Item 7. Management’s Discussion and Analysis
Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the
Company’s financial condition and results of operations should be read in conjunction with the audited financial statements and
the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report
on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual
results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Certain information
contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary
Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Item 1A. Risk Factors” and elsewhere in this Annual
Report on Form 10-K.
Overview
We are a blank check company incorporated in
the Cayman Islands on November 23, 2020, formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses that we have not yet identified. We intend
to effectuate our business combination using cash derived from the proceeds of the Initial Public Offering and the sale of the private
placement warrants, our shares, debt or a combination of cash, shares and debt.
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We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from November 23, 2020 (inception) through December 31, 2024 were organizational
activities, those necessary to prepare for the Initial Public Offering, described below, and subsequent to the Initial Public Offering,
identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion
of our business combination. We generate non-operating income in the form of interest income from the proceeds derived from the Initial
Public Offering held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting
and auditing compliance), as well as for due diligence expenses.
For the year ended December 31, 2024, we had
a net income of $8,671,665, which consisted of interest earned on marketable securities held in the Trust Account of $9,236,638, partially
offset by organizational and operational costs of $564,973.
For the year ended December 31, 2023, we had
net loss of $14,041, which consists of organizational and operational costs.
Liquidity and Capital Resources
Until the consummation of the Initial Public Offering,
our only source of liquidity was an initial purchase of shares of Class B ordinary shares, par value $0.0001 per share, by our co-sponsors
in the amount of $25,000 and loans from our co-sponsors or their affiliates pursuant to promissory notes. These loans are non-interest
bearing, unsecured and are due at the earlier of the consummation of our initial business combination and the second anniversary of the
consummation of our Initial Public Offering. As of December 31, 2024, there was a total amount of $400,000 outstanding under such
promissory notes, of which $200,000 remains outstanding under the promissory note with GP Sponsor, $100,000 remains outstanding under
the promissory note with Boxcar Partners Two, LLC, an affiliate of Boxcar sponsor, and $100,000 remains outstanding under the promissory
note with Act III sponsor.
On May 13, 2024, we consummated the Initial
Public Offering of 28,750,000 Units, which includes the full exercise by the underwriter of its over-allotment option in the amount of
3,750,000 Units, at $10.00 per Unit, generating gross proceeds of $287,500,000. Simultaneously with the closing of the Initial Public
Offering, we consummated the sale of 7,000,000 private placement warrants to Sponsor HoldCo and to Cantor at a price of $1.00 per Private
Placement Warrant, generating gross proceeds of $7,000,000, including the purchase by the non-managing HoldCo investors, indirectly through
the purchase of non-managing Sponsor HoldCo membership interests, if 4,025,000 private placement warrants at a price of $1.00 per warrant.
Following the Initial Public Offering and the
private placement, a total of $287,500,000 ($10.00 per Unit) was placed in the Trust Account. We incurred transaction costs of $20,269,166
consisting of $5,000,000 of cash underwriting fee, $13,687,500 of deferred underwriting fee (see additional discussion in Note 6
of the financial statements), and $1,581,666 of other offering costs.
For the year ended December 31, 2024, cash used
in operating activities was $584,718. Net income of $8,671,665 was affected by interest earned on marketable securities held in the Trust
Account of $9,236,638. Changes in operating assets and liabilities used $19,745 of cash for operating activities.
For the year ended December 31, 2023, cash used
in operating activities was $10,970. Net loss of $14,041 was affected by changes in operating assets and liabilities used $2,000 of cash
for operating activities and payment of operating expenses through advances from related party of $1,071.
As of December 31, 2024, we had marketable securities
held in the Trust Account of $296,736,638 (including approximately $9,236,638 of interest income). We may withdraw interest from the
Trust Account to pay taxes, if any. We intend to use substantially all of the funds held in the Trust Account, including any amounts
representing interest earned on the Trust Account (less permitted withdrawals and deferred underwriting discounts and commissions), to
complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration
to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance
the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
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As of December 31, 2024, we had cash of $483,572.
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, structure, negotiate
and complete a business combination, and to pay for directors and officers liability insurance premiums. We have incurred and expect
to continue to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs
in pursuit of the consummation of a business combination.
We initially have until May 13, 2026
to consummate the initial business combination (assuming no extensions). If we do not complete a business combination, we will trigger
an automatic winding up, dissolution and liquidation pursuant to the terms of the Amended and Restated Memorandum and Articles of Association.
Notwithstanding management’s belief that we would have sufficient funds to execute its business strategy, there is a possibility
that business combination might not happen within the 24-month period from the date of the auditors’ report.
In connection with our assessment of going concern considerations in accordance with ASC 205-40, “Going Concern”, as of December
31, 2024, we may need to raise additional capital through loans or additional investments from our co-sponsors, Sponsor HoldCo, stockholders,
officers, directors, or third parties. Our officers, directors and co-sponsors may, but are not obligated to, loan us funds, from time
to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly,
we may not be able to obtain additional financing. If we are unable to raise additional capital, it may be required to take additional
measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit
of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to it
on commercially acceptable terms, if at all.
Management plans to address this uncertainty through a business combination.
If a business combination is not consummated within 24 months from the closing of the Initial Public Offering, currently May 13, 2026,
there will be a mandatory liquidation and subsequent dissolution. Management has determined that the liquidity condition raises substantial
doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities
should we be required to liquidate within 24 months from the closing of the Initial Public Offering. We intend to complete the initial
business combination before the end of the 24-month period. However, there can be no assurance that we will be able to consummate any
business combination by the end of this period or at all.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of December 31, 2024. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an aggregate of $5,000 per month
to the affiliate of GPIAC II, LLC for office space, administrative and support services. We began incurring these fees on May 8,
2024 and will continue to incur these fees monthly until the earlier of the completion of the business combination and our liquidation.
The underwriter is entitled to a deferred fee
of (i) $0.45 per Unit sold in the base offering of the Initial Public Offering, or $11,250,000 in the aggregate, and (ii) $0.65
per Unit sold pursuant to the underwriter’s over-allotment option, or up to an additional $2,437,500 in the aggregate ($13,687,500
in total). Considering that the underwriter’s over-allotment option was exercised in full, the deferred underwriter’s fee
of $13,687,500 will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company
completes an initial business combination subject to the terms of the underwriting agreement.
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Critical Accounting Estimates
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements,
and income and expenses during the periods reported. Making estimates requires management to exercise significant judgement. 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, actual results could materially differ from those estimates. As of December 31, 2024 and
2023, we did not have any critical accounting estimates to be disclosed.
Net Income per Ordinary Share
We comply with accounting and disclosure requirements
of ASC 260, Earnings Per Share. We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary
shares. Income and losses are shared pro rata between the two classes of shares. Net income per ordinary share is calculated by dividing
the net income by the weighted average ordinary shares outstanding for the respective period. Diluted net income per share attributable
to ordinary shareholders adjust the basic net income per share attributable to ordinary shareholders and the weighted-average ordinary
shares outstanding for the potentially dilutive impact of outstanding warrants. However, because the warrants are anti-dilutive, diluted
income per ordinary share is the same as basic income per ordinary share for the periods presented.
Recent Accounting Standards
In March 2024, the FASB issued ASU 2024-01, “Compensation-
Stock Compensation (Topic 718): Scope Application of Profit Interest and Similar Awards” (“ASU 2024-01”). This ASU
provides clarification on when profit interest awards should be accounted for similar to a cash bonus or profit-sharing arrangement in
accordance with ASC 710 or as a share-based payment arrangement in accordance with ASC 718. The FASB issued this ASU to address diversity
in the practice of accounting for profit interest awards. Management does not believe the adoption of ASU 2024-01 will have a material
impact on the accompanying financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07,
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an
annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”),
as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that
a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment
profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all
annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to
provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective
for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early
adoption permitted. The Company adopted ASU 2023-07 as required for the year ended December 31, 2024. The adoption requires us to provide
additional disclosures, but otherwise it does not materially impact our financial statements.
Management does not
believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on
the Company’s financial statements.
Item 7.A. Quantitative
and Qualitative Disclosure About Market Risk.
We are a smaller reporting company as defined
by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
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