NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
NOTE 1 –
ORGANIZATION AND BUSINESS BACKGROUND
Golden Path Acquisition Corporation (the “Company”)
is a blank check company incorporated in the Cayman Islands on May 9, 2018. The Company was formed for the purpose of effecting a merger,
share exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (“Business
Combination”).
Although the Company is not limited to a particular
industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on businesses that have
a connection to the Asian market. The Company is an early stage and emerging growth company and, as such, the Company is subject to all
of the risks associated with early stage and emerging growth companies.
As of June 30, 2021, the Company had not commenced
any operations. All activity through June 30, 2021 relates to the Company’s formation and the initial public offering as described
below. The Company will not generate any operating revenues until after the completion of a Business Combination at the earliest. The
Company will generate non-operating income in the form of dividend income from investing the proceeds derived from the initial public
offering. The Company has selected December 31 as its fiscal year end.
Financing
The registration statement for the Company’s
initial public offering (the “Initial Public Offering” as described in Note 4) was declared effective by the United States
Securities and Exchange Commission (the “SEC”) on June 21, 2021. On June 24, 2021, the Company consummated the Initial Public
Offering of 5,750,000 ordinary units (the “Public Units”), which includes the full exercise by the underwriter of its over-allotment
option in the amount of 750,000 Public Units, at $10.00 per Public Unit, generating gross proceeds of $57,500,000.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 270,500 units (the “Private Units”) at a price of $10.00 per Private
Unit in a private placement to Greenland Asset Management Corporation (the “Sponsor”), generating gross proceeds of $2,705,000,
which is described in Note 5.
Transaction costs amounted to $2,887,500, consisting
of $1,150,000 of underwriting fees, $1,437,500 of deferred underwriting fees and $300,000 of other offering costs. In addition, at June
30, 2021, cash of $509,568 and cash held in escrow of $9,000 were held outside of the Trust Account and is available for the payment of
offering costs and for working capital purposes.
Trust Account
Upon the closing of the Initial Public Offering
and the private placement, $58,075,002 was placed in a trust account (the “Trust Account”) with Wilmington Trust, National
Association acting as trustee. The funds held in the Trust Account can be invested in United States government treasury bills, bonds or
notes, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act until the earlier of (i) the consummation of the Company’s initial Business Combination and (ii) the Company’s
failure to consummate a Business Combination within 21 months from the closing of the Public Offering. Placing funds in the Trust Account
may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers,
prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to
any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The remaining net proceeds
(not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing
general and administrative expenses. Additionally, the interest earned on the Trust Account balance may be released to the Company to
pay the Company’s tax obligations.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
Business Combination
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private Units, although substantially
all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the
Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance
in the Trust Account (as defined below) (less any deferred underwriting commissions and taxes payable on interest earned) at the time
of the signing of an agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business
Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940,
as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business
Combination.
The Company will provide its shareholders with
the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection
with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. In connection with an Initial
Business Combination, the Company may seek shareholder approval of a Business Combination at a meeting called for such purpose at which
shareholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will
proceed with a Business Combination only 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 shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business
Combination.
Notwithstanding the foregoing, if the Company
seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s
Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to
15% or more of the Public Shares without the Company’s prior written consent.
If a shareholder vote is not required and the
Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and
Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the Securities and Exchange
Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in
a proxy statement with the SEC prior to completing a Business Combination.
The shareholders will be entitled to redeem their
Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.10 per Public Share, subject to increase of
up to an additional $0.30 per Public Share in the event that the Sponsor elects to extend the period of time to consummate a Business
Combination (see below), plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company
to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their Public Shares will not be reduced
by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 9). There will be no redemption
rights upon the completion of a Business Combination with respect to the Company’s rights or warrants. The ordinary shares will
be 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.”
The Sponsor and any of the Company’s officers
or directors that may hold Founder Shares (as defined in Note 6) (the “shareholders”) and the underwriters will agree (a)
to vote their Founder Shares, the ordinary shares included in the Private Units (the “Private Shares”) and any Public Shares
purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s
Amended and Restated Memorandum and Articles of Association with respect to the Company’s pre-Business Combination activities prior
to the consummation of a Business Combination unless the Company provides dissenting public shareholders with the opportunity to redeem
their Public Shares in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) and Private Shares
into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a Business Combination (or to sell
any shares in a tender offer in connection with a Business Combination if the Company does not seek shareholder approval in connection
therewith) or a vote to amend the provisions of the Amended and Restated Memorandum and Articles of Association relating to shareholders’
rights of pre-Business Combination activity and (d) that the Founder Shares and Private Shares shall not participate in any liquidating
distributions upon winding up if a Business Combination is not consummated. However, the shareholders will be entitled to liquidating
distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company
fails to complete its Business Combination.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
Liquidation
The Company will have until June 23, 2022 to consummate
a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination within 12 months,
the Company may extend the period of time to consummate a Business Combination up to nine times, each by an additional month (for a total
of 21 months to complete a Business Combination (the “Combination Period”). In order to extend the time available for the
Company to consummate a Business Combination, the Sponsor or its affiliate or designees must deposit into the Trust Account $191,667 (approximately
$0.033 per Public Share), up to an aggregate of $1,725,000, or $0.30 per Public Share, on or prior to the date of the applicable deadline,
for each one month extension. Any funds which may be provided to extend the time frame will be in the form of a loan to us from our sponsor.
The terms of any such loan have not been definitely negotiated, provided, however, any loan will be interest free and will be repayable
only if we compete a business combination.
If the Company is unable to complete a Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of taxes payable and
less interest to pay dissolution expenses up to $50,000), divided by the number of then outstanding Public Shares, which redemption will
completely extinguish public shareholders’ rights as shareholders (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 remaining shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal
dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable
law. The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the
Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with
the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution,
it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering
price per Unit ($10.00).
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 amounts in the Trust Account to below
(i) $10.10 per share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust
Account due to reductions in the value of the trust assets, except as to any claims by a third party who executed a waiver of any and
all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of
the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible
to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have
to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses
or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim
of any kind in or to monies held in the Trust Account.
GOLDEN PATH ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”),
except for number of shares)
(Unaudited)
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL
STATEMENTS
On April 12, 2021, the Acting Director of the Division
of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations
for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations
for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically,
the SEC Statement focused on certain provisions that provided for potential changes to the settlement amounts dependent upon the characteristics
of the holder of the warrant, which terms are similar to those contained in the warrant agreement governing the Company’s warrants.
The Company’s management evaluated the warrants
under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15
addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states
that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common
stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant
require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. The
Company’s Private Warrants are not indexed to the Company’s common shares in the manner contemplated by ASC Section 815-40-15
because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, the tender
offer provision included in the warrant agreement fails the “classified in shareholders’ equity” criteria as contemplated
by ASC Section 815-40-25. As a result, the only Private Warrants shall be classified as liabilities and the Public Warrants shall
be classified as equity and the Company reevaluated the accounting treatment of the 5,750,000 warrants that were issued to the Company’s
sponsor in an initial public offering (“Public Warrants”). The Company previously accounted for the Public Warrants as components
of liabilities.
In further consideration of the guidance in Accounting
Standards Codification (“ASC”) 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC
815”), the Company concluded that a provision in the warrant agreement related to certain transfer provisions precludes the Private
Warrants from being accounted for as components of equity. As the Private Warrants meet the definition of a derivative as contemplated
in ASC 815, the Private Warrants should be recorded as derivative liabilities on the balance sheet and measured at fair value at inception
(on the date of the Initial Public Offering) and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes
in fair value recognized in the Statements of Operations in the period of change.
In addition, the Company concluded it should restate
its consolidated financial statements to classify all ordinary shares subject to possible redemption in temporary equity. In accordance
with the SEC and its staff’s guidance on redeemable equity instruments, ASC Topic 480, Distinguishing Liabilities from Equity (ASC
480), paragraph 10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption
to be classified outside of permanent equity. The Company had previously classified a substantial portion of its ordinary shares in permanent
equity. Although the Company did not specify a maximum redemption threshold, its charter provides that the Company will not redeem its
public shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Company considered that the threshold
would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside equity. As a result,
the Company restated its previously filed financial statements to classify all ordinary shares as temporary equity and to recognize accretion
from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480. The change
in the carrying value of redeemable shares of ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.
In accordance with SEC Staff Accounting Bulletin
No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated the changes and has determined that
the related impacts were material to any previously presented financial statements. Therefore, the Company, in consultation with its Audit
Committee, concluded that its previously issued financial statements impacted should be restated to report all public shares as temporary
equity.
GOLDEN PATH ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”),
except for number of shares)
(Unaudited)
The impact to the previously presented financial statements is presented
below:
Adjustment #1 refer to Public warrant reclassify
from warrant liabilities to equity component.
Adjustment #2 refer to classify all public shares
as temporary equity.
Schedule of effect of the revision on each financial statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
Adjustment
|
|
|
Adjustments
|
|
|
As
|
|
|
|
Reported
|
|
|
#1
|
|
|
#2
|
|
|
Restated
|
|
Balance sheet as of June 24, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities
|
|
|
8,616,000
|
|
|
|
(7,991,000
|
)
|
|
|
-
|
|
|
|
625,000
|
|
Total liabilities
|
|
|
10,071,000
|
|
|
|
(7,991,000
|
)
|
|
|
-
|
|
|
|
2,080,000
|
|
Ordinary shares subject to possible redemption
|
|
|
43,522,748
|
|
|
|
-
|
|
|
|
14,552,252
|
|
|
|
58,075,000
|
|
Ordinary shares
|
|
|
315
|
|
|
|
-
|
|
|
|
(144
|
)
|
|
|
171
|
|
Additional paid-in capital
|
|
|
5,203,437
|
|
|
|
7,991,000
|
|
|
|
(13,194,437
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
|
(203,748
|
)
|
|
|
-
|
|
|
|
(1,357,671
|
)
|
|
|
(1,561,419
|
)
|
Total shareholders’ equity (deficit)
|
|
|
5,000,004
|
|
|
|
7,991,000
|
|
|
|
(14,552,252
|
)
|
|
|
(1,561,248
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares subject to possible redemption
|
|
|
51,477,834
|
|
|
|
-
|
|
|
|
6,597,166
|
|
|
|
58,075,000
|
|
Ordinary shares
|
|
|
236
|
|
|
|
-
|
|
|
|
(65
|
)
|
|
|
171
|
|
Additional paid-in capital
|
|
|
5,239,430
|
|
|
|
-
|
|
|
|
(5,239,430
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
|
(239,658
|
)
|
|
|
-
|
|
|
|
(1,357,671
|
)
|
|
|
(1,597,329
|
)
|
Total shareholders’ equity (deficit)
|
|
|
5,000,008
|
|
|
|
-
|
|
|
|
(6,597,166
|
)
|
|
|
(1,597,158
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of changes in shareholders’ deficit for the three and six months ended June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial classification of ordinary shares subject to possible redemption – no. of shares
|
|
|
(5,100,371
|
)
|
|
|
-
|
|
|
|
(649,629
|
)
|
|
|
(5,750,000
|
)
|
Initial classification of ordinary shares subject to possible redemption – amount
|
|
|
(510
|
)
|
|
|
-
|
|
|
|
(65
|
)
|
|
|
(575
|
)
|
Initial classification of ordinary shares subject to possible redemption – additional paid-in capital
|
|
|
(51,513,238
|
)
|
|
|
-
|
|
|
|
(3,997,226
|
)
|
|
|
(55,510,464
|
)
|
Initial classification of ordinary shares subject to possible redemption – total shareholder’s deficit
|
|
|
(51,513,748
|
)
|
|
|
-
|
|
|
|
(3,997,291
|
)
|
|
|
(55,511,039
|
)
|
Allocation of offering costs to common stock subject to redemption
|
|
|
-
|
|
|
|
-
|
|
|
|
2,787,620
|
|
|
|
2,787,620
|
|
Accretion of carrying value to redemption value – additional paid-in capital
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,993,910
|
)
|
|
|
(3,993,910
|
)
|
Accretion of carrying value to redemption value – accumulated deficit
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,357,671
|
)
|
|
|
(1,357,671
|
)
|
Accretion of carrying value to redemption value – total shareholder’s deficit
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,351,581
|
)
|
|
|
(5,351,581
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of cash flows for the six months ended June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial classification of ordinary shares subject to possible redemption
|
|
|
51,513,748
|
|
|
|
-
|
|
|
|
3,997,291
|
|
|
|
55,511,039
|
|
Allocation of offering costs to common stock subject to redemption
|
|
|
-
|
|
|
|
-
|
|
|
|
2,787,620
|
|
|
|
2,787,620
|
|
Accretion of carry value of redemption value
|
|
|
-
|
|
|
|
-
|
|
|
|
5,351,581
|
|
|
|
5,351,581
|
|
Notes 3, 5 and 8 have been updated to reflect the restatements.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
NOTE 3 –
SIGNIFICANT ACCOUNTING POLICIES (AS RESTATED)
These accompanying unaudited condensed financial
statements are presented in U.S. dollars have been prepared in accordance with generally accepted accounting principles in the United
States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. The interim
financial information provided is unaudited, but includes all adjustments which management considers necessary for the fair presentation
of the results for these periods. Operating results for the interim period ended June 30, 2021 are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 2021. The information included in this Form 10-Q should be read in conjunction
with Management’s Discussion and Analysis, and the financial statements and notes for the fiscal year ended December 31, 2020 thereto
included in the Company’s Form S-1 Amendment No. 2, filed with the SEC on June 11, 2021.
|
●
|
Emerging growth company
|
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of 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 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 may differ from those estimates.
|
●
|
Cash and cash equivalents
|
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of June 30,
2021 and December 31, 2020.
|
●
|
Cash and investments held in trust account
|
At June 30, 2021, the assets held in the Trust
Account are held in cash and US Treasury securities. Investment securities in the Company’s Trust Account consisted of $58,075,002
in United States Treasury Bills.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
The Company classifies marketable securities as
available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities
are recorded at their estimated fair value. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive
loss. The Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired.
Impairments are considered other than temporary if they are related to deterioration in credit risk or if it is likely the Company will
sell the securities before the recovery of the cost basis. Realized gains and losses and declines in value determined to be other than
temporary are determined based on the specific identification method and are reported in other income (expense), net in the statements
of operations.
|
●
|
Deferred Offering Costs
|
Deferred offering costs consist of underwriting,
legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering
and that were charged to shareholders’ equity upon the completion of the Initial Public Offering.
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 ordinary shares and whether the warrant holders could potentially require “net
cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This
assessment, which requires the use of professional judgment, 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 equity 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 as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in
the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair
value of the Public Warrants was estimated using a Binomial model and the fair value of the Private Warrants was estimated using a
Black-Scholes model (see Note 9).
|
●
|
Ordinary shares subject to possible redemption
|
The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in ASC 480. Ordinary shares subject to mandatory redemption (if any) are classified
as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature
redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not
solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’
equity. As of June 30, 2021, 5,750,000 ordinary shares subject to possible redemption which are subject to occurrence of uncertain future
events and considered to be outside of the Company’s control are presented as temporary equity, outside of the shareholders’
equity section of the Company’s balance sheet.
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 principally of professional and registration fees incurred through the balance sheet date that are related to the
Initial Public Offering and that were charged to shareholders’ equity upon the completion of the Initial Public Offering.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
|
●
|
Fair value of financial instruments
|
FASB ASC Topic 820 “Fair Value Measurements
and Disclosures” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the
buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach,
income approach and cost approach shall be used to measure fair value. FASB ASC Topic 820 establishes a fair value hierarchy for inputs,
which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable
and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market
data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that
the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.
The fair value hierarchy is categorized into three
levels based on the inputs as follows:
Level 1 —
|
Valuations based on unadjusted quoted prices in
active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts
are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation
of these securities does not entail a significant degree of judgment.
|
Level 2 —
|
Valuations based on (i) quoted prices in active
markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs
other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through
correlation or other means.
|
Level 3 —
|
Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
The fair value of the Company’s
certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and
Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash
equivalents, and other current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of June
30, 2021 due to the short maturities of such instruments. See Note 9 for the disclosure of the Company’s assets and
liabilities that were measured at fair value on a recurring basis.
|
●
|
Concentration of credit risk
|
Financial instruments that potentially subject
the Company to concentration of credit risk consist of cash and trust accounts in a financial institution which, at times may exceed the
Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the
Company is not exposed to significant risks on such accounts.
Income taxes are determined in accordance with
the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date.
ASC 740 prescribes a comprehensive model for how
companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to
be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely
than not the position will be sustained upon examination by the tax authorities. The Company’s management determined that the British
Virgin Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties
as of June 30, 2021 or December 31, 2020. 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 may be subject to potential examination
by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount
of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws.
The Company’s tax provision is zero for
the period ended June 30, 2021 and 2020.
The Company is considered to be an exempted Cayman
Islands Company, and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
|
●
|
Net loss per share (As Restated)
|
The Company calculates net loss per share in accordance
with ASC Topic 260, Earnings per Share. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable
shares, the Company first considered the undistributed income (loss) allocable to both the redeemable ordinary shares and non-redeemable
ordinary shares and the undistributed income (loss) is calculated using the total net loss less any dividends paid. The Company then allocated
the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable
ordinary shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered
to be dividends paid to the public stockholders.
The net loss per share presented in the unaudited
condensed statement of operations is based on the following:
Schedule of unaudited condensed consolidated statement of operations
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
June 30,
2021
|
|
|
For the Three Months Ended
June 30,
2020
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(143,212
|
)
|
|
$
|
(4,805
|
)
|
Accretion of carrying value to redemption value
|
|
|
-
|
|
|
|
-
|
|
Net loss
|
|
$
|
(143,212
|
)
|
|
$
|
(4,805
|
)
|
|
|
For the Six Months Ended
June 30,
2021
|
|
|
For the Six Months Ended
June 30,
2020
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(199,991
|
)
|
|
$
|
(4,891
|
)
|
Accretion of carrying value to redemption value
|
|
|
(5,351,581
|
)
|
|
|
-
|
|
Net loss
|
|
$
|
(5,551,572
|
)
|
|
$
|
(4,891
|
)
|
Schedule of basic and diluted net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
Ordinary shares
|
|
|
Non-Redeemable
Ordinary shares
|
|
|
Redeemable
Ordinary shares
|
|
|
Non-Redeemable
Ordinary shares
|
|
|
|
For the Three Months Ended
June 30, 2021
|
|
|
For the Three Months Ended
June 30, 2020
|
|
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net loss including carrying value to redemption value
|
|
$
|
(29,597
|
)
|
|
|
(113,616
|
)
|
|
|
-
|
|
|
|
(4,805
|
)
|
Accretion of carrying value to redemption value
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Allocation of net loss
|
|
$
|
(29,597
|
)
|
|
|
(113,616
|
)
|
|
|
-
|
|
|
|
(4,805
|
)
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
379,121
|
|
|
|
1,455,335
|
|
|
|
-
|
|
|
|
10
|
|
Basic and diluted net loss per share
|
|
$
|
(0.08
|
)
|
|
|
(0.08
|
)
|
|
|
-
|
|
|
|
(481
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
June 30, 2021
|
|
|
For the Six Months Ended
June 30, 2020
|
|
|
|
Redeemable Ordinary shares
|
|
|
Non-Redeemable Ordinary shares
|
|
|
Redeemable Ordinary shares
|
|
|
Non-Redeemable Ordinary shares
|
|
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net loss including carrying value to redemption value
|
|
$
|
(649,531
|
)
|
|
|
(4,902,042
|
)
|
|
|
-
|
|
|
|
(4,891
|
)
|
Accretion of carrying value to redemption value
|
|
|
5,351,581
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Allocation of net income (loss)
|
|
$
|
4,702,050
|
|
|
|
(4,902,042
|
)
|
|
|
-
|
|
|
|
(4,891
|
)
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
191,667
|
|
|
|
1,446,517
|
|
|
|
-
|
|
|
|
10
|
|
Basic and diluted net income (loss) per share
|
|
$
|
24.53
|
|
|
|
(3.39
|
)
|
|
|
-
|
|
|
|
(489.10
|
)
|
Parties, which can be a corporation or individual,
are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are
subject to common control or common significant influence.
|
●
|
Recent accounting pronouncements
|
The Company has considered all new accounting
pronouncements and has concluded that there are no new pronouncements that may have a material impact on the results of operations, financial
condition, or cash flows, based on the current information.
NOTE 4 — CASH AND INVESTMENT HELD
IN TRUST ACCOUNT
As of June 30, 2021, investment securities in
the Company’s Trust Account consisted of $58,075,002 in United States Treasury Bills and $0 in cash. The Company classifies its
United States Treasury securities as available-for-sale. Available-for-sale marketable securities are recorded at their estimated fair
value on the accompanying June 30, 2021 balance sheet. The carrying value, including gross unrealized holding gain as other comprehensive
income and fair value of held to marketable securities on June 30, 2021 is as follows:
Schedule of including gross unrealized holding gain as other comprehensive income and fair value
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
Value as of
June 30,
2021
(Unaudited)
|
|
|
Gross
Unrealized Holding Gain
|
|
|
Fair
Value
as of
June 30,
2021
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Securities
|
|
$
|
58,075,002
|
|
|
$
|
-
|
|
|
$
|
58,075,002
|
|
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
NOTE 5 — INITIAL PUBLIC OFFERING (AS RESTATED)
On June 24, 2021, the Company sold 5,750,000 units
at a price of $10.00 per Public Unit in the Public Offering. Each Public Unit consists of one ordinary share of the Company, $0.0001 par
value per share (the “Public Shares”), one right (the “Public Rights”) and one redeemable warrant (the “Public
Warrant”). Each Public Right entitles the holder to receive one-tenth (1/10) of an ordinary share upon consummation of an initial
Business Combination. Each Public Warrant entitles the holder to purchase one-half (1/2) of an ordinary share at an exercise price of
$11.50 per whole share (see Note 8).
If the Company does not complete its Business
Combination within the necessary time period described in Note 1, the Public Rights will expire and be worthless. Since the Company is
not required to net cash settle the Rights and the Rights are convertible upon the consummation of an initial Business Combination, the
Management determined that the Rights are classified within shareholders’ equity as “Additional paid-in capital” upon
their issuance in accordance with ASC 815-40. The proceeds from the sale are allocated to Public Shares and Rights based on the relative
fair value of the securities in accordance with ASC 470-20-30. The value of the Public Shares and Rights will be based on the closing
price paid by investors.
All of the 5,750,000 public shares sold as part
of the Public Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares
if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to
the Company’s amended and restated memorandum and articles of association, or in connection with the Company’s liquidation.
In accordance with the Securities and Exchange Commission (the “SEC”) and its staff’s guidance on redeemable equity
instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary
shares subject to redemption to be classified outside of permanent equity.
The Company’s redeemable ordinary shares
is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is
probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value
over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later)
to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust
the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize
the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in
absence of retained earnings, additional paid-in capital).
As of June 30, 2021, the ordinary shares reflected
on the balance sheet are reconciled in the following table.
Schedule of reconcilation
|
|
|
|
|
|
|
June 30,
|
|
|
|
2021
|
|
Gross proceeds
|
|
$
|
57,500,000
|
|
Less:
|
|
|
|
|
Proceeds allocated Public Warrants
|
|
|
(1,804,109
|
)
|
Proceeds allocated Public Rights
|
|
|
(184,852
|
)
|
Offering costs of Public Shares
|
|
|
(2,787,620
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
5,351,581
|
|
Common stock subject to possible redemption
|
|
$
|
58,075,000
|
|
The Company paid an upfront underwriting discount
of $1,150,000, equal to 2% of the gross offering proceeds to the underwriter at the closing of the Initial Public Offering, with an additional
fee of $1,437,500 (the “Deferred Underwriting Discount”) or 2.5% of the gross offering proceeds payable upon the Company’s
completion of the Business Combination. The Deferred Underwriting Discount will become payable to the underwriter from the amounts held
in the Trust Account solely in the event the Company completes its Business Combination. In the event that the Company does not close
the Business Combination, the underwriter has waived its right to receive the Deferred Underwriting Discount. The underwriter is not entitled
to any interest accrued on the Deferred Underwriting Discount.
NOTE 6 –
PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Company consummated a private placement of 270,500 Private Units at $10.00 per unit, purchased by the sponsor.
The Private Units are identical to the units sold
in the Initial Public Offering except that the warrants included in the Private Units (the “Private Warrants”) are non-redeemable
and may be exercised on a cashless basis so long as the Private Warrants continue to be held by the initial purchasers of the Placement
Units or their permitted transferees.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
NOTE 7 – RELATED PARTY
TRANSACTIONS
Founder Shares
In May 2018, the Company issued one ordinary share
to the Sponsor for no consideration. In January 2021, the Company effected a 10 for 1 share split, resulting in an aggregate of 10 ordinary
shares outstanding. All share and per-share amounts have been retroactively restated to reflect the share split. On January 6, 2021, the
Sponsor purchased an aggregate of 1,150,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.02 per share.
On March 26, 2021, the Company issued an additional 287,500 founder shares to the Sponsor in connection with a recapitalization.
The founders and our officers and directors have
agreed not to transfer, assign or sell any of the Founder Shares (except to certain permitted transferees) until, with respect to 50%
of the Founder Shares, the earlier of (i) six months after the date of the consummation of a Business Combination, or (ii) the date on
which the closing price of the Company’s ordinary shares equals or exceeds $12.50 per share (as adjusted for stock splits, stock
dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after a Business
Combination, with respect to the remaining 50% of the Founder Shares, upon six months after the date of the consummation of a Business
Combination, or earlier, in each case, if, subsequent to a Business Combination, the Company consummates a subsequent liquidation, merger,
stock exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their
ordinary shares for cash, securities or other property.
Administrative Services Agreement
An affiliate of the Sponsor agreed, commencing
on June 24, 2021 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to make available
to the Company certain general and administrative services, including office space, utilities and administrative services, as the Company
may require from time to time. The Company has agreed to pay the affiliate of the Sponsor $10,000 per month for these services.
Related Party
Loan
In order to finance transaction costs in connection
with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors
may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans
would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest,
or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation of a Business Combination into additional
Private Units at a price of $10.00 per Unit. In the event that a Business Combination does not close, the Company may use a portion of
proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to
repay the Working Capital Loans.
Related Party Extensions Loan
As discussed in Note 1, the Company may extend
the period of time to consummate a Business Combination up to nine times, each by an additional month (for a total of 21 months to complete
a Business Combination). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its
affiliates or designees must deposit into the Trust Account $191,667 (approximately $0.033 per Public Share), up to an aggregate of $1,725,000,
or $0.30 per Public Share, on or prior to the date of the applicable deadline, for each one month extension. Any such payments would be
made in the form of a loan. The terms of the promissory note to be issued in connection with any such loans have not yet been negotiated.
If the Company completes a Business Combination, the Company would repay such loaned amounts out of the proceeds of the Trust Account
released to the Company. If the Company does not complete a Business Combination, the Company will not repay such loans. Furthermore,
the letter agreement with the shareholders contains a provision pursuant to which the Sponsor has agreed to waive its right to be repaid
for such loans in the event that the Company does not complete a Business Combination. The Sponsor and its affiliates or designees are
not obligated to fund the Trust Account to extend the time for the Company to complete a Business Combination.
Related Party Advances
In the event the Sponsor pays for any expense
or liability on behalf of the Company, then such payments would be accounted for as loan to the Company by the Sponsor, Greenland Asset
Management Corporation.
As of June 30, 2021 and December 31, 2020, the
Company owed a balance of $27,931 and $36,784 to Greenland Asset Management Corporation.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
NOTE 8 – SHAREHOLDER’S EQUITY (AS RESTATED)
Ordinary Shares
The Company is authorized to issue 500,000,000
ordinary shares, with a par value of $0.0001 per share. Holders of the ordinary shares are entitled to one vote for each ordinary share.
In January 2021, the Company effected a 10 for
1 share split, resulting in an aggregate of 10 ordinary shares outstanding. All share and per-share amounts have been retroactively restated
to reflect the share split.
On January 6, 2021, the Company issued an aggregate
of 1,150,000 founder shares to the Sponsor for an aggregate purchase price of $25,000 in cash.
On March 26, 2021, the Company issued an additional
287,500 founder shares to the Sponsor in connection with a recapitalization.
On June 24, 2021, the Company sold 5,750,000 units
at a price of $10.00 per Public Unit in the Initial Public Offering.
Simultaneously on June 24, 2021, the Company issued
ordinary shares under the private placement of private units at $ per unit, to the Sponsor.
As of June 30, 2021 and December 31, 2020,
1,708,000 and 10 ordinary shares issued and outstanding excluding 5,096,815 and 0 shares are subject to possible
conversion.
Rights
Each holder of a right will receive one-tenth
(1/10) of one ordinary share upon consummation of a Business Combination, even if the holder of such right redeemed all shares held by
it in connection with a Business Combination. No fractional shares will be issued upon exchange of the rights. No additional consideration
will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of a Business Combination
as the consideration related thereto has been included in the Unit purchase price paid for by investors in the Initial Public Offering.
If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the
definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares
will receive in the transaction on an as-converted into ordinary share basis and each holder of a right will be required to affirmatively
convert its rights in order to receive 1/10 share underlying each right (without paying additional consideration). The shares issuable
upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company).
If the Company is unable to complete a Business
Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive
any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of
the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure
to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company
be required to net cash settle the rights. Accordingly, the rights may expire worthless.
Warrants
Each public warrant entitles the holder thereof
to purchase one-half (1/2) of one ordinary share at a price of $11.50 per full share, subject to adjustment as described in Form S-1 Amendment
No. 2 filed on June 11, 2021. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of
shares. This means that only an even number of warrants may be exercised at any given time by a warrant holder.
No public warrants will be exercisable for cash
unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants
and a current prospectus relating to such ordinary shares. It is the Company’s current intention to have an effective and current
registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary
shares in effect promptly following consummation of an initial business combination.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
The Public Warrants will become exercisable on
the later of (a) the consummation of a Business Combination or (b) 12 months from the effective date of the registration statement relating
to the Initial Offering. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration
statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary
shares. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business
Combination, the Company will use its best efforts to file, and within 60 business days following a Business Combination to have declared
effective, a registration statement covering the ordinary shares issuable upon exercise of the warrants. Notwithstanding the foregoing,
if a registration statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 60
days, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have
failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption
from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their
Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier
upon redemption or liquidation.
The Company may call the warrants for redemption
(excluding the Private Warrants), in whole and not in part, at a price of $0.01 per warrant:
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at any time while the Public
Warrants are exercisable,
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●
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upon not less than 30 days’
prior written notice of redemption to each Public Warrant holder,
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●
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if, and only if, the reported
last sale price of the ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a 30 trading day period ending
on the third trading day prior to the notice of redemption to Public Warrant holders, and
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●
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if, and only if, there is a
current registration statement in effect with respect to the issuance of the ordinary shares underlying such warrants at the time of
redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
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The Private Warrants will be identical to the
Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Warrants and the ordinary shares
issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business
Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basis and will
be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held
by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and
exercisable by such holders on the same basis as the Public Warrants.
If the Company calls the Public Warrants for redemption,
management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,”
as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be
adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization,
merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business
Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not
receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held
outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
NOTE 9 – 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 our assessment
of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about
the Company’s assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2021, and indicates the
fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
Schedule of fair value hierarchy of valuation techniques
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June 30,
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Quoted Prices In Active Markets
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Significant Other Observable Inputs
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Significant Other Unobservable Inputs
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Description
|
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2021
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(Level 1)
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(Level 2)
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(Level 3)
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Assets:
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U.S. Treasury Securities held in Trust Account*
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$
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58,075,002
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$
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58,075,002
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$
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-
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$
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-
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Liabilities:
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Warrant liabilities – Private Warrants
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$
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625,000
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$
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-
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$
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-
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$
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625,000
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*
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included in cash and investments
held in trust account on the Company’s balance sheet.
|
The private warrants are accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities on the balance sheets.
The Company established the initial fair value for
the private warrants at $625,000 on June 24, 2021, the date of the Company’s Initial Public Offering, using a Black-Scholes model.
The Company allocated the proceeds received from the sale of Private Units, first to the private warrants based on their fair values as
determined at initial measurement, with the remaining proceeds recorded as ordinary shares subject to possible redemption, and ordinary
shares based on their relative fair values recorded at the initial measurement date. The warrants were classified as Level 3 at the initial
measurement date due to the use of unobservable inputs.
The key inputs into the Black-Scholes
model for the Private Warrants were as follows at their measurement dates:
Schedule of Black-Scholes model
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June
30,
2021
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June
24,
2021
(Initial
measurement)
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Input
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Share price
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$
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10.00
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$
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10.00
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Risk-free interest rate
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0.90
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%
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0.90
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%
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Volatility
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58.40
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%
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58.40
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%
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Exercise price
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$
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11.50
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$
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11.50
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Warrant life
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5 years
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|
|
|
5 years
|
|
GOLDEN PATH ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
As of June 30, 2021, the aggregate value of the private
warrants was $0.625 million and there was immaterial change in fair value from June 24, 2021 to June 30, 2021.
To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the
inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used
had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value
is greatest for investments categorized in Level 3. Level 3 financial liabilities consist of the Warrant liability for which there is
no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes
in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates
or assumptions and recorded as appropriate.
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management is currently evaluating the impact
of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect
on the Company’s future financial position, results of its operations and/or search for a target company, there has been a significant
impact as of the date of these financial statements. The financial statements do not include any adjustments that might result from the
future outcome of this uncertainty.
Registration Rights
Pursuant to a registration rights agreement entered
into on June 24, 2021 the holders of the Founder Shares, Private Units (and their underlying securities) and any Units that may be issued
upon conversion of the Working Capital Loans (and underlying securities) are entitled to registration rights. The holders of these securities
are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders
have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation
of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities
Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to a deferred fee
of two and one-half percent (2.5%) of the gross proceeds of the Initial Public Offering, or $1,437,500, of which the Company will have
the right to pay up to 40% of such amount to other advisors retained by the Company to assist it in connection with a Business Combination.
The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to
the terms of the underwriting agreement.
NOTE 11 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards
of accounting for and disclosure of events that occur after the balance sheet date but before this unaudited financial statements
are issued, the Company has evaluated all events or transactions that occurred after June 30, 2021, up through the date was the
Company issued the unaudited condensed financial statements. During the period, the Company did not have any material subsequent
events other than disclosed above.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References
in this report on form 10-Q (the “Quarterly Report”) to “we,” “us” or the “Company” refer
to Golden Path Acquisition Corporation. References to our “management” or our “management team” refer to our
officers and directors, references to the “Sponsor” refer to Greenland Asset Management Corporation. The following discussion
and analysis of the Company’s financial condition and results of operations should be read in conjunction with the 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.
Background
and Overview
Prior
to completion of its initial public offering on June 24, 2021, Golden Path Acquisition Corporation, a Cayman Islands exempt company
(the “Company”), was a private company incorporated on May 9, 2018. Golden Path is a blank check company incorporated as
a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, stock
purchase, reorganization or similar business combination with one or more businesses.
Our
efforts in identifying prospective target businesses will not be limited to a particular geographic region, although we intend to focus
on businesses that have a connection to the Asian market. We believe that we will add value to these businesses primarily by providing
them with access to the U.S. capital markets.
We
presently have no revenue, have had losses since inception from incurring formation costs and have had no operations other than
completing our initial public offering and since its completion the active solicitation of a target business with which to complete
a business combination. Prior to our initial public offering as described below, we had relied upon the sale of our securities to our
Sponsor and loans from our Sponsor to fund our operations.
On
June 21, 2021, the Company’s registration statement (File No. 333-255297) (the “Registration Statement”) relating to
the initial public offering (“IPO”) was declared effective by the Securities and Exchange Commission.
On
June 24, 2021, the Company consummated the IPO of 5,000,000 units (the “Units”). In addition, the underwriters exercised
in full the over-allotment option for an additional 750,000 Units, resulting in the issuance and sale of an aggregate of 5,750,000 Units.
Each Unit consists of one ordinary share, par value $0.0001 per ordinary share (“Share”), one redeemable warrant (“Warrant”)
entitling its holder to purchase one-half of one Share at a price of $11.50 per Share, and one right to receive one-tenth (1/10) of one
Share upon the consummation of the Company’s initial business combination.
Simultaneously
with the closing of the IPO, the Company consummated a private placement exempt from registration under the Securities Act of 1933, as
amended (“Private Placement”) with its sponsor, Greenland Asset Management Corporation, a British Virgin Islands company
(“Sponsor”) for the purchase of 270,500 Units (the “Private Units”) at a price of $10.00 per Private Unit, generating
total proceeds of $2,705,000, pursuant to the Private Placement Unit Purchase Agreement dated June 17, 2021.
The
Sponsor had previously advanced expenses or loaned the Company the sum of $453,364, evidenced in part by a note dated as of December
19, 2020 which loan was payable upon the earlier of completion of the IPO or December 31, 2021. In connection with the completion of
the IPO, the note was repaid in full via an offset of certain amounts due under the Private Placement subscription.
As
of June 24, 2021, an aggregate total of $58,075,000 of the net proceeds from the IPO and the Private Placement Unit Purchase Agreement
transaction completed with the Sponsor (as described in Item 3.02 below), Greenland Asset Management Corporation, a British Virgin Islands
company, were deposited in a trust account (“Trust Account”) established for the benefit of the Company’s public shareholders,
established with Wilmington Trust, National Association acting as trustee.
Transaction costs for the IPO amounted to $2,887,500,
consisting of $1,150,000 of underwriting fees, $1,437,500 of deferred underwriting fees and $300,000 of other offering costs. In addition,
at June 30, 2021, cash of $509,568 and cash held in escrow of $9,000 were held outside of the Trust Account established at the time of
our IPO and is available for the payment of offering costs and for working capital purposes. An audited balance sheet as of June 24, 2021
reflecting receipt of the proceeds received by the Company in connection with the consummation of the IPO and the Private Placement Unit
Purchase Agreement was previously filed by the Company on a Current Report on Form 8-K filed by the Company on June 30, 2021.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities
Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval
of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may
be a less active trading market for our securities and the prices of our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other
words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of
the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed
to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million
as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during
the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in
the JOBS Act.
We
will have until 12 months from the closing of our IPO to consummate our initial business combination. However, if we anticipate that
we may not be able to consummate our initial business combination within 12 months, we may, by resolution of our board if requested by
our sponsor, extend the period of time to consummate a business combination up to nine times, each by an additional one month (for a
total of up to 21 months to complete a business combination), subject to the sponsor depositing additional funds into the trust account
as set out below. Pursuant to the terms of our memorandum and articles of association and the trust agreement entered into between us,
Wilmington Trust National Association and Vstock Transfer LLC on the closing of our IPO, in order for the time available for us to consummate
our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior to the
applicable deadline, must deposit into the trust account $166,667, or $191,667 if the underwriters’ over-allotment option is exercised
in full (approximately $0.033 per public share in either case), up to an aggregate of $1,500,000 (or $1,725,000 if the underwriters’
over-allotment option is exercised in full), or $0.30 per public share (for an aggregate of 9 months), on or prior to the date of the
applicable deadline, for each extension. In the event that we receive notice from our sponsor five days prior to the applicable deadline
of its wish for us to effect an extension, we intend to issue a press release announcing such intention at least three days prior to
the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or
not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend
the time for us to complete our initial business combination. If we are unable to consummate our initial business combination within
the applicable time period, we will, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public
shares for a pro rata portion of the funds held in the trust account and as promptly as reasonably possible following such redemption,
subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event,
the warrants and rights will be worthless.
Results
of Operations
From
our incorporation until late 2020 we were essentially dormant. In late 2020, we commenced preparing for the initial public offering which
was completed in June, 2021. Since the initial public offering, our activity has been limited to the evaluation of business combination
candidates, and we will not be generating any operating revenues until the closing and completion of our initial business combination.
We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses in connection with our efforts to source a business combination. We expect our expenses
to increase substantially after the June 30th period.
We presently have no revenue, have had losses since
inception from incurring formation costs and have had no operations other than completing our initial public offering and since its completion
the active solicitation of a target business with which to complete a business combination. For the three months ended June 30, 2021 and
2020, we incurred $143,280 and $4,805 in formation, general and administrative expenses, respectively. For the six months ended June 30,
2021 and 2020, we incurred $200,059 and $4,891 in formation, general and administrative expenses, respectively. For the three months ended
June 30, 2021 and 2020, we had net losses of $143,212 and $4,805, respectively and net losses of $199,991 and $4,891 for the six months
ended June 30, 2021 and 2020, respectively.
For
the three and six months ended June 30, 2021, we had net losses of $0.07 and $0.09 per share, respectively.
Liquidity
and Capital Resources
As
of June 24, 2021, an aggregate total of $58,075,000 of the net proceeds from the IPO and the Private Placement Unit Purchase Agreement
transaction completed with the Sponsor (as described in Item 3.02 below), Greenland Asset Management Corporation, a British Virgin Islands
company, were deposited in a trust account established for the benefit of the Company’s public shareholders, established with Wilmington
Trust, National Association acting as trustee.
Transaction
costs for the IPO amounted to $2,887,500, consisting of $1,150,000 of underwriting fees, $1,437,500 of deferred underwriting fees and
$300,000 of other offering costs. In addition, at June 30, 2021, cash of $509,568 and cash held in escrow of $9,000 were held outside
of the Trust Account and is available for the payment of offering costs and for working capital purposes.
We
intend to use substantially all of the net proceeds of the initial public offering, including the funds held in the Trust Account, to
acquire a target business or businesses and to pay our expenses relating thereto. To the extent that our capital stock is used in whole
or in part as consideration to effect our business combination, the remaining proceeds held in the Trust Account, as well as any other
net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds
could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions
and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses
or finders’ fees which we had incurred prior to the completion of our business combination if the funds available to us outside
of the Trust Account were insufficient to cover such expenses.
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
At
the present time, we do not believe we will need to raise additional funds in order to meet the expenditures required for operating our
business which is solely to source a potential business combination target. This belief is based on the fact that while we may begin
preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence,
depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or
other preliminary agreement that addresses the terms of our initial business combination. However, if our estimate of the costs of undertaking
in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount
of interest available to use from the trust account is minimal as a result of the current interest rate environment, we may be required
to raise additional capital, the amount, availability and cost of which is currently unascertainable. In this event, we could seek such
additional capital through loans or additional investments from our Sponsor or members of our management team, but neither the Sponsor
nor members of our management team are under any obligation to advance funds to, or invest in, us. In the event that the 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. Such loans would be evidenced by promissory notes. The notes would either be
paid upon consummation of our business combination, without interest, or, at the lender’s discretion, up to $1,500,000 of the notes
may be converted upon consummation of our business combination into additional Private Units at a price of $10.00 per unit. The terms
of such loans by our initial Sponsor, officers and directors, or their affiliates, if any, have not been determined and no written agreements
exist with respect to such loans.
Off-balance
sheet financing arrangements
We
have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of June 30, 2021. 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
As
of June 30, 2021 we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other
than an agreement to pay our Sponsor a monthly fee of $10,000 for general and administrative services, including office space, utilities
and administrative services to the Company. We began incurring these fees on June 24, 2021 and will continue to incur these fees monthly
until the earlier of the completion of the business combination and the Company’s liquidation.
Critical
Accounting Policies
Use
of Estimates
The
preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United
States of America (“GAAP”) 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. The Company has not identified any significant accounting
policies.
Cash
and Investments
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
There were no cash equivalents as of June 30, 2021 and December 31, 2020. The Company classifies marketable securities as available-for-sale
at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities are recorded at
their estimated fair value. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive loss. The
Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired. Impairments
are considered other than temporary if they are related to deterioration in credit risk or if it is likely the Company will sell the
securities before the recovery of the cost basis. Realized gains and losses and declines in value determined to be other than temporary
are determined based on the specific identification method and are reported in other income (expense), net in the statements of operations.
Warrant
Related Accounting Policies
The Company accounts for
warrants as 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 ordinary shares and whether the warrant holders could potentially require “net
cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. Certain
terms and conditions of the public warrants and private warrants result in the classification of these financial instruments as a liability
as opposed to equity. The classification of these financial instruments as a liability results in the application of derivative liability
accounting, which entails a quarterly valuation of these liabilities with any change in value required to be reflected in our quarterly
and annual financial statements. The determination by us to classify the public warrants and private warrants as a liability results
in us having to incur significant expense in valuing such liabilities on a quarterly and annual basis, and the resulting liability is
and will be reflected on our financial statements, and such classification and ongoing expense may make it more difficult for us to complete
an initial business combination.
Ordinary
Shares as Temporary Equity
The Company accounts
for its ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Ordinary shares subject to mandatory
redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares
(including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon
the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times,
ordinary shares are classified as shareholders’ equity. As of June 30, 2021, 5,750,000 ordinary shares subject to possible redemption
which are subject to occurrence of uncertain future events and considered to be outside of the Company’s control , are presented
as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.