UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission file number: 001-40585
GOOD WORKS II ACQUISITION CORP.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | ||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
4265 San Felipe, Suite 603
Houston, Texas 77027
(713) 468-2717
(Address of Principal Executive Offices, Zip Code and Registrant’s Telephone Number, Including Area Code)Number)
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class | Trading Symbol (s) | Name of each exchange on which registered | ||
Common Stock, par value $0.001 per share | The NASDAQ Stock Market LLC | |||
Warrants, each whole warrant exercisable for | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
Indicate by check mark whether the registrant has submitted electronically if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | |||
| Non-Accelerated Filer | Smaller Reporting Company | ☒ | ||||
| Emerging Growth Company | ☒ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
The registrant had 29,400,000
TABLE OF CONTENTS
| Page | ||||||
| PART I FINANCIAL INFORMATION | ||||||
| Item 1. | ||||||
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
| 15 | ||||||
| 19 | ||||||
| Item 4. | Controls and Procedures | 19 | ||||
| PART II OTHER INFORMATION | ||||||
| Legal Proceedings | 20 | |||||
| Risk Factors | 20 | |||||
| 20 | ||||||
| 20 | ||||||
| 20 | ||||||
| 20 | ||||||
| Exhibits | 21 | |||||
| 22 | ||||||
i
As of | ||||||||
June 30, 2021 | December 31, 2020 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 28,354 | $ | 3,000 | ||||
| Deferred offering costs | 315,793 | — | ||||||
Total Current Assets | $ | 344,147 | $ | 3,000 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 189,750 | $ | 2,450 | ||||
Promissory note payable to related party | 150,000 | — | ||||||
Total Current Liabilities | 339,750 | 2,450 | ||||||
Commitments and Contingencies (Note 6) | 0 | 0 | ||||||
Stockholders’ Equity | ||||||||
Common stock, $0.0001 par value, 10,000,000 shares authorized, 5,750,000 shares issued and outstanding on June 30, 2021, 3,800,000 shares issued and outstanding on December 31, 2020 | 575 | 380 | ||||||
Additional paid-in capital | 8,425 | 2,620 | ||||||
Accumulated deficit | (4,603 | ) | (2,450 | ) | ||||
Total Stockholders’ Equity | 4,397 | 550 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 344,147 | $ | 3,000 | ||||
(UNAUDITED)
| As of | ||||||||
| March 31, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Cash | $ | 1,086,643 | $ | 1,335,598 | ||||
| Prepaid expenses and other | 727,419 | 820,787 | ||||||
| Total Current Assets | 1,814,062 | 2,156,385 | ||||||
| Investment held in Trust Account | 230,098,376 | 230,036,932 | ||||||
| Total Assets | $ | 231,912,438 | $ | 232,193,317 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accrued Expenses | $ | 58,500 | $ | 150,719 | ||||
| Total Current Liabilities | 58,500 | 150,719 | ||||||
| Commitments and Contingencies | ||||||||
| Common stock subject to possible redemption, 23,000,000 shares at March 31, 2022 and December 31, 2021, at redemption value | 230,000,000 | 230,000,000 | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized, 6,400,000 shares issued and outstanding on March 31, 2022 and December 31, 2021 (excluding 23,000,000 shares subject to possible redemption) | 640 | 640 | ||||||
| Additional paid-in capital | 2,546,017 | 2,546,017 | ||||||
| Accumulated deficit | (692,719 | ) | (504,059 | ) | ||||
| Total Stockholders’ Equity | 1,853,938 | 2,042,598 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 231,912,438 | $ | 232,193,317 | ||||
The accompanying notes to unaudited condensed consolidatedare an integral part of these financial statements.
GOOD WORKS II ACQUISITION CORP.
STATEMENTS OF OPERATIONS
For the three months ended June 30, 2021 | For the six months ended June 30, 2021 | |||||||
2021 | 2021 | |||||||
Formation and operating costs | $ | 1,218 | $ | 2,153 | ||||
Net Loss | $ | (1,218) | $ | (2,153 | ) | |||
Weighted average shares outstanding, basic and diluted (1) | 5,000,000 | 4,536,740 | ||||||
Basic and diluted net loss per common share | $ | (0.00) | $ | (0.00 | ) | |||
(UNAUDITED)
| For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | |||||||
| Formation and operating costs | $ | 287,037 | $ | 935 | ||||
| Loss from operations | (287,037 | ) | (935 | ) | ||||
| Other Income (expense) | ||||||||
| Income on Investment held in Trust Account | 98,377 | - | ||||||
| Total Other Income (expense) | 98,377 | - | ||||||
| Net Loss | $ | (188,660 | ) | $ | (935 | ) | ||
| Basic and diluted weighted average redeemable common shares outstanding | 23,000,000 | - | ||||||
| Basic and diluted net loss per redeemable common share | $ | (0.01 | ) | $ | - | |||
| Basic and diluted weighted average non-redeemable common shares outstanding | 6,400,000 | 4,068,333 | ||||||
| Basic and diluted net loss per non-redeemable common share | $ | (0.01 | ) | $ | (0.00 | ) | ||
The accompanying notes are an integral part of these financial statements.
GOOD WORKS II ACQUISITION CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance – December 31, 2021 | 6,400,000 | $ | 640 | $ | 2,546,017 | $ | (504,059 | ) | $ | 2,042,598 | ||||||||||
| Net Loss | - | - | - | (188,660 | ) | (188,660 | ) | |||||||||||||
| Balance – March 31, 2022 | 6,400,000 | $ | 640 | $ | 2,546,017 | $ | (692,719 | ) | $ | 1,853,938 | ||||||||||
| Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance – December 31, 2020 | 3,800,000 | $ | 380 | $ | 2,620 | $ | (2,450 | ) | $ | 550 | ||||||||||
| Issuance of common stock to Management and Anchor Investors | 1,950,000 | 195 | 5,805 | - | 6,000 | |||||||||||||||
| Net Loss | - | - | (935 | ) | (935 | ) | ||||||||||||||
| Balance – March 31, 2021 | 5,750,000 | $ | 575 | $ | 8,425 | $ | (3,385 | ) | $ | 5,615 | ||||||||||
The accompanying notes are an integral part of these financial statements.
Additional Paid-in Capital | Total Stockholders’ Equity | |||||||||||||||||||
Common Stock | Accumulated Deficit | |||||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance — December 31, 2020 | 3,800,000 | $ | 380 | $ | 2,620 | $ | (2,450 | ) | $ | 550 | ||||||||||
Issuance of common stock to Management | 1,950,000 | 195 | 5,805 | — | 6,000 | |||||||||||||||
Cancellation of common stock by Founder | (1,166,666 | ) | (117 | ) | (804 | ) | — | (921 | ) | |||||||||||
Issuance of common stock to Anchor Investors | 1,166,666 | 117 | 804 | 921 | ||||||||||||||||
Net loss | — | — | — | (935 | ) | (935 | ) | |||||||||||||
Balance-March 31, 2021 | 5,750,000 | 575 | 8,425 | (3,385 | ) | 5,615 | ||||||||||||||
Issuance of common stock to Directors | 240,000 | 24 | 165 | 0 | 189 | |||||||||||||||
Cancellation of common stock by Founder | (240,000 | ) | (24 | ) | (165 | ) | 0 | (189 | ) | |||||||||||
Issuance of common stock | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Net Loss | (1,218 | ) | (1,218 | ) | ||||||||||||||||
Balance- | 5,750,000 | $ | 575 | $ | 8,425 | $ | (4,603 | ) | $ | 4,397 | ||||||||||
GOOD WORKS II ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the three months ended March 31, 2022 | For the three months March 31, 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (188,660 | ) | $ | (935 | ) | ||
| Interest on investment held in Trust Account | (61,444 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid and other | 93,368 | - | ||||||
| Accrued expenses | (92,219 | ) | (1,434 | ) | ||||
| Net cash used in operating activities | (248,955 | ) | (2,369 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from issuance of common stock | - | 6,000 | ||||||
| Proceeds from affiliate promissory note | - | 125,000 | ||||||
| Payment of offering costs | - | (53,573 | ) | |||||
| Net cash provided by financing activities | - | 77,427 | ||||||
| Net change in cash | (248,955 | ) | 75,058 | |||||
| Cash at beginning of period | 1,335,598 | 3,000 | ||||||
| Cash at end of period | $ | 1,086,643 | $ | 78,058 | ||||
| Cash paid for taxes | $ | 97,242 | $ | - | ||||
The accompanying notes are an integral part of these financial statements.
Six Months Ended June 30, 2021 | ||||
Cash Flows from Operating Activities: | ||||
Net loss | $ | (2,153 | ) | |
Changes in operating assets and liabilities: | ||||
Accrued expenses | 187,300 | |||
Net cash provided by operating activities | 185,147 | |||
Cash Flows from Financing Activities: | ||||
Payment of offering costs | (315,793 | ) | ||
Proceeds from promissory note payable-related party | 150,000 | |||
Proceeds from the issuance of common stock | 6,000 | |||
Net cash used in financing activities | (159,793 | ) | ||
Net change in cash | 25,354 | |||
Cash-beginning of period | 3,000 | |||
Cash-end of period | $ | 28,354 | ||
GOOD WORKS II ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2022 AND 2021
(UNAUDITED)
Note 1 – Description of Organization and Business Operations
Good Works II Acquisition Corp. (the “Company”) was incorporated in Delaware on July 27, 2020. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).
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 March 31, 2022, the Company has not commenced operations. All activity for the periodsperiod from July 27, 2020 (inception) through June 30, 2021 relateMarch 31, 2022 relates to the Company’s formation, and the initial public offering (“Initial Public Offering”) and activities in connection with the search for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generateOffering.Offering and placed in the Trust Account (defined below). The Company has selected December 31 as its fiscal year end.
Initial Public Offering
On July 14, 2021, the Company completed the sale of 23,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”, and with respect to the holders of those shares, “Public Stockholders”) at $10.00 per Unit, generating gross proceeds of $230,000,000 which is described in Note 3.
Simultaneous with the closing of the IPO, the Company completed the sale of 350,000 Private Units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to certain funds and accounts managed by Glazer Capital LLC, Magnetar Financial LLC, Mint Tower Capital Management B.V., Periscope Capital Inc., and Polar Asset Management Partners Inc. (collectively, the “Anchor Investors”), generating gross proceeds of $3,500,000, which is described in Note 4.
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). Management agreed that an amount equal to at least $10.00 per Unit sold in the Public Offering will be held in a trust account (“Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”)Stockholders 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 stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, 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. In the event of a complete liquidation of the Company, the Trust Account could be further reduced by up to $100,000 for expenses of the liquidation). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 immediately before or after such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S.
The Sponsor and the Company’s management and Directors have agreed (a) to waive their redemption rights with respect to their Founder Shares and any Public Shares held by them in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to consummate a Business Combination and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Anchor Investors have agreed (a) to waive their redemption rights with respect to their Founder Shares and Private Shares held in connection with the completion of a Business Combination, and (b) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares and Private Shares if the Company fails to consummate a Business Combination.
The Company has 15 months from the closing of the Public Offering to complete a Business Combination (the “Combination Period”), unless it undertakes to extend the Combination Period, which would require an amendment to the Company's Amended and Restated Certificate of Incorporation, which may not be affected unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment). 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 not more than ten business days thereafter, redeem the Public Shares, at a
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed an agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. 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.
Risks and Uncertainties
Management continues to evaluate the impact of Contents
Liquidity and Capital Resources
As of March 31, 2022, the Company had approximately $1.1 million in its operating bank account and working capital of approximately $1.8 million.
The Company’s liquidity needs up to July 14, 2021, the date of the IPO, were satisfied through a payment from the Sponsor for the Founder Shares and the loan under an unsecured promissory note from the Sponsor of $150,000 to cover certain offering costs prior to the consummation of the IPO. The promissory note was fully repaid as of July 14, 2021. Subsequent to the consummation of the IPO, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the IPO and the private placement held outside of the Trust Account. In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans, as defined below (see Note 4). As of March 31, 2022, there were no amounts outstanding under any Working Capital Loans.
The Company incurred, and expects to continue to incur, additional significant costs in pursuit of its financing and acquisition plans including the proposed Business Combination. In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements-Going Concern,” the Company has until October 14, 2022 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after October 14, 2022.
The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, it may have insufficient funds available to operate prior to the Business Combination. Moreover, the Company may need to obtain additional financing either to complete the Business Combination or because it may become obligated to redeem a significant number of Public Shares upon consummation of the Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of the Business Combination. If the Company is unable to complete the Business Combination because it does not have sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
Use of Estimates
The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $28,354$1,086,643 and $3,000$1,335,598 as of June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
Cash and securities held in Trust Account
As of March 31, 2022 and December 31, 2021, the assets held in the Trust Account consisted of cash and U.S. Treasury securities in the amount of $230,098,376 and $230,036,932, respectively. During the three months ended March 31, 2022, the Company withdrew $36,932 from the Trust in accordance with the Trust Agreement to pay its taxes, if any.
Offering costs
The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Offering costs consist principally of legal, accounting, underwritingprofessional and registration fees and other costs incurred through the consolidated balance sheet date that are directly related to the Initial Public Offering that occurred on July 14, 2021,IPO and that were charged to stockholder’sstockholders’ equity upon the completion of the Initial
Public Offering.
Fair Value Measurements
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At June 30, 2021,As of March 31, 2022, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Common Stock Subject to Possible Redemption
The Company accounts for common stock subject to possible redemption in accordance with the guidance in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of its control and subject to the occurrence of uncertain future events. Accordingly, 23,000,000 shares of common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the balance sheet.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit. On July 14, 2021, the Company recorded an accretion of $3,962,343 in additional paid-in capital.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were 0no unrecognized tax benefits and 0no amounts accrued for interest and penalties as of JuneSeptember 30, 2021 and 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 is subject to income tax examinations by major taxing authorities since inception.
The Company recorded a full valuation allowance for all periods presented. As such the provisionsprovision for income taxes was 0zero for the sixthree months ended June 30, 2021March 31, 2022 and the deferred tax asset was 0zero as of June 30, 2021March 31, 2022 and December 31, 2020.
Net Income (loss) Per Common Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss)loss per share is computed by dividing income (loss)net loss by the weighted-averageweighted average number of shares of common stock outstanding during the period, excludingperiod. The Company applies the two-class method in calculating income per share of common stock. Accretion associated with the redeemable shares of common stock subject to forfeiture byis excluded from income per common share as the Sponsors. Weighted average shares were reduced forredemption value approximates fair value.
The calculation of diluted income per share of common stock does not consider the effect of an aggregatethe warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of 750,000 sharesthe warrants is contingent upon the occurrence of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 7).
The following table reflects the calculation of basic and diluted net loss per common share:
| For the three months ended March 31, 2022 | For the three months ended March 31, 2021 | |||||||||||||||
| Redeemable Common Stock | Non-Redeemable Common Stock | Redeemable Common Stock | Non-Redeemable Common Stock | |||||||||||||
| Basic and diluted net loss per share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | (147,591 | ) | $ | (41,069 | ) | $ | - | $ | (935 | ) | |||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | 23,000,000 | 6,400,000 | - | 4,068,333 | ||||||||||||
| Basic and diluted net loss per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | - | $ | (0.00 | ) | |||||
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt—Debt with Conversion and Other Options for convertible instruments and introducing other changes. As a result of ASU No. 2020-06, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost and more convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no features require bifurcation and recognition as derivatives. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted ASU No. 2020-06 upon its incorporation. The impact to our balance sheet, statement of operations and cash flows was not material.
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3–3 – Initial Public Offering
Pursuant to the IPO on July 14, 2021 the Company sold
An aggregate of $10.00 per Unit sold in the Initial Public Offering was held in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of
Note 4 – Private Placement
Simultaneously with the closing of the IPO, the
Note 5 – Related Party Transactions
Founder Shares
In September 2020,
Of the Founder Shares, several of the Founders were holding an aggregate of 750,000 shares which they havehad agreed to contribute to a
The Founders and Anchor Investor have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of earlier of (1) one year after the completion of the Business Combination and (2) the date on which the Company consummates a liquidation, merger, capital stock exchange, reorganization, or other similar transaction after the Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any
Related Party Loans
Promissory Note
On February 12, 2021, the Company issued an unsecured promissory note to IBS Holding Corporation (the “Promissory Note”), an affiliate of the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $425,000.
Working Capital Loans
In addition, in order to finance transaction costs in connection with a Business Combination, Sponsor and its designees may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into Private Units of the post Business Combination entity at a price of $10.00 per Private Unit. The Private Units are identical to the Private Units issued in the private placement.
Administrative Support Agreement
The Company has agreed, commencing on the Effective Date of the registration statement through the earlier of the Company’s consummation of a Business Combination and the liquidation of the Trust Account, to pay an affiliate of one of the Company’s executive officers $10,000 per month for office space, utilities and secretarial and administrative support. The Company has incurred $90,000 pursuant to this agreement through March 31, 2022.
Note 6 – Commitments
As of March 31, 2022, investment in the Company’s Trust Account consisted of $1,069 in a money market account and $230,097,307 in U.S. Treasury Securities. All of the U.S. Treasury Securities matured on December 31, 2021 and were reinvested in U.S. Treasury Securities maturing June 30, 2022. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC 320 “Investments — Debt and Equity Securities”. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The Company considers all investments with original maturities of more than three months but less than one year to be short-term investments. The carrying value approximates the fair value due to its short-term maturity. The carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities on March 31, 2022 are as follows:
| Carrying Value/Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of March 31, 2022 | |||||||||||||
| Cash held in Trust Account | $ | 1,069 | $ | - | $ | - | $ | 1,069 | ||||||||
| U.S. Treasury Securities | 230,097,307 | - | (178,549 | ) | 229,918,758 | |||||||||||
| $ | 230,098,376 | $ | - | $ | (178,549 | ) | $ | 229,919,827 | ||||||||
Note 7 – Commitments and Contingencies
Registration Rights
The holders of the Founder Shares, as well as the holders of the Private Units and any Private Warrants or Private Units that may be issued in payment of Working Capital Loans made to the Company (and all underlying securities), are entitled to registration rights pursuant to an agreement executed prior to the effective date of IPO. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The
Underwriting Agreement
The Company granted the underwriters a 45-day option from the date of Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Public Offering price less the underwriting discounts and commissions.
Business Combination Marketing Agreement
The Company has engaged
Administrative Support Agreement
Refer to Note 5 for discussion of the administrative support agreement.
Note 78 – Stockholders’ Equity
Common Stock
Warrants - The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Public Offering. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period
Once the warrants become exercisable, the Company may redeem the Public Warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon not less than 30 days’ prior written notice of redemption; |
| ● | if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and |
| ● | if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the 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 Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be
The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. 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 the respect to such warrants. Accordingly, the warrants may expire worthless.
Note 89 – Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. The Company identified oneno subsequent event on July 14, 2021 related to the initial public offering.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form
Overview
We are a blank check company incorporated on July 27, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stockshare exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.businesses (a “Business Combination”). We have not selected any specific business combination targetconsummated our Public Offering (as defined below) on July 14, 2021 and we have not, nor has anyone on our behalf, engagedare currently in any substantive discussions directly or indirectly, with any business combination target with respect to an initial business combination with us. In addition, we have not contacted anythe process of the prospective target businesses that Good Works I had considered and rejected while such entity was a blank check company searching for target businesses to acquire. While our efforts in identifying a prospective target businesslocating suitable targets for our initial business combination will not be limited to a particular industry or geographic region, we intend to initially focus our search on identifying a prospective target business experiencing very high-growth.combination. We intend to effectuateuse the cash proceeds from our initial business combination using cash fromPublic Offering and the proceedsPrivate Placement described below as well as additional issuances, if any, of this offering, shares issued to the owners of the target,our capital stock, debt issued to bank or other lenders or the owners of the target, additional equity raised through a public or private offering, or a combination of cash, stock and debt to complete the foregoing.Business Combination.
We expect to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to raise capital or to complete our initial Business Combination will be successful.
We completed the sale of 23,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit on July 14, 2021. Simultaneous with the closing of the Public Offering, we completed the sale of 350,000 Private Units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to certain funds and accounts managed by Glazer Capital LLC, Magnetar Financial LLC, Mint Tower Capital Management B.V., Periscope Capital, Inc., and Polar Asset Management Partners Inc. (collectively, the “Anchor Investors”).
As of March 31, 2022, a total of $230,098,376 of the net proceeds from the IPO (including the partial exercise of the over-allotment option) and the Private Placements were in a trust account established for the benefit of the Company’s public shareholders. The trust fund account is invested in interest-bearing U.S. government securities and the income earned on those investments is also for the benefit of our public shareholders.
Our management has broad discretion with respect to the specific application of the net proceeds of IPO and the Private Placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a business combination.
Results of Operations and Known Trends or Future Events
As of Contents
For the sixthree months ended June 30,March 31, 2022, we had a net loss of $188,660 which consisted of $287,037 in operating expenses incurred offset by $98,377 in interest income from investments held in the Trust Account.
For the three months ended March 31, 2021, we had a net loss of $2,153$935 which consisted of operating expenses incurred.
The loss in the quarter ended March 31, 2022 was greater than the loss in the quarter ended March 31, 2021 because the Company had not yet completed its IPO.
Liquidity and Capital Resources
As of June 30, 2021March 31, 2022, we had $28,354cash outside our trust account of cash.
Pursuant to the IPO on July 14, 2021 the Company sold 23,000,000 Units (including 3,000,000 Units of over-allotment options that was fully exercised) at a price of $10.00 per Unit. Each Unit consists of one share of common stock and
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding the business combination marketing fees payable to
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination. However, if our estimates of the costs of identifying a target business, undertaking
We expect our primary liquidity requirements during the period after the offering and prior to our initial business combination to include approximately $600,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $250,000 for legal and accounting fees related to regulatory reporting requirements; $72,500 for Nasdaq continued listing fees; and approximately $177,500 for general working capital that will be used for miscellaneous expenses and reserves. We willare also paypaying an affiliate of one of our officers $10,000 per month for office space, secretarial and administrative services provided to members of our management team subsequent to the closing of this offering.team.
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a
Moreover, we may need to obtain additional financing either to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust accountBusiness Combination or because we become obligated to redeem a significant number of our public shares upon completionconsummation of the business combination,our Business Combination, in which case we may issue additional securities or incur debt in connection with such business combination.Business Combination. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of thisour initial public offering and the sale of the private placement units, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in
Off-Balance
We did not have any
Contractual Obligations
As of June 30, 2021,March 31, 2022, we did not have any long-term debt, capital or operating lease obligations.
We entered into an administrative support agreement pursuant to which we will pay an affiliate of one of our directors for office space and secretarial and administrative services provided to members of our management team, in an amount not to exceed $10,000 per month.
We have engaged I-Bankers as an advisor in connection with our acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar Business Combination with one or more businesses or entities. We will pay I-Bankers for such services a fee equal to 3.5% of the gross proceeds of the Public Offering.
Critical Accounting Policies
Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our unauditedaudited financial information. We describe our significant accounting policies in Note 2 – Summary of Significant Accounting Policies, of the Notes to Financial Statements included in this report.report, with those considered critical outlined below. Our unauditedaudited financial statements have been prepared in accordance with U.S. GAAP. Certain of our accounting policies require that management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.
Common Stock Subject to Possible Redemption
We account for common stock subject to possible redemption in accordance with the guidance in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, 23,000,000 shares of common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of our balance sheet at March 31, 2022 and December 31, 2021.
Net Income (loss) Per Common Stock
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. We apply the two-class method in calculating income per share of common stock. Accretion associated with the redeemable shares of common stock is excluded from income per common share as the redemption value approximates fair value.
The calculation of diluted income per share of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of March 31, 2022 and December 31, 2021, we did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in our earnings. As a result, diluted net income per common share is the same as basic net income per common share for the periods presented.
Recent Accounting Standards
Our management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of March 31, 2022, we were not subject to any material market or interest rate risk. Following the consummation of our Public Offering, the net proceeds of this offeringthe Public Offering and the sale of the private placement units heldPrivate Placement, including amounts in the trust account will beTrust Account, were invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule
We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are not currentlyprocedures that are designed with the objective of ensuring that information required to maintain an effective systembe disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of internalensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as defined by Section 404of March 31, 2022, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of March 31, 2022, our disclosure controls and procedures were effective.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the Sarbanes-Oxley Act. Wedisclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will be required to comply with thesucceed in achieving its stated goals under all potential future conditions.
Management’s Report on Internal Controls Over Financial Reporting
This Report does not include a report of management’s assessment regarding internal control requirements of the Sarbanes- Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filerover financial reporting or an accelerated filer and no longer an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantagereport 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 requirement.
Changes in areas such as:
There were no changes in the period to which they relate;
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On July 14, 2021, we consummated our initial public offering (“IPO”) of 20,000,000 Units. The Units were sold at a price of $10.00 per unit, generating gross proceeds of $200,000,000. In September 2020,connection with the Sponsor, andIPO, the Company’s officers and directors (collectively,underwriters were granted a 45-day option from the “Founders”date of the IPO prospectus (the “Over-Allotment Option”) to purchase up to 3,000,000 additional units to cover over-allotments (the “Over-Allotment Units”), if any. On July 14, 2021, the underwriters purchased an additional 3,000,000 Over-Allotment Units pursuant to the full exercise of the Over-Allotment Option. The Over-Allotment Units were sold at an offering price of $10.00 per Over-Allotment Unit, generating aggregate additional gross proceeds of $30,000,000 to the Company.
Simultaneously with the closing of the IPO, pursuant to certain subscription agreements, we completed a private sale of an aggregate of 4,312,500 shares350,000 units (the “Founder Shares”“Private Placement Units”) ofto the Company’s common stock for an aggregate price of $3,000. In February 2021, Sponsor forfeited 512,500 Founders Shares and the certain of our officers and directors purchased 1,950,000 Founder Shares for an aggregate purchase price of approximately $6,000, or approximately $0.003 per share. In March 2021, the Sponsor forfeited an aggregate of 1,166,666 Founder Shares and our Anchor Investors purchased an aggregate of 1,166,666 shares for an aggregate purchase price of $921. In April 2021, the Sponsor forfeited an aggregate of 240,000 Founder Shares and certain of our directors purchased an aggregate of 240,000 shares foranchor investors at a purchase price of approximately $192.$10.00 per Private Placement Unit, generating gross proceeds to the Company of $3,500,000. The Private Placement Units are identical to the Units sold in the IPO except that the private placement warrants included in the Private Placement Units: (i) will not be redeemable by the Company and (ii) may be exercised for cash or on a cashless basis, as described in the Registration Statement, in each case so long as they are held by the initial purchasers or any of their permitted transferees. If the private placement warrants are held by holders other than the initial purchasers or any of their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the Units sold in the IPO. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the founder sharesPrivate Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
I-Bankers was representative of the several underwriters. The securities sold in the IPO were registered under the Securities Act on a registration statement on Form S-1 (No. 333-254462). The SEC declared the registration statement effective on July 14, 2021.
We paid a total of $600,000 in underwriting discounts and commissions and $1,650,000 for other costs and expenses related to the IPO. I-Bankers, representative of the several underwriters in the IPO, received a portion of the underwriting discounts and commissions related to the IPO. We also repaid the promissory note to an affiliate of our sponsor from the proceeds of the IPO. After deducting the underwriting discounts and commissions and incurred offering costs, the total net proceeds from our IPO (including the Units sold in the Over-Allotment Option) and the sale of the private placement units was $231,250,000, of which $230,000,000 (or $10.00 per unit sold in the IPO) was placed in the trust account. Other than as described above, no payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of | |
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GOOD WORKS II ACQUISITION CORP. | |||||
Date: May 3, 2022 | By: | /s/ Douglas Wurth | |||
| Name: | Douglas Wurth | ||||
| Title: | Chief Executive Officer | ||||
/s/ Cary Grossman | |||||
| Name: | Cary Grossman | ||||
| Title: | President and Chief Financial Officer | ||||
22