $811,872 

 

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022

 

   Common Stock   Additional
Paid-in
   Accumulated   Total
Stockholder’s
 
   Shares   Amount   Capital   Deficit   Equity 
Balance – December 31, 2021   4,312,500   $431   $24,569   $(7,048)  $17,952 
Net loss       
    
    (7,990)   (7,990)
Balance – March 31, 2022 (unaudited)   4,312,500    431    24,569    (15,038)   9,962 
Sale of 8,537,500 Private Placement Warrants       
    8,537,500    
    8,537,500 
Issuance of Representative Shares   450,000    45    3,463,629    
    3,463,674 
Fair value of Public Warrants at issuance       
    3,379,730    
    3,379,730 
Allocated value of transaction costs to Common Stock       
    (340,594)   
    (340,594)
Accretion of stock subject to redemption amount       
    (13,322,073)   
    (13,322,073)
Net loss       
    
    (85,043)   (85,043)
Balance – June 30, 2022 (unaudited)   4,762,500   $476   $1,742,761   $(100,081)  $1,643,156 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

3

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS

 

  

For the Six Months Ended

June 30,

 
   2023   2022 
Cash Flows from Operating Activities:        
Net income (loss)  $2,663,904   $(93,033)
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Interest earned on marketable securities held in Trust Account   (4,008,363)   (174,724)
Changes in operating assets and liabilities:          
Prepaid expenses   168,628    (734,548)
Accrued offering costs and expenses   (47,320)   87,194 
Due from related party   (10,160)   (22,740)
Income taxes payable   191,756    25,993 
Net cash used in operating activities   (1,041,555)   (911,858)
           
Cash Flows from Investing Activities:          
Investment of cash in Trust Account   
    (175,087,500)
Cash withdrawn from Trust Account to pay franchise and income taxes   1,284,000      
Net cash provided by (used in) investing activities   1,284,000    (175,087,500)
           
Cash Flows from Financing Activities:          
Proceeds from sale of Units, net of underwriting discounts paid   
    169,050,000 
Proceeds from sale of Private Placement Warrants   
    8,537,500 
Repayment of promissory note – related party   
    (546,343)
Payment of deferred offering costs   
    (481,498)
Net cash provided by financing activities   
    176,559,659 
           
Net Change in Cash   242,445    560,301 
Cash – Beginning of period   765,243    464,071 
Cash – End of period  $1,007,688   $1,024,372 
           
Supplementary cash flow information:          
Cash paid for taxes  $629,000   $
 
           
Non-cash financing activities:          
Offering costs included in accrued offerings costs  $
   $95,000 
Issuance of Representative Shares as consideration for transaction costs  $
   $3,463,674 

 

The accompanying notes are an integral part of the unaudited condensed financial statements. 

 

4

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

 

Global Blockchain Acquisition Corp. (the “Company”) is a newly organized blank check company incorporated in Delaware on March 18, 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 (“Business Combination”).

 

As of June 30, 2023, the Company had not commenced any operations. All activity through June 30, 2023 relates to the Company’s formation and initial public offering (the “Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying 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 will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

 

The registration statement for the Company’s Initial Public Offering was declared effective on May 9, 2022. On May 12, 2022, the Company completed the Initial Public Offering of 17,250,000 units (the “Units” and, with respect to the shares included in the Units being offered, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000, which is described in Note 3.

 

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,537,500 warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, I-Bankers Securities, Inc. (“I-Bankers”) and Dawson James Securities, Inc. (“Dawson James”) (together, the “Private Placement Warrants”), generating gross proceeds of $8,537,500, which is described in Note 4.

 

Transaction costs amounted to $7,597,200, consisting of $3,450,000 of underwriting fees, and $4,147,200 of other offering costs, which includes the fair value of the issuance of representative shares of $3,463,674.

 

The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the value of the assets held in the Trust Account (as defined below) (excluding taxes payable on the interest earned on the Trust Account) at the time of the signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction 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. There is no assurance that the Company will be able to successfully effect a Business Combination.

 

Following the closing of the Initial Public Offering on May 12, 2022, an amount of $175,087,500 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and private placement were placed in a Trust Account (“Trust Account”) and were invested in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the trust account that may be released to the Company to pay the Company’s taxes, if any, the proceeds from the Initial Public Offering will not be released from the trust account until the earliest of (i) the completion of the initial Business Combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete the initial Business Combination within the combination period, or (B) with respect to any other provision relating to stockholders’ rights or pre-Business Combination activity, or (iii) the redemption of all of the Company’s public shares if the Company is unable to complete the Business Combination within the combination period, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders. The proceeds held in the trust account may be invested by the trustee only in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, the Company believes it will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If the Company was deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which it has not allotted funds and may hinder its ability to consummate a Business Combination. If the Company is unable to complete its initial Business Combination, its public stockholders may receive only approximately $10.15 per share on the liquidation of its trust account and its warrants will expire worthless.

 

5

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of its initial Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed Business Combination or conduct 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 require it to seek stockholder approval under the law or stock exchange listing requirement. The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of its initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of its initial Business Combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.15 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the business combination marketing fee payable to I-Bankers and Dawson James.

 

The shares of common stock subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.

 

If the Company is unable to complete an initial Business Combination prior to May 12, 2024 (if the Company extends the period of time to consummate a Business Combination), it 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 (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its board of directors, dissolve and liquidate, subject in each case to its obligations under Delaware 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 the Company’s warrants, which will expire worthless if the Company fail to complete its Business Combination within the combination period.

 

The Sponsor, holders of the representative shares, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the Company’s initial Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its initial Business Combination within the combination period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its Business Combination within the prescribed time frame). The Sponsor, officers and directors have agreed to vote their Founder Shares and any public shares purchased during or after the Initial Public Offering in favor of its initial Business Combination.

 

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.15 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be released to the Company to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.

 

6

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

Liquidity and Going Concern

 

As of June 30, 2023, the Company had $1,007,688 in operating cash, $180,288,751 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital of $528,744. Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

 

In connection with the Company’s 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,” the Company has until as late as May 12, 2024, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the Company's liquidity position and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution, raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to complete a Business Combination; however, the Company cannot guarantee that a Business Combination will take place. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after May 12, 2024.

 

Risks and Uncertainties

 

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Additionally, as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Inflation Reduction Act of 2022

 

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

 

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.

 

7

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

 

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022 filed with the SEC on March 31, 2023. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023 or for any future periods.

 

Emerging Growth Company

 

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

 

Use of Estimates

 

The preparation of the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.

 

Offering Costs

 

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs were charged to temporary equity and permanent equity based on relative fair values of the equity instruments purchased, upon the completion of the Initial Public Offering.

 

Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $7,597,200 were charged to common stock subject to possible redemption upon the completion of Initial Public Offering.

 

As of June 30, 2023 and December 31, 2022, there were no amounts recorded under deferred offering costs in the accompanying condensed balance sheets.

 

8

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

Warrant Instruments

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity.

 

Common Stock Subject to Possible Redemption

 

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity.” common stock subject to mandatory redemption are classified as a liability instrument and are measured at redemption value. Conditionally redeemable common stock (including common stock 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, common stock are classified as stockholders’ equity. The Company’s common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the permanent deficit section of the Company’s balance sheets.

 

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital and accumulated.

 

At June 30, 2023 and December 31, 2022, the common stock reflected in the balance sheet is reconciled in the following table:

 

Gross proceeds  $172,500,000 
Less:     
Proceeds allocated to Public Warrants   (3,379,730)
Common stock issuance costs   (7,256,606)
Plus:     
Accretion of carrying value to redemption value   15,054,352 
Common stock subject to possible redemption, December 31, 2022   176,918,016 
Plus:     
Accretion of carrying value to redemption value   3,087,607 
Common stock subject to possible redemption, June 30, 2023  $180,005,623 

 

Income Taxes

 

ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of June 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. The Company’s effective tax rate was 22.95% and 44.02% for the three months ended June 30, 2023 and 2022, respectively, and 23.55% and 38.77% for the six months ended June 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and six months ended June 30, 2023 and 2022, due to the valuation allowance on the deferred tax assets.

 

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

 

9

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
 

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023 and December 31, 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

 

Net Income (Loss) per Common Share

 

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.

 

The Company’s condensed statements of operations include a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for redeemable common stock is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of redeemable common stock outstanding since original issuance. Net income (loss) per common share, basic and diluted, for common stock is calculated by dividing the net income (loss), adjusted for income (loss) attributable to redeemable common stock, net of applicable franchise and income taxes, by the weighted average number of common stock outstanding for the period. Common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.

 

The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts): 

 

   For the Three Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $1,138,213   $314,246   $(58,475)  $(26,569)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    9,453,297    4,295,192 
Basic and diluted net income (loss) per common share
  $0.07   $0.07   $(0.01)  $(0.01)

 

   For the Six Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $2,087,557   $576,347   $(50,370)  $(42,663)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    4,752,762    4,025,625 
Basic and diluted net income (loss) per common share
  $0.12   $0.12   $(0.01)  $(0.01)

 

Concentration of Credit Risk

 

The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

 

Fair Value of Financial Instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

 

Recent Accounting Standards

 

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.

10

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.

 

NOTE 3. INITIAL PUBLIC OFFERING

 

In the Initial Public Offering, the Company sold 17,250,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 Units, at a purchase price of $10.00 per Unit. Each unit that the Company sold in the Initial Public Offering had a price of $10.00 and consists of one share of common stock, one redeemable warrant, and one right, which right entitles the holder to one-tenth share of common stock upon the consummation the Business Combination.

 

NOTE 4. PRIVATE PLACEMENT

 

Simultaneously with the closing of the Initial Public Offering, the Company’s Sponsor, I-Bankers and Dawson James purchased an aggregate of 8,537,500 warrants at a price of $1.00 per warrant ($8,537,500 in the aggregate) in a private placement. Of such amount, (i) 6,812,500 warrants were purchased by the Sponsor, (ii) 1,466,250 warrants were purchased by I-Bankers and (iii) 258,750 warrants were purchased by Dawson James.

 

The private placement warrants (including the common stock issuable upon exercise of the private placement warrants) will (with limited exceptions) 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 so long as they are held by the original holders or their permitted transferees. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the Initial Public Offering. If the private placement warrants are held by holders other than the original holders or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the Initial Public Offering.

 

If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.

 

NOTE 5. RELATED PARTY TRANSACTIONS

 

Founder Shares

 

In August 2021, the Sponsor paid $25,000, or approximately $0.006 per share, to cover certain of the offering costs in exchange for an aggregate of 4,312,500 shares of common stock, par value $0.0001 per share (the “Founder Shares”).

 

The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the initial Business Combination that results in all of the Company’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under “Principal Stockholders — Transfers of Founder Shares. Private Placement Warrants and Underlying Securities”). The Company refers to such transfer restrictions throughout this Report as the “lock-up”.

 

Notwithstanding the foregoing, if the last sale price of the common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, the Founder Shares will be released from the lock-up.

 

Administrative Services Agreement

 

The Company entered into an agreement, commencing on May 9, 2022, to pay an affiliate of the Company’s officers a total of $5,000 per month for office space, utilities, secretarial support and other administrative and consulting services. Upon completion of the Company’s Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and six months ended June 30, 2023, the Company incurred $18,000 and $36,000 for these services, respectively. For the three and six months ended June 30, 2022, the Company incurred $1,500 and $13,000 for these services, respectively.

 

Promissory Note — Related Party

 

On August 17, 2021, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $600,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2021 or (ii) the consummation of the Initial Public Offering. As of June 30, 2023 and December 31, 2022, there were no outstanding under the Promissory Note. The outstanding amount of $546,343 was repaid at the closing of the Initial Public Offering on May 12, 2022. Borrowings under the Promissory Note are no longer available.

 

11

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

Due from Related Party

 

As of June 30, 2023 an amount of $32,900 is due to the Company from the Sponsor for funds held outside the operating account. The original purpose of the funds held outside the operating account was to be under the $250,000 Federal Deposit Insurable Corporation (“FDIC”) threshold. As of December 31, 2022 an amount of $22,740 is due to the Company from the Sponsor for miscellaneous fees the Company paid on its behalf and a sum of the funds to be held outside of trust for working capital purposes of approximately $22,000.

 

Related Party Loans

 

In order to finance transaction costs in connection with an intended initial Business Combination, the initial stockholders or an affiliate of the initial stockholders or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes the initial Business Combination, the Company would repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible, at the option of the lender, into warrants at a price of $1.00 per warrant of the post Business Combination entity. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. As of June 30, 2023 and December 31, 2022, there were no amounts outstanding under the Working Capital Loans.

 

NOTE 6. COMMITMENTS AND CONTINGENCIES

 

Registration Rights

 

The holders of the founder shares, the private placement warrants (and underlying securities) and private placement warrants that may be issued upon conversion of working capital loans (and any underlying securities) are entitled to registration rights pursuant to a registration rights agreement. 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 completion of the initial Business Combination. However, the registration 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 period described above “— Transfers of Founder Shares, Private Placement Warrants and Underlying Securities.” The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Underwriting Agreement

 

The underwriters were paid a cash underwriting discount of two percent (2%) of the gross proceeds of the Initial Public Offering, or $3,450,000.

 

Business Combination Marketing Agreement

 

At the closing of the offering, the Company engaged I-Bankers and Dawson James as advisors in connection with the Company’s business combination to (i) assist the Company in preparing presentations for each potential business combination; (ii) assist the Company in arranging meetings with stockholders, including making calls directly to stockholders, to discuss each potential business combination and each potential target’s attributes and providing regular market feedback, including written status reports, from these meetings and participate in direct interaction with stockholders, in all cases to the extent legally permissible; (iii) introduce The Company to potential investors to purchase securities in connection with each potential business combination; and assist the Company with the preparation of any press releases and filings related to each potential business combination or target. Pursuant to the business combination marketing agreement, I-Bankers and Dawson James are not obligated to assist the Company in identifying or evaluating possible acquisition candidates. Pursuant to the Company’s agreement with I-Bankers and Dawson James, the advisory fees payable to I-Bankers and Dawson James will collectively be 3.5% of the gross proceeds of our initial public offering, including the proceeds from the full exercise of the underwriters’ over-allotment option.

 

Representative’s Shares

 

The Company issued (i) to I-Bankers Securities (and/or their designees) 382,500 shares of common stock upon the consummation of the Initial Public Offering and (ii) to Dawson James (and/or their designees) 67,500 shares upon the consummation of the Initial Public Offering. The Company determined the fair value of the representative shares to be $3,463,674 (or $7.70 per share) using the Probability Weighted Expected Return Model. The fair value of the shares granted to the underwriters utilized the following assumptions: (1) expected volatility of 2.4%, (2) risk-free interest rate of 1.93%, (3) expected life of 0.97 years, and (4) no dividend. To arrive to the assumptions used in the valuation, comparable for 15 pre-business combination Companies (selected based on industry or sector focus, size, warrant coverage and the remaining term to complete their business combination), were selected. The implied volatility was based on the current quoted prices of the warrants and underlying stock. The risk-free interest rate was based on a 0.5 to 2 year US treasury rate. I-Bankers and Dawson James (and/or their respective designees) have agreed not to transfer, assign or sell any such shares until the completion of the initial Business Combination. In addition, I-Bankers and Dawson James (and/or their respective designees) have agreed (i) to waive their redemption rights with respect to such shares in connection with the completion of the initial Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its initial Business Combination within the combination period.

 

12

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

NOTE 7. STOCKHOLDERS’ EQUITY

 

Common Stock — The Company is authorized to issue a total of 100,000,000 shares of common stock with a par value of $0.0001 each. On August 17, 2021, the Company issued 4,312,500 shares of common stock to its initial stockholders for $25,000, or approximately $0.006 per share. The Founder Shares include an aggregate of up to 562,500 shares subject to forfeiture if the over-allotment option is not exercised by the underwriters in full. As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are currently subject to forfeiture.

 

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in the Company’s amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of the Company’s common stock that are voted is required to approve any such matter voted on by the stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors (prior to consummation of the initial Business Combination). The Company’s stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. At June 30, 2023 and December 31, 2022, there were 4,762,500 shares of common stock issued and outstanding, excluding 17,250,000 shares subject to possible redemption.

 

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per stock with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

 

Warrants — As of June 30, 2023 and December 31, 2022, there were 17,250,000 Public Warrants outstanding. Each warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, If (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or its affiliates, as applicable, prior to such issuance) (the “newly issued price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the completion of its initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the common stock during the 20 trading day period starting on the trading day prior to the day on which the Company completes its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the newly issued price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the newly issued price.

 

The warrants will become exercisable 30 days after the completion of its initial Business Combination, and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

 

The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of the initial Business Combination, the Company will use its reasonable best efforts to file, and within 60 business days after the closing of the initial Business Combination, to have declared effective, a registration statement relating to the shares of common stock issuable upon exercise of the warrants and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at the Company’s option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but will use its best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

Redemption of warrants when the price per share of common stock equals or exceeds $18.00.

 

Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):

 

  in whole and not in part
     
  at a price of $0.01 per warrant;
     
  upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the 30-day redemption period; and
     
  if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

 

The Company will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. The Company may not redeem the warrants when a holder may not exercise such warrants.

 

13

 

 

GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023

 

If the Company calls the warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” the Company’s management will consider, among other factors, the Company’s cash position, the number of warrants that are outstanding and the dilutive effect on the Company’s stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

 

NOTE 8. FAIR VALUE MEASUREMENTS 

 

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability.

 

At June 30, 2023, assets held in the Trust Account were comprised of $180,288,751 in a money market fund which is invested primarily in U.S. Treasury Securities. Through June 30, 2023, Company had withdrawn $1,284,000 of the income earned on the Trust Account to pay taxes obligations. U.S. Treasury Securities are accounted for as trading securities and accordingly, changes in fair value are recorded in the statements of operations.

 

At December 31, 2022, assets held in the Trust Account were comprised of $177,564,388 in a money market fund which is invested primarily in U.S. Treasury Securities. Through December 31, 2022, Company did not withdraw any of the income earned on the Trust Account. U.S. Treasury Securities are accounted for as trading securities and accordingly, changes in fair value are recorded in the statements of operations.

 

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

 

June 30, 2023   Level     Fair Value  
Assets:            
Marketable securities held in Trust Account –Money Market Fund     1     $ 180,288,751  

 

December 31, 2022  Level   Fair Value 
Assets:          
Marketable securities held in Trust Account –Money Market Fund   1   $177,564,388 

 

NOTE 9. SUBSEQUENT EVENTS 

 

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were available to be issued. Based upon this review, other than noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

 

The Company held a meeting on August 8, 2023 to vote on the proposal to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate a business combination or, if it fails to do so, cease its operations and redeem or repurchase 100% of the shares of the Company’s common stock issued in the Company’s initial public offering, from August 12, 2023, monthly for up to nine additional months at the election of the Company, ultimately until as late as May 12, 2024 (the “Extension”, and such extension date the “Extended Date”). In connection with the vote, 14,820,620 shares of the Company’s common stock were redeemed with a total redemption payment of $155,196,226. 

 

14

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Global Blockchain Acquisition Corp.. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Global Blockchain Sponsor, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

 

Special Note Regarding Forward-Looking Statements

 

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of a Business Combination, the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of a Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 

Overview

 

We are a blank check company formed under the laws of the State of Delaware on March 18, 2021 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

 

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

 

Results of Operations

 

We have neither engaged in any operations nor generated any revenues to date. Our only activities from March 18, 2021 (inception) through June 30, 2023 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

 

For the three months ended June 30, 2023, we had net income of $1,452,459, which consists of interest income on marketable securities held in the Trust Account of $2,109,817, offset by the formation and operational costs of $224,797 and provision for income taxes of $432,561.

 

For the three months ended June 30, 2022, we had a net loss of $85,043, which consists of operating costs of $233,774 and provision for income taxes of $25,993, offset by interest income on marketable securities held in the Trust Account of $174,724.

 

For the six months ended June 30, 2023, we had net income of $2,663,904, which consists of interest income on marketable securities held in the Trust Account of $4,008,363, offset by the formation and operational costs of $523,703 and provision for income taxes of $820,756.

 

For the six months ended June 30, 2022, we had a net loss of $93,033, which consists of operating costs of $241,764 and provision for income taxes of $25,993, offset by interest income on marketable securities held in the Trust Account of $174,724.

 

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Liquidity and Capital Resources

 

On May 12, 2022, we completed the Initial Public Offering of $17,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public Offering, we completed the sale of 8,537,500 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $8,537,500.

 

On May 12, 2022, in connection with the underwriters’ exercise of their over-allotment option in full, we consummated the sale of an additional 2,250,000 Units at a price of $10.00 per Unit, generating total gross proceeds of $2,250,000.

 

For the six months ended June 30, 2023, cash used in operating activities was $1,041,555. Net income of $2,663,904 was affected by interest earned on marketable securities held in the Trust Account of $4,008,363. Changes in operating assets and liabilities provided $302,904 of cash for operating activities.  

 

For the six months ended June 30, 2022, cash used in operating activities was $911,858. Net income of $ 93,033 was affected by interest earned on marketable securities held in the Trust Account of $174,724. Changes in operating assets and liabilities provided $644,101 of cash for operating activities.  

 

As of June 30, 2023, we had marketable securities held in the Trust Account of $180,288,751 (including approximately $5,201,251 of interest income) consisting of U.S. Treasury Bills with a maturity of 185 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through June 30, 2023, we have withdrawn $1,284,000 of interest earned from the Trust Account to pay taxes obligations.

 

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our 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 June 30, 2023 we had cash of $1,007,688. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

 

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a 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, at the option of the lender, into warrants at a price of $1.00 per warrant of the post Business Combination entity.

 

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until as late as May 12, 2024, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and the mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution, raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to complete a Business Combination; however, the Company cannot guarantee that a Business Combination will take place. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after May 12, 2024.

 

The Company held a meeting on August 8, 2023 to vote on the proposal to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate a business combination or, if it fails to do so, cease its operations and redeem or repurchase 100% of the shares of the Company’s common stock issued in the Company’s initial public offering, from August 12, 2023, monthly for up to nine additional months at the election of the Company, ultimately until as late as May 12, 2024 (the “Extension”, and such extension date the “Extended Date”). In connection with the vote, 14,820,620 shares of the Company’s common stock were redeemed with a total redemption payment of $155,196,226. 

 

16

 

 

If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the unaudited condensed financial statements. These unaudited condensed financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Off-Balance Sheet Arrangements

 

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2023. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

 

Contractual obligations

  

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of one of our executive officers a monthly fee of $5,000 for office space, utilities, secretarial support and other administrative and consulting services. We began incurring these fees on May 9, 2022 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

 

Prior to the closing of our Initial Public Offering, we engaged I-Bankers and Dawson James as advisors in connection with our business combination to (i) assist us in preparing presentations for each potential business combination; (ii) assist us in arranging meetings with our stockholders, including making calls directly to stockholders, to discuss each potential business combination and each potential target’s attributes and providing regular market feedback, including written status reports, from these meetings and participate in direct interaction with stockholders, in all cases to the extent legally permissible; (iii) introduce us to potential investors to purchase our securities in connection with each potential business combination; and assist us with the preparation of any press releases and filings related to each potential business combination or target. Pursuant to the business combination marketing agreement, I-Bankers and Dawson James are not obligated to assist us in identifying or evaluating possible acquisition candidates. Pursuant to our agreement with I-Bankers and Dawson James, the advisory fees payable to I-Bankers and Dawson James will collectively be 3.5% of the gross proceeds of the Initial Public Offering, including the proceeds from the full exercise of the underwriters’ over-allotment option.

 

17

 

 

Critical Accounting Policies

 

The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

 

Common stock Subject to Possible Redemption

 

We account for our Common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, shares of Common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of our balance sheets.

 

Net Income (Loss) Per Common Share

 

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common stock outstanding during the period, excluding common stock subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 562,500 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). At June 30, 2023 2022, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted income (loss) per common share is the same as basic income (loss) per common share for the period presented.

 

Critical Accounting Estimates

 

Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant. Provide qualitative and quantitative information necessary to understand the estimation uncertainty and the impact the critical accounting estimate has had or is reasonably likely to have on financial condition or results of operations to the extent the information is material and reasonably available. This information should include why each critical accounting estimate is subject to uncertainty and, to the extent the information is material and reasonably available, how much each estimate and/or assumption has changed over a relevant period, and the sensitivity of the reported amount to the methods, assumptions and estimates underlying its calculation.

 

Recent Accounting Standards

 

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.

 

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.

 

18

 

 

JOBS Act

 

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and 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, our 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 independent registered public accounting firm’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 independent registered public accounting firm’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the 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 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not required for smaller reporting companies.

  

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

  

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

 

Changes in Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting that occurred during the fiscal quarter of 2023 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

19

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None

 

Item 1A. Risk Factors

 

Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our Annual Report on Form 10-K filed with the SEC. As of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

On May 12, 2022, we consummated the Initial Public Offering of 17,250,000 Units. The Units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $172,500,000. I-Bankers Securities, Inc acted as sole book-running manager and Dawson James Securities, Inc. acted as co-manager, of the Initial Public Offering. The securities in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-264396). The Securities and Exchange Commission declared the registration statements effective on May 9, 2022.

 

Simultaneously with the closing of the Initial Public Offering, the Company’s Sponsor, I-Bankers and Dawson James purchased an aggregate of 8,537,500 warrants at a price of $1.00 per warrant ($8,537,500 in the aggregate) in a private placement. Of such amount, (i) 6,812,500 warrants were purchased by the Sponsor, (ii) 1,466,250 warrants were purchased by I-Bankers and (iii) 258,750 warrants were purchased by Dawson James.

 

The Private Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions.

 

On May 12, 2022, the underwriters exercised their over-allotment option in full, resulting in the sale of an additional 2,250,000 Units for gross proceeds of $22,500,000. In connection with the underwriters’ exercise of their over-allotment option, the Company also consummated the sale of an additional 8,537,500 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $8,537,500. A total of $175,087,500 was deposited into the Trust Account.

 

Of the gross proceeds received from the Initial Public Offering, the exercise of the over-allotment option and the Private Units, an aggregate of $173,440,300 was placed in the Trust Account.

 

We paid a total of $3,450,000 in underwriting discounts and commissions and $4,147,200 for other costs and expenses related to the Initial Public Offering.

 

For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable

 

Item 5. Other Information

 

During the period covered by this Quarterly Report, none of the Company’s directors or executive officers has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended).

 

20

 

 

Item 6. Exhibits

 

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

 

No.   Description of Exhibit
31.1*   Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*   Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*   Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*   Inline XBRL Instance Document.
101.SCH*   Inline XBRL Taxonomy Extension Schema Document.
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

* Filed herewith.

 

21

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  GLOBAL BLOCKCHAIN ACQUISITION CORP.
     
Date: August 14, 2023 By: /s/ Max Hooper
  Name:  Max Hooper
  Title: Chief Executive Officer
     
Date: August 14, 2023 By: /s/ Jonathan Morris
  Name:  Jonathan Morris
  Title: Chief Financial Officer

 

 

22

 
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2022-04-01 2022-06-30 0001894951 gbbk:NonRedeemableSharesMember 2022-04-01 2022-06-30 0001894951 gbbk:RedeemableSharesMember 2023-01-01 2023-06-30 0001894951 gbbk:NonRedeemableSharesMember 2023-01-01 2023-06-30 0001894951 gbbk:RedeemableSharesMember 2022-01-01 2022-06-30 0001894951 gbbk:NonRedeemableSharesMember 2022-01-01 2022-06-30 0001894951 us-gaap:OverAllotmentOptionMember 2023-01-01 2023-06-30 0001894951 us-gaap:OverAllotmentOptionMember 2023-06-30 0001894951 us-gaap:PrivatePlacementMember 2023-01-01 2023-06-30 0001894951 gbbk:SponsorMember us-gaap:PrivatePlacementMember 2023-06-30 0001894951 gbbk:IBankersMember us-gaap:PrivatePlacementMember 2023-06-30 0001894951 gbbk:DawsonJamesMember us-gaap:PrivatePlacementMember 2023-06-30 0001894951 gbbk:FounderSharesMember 2021-08-31 0001894951 gbbk:FounderSharesMember 2023-01-01 2023-06-30 0001894951 2022-05-09 0001894951 gbbk:SponsorMember 2021-08-17 0001894951 gbbk:FDICMember 2023-06-30 0001894951 gbbk:SponsorMember 2022-12-31 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Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Max Hooper, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Global Blockchain Acquisition Corp.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

 

  b) (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a);

 

  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 14, 2023

 

  /s/ Max Hooper
  Max Hooper
  Chief Financial Officer

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Jonathan Morris, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Global Blockchain Acquisition Corp.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

 

  b) (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a);

 

  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 14, 2023

 

  /s/ Jonathan Morris
  Jonathan Morris
  Chief Financial Officer

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Global Blockchain Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Max Hooper, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: August 14, 2023

 

  /s/ Max Hooper
  Max Hooper
  Chief Financial Officer

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Global Blockchain Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, Jonathan Morris, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: August 14, 2023

 

  /s/ Jonathan Morris
  Jonathan Morris
  Chief Financial Officer
  (Principal Financial and Accounting Officer)

 

 

v3.23.2
Document And Entity Information - shares
6 Months Ended
Jun. 30, 2023
Aug. 14, 2023
Document Information Line Items    
Entity Registrant Name GLOBAL BLOCKCHAIN ACQUISITION CORP.  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   7,191,880
Amendment Flag false  
Entity Central Index Key 0001894951  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Jun. 30, 2023  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q2  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Shell Company true  
Entity Ex Transition Period false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 001-41381  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 87-2045077  
Entity Address, Address Line One 6555 Sanger Road  
Entity Address, Address Line Two Suite 200  
Entity Address, City or Town Orlando  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 32827  
City Area Code (407)  
Local Phone Number 720-9250  
Entity Interactive Data Current Yes  
Common Stock, par value $0.0001 per share    
Document Information Line Items    
Trading Symbol GBBK  
Title of 12(b) Security Common Stock, par value $0.0001 per share  
Security Exchange Name NASDAQ  
Redeemable warrants, each warrant exercisable for one share of common stock at an exercise price of $11.50 per whole share    
Document Information Line Items    
Trading Symbol GBBKW  
Title of 12(b) Security Redeemable warrants, each warrant exercisable for one share of common stock at an exercise price of $11.50 per whole share  
Security Exchange Name NASDAQ  
Rights, each entitling the holder to receive one-tenth of one share of common stock    
Document Information Line Items    
Trading Symbol GBBKR  
Title of 12(b) Security Rights, each entitling the holder to receive one-tenth of one share of common stock  
Security Exchange Name NASDAQ  
v3.23.2
Condensed Balance Sheets - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Current assets    
Cash $ 1,007,688 $ 765,243
Prepaid expenses 359,787 528,415
Due from related party 32,900 22,740
Total Current Assets 1,400,375 1,316,398
Marketable securities held in Trust Account 180,288,751 177,564,388
TOTAL ASSETS 181,689,126 178,880,786
Current liabilities    
Accrued offering costs and expenses 193,282 240,602
Income taxes payable 678,349 486,593
Total Liabilities 871,631 727,195
Commitments and contingencies  
Common stock subject to possible redemption, $0.0001 par value; 17,250,000 shares at redemption value of $10.44 and $10.26 as of June 30, 2023 and December 31, 2022, respectively 180,005,623 176,918,016
Stockholders’ Equity    
Common Stock, $0.0001 par value, 100,000,000 shares authorized; 4,762,500 shares issued and outstanding, excluding 17,250,000 shares subject to possible redemption, as of June 30, 2023 and December 31, 2022, respectively 476 476
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding
Additional paid-in capital 10,482
Retained earnings 811,396 1,224,617
Total Stockholders’ Equity 811,872 1,235,575
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY $ 181,689,126 $ 178,880,786
v3.23.2
Condensed Balance Sheets (Parentheticals) - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Common stock subject to possible redemption, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock subject to possible redemption 17,250,000 17,250,000
Common stock subject to possible redemption (in Dollars per share) $ 10.44 $ 10.26
Common stock par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 4,762,500 4,762,500
Common stock, shares outstanding 4,762,500 4,762,500
Preferred stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock shares issued
Preferred stock shares outstanding
v3.23.2
Unaudited Condensed Statements of Operations - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Formation and operational costs $ 224,797 $ 233,774 $ 523,703 $ 241,764
Loss from operations (224,797) (233,774) (523,703) (241,764)
Other income:        
Interest earned on marketable securities held in Trust Account 2,109,817 174,724 4,008,363 174,724
Total other income 2,109,817 174,724 4,008,363 174,724
Income (loss) before provision for income taxes 1,885,020 (59,050) 3,484,660 (67,040)
Provision for income taxes (432,561) (25,993) (820,756) (25,993)
Net income (loss) $ 1,452,459 $ (85,043) $ 2,663,904 $ (93,033)
Redeemable Shares        
Other income:        
Weighted average shares outstanding (in Shares) 17,250,000 9,453,297 17,250,000 4,752,762
Basic net income (loss) per common share (in Dollars per share) $ 0.07 $ (0.01) $ 0.12 $ (0.01)
Non-Redeemable Shares        
Other income:        
Weighted average shares outstanding (in Shares) 4,762,500 4,295,192 4,762,500 4,025,625
Basic net income (loss) per common share (in Dollars per share) $ 0.07 $ (0.01) $ 0.12 $ (0.01)
v3.23.2
Unaudited Condensed Statements of Operations (Parentheticals) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Redeemable Shares        
Diluted net income (loss) per common share $ 0.07 $ (0.01) $ 0.12 $ (0.01)
Non-Redeemable Shares        
Diluted net income (loss) per common share $ 0.07 $ (0.01) $ 0.12 $ (0.01)
v3.23.2
Unaudited Condensed Statements of Changes in Stockholders’ Equity - USD ($)
Common Stock
Additional Paid-in Capital
Retained Earnings
Total
Balance at Dec. 31, 2021 $ 431 $ 24,569 $ (7,048) $ 17,952
Balance (in Shares) at Dec. 31, 2021 4,312,500      
Net income (loss) (7,990) (7,990)
Balance at Mar. 31, 2022 $ 431 24,569 (15,038) 9,962
Balance (in Shares) at Mar. 31, 2022 4,312,500      
Balance at Dec. 31, 2021 $ 431 24,569 (7,048) 17,952
Balance (in Shares) at Dec. 31, 2021 4,312,500      
Net income (loss)       (93,033)
Balance at Jun. 30, 2022 $ 476 1,742,761 (100,081) 1,643,156
Balance (in Shares) at Jun. 30, 2022 4,762,500      
Balance at Mar. 31, 2022 $ 431 24,569 (15,038) 9,962
Balance (in Shares) at Mar. 31, 2022 4,312,500      
Sale of 8,537,500 Private Placement Warrants 8,537,500 8,537,500
Issuance of Representative Shares $ 45 3,463,629 3,463,674
Issuance of Representative Shares (in Shares) 450,000      
Fair value of Public Warrants at issuance 3,379,730 3,379,730
Allocated value of transaction costs to Common Stock (340,594) (340,594)
Accretion of stock subject to redemption amount (13,322,073) (13,322,073)
Net income (loss) (85,043) (85,043)
Balance at Jun. 30, 2022 $ 476 1,742,761 (100,081) 1,643,156
Balance (in Shares) at Jun. 30, 2022 4,762,500      
Balance at Dec. 31, 2022 $ 476 10,482 1,224,617 1,235,575
Balance (in Shares) at Dec. 31, 2022 4,762,500      
Accretion of stock subject to redemption amount (10,482) (1,449,869) (1,460,351)
Net income (loss) 1,211,445 1,211,445
Balance at Mar. 31, 2023 $ 476 986,193 986,669
Balance (in Shares) at Mar. 31, 2023 4,762,500      
Balance at Dec. 31, 2022 $ 476 10,482 1,224,617 1,235,575
Balance (in Shares) at Dec. 31, 2022 4,762,500      
Net income (loss)       2,663,904
Balance at Jun. 30, 2023 $ 476 811,396 811,872
Balance (in Shares) at Jun. 30, 2023 4,762,500      
Balance at Mar. 31, 2023 $ 476 986,193 986,669
Balance (in Shares) at Mar. 31, 2023 4,762,500      
Accretion of stock subject to redemption amount (1,627,256) (1,627,256)
Net income (loss) 1,452,459 1,452,459
Balance at Jun. 30, 2023 $ 476 $ 811,396 $ 811,872
Balance (in Shares) at Jun. 30, 2023 4,762,500      
v3.23.2
Unaudited Condensed Statements of Changes in Stockholders’ Equity (Parentheticals)
3 Months Ended
Jun. 30, 2022
shares
Statement of Stockholders' Equity [Abstract]  
Sale of Private Placement Warrants 8,537,500
v3.23.2
Unaudited Condensed Statement of Cash Flows - USD ($)
6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Cash Flows from Operating Activities:    
Net income (loss) $ 2,663,904 $ (93,033)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Interest earned on marketable securities held in Trust Account (4,008,363) (174,724)
Changes in operating assets and liabilities:    
Prepaid expenses 168,628 (734,548)
Accrued offering costs and expenses (47,320) 87,194
Due from related party (10,160) (22,740)
Income taxes payable 191,756 25,993
Net cash used in operating activities (1,041,555) (911,858)
Cash Flows from Investing Activities:    
Investment of cash in Trust Account (175,087,500)
Cash withdrawn from Trust Account to pay franchise and income taxes 1,284,000  
Net cash provided by (used in) investing activities 1,284,000 (175,087,500)
Cash Flows from Financing Activities:    
Proceeds from sale of Units, net of underwriting discounts paid 169,050,000
Proceeds from sale of Private Placement Warrants 8,537,500
Repayment of promissory note – related party (546,343)
Payment of deferred offering costs (481,498)
Net cash provided by financing activities 176,559,659
Net Change in Cash 242,445 560,301
Cash – Beginning of period 765,243 464,071
Cash – End of period 1,007,688 1,024,372
Supplementary cash flow information:    
Cash paid for taxes 629,000
Non-cash financing activities:    
Offering costs included in accrued offerings costs 95,000
Issuance of Representative Shares as consideration for transaction costs $ 3,463,674
v3.23.2
Description of Organization and Business Operations
6 Months Ended
Jun. 30, 2023
Description of Organization and Business Operations [Abstract]  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

 

Global Blockchain Acquisition Corp. (the “Company”) is a newly organized blank check company incorporated in Delaware on March 18, 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 (“Business Combination”).

 

As of June 30, 2023, the Company had not commenced any operations. All activity through June 30, 2023 relates to the Company’s formation and initial public offering (the “Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying 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 will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

 

The registration statement for the Company’s Initial Public Offering was declared effective on May 9, 2022. On May 12, 2022, the Company completed the Initial Public Offering of 17,250,000 units (the “Units” and, with respect to the shares included in the Units being offered, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000, which is described in Note 3.

 

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,537,500 warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, I-Bankers Securities, Inc. (“I-Bankers”) and Dawson James Securities, Inc. (“Dawson James”) (together, the “Private Placement Warrants”), generating gross proceeds of $8,537,500, which is described in Note 4.

 

Transaction costs amounted to $7,597,200, consisting of $3,450,000 of underwriting fees, and $4,147,200 of other offering costs, which includes the fair value of the issuance of representative shares of $3,463,674.

 

The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the value of the assets held in the Trust Account (as defined below) (excluding taxes payable on the interest earned on the Trust Account) at the time of the signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction 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. There is no assurance that the Company will be able to successfully effect a Business Combination.

 

Following the closing of the Initial Public Offering on May 12, 2022, an amount of $175,087,500 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and private placement were placed in a Trust Account (“Trust Account”) and were invested in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the trust account that may be released to the Company to pay the Company’s taxes, if any, the proceeds from the Initial Public Offering will not be released from the trust account until the earliest of (i) the completion of the initial Business Combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete the initial Business Combination within the combination period, or (B) with respect to any other provision relating to stockholders’ rights or pre-Business Combination activity, or (iii) the redemption of all of the Company’s public shares if the Company is unable to complete the Business Combination within the combination period, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders. The proceeds held in the trust account may be invested by the trustee only in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, the Company believes it will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If the Company was deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which it has not allotted funds and may hinder its ability to consummate a Business Combination. If the Company is unable to complete its initial Business Combination, its public stockholders may receive only approximately $10.15 per share on the liquidation of its trust account and its warrants will expire worthless.

 

The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of its initial Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed Business Combination or conduct 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 require it to seek stockholder approval under the law or stock exchange listing requirement. The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of its initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of its initial Business Combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.15 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the business combination marketing fee payable to I-Bankers and Dawson James.

 

The shares of common stock subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.

 

If the Company is unable to complete an initial Business Combination prior to May 12, 2024 (if the Company extends the period of time to consummate a Business Combination), it 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 (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its board of directors, dissolve and liquidate, subject in each case to its obligations under Delaware 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 the Company’s warrants, which will expire worthless if the Company fail to complete its Business Combination within the combination period.

 

The Sponsor, holders of the representative shares, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the Company’s initial Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its initial Business Combination within the combination period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its Business Combination within the prescribed time frame). The Sponsor, officers and directors have agreed to vote their Founder Shares and any public shares purchased during or after the Initial Public Offering in favor of its initial Business Combination.

 

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.15 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be released to the Company to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.

 

Liquidity and Going Concern

 

As of June 30, 2023, the Company had $1,007,688 in operating cash, $180,288,751 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital of $528,744. Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

 

In connection with the Company’s 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,” the Company has until as late as May 12, 2024, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the Company's liquidity position and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution, raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to complete a Business Combination; however, the Company cannot guarantee that a Business Combination will take place. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after May 12, 2024.

 

Risks and Uncertainties

 

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Additionally, as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Inflation Reduction Act of 2022

 

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

 

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.

v3.23.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

 

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022 filed with the SEC on March 31, 2023. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023 or for any future periods.

 

Emerging Growth Company

 

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

 

Use of Estimates

 

The preparation of the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.

 

Offering Costs

 

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs were charged to temporary equity and permanent equity based on relative fair values of the equity instruments purchased, upon the completion of the Initial Public Offering.

 

Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $7,597,200 were charged to common stock subject to possible redemption upon the completion of Initial Public Offering.

 

As of June 30, 2023 and December 31, 2022, there were no amounts recorded under deferred offering costs in the accompanying condensed balance sheets.

 

Warrant Instruments

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity.

 

Common Stock Subject to Possible Redemption

 

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity.” common stock subject to mandatory redemption are classified as a liability instrument and are measured at redemption value. Conditionally redeemable common stock (including common stock 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, common stock are classified as stockholders’ equity. The Company’s common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the permanent deficit section of the Company’s balance sheets.

 

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital and accumulated.

 

At June 30, 2023 and December 31, 2022, the common stock reflected in the balance sheet is reconciled in the following table:

 

Gross proceeds  $172,500,000 
Less:     
Proceeds allocated to Public Warrants   (3,379,730)
Common stock issuance costs   (7,256,606)
Plus:     
Accretion of carrying value to redemption value   15,054,352 
Common stock subject to possible redemption, December 31, 2022   176,918,016 
Plus:     
Accretion of carrying value to redemption value   3,087,607 
Common stock subject to possible redemption, June 30, 2023  $180,005,623 

 

Income Taxes

 

ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of June 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. The Company’s effective tax rate was 22.95% and 44.02% for the three months ended June 30, 2023 and 2022, respectively, and 23.55% and 38.77% for the six months ended June 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and six months ended June 30, 2023 and 2022, due to the valuation allowance on the deferred tax assets.

 

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

 

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023 and December 31, 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

 

Net Income (Loss) per Common Share

 

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.

 

The Company’s condensed statements of operations include a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for redeemable common stock is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of redeemable common stock outstanding since original issuance. Net income (loss) per common share, basic and diluted, for common stock is calculated by dividing the net income (loss), adjusted for income (loss) attributable to redeemable common stock, net of applicable franchise and income taxes, by the weighted average number of common stock outstanding for the period. Common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.

 

The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts): 

 

   For the Three Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $1,138,213   $314,246   $(58,475)  $(26,569)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    9,453,297    4,295,192 
Basic and diluted net income (loss) per common share
  $0.07   $0.07   $(0.01)  $(0.01)

 

   For the Six Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $2,087,557   $576,347   $(50,370)  $(42,663)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    4,752,762    4,025,625 
Basic and diluted net income (loss) per common share
  $0.12   $0.12   $(0.01)  $(0.01)

 

Concentration of Credit Risk

 

The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

 

Fair Value of Financial Instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

 

Recent Accounting Standards

 

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.

v3.23.2
Initial Public Offering
6 Months Ended
Jun. 30, 2023
Initial Public Offering [Abstract]  
INITIAL PUBLIC OFFERING

NOTE 3. INITIAL PUBLIC OFFERING

 

In the Initial Public Offering, the Company sold 17,250,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 Units, at a purchase price of $10.00 per Unit. Each unit that the Company sold in the Initial Public Offering had a price of $10.00 and consists of one share of common stock, one redeemable warrant, and one right, which right entitles the holder to one-tenth share of common stock upon the consummation the Business Combination.

v3.23.2
Private Placement
6 Months Ended
Jun. 30, 2023
Private Placement [Abstract]  
PRIVATE PLACEMENT

NOTE 4. PRIVATE PLACEMENT

 

Simultaneously with the closing of the Initial Public Offering, the Company’s Sponsor, I-Bankers and Dawson James purchased an aggregate of 8,537,500 warrants at a price of $1.00 per warrant ($8,537,500 in the aggregate) in a private placement. Of such amount, (i) 6,812,500 warrants were purchased by the Sponsor, (ii) 1,466,250 warrants were purchased by I-Bankers and (iii) 258,750 warrants were purchased by Dawson James.

 

The private placement warrants (including the common stock issuable upon exercise of the private placement warrants) will (with limited exceptions) 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 so long as they are held by the original holders or their permitted transferees. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the Initial Public Offering. If the private placement warrants are held by holders other than the original holders or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the Initial Public Offering.

 

If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.

v3.23.2
Related Party Transactions
6 Months Ended
Jun. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 5. RELATED PARTY TRANSACTIONS

 

Founder Shares

 

In August 2021, the Sponsor paid $25,000, or approximately $0.006 per share, to cover certain of the offering costs in exchange for an aggregate of 4,312,500 shares of common stock, par value $0.0001 per share (the “Founder Shares”).

 

The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the initial Business Combination that results in all of the Company’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under “Principal Stockholders — Transfers of Founder Shares. Private Placement Warrants and Underlying Securities”). The Company refers to such transfer restrictions throughout this Report as the “lock-up”.

 

Notwithstanding the foregoing, if the last sale price of the common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, the Founder Shares will be released from the lock-up.

 

Administrative Services Agreement

 

The Company entered into an agreement, commencing on May 9, 2022, to pay an affiliate of the Company’s officers a total of $5,000 per month for office space, utilities, secretarial support and other administrative and consulting services. Upon completion of the Company’s Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and six months ended June 30, 2023, the Company incurred $18,000 and $36,000 for these services, respectively. For the three and six months ended June 30, 2022, the Company incurred $1,500 and $13,000 for these services, respectively.

 

Promissory Note — Related Party

 

On August 17, 2021, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $600,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2021 or (ii) the consummation of the Initial Public Offering. As of June 30, 2023 and December 31, 2022, there were no outstanding under the Promissory Note. The outstanding amount of $546,343 was repaid at the closing of the Initial Public Offering on May 12, 2022. Borrowings under the Promissory Note are no longer available.

 

Due from Related Party

 

As of June 30, 2023 an amount of $32,900 is due to the Company from the Sponsor for funds held outside the operating account. The original purpose of the funds held outside the operating account was to be under the $250,000 Federal Deposit Insurable Corporation (“FDIC”) threshold. As of December 31, 2022 an amount of $22,740 is due to the Company from the Sponsor for miscellaneous fees the Company paid on its behalf and a sum of the funds to be held outside of trust for working capital purposes of approximately $22,000.

 

Related Party Loans

 

In order to finance transaction costs in connection with an intended initial Business Combination, the initial stockholders or an affiliate of the initial stockholders or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes the initial Business Combination, the Company would repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible, at the option of the lender, into warrants at a price of $1.00 per warrant of the post Business Combination entity. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. As of June 30, 2023 and December 31, 2022, there were no amounts outstanding under the Working Capital Loans.

v3.23.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2023
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 6. COMMITMENTS AND CONTINGENCIES

 

Registration Rights

 

The holders of the founder shares, the private placement warrants (and underlying securities) and private placement warrants that may be issued upon conversion of working capital loans (and any underlying securities) are entitled to registration rights pursuant to a registration rights agreement. 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 completion of the initial Business Combination. However, the registration 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 period described above “— Transfers of Founder Shares, Private Placement Warrants and Underlying Securities.” The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Underwriting Agreement

 

The underwriters were paid a cash underwriting discount of two percent (2%) of the gross proceeds of the Initial Public Offering, or $3,450,000.

 

Business Combination Marketing Agreement

 

At the closing of the offering, the Company engaged I-Bankers and Dawson James as advisors in connection with the Company’s business combination to (i) assist the Company in preparing presentations for each potential business combination; (ii) assist the Company in arranging meetings with stockholders, including making calls directly to stockholders, to discuss each potential business combination and each potential target’s attributes and providing regular market feedback, including written status reports, from these meetings and participate in direct interaction with stockholders, in all cases to the extent legally permissible; (iii) introduce The Company to potential investors to purchase securities in connection with each potential business combination; and assist the Company with the preparation of any press releases and filings related to each potential business combination or target. Pursuant to the business combination marketing agreement, I-Bankers and Dawson James are not obligated to assist the Company in identifying or evaluating possible acquisition candidates. Pursuant to the Company’s agreement with I-Bankers and Dawson James, the advisory fees payable to I-Bankers and Dawson James will collectively be 3.5% of the gross proceeds of our initial public offering, including the proceeds from the full exercise of the underwriters’ over-allotment option.

 

Representative’s Shares

 

The Company issued (i) to I-Bankers Securities (and/or their designees) 382,500 shares of common stock upon the consummation of the Initial Public Offering and (ii) to Dawson James (and/or their designees) 67,500 shares upon the consummation of the Initial Public Offering. The Company determined the fair value of the representative shares to be $3,463,674 (or $7.70 per share) using the Probability Weighted Expected Return Model. The fair value of the shares granted to the underwriters utilized the following assumptions: (1) expected volatility of 2.4%, (2) risk-free interest rate of 1.93%, (3) expected life of 0.97 years, and (4) no dividend. To arrive to the assumptions used in the valuation, comparable for 15 pre-business combination Companies (selected based on industry or sector focus, size, warrant coverage and the remaining term to complete their business combination), were selected. The implied volatility was based on the current quoted prices of the warrants and underlying stock. The risk-free interest rate was based on a 0.5 to 2 year US treasury rate. I-Bankers and Dawson James (and/or their respective designees) have agreed not to transfer, assign or sell any such shares until the completion of the initial Business Combination. In addition, I-Bankers and Dawson James (and/or their respective designees) have agreed (i) to waive their redemption rights with respect to such shares in connection with the completion of the initial Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its initial Business Combination within the combination period.

v3.23.2
Stockholders' Equity
6 Months Ended
Jun. 30, 2023
Stockholders' Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 7. STOCKHOLDERS’ EQUITY

 

Common Stock — The Company is authorized to issue a total of 100,000,000 shares of common stock with a par value of $0.0001 each. On August 17, 2021, the Company issued 4,312,500 shares of common stock to its initial stockholders for $25,000, or approximately $0.006 per share. The Founder Shares include an aggregate of up to 562,500 shares subject to forfeiture if the over-allotment option is not exercised by the underwriters in full. As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are currently subject to forfeiture.

 

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in the Company’s amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of the Company’s common stock that are voted is required to approve any such matter voted on by the stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors (prior to consummation of the initial Business Combination). The Company’s stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. At June 30, 2023 and December 31, 2022, there were 4,762,500 shares of common stock issued and outstanding, excluding 17,250,000 shares subject to possible redemption.

 

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per stock with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

 

Warrants — As of June 30, 2023 and December 31, 2022, there were 17,250,000 Public Warrants outstanding. Each warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, If (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or its affiliates, as applicable, prior to such issuance) (the “newly issued price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the completion of its initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the common stock during the 20 trading day period starting on the trading day prior to the day on which the Company completes its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the newly issued price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the newly issued price.

 

The warrants will become exercisable 30 days after the completion of its initial Business Combination, and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

 

The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of the initial Business Combination, the Company will use its reasonable best efforts to file, and within 60 business days after the closing of the initial Business Combination, to have declared effective, a registration statement relating to the shares of common stock issuable upon exercise of the warrants and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at the Company’s option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but will use its best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

Redemption of warrants when the price per share of common stock equals or exceeds $18.00.

 

Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):

 

  in whole and not in part
     
  at a price of $0.01 per warrant;
     
  upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the 30-day redemption period; and
     
  if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

 

The Company will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. The Company may not redeem the warrants when a holder may not exercise such warrants.

 

If the Company calls the warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” the Company’s management will consider, among other factors, the Company’s cash position, the number of warrants that are outstanding and the dilutive effect on the Company’s stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

v3.23.2
Fair Value Measurements
6 Months Ended
Jun. 30, 2023
Fair Value Measurements [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 8. FAIR VALUE MEASUREMENTS 

 

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability.

 

At June 30, 2023, assets held in the Trust Account were comprised of $180,288,751 in a money market fund which is invested primarily in U.S. Treasury Securities. Through June 30, 2023, Company had withdrawn $1,284,000 of the income earned on the Trust Account to pay taxes obligations. U.S. Treasury Securities are accounted for as trading securities and accordingly, changes in fair value are recorded in the statements of operations.

 

At December 31, 2022, assets held in the Trust Account were comprised of $177,564,388 in a money market fund which is invested primarily in U.S. Treasury Securities. Through December 31, 2022, Company did not withdraw any of the income earned on the Trust Account. U.S. Treasury Securities are accounted for as trading securities and accordingly, changes in fair value are recorded in the statements of operations.

 

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

 

June 30, 2023   Level     Fair Value  
Assets:            
Marketable securities held in Trust Account –Money Market Fund     1     $ 180,288,751  

 

December 31, 2022  Level   Fair Value 
Assets:          
Marketable securities held in Trust Account –Money Market Fund   1   $177,564,388 
v3.23.2
Subsequent Events
6 Months Ended
Jun. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 9. SUBSEQUENT EVENTS 

 

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were available to be issued. Based upon this review, other than noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

 

The Company held a meeting on August 8, 2023 to vote on the proposal to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate a business combination or, if it fails to do so, cease its operations and redeem or repurchase 100% of the shares of the Company’s common stock issued in the Company’s initial public offering, from August 12, 2023, monthly for up to nine additional months at the election of the Company, ultimately until as late as May 12, 2024 (the “Extension”, and such extension date the “Extended Date”). In connection with the vote, 14,820,620 shares of the Company’s common stock were redeemed with a total redemption payment of $155,196,226. 

v3.23.2
Accounting Policies, by Policy (Policies)
6 Months Ended
Jun. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022 filed with the SEC on March 31, 2023. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023 or for any future periods.

Emerging Growth Company

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

Use of Estimates

The preparation of the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

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. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.

Offering Costs

Offering Costs

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs were charged to temporary equity and permanent equity based on relative fair values of the equity instruments purchased, upon the completion of the Initial Public Offering.

Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $7,597,200 were charged to common stock subject to possible redemption upon the completion of Initial Public Offering.

As of June 30, 2023 and December 31, 2022, there were no amounts recorded under deferred offering costs in the accompanying condensed balance sheets.

 

Warrant Instruments

Warrant Instruments

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity.

Common Stock Subject to Possible Redemption

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity.” common stock subject to mandatory redemption are classified as a liability instrument and are measured at redemption value. Conditionally redeemable common stock (including common stock 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, common stock are classified as stockholders’ equity. The Company’s common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the permanent deficit section of the Company’s balance sheets.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital and accumulated.

At June 30, 2023 and December 31, 2022, the common stock reflected in the balance sheet is reconciled in the following table:

Gross proceeds  $172,500,000 
Less:     
Proceeds allocated to Public Warrants   (3,379,730)
Common stock issuance costs   (7,256,606)
Plus:     
Accretion of carrying value to redemption value   15,054,352 
Common stock subject to possible redemption, December 31, 2022   176,918,016 
Plus:     
Accretion of carrying value to redemption value   3,087,607 
Common stock subject to possible redemption, June 30, 2023  $180,005,623 
Income Taxes

Income Taxes

ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of June 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. The Company’s effective tax rate was 22.95% and 44.02% for the three months ended June 30, 2023 and 2022, respectively, and 23.55% and 38.77% for the six months ended June 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and six months ended June 30, 2023 and 2022, due to the valuation allowance on the deferred tax assets.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

 

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023 and December 31, 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.

The Company’s condensed statements of operations include a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for redeemable common stock is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of redeemable common stock outstanding since original issuance. Net income (loss) per common share, basic and diluted, for common stock is calculated by dividing the net income (loss), adjusted for income (loss) attributable to redeemable common stock, net of applicable franchise and income taxes, by the weighted average number of common stock outstanding for the period. Common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.

The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts): 

   For the Three Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $1,138,213   $314,246   $(58,475)  $(26,569)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    9,453,297    4,295,192 
Basic and diluted net income (loss) per common share
  $0.07   $0.07   $(0.01)  $(0.01)
   For the Six Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $2,087,557   $576,347   $(50,370)  $(42,663)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    4,752,762    4,025,625 
Basic and diluted net income (loss) per common share
  $0.12   $0.12   $(0.01)  $(0.01)
Concentration of Credit Risk

Concentration of Credit Risk

The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

Recent Accounting Standards

Recent Accounting Standards

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.

v3.23.2
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
Schedule of Common Stock Reflected in the Balance Sheet At June 30, 2023 and December 31, 2022, the common stock reflected in the balance sheet is reconciled in the following table:
Gross proceeds  $172,500,000 
Less:     
Proceeds allocated to Public Warrants   (3,379,730)
Common stock issuance costs   (7,256,606)
Plus:     
Accretion of carrying value to redemption value   15,054,352 
Common stock subject to possible redemption, December 31, 2022   176,918,016 
Plus:     
Accretion of carrying value to redemption value   3,087,607 
Common stock subject to possible redemption, June 30, 2023  $180,005,623 
Schedule of Basic and Diluted Net Income (Loss) Per Common Share The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):
   For the Three Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $1,138,213   $314,246   $(58,475)  $(26,569)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    9,453,297    4,295,192 
Basic and diluted net income (loss) per common share
  $0.07   $0.07   $(0.01)  $(0.01)
   For the Six Months Ended June 30, 
   2023   2022 
   Redeemable   Non-
Redeemable
   Redeemable   Non-
Redeemable
 
                 
Numerator:                
Allocation of net income (loss)  $2,087,557   $576,347   $(50,370)  $(42,663)
Denominator:                    
Basic and diluted weighted average shares outstanding
   17,250,000    4,762,500    4,752,762    4,025,625 
Basic and diluted net income (loss) per common share
  $0.12   $0.12   $(0.01)  $(0.01)
v3.23.2
Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2023
Fair Value Measurements [Abstract]  
Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
June 30, 2023   Level     Fair Value  
Assets:            
Marketable securities held in Trust Account –Money Market Fund     1     $ 180,288,751  
December 31, 2022  Level   Fair Value 
Assets:          
Marketable securities held in Trust Account –Money Market Fund   1   $177,564,388 
v3.23.2
Description of Organization and Business Operations (Details) - USD ($)
6 Months Ended
May 12, 2022
Jun. 30, 2023
Dec. 31, 2022
Aug. 16, 2022
Description of Organization and Business Operations (Details) [Line Items]        
Generating gross proceeds   $ 8,537,500    
Transaction costs   7,597,200    
Underwriting fees   3,450,000    
Other offering costs   4,147,200    
Fair value issuance of representative shares   3,463,674    
Net proceeds $ 175,087,500      
Public shares percentage 100.00%      
Net tangible assets   5,000,001    
Net of taxes payable   100,000    
Operating cash   1,007,688    
Securities held in trust account   180,288,751 $ 177,564,388  
Working capital   $ 528,744    
Us federal excise tax rate       1.00%
Excise tax of market value       1.00%
Initial Public Offering [Member]        
Description of Organization and Business Operations (Details) [Line Items]        
Sale of units (in Shares) 17,250,000 8,537,500    
Price per share (in Dollars per share) $ 10.15      
Maturity days 185 days      
Over-Allotment Option [Member]        
Description of Organization and Business Operations (Details) [Line Items]        
Sale of units (in Shares) 2,250,000      
Price per share (in Dollars per share) $ 10      
Generating gross proceeds $ 172,500,000      
Private Placement Warrant [Member]        
Description of Organization and Business Operations (Details) [Line Items]        
Private placement price per share (in Dollars per share)   $ 1    
Public Share [Member]        
Description of Organization and Business Operations (Details) [Line Items]        
Price per share (in Dollars per share)   10.15    
US Treasury Securities [Member]        
Description of Organization and Business Operations (Details) [Line Items]        
Maturity days 185 days      
Sponsor [Member]        
Description of Organization and Business Operations (Details) [Line Items]        
Price per share (in Dollars per share)   $ 10.15    
Business Combination [Member]        
Description of Organization and Business Operations (Details) [Line Items]        
Price per share (in Dollars per share) $ 10.15      
Market value percentage   80.00%    
Business combination acquires percentage   50.00%    
v3.23.2
Summary of Significant Accounting Policies (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Summary of Significant Accounting Policies (Details) [Line Items]        
Effective tax rate 22.95% 44.02% 23.55% 38.77%
Effective statutory tax rate 21.00% 21.00% 21.00% 21.00%
Federal depository insurance (in Dollars)     $ 250,000  
Initial Public Offering [Member]        
Summary of Significant Accounting Policies (Details) [Line Items]        
Offering costs (in Dollars) $ 7,597,200   $ 7,597,200  
v3.23.2
Summary of Significant Accounting Policies (Details) - Schedule of Common Stock Reflected in the Balance Sheet - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Schedule of Common Stock Reflected in the Balance Sheet [Abstract]    
Gross proceeds   $ 172,500,000
Less:    
Proceeds allocated to Public Warrants   (3,379,730)
Common stock issuance costs   (7,256,606)
Plus:    
Accretion of carrying value to redemption value $ 3,087,607 15,054,352
Common stock subject to possible redemption $ 180,005,623 $ 176,918,016
v3.23.2
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Net Income (Loss) Per Common Share - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Redeemable [Member]        
Numerator:        
Allocation of net income (loss) $ 1,138,213 $ (58,475) $ 2,087,557 $ (50,370)
Denominator:        
Basic weighted average shares outstanding 17,250,000 9,453,297 17,250,000 4,752,762
Basic net income (loss) per common share $ 0.07 $ (0.01) $ 0.12 $ (0.01)
Non- Redeemable [Member]        
Numerator:        
Allocation of net income (loss) $ 314,246 $ (26,569) $ 576,347 $ (42,663)
Denominator:        
Basic weighted average shares outstanding 4,762,500 4,295,192 4,762,500 4,025,625
Basic net income (loss) per common share $ 0.07 $ (0.01) $ 0.12 $ (0.01)
v3.23.2
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Net Income (Loss) Per Common Share (Parentheticals) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Redeemable [Member]        
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Net Income (Loss) Per Common Share (Parentheticals) [Line Items]        
Diluted weighted average shares outstanding 17,250,000 9,453,297 17,250,000 4,752,762
Diluted net income (loss) per common share $ 0.07 $ (0.01) $ 0.12 $ (0.01)
Non- Redeemable [Member]        
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Net Income (Loss) Per Common Share (Parentheticals) [Line Items]        
Diluted weighted average shares outstanding 4,762,500 4,295,192 4,762,500 4,025,625
Diluted net income (loss) per common share $ 0.07 $ (0.01) $ 0.12 $ (0.01)
v3.23.2
Initial Public Offering (Details) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2023
Initial Public Offering (Details) [Line Items]    
Sale units 8,537,500  
Proposed public offering, description   Each unit that the Company sold in the Initial Public Offering had a price of $10.00 and consists of one share of common stock, one redeemable warrant, and one right, which right entitles the holder to one-tenth share of common stock upon the consummation the Business Combination.
Initial Public Offering [Member]    
Initial Public Offering (Details) [Line Items]    
Sale units   17,250,000
Over-Allotment Option [Member]    
Initial Public Offering (Details) [Line Items]    
Sale units   2,250,000
Purchase price per unit (in Dollars per share)   $ 10
v3.23.2
Private Placement (Details)
6 Months Ended
Jun. 30, 2023
USD ($)
$ / shares
Private Placement [Member]  
Private Placement (Details) [Line Items]  
Aggregate warrant $ 8,537,500
Sponsor [Member]  
Private Placement (Details) [Line Items]  
Purchase warrants $ 8,537,500
Price per warrant (in Dollars per share) | $ / shares $ 1
Sponsor [Member] | Private Placement [Member]  
Private Placement (Details) [Line Items]  
Purchase warrants $ 6,812,500
I-Bankers [Member] | Private Placement [Member]  
Private Placement (Details) [Line Items]  
Purchase warrants 1,466,250
Dawson James [Member] | Private Placement [Member]  
Private Placement (Details) [Line Items]  
Purchase warrants $ 258,750
v3.23.2
Related Party Transactions (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
May 12, 2022
May 09, 2022
Aug. 31, 2021
Aug. 17, 2021
Related Party Transactions (Details) [Line Items]                  
Pay an affiliate services             $ 5,000    
Incurred Services $ 18,000 $ 1,500 $ 36,000 $ 13,000          
Due from the related party 32,900   32,900            
Convertible loans 1,500,000   $ 1,500,000            
Founder Shares [Member]                  
Related Party Transactions (Details) [Line Items]                  
Sponsor paid               $ 25,000  
Price per share (in Dollars per share)               $ 0.006  
Shares of common stock (in Shares)               4,312,500  
Common stock par value (in Dollars per share)               $ 0.0001  
Common stock equals or exceeds per share (in Dollars per share)     $ 12            
Initial Public Offering [Member]                  
Related Party Transactions (Details) [Line Items]                  
Outstanding amount repaid           $ 546,343      
FDIC [Member]                  
Related Party Transactions (Details) [Line Items]                  
Due from the related party $ 250,000   $ 250,000            
Sponsor [Member]                  
Related Party Transactions (Details) [Line Items]                  
Aggregate principal amount                 $ 600,000
Miscellaneous fees         $ 22,740        
Working capital         $ 22,000        
Initial Business Combination [Member]                  
Related Party Transactions (Details) [Line Items]                  
Warrant exercise price per share (in Dollars per share)     $ 1            
v3.23.2
Commitments and Contingencies (Details)
6 Months Ended
Jun. 30, 2023
USD ($)
Commitments and Contingencies [Abstract]  
Underwriting discount percentage 2.00%
Gross proceeds (in Dollars) $ 3,450,000
Percentage of gross proceeds 3.50%
Representative's shares, description The Company issued (i) to I-Bankers Securities (and/or their designees) 382,500 shares of common stock upon the consummation of the Initial Public Offering and (ii) to Dawson James (and/or their designees) 67,500 shares upon the consummation of the Initial Public Offering. The Company determined the fair value of the representative shares to be $3,463,674 (or $7.70 per share) using the Probability Weighted Expected Return Model. The fair value of the shares granted to the underwriters utilized the following assumptions: (1) expected volatility of 2.4%, (2) risk-free interest rate of 1.93%, (3) expected life of 0.97 years, and (4) no dividend. To arrive to the assumptions used in the valuation, comparable for 15 pre-business combination Companies (selected based on industry or sector focus, size, warrant coverage and the remaining term to complete their business combination), were selected. The implied volatility was based on the current quoted prices of the warrants and underlying stock. The risk-free interest rate was based on a 0.5 to 2 year US treasury rate. I-Bankers and Dawson James (and/or their respective designees) have agreed not to transfer, assign or sell any such shares until the completion of the initial Business Combination. In addition, I-Bankers and Dawson James (and/or their respective designees) have agreed (i) to waive their redemption rights with respect to such shares in connection with the completion of the initial Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its initial Business Combination within the combination period.
v3.23.2
Stockholders' Equity (Details) - USD ($)
6 Months Ended
Aug. 17, 2021
Jun. 30, 2023
Dec. 31, 2022
Stockholders' Equity (Details) [Line Items]      
Common stock, shares authorized   100,000,000 100,000,000
Common stock, par value (in Dollars per share)   $ 0.0001 $ 0.0001
Common stock, shares issued   4,762,500 4,762,500
Initial stockholders (in Dollars) $ 25,000    
Common stock, per share (in Dollars per share) $ 0.006    
Vote for shares   one  
Percentage of shares voted for the election of directors   50.00%  
Common stock, shares outstanding   4,762,500 4,762,500
Preferred stock share authorized   1,000,000 1,000,000
Preferred stock par value (in Dollars per share)   $ 0.0001 $ 0.0001
Preferred stock share issued  
Preferred stock share outstanding  
Warrants outstanding   17,250,000 17,250,000
Description of warrants   The warrants will become exercisable 30 days after the completion of its initial Business Combination, and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.  
Description of redemption of warrants   Redemption of warrants when the price per share of common stock equals or exceeds $18.00.Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):   ● in whole and not in part         ● at a price of $0.01 per warrant;         ● upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the 30-day redemption period; and         ● if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. The Company will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. The Company may not redeem the warrants when a holder may not exercise such warrants.   
Over-allotment [Member]      
Stockholders' Equity (Details) [Line Items]      
Founder shares forfeiture   562,500  
Common Stock [Member]      
Stockholders' Equity (Details) [Line Items]      
Common stock, shares authorized   100,000,000  
Common stock, shares issued 4,312,500    
Warrant [Member]      
Stockholders' Equity (Details) [Line Items]      
Common stock, par value (in Dollars per share)   $ 9.2  
Common stock, per share (in Dollars per share)   $ 11.5  
Percentage of total equity proceed   60.00%  
Business Combination [Member]      
Stockholders' Equity (Details) [Line Items]      
Market value (in Dollars per share)   $ 9.2  
Percentage of market value   115.00%  
Business Combination [Member] | Warrant [Member]      
Stockholders' Equity (Details) [Line Items]      
Percentage of market value   180.00%  
Newly issued price per share (in Dollars per share)   $ 18  
v3.23.2
Fair Value Measurements (Details) - USD ($)
6 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Fair Value Measurements [Abstract]    
Assets held in the Trust Account $ 180,288,751 $ 177,564,388
Withdrawn of income earned $ 1,284,000  
v3.23.2
Fair Value Measurements (Details) - Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis [Abstract]    
Marketable securities held in Trust Account –Money Market Fund $ 180,288,751 $ 177,564,388
v3.23.2
Subsequent Events (Details) - Subsequent Event [Member] - USD ($)
Aug. 12, 2023
Aug. 08, 2023
Subsequent Events (Details) [Line Items]    
Repurchase of shares percentage 100.00%  
Common stock redeemed   14,820,620
Total redemption payment   $ 155,196,226

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