GLOBAL SYNERGY ACQUISITION CORP. References to the "company," "our," "us" or "we" refer to
Overview
We are a blank check company incorporated on
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private placement warrants, our shares, debt or a combination of cash, equity and debt.
The issuance of additional shares in an initial business combination:
? may significantly dilute the equity interest of our existing investors,
which dilution would increase if the anti-dilution provisions in the
Class B ordinary shares resulted in the issuance of Class A ordinary
shares on a greater than one-to-one basis upon conversion of the
Class B ordinary shares;
? may subordinate the rights of holders of Class A ordinary shares if
preference shares are issued with rights senior to those afforded our
Class A ordinary shares;
? could cause a change in control if a substantial number of our Class A
ordinary shares are issued, which may affect, among other things, our
ability to use our net operating loss carry forwards, if any, and could
result in the resignation or removal of our present officers and
directors;
? may have the effect of delaying or preventing a change of control of us
by diluting the share ownership or voting rights of a person seeking to
obtain control of us; and
? may adversely affect prevailing market prices for our Class A ordinary
shares and/or warrants.
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Similarly, if we issue debt or otherwise incur significant debt, it could result
in:
? default and foreclosure on our assets if our operating revenues after
an initial business combination are insufficient to repay our debt
obligations;
? acceleration of our obligations to repay the indebtedness even if we
make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or
reserves without a waiver or renegotiation of that covenant;
? our immediate payment of all principal and accrued interest, if any, if
the debt is payable on demand;
? our inability to obtain necessary additional financing if the debt
contains covenants restricting our ability to obtain such financing
while the debt is outstanding;
? our inability to pay dividends on our Class A ordinary shares;
? using a substantial portion of our cash flow to pay principal and
interest on our debt, which will reduce the funds available for
dividends on our Class A ordinary shares (if declared), expenses,
capital expenditures, acquisitions, and other general corporate
purposes;
? limitations on our flexibility in planning for and reacting to changes
in our business and in the industry in which we operate;
? increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government
regulation; and
? limitations on our ability to borrow additional amounts for expenses,
capital expenditures, acquisitions, debt service requirements,
execution of our strategy and other purposes and other disadvantages
compared to our competitors who have less debt.
As indicated in the accompanying financial statements, as of
Our registration statement for our initial public offering was declared
effective on
Simultaneously with the closing of the initial public offering, the Company
consummated the private placement ("Private Placement") of 7,600,000 warrants
(each, a "Private Placement Warrant" and collectively, the "Private Placement
Warrants"), at a price of
Upon the closing of the initial public offering and the Private Placement,
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If we are unable to complete a Business Combination within 18 months (or
24 months, as applicable) (the "Combination Period"), we will (i) cease all
operations except for the purpose of winding up; (ii) as promptly as reasonably
possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to us to pay our income
taxes, if any (less up to
Results of Operations
Our entire activity from inception up to
For the year ended
For the period from
Liquidity and Capital Resources
As of
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor,
or our officers and directors to meet our needs through the earlier of the
consummation of a Business Combination or one year from this filing. Over this
time period, we will be using these funds to pay existing accounts payable,
identifying and evaluating prospective Initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Business Combination. However, in
connection with management's assessment of going concern considerations in
accordance with FASB ASC Topic 205-40, "Presentation of Financial Statements -
Going Concern," we have until the end of the Combination Period,
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RELATED PARTY TRANSACTIONS
Founder Shares
On
The holders of the Founder Shares prior to this initial public offering (the
"Initial Shareholders") agreed not to transfer, assign or sell any of their
Founder Shares until the earlier to occur of: (A) one year after the completion
of the Initial Business Combination and (B) subsequent to the Initial Business
Combination, (x) if the closing price of Class A ordinary shares equals or
exceeds
Related Party Loans
On
In addition, in order to fund working capital deficiencies or finance
transaction costs in connection with a Business Combination, our Sponsor or an
affiliate of our Sponsor, or certain of our officers and directors may, but are
not obligated to, provide us Working Capital Loans. If we complete a Business
Combination, we may repay the Working Capital Loans out of the proceeds of the
Trust Account released to us. Otherwise, the Working Capital Loans may be repaid
only out of funds held outside the Trust Account. In the event that a Business
Combination does not close, we 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. The Working
Capital Loans would either be repaid upon consummation of a Business
Combination, without interest, or, at the lenders' discretion, up to
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In order for the time available for us to consummate our Initial Business
Combination to be extended, our Sponsor or our affiliates or designees, upon
five business days advance notice prior to the expiration of the initial term,
must deposit into the Trust Account approximately
Administrative Services Agreement
Commencing on the date that our securities were first listed on the Nasdaq in
In addition, our Sponsor, officers and directors, or any of our respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, officers or directors, or our affiliates. Any such payments prior to an Initial Business Combination will be made from funds held outside the Trust Account.
Contractual Obligations
Registration and Shareholder Rights
The holders of founder shares, private placement warrants and warrants that may be issued upon conversion of Working Capital Loans or Extension Loans, if any, (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans or Extension Loans) are entitled to registration rights pursuant to a registration and shareholder rights agreement. These holders will be entitled to certain demand and "piggyback" registration rights. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
On
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The Underwriters were entitled to an underwriting discount of
Risks and Uncertainties
We continue to evaluate the impact of the COVID-19 pandemic on the industry and have concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In
Critical Accounting Policies and Estimates
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC 815. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
The Public Warrants and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statement of operations. The fair value of the Public Warrants issued in connection with the Initial Public Offering and Private Placement Warrants were initially measured using a Monte Carlo simulation model. The fair value of Public Warrants issued in connection with the Initial Public Offering have subsequently been measured based on the listed market price of such warrants. Subsequently, the fair value of the Private Placement Warrants has been estimated by reference to the trading price of the Public Warrants. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in
accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from
Equity." Class A ordinary shares subject to mandatory redemption (if any) are
classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A ordinary shares (including Class A 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 our control) are classified as temporary equity. At all other
times, Class A ordinary shares are classified as shareholders' equity. Our Class
A ordinary shares feature certain redemption rights that are considered to be
outside of our control and subject to the occurrence of uncertain future events.
Accordingly, at
Under ASC 480-10-S99, we have elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of the reporting period. This method would view the end of the reporting period as if it were also the redemption date of the security. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
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Offering Costs Associated with the Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred and are presented as non-operating expenses in the statement of operations. Offering costs associated with the Public Shares were charged to the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities as their settlement is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Net Income (Loss) per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC Topic 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 (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average number of ordinary shares outstanding for the respective period.
The calculation of diluted net income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement to purchase an aggregate of 20,537,500 Class A ordinary shares since their exercise is contingent upon future events. The Company has considered the effect of Class B ordinary shares that were excluded from the weighted average number of basic shares outstanding as they were contingent on the exercise of the over-allotment option by the Underwriters. Since the contingency was satisfied, the Company has included these shares in the weighted average number as of the beginning of the period to determine the dilutive impact of these shares. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
In
Our management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Off-Balance Sheet Arrangements
As of
JOBS Act
On
As an "emerging growth company", we are not required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.
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