References in this report (the "Quarterly Report") to "we," "us,"
"Goldenbridge," or the "Company" refer to Goldenbridge Acquisition Limited.
References to our "management" or our "management team" refer to our officers
and directors, references to the "Sponsor" refer to Cross Wealth Investment
Holding Limited. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the financial statements and the notes thereto contained elsewhere in this
Quarterly Report. Certain information contained in the discussion and analysis
set forth below includes forward-looking statements that involve risks and
uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
that are not historical facts, and involve risks and uncertainties that could
cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section in our annual report on Form 10-K for the fiscal year ended June
30, 2022 filed with the SEC on September 30, 2022. The Company's securities
filings can be accessed on the EDGAR section of the SEC's website at
www.sec.gov. Except as expressly required by applicable securities law, the
Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise.
Recent Developments
On November 23, 2022, the Company held an extraordinary general meeting of
shareholders (the "Meeting"). During the Meeting, a proposal to amend the
Company's the amended and restated memorandum and articles of association (the
"Amended Charter") to extend the date by which the Company has to consummate a
business combination up to three (3) times for an additional three (3) months
each time, from December 4, 2022 to September 4, 2023, has been approved. On
November 24, 2022, subsequent to the approval by its shareholders of the Amended
Charter, the Company filed the Amended Charter with the British Virgin Islands
General Registry, effective the same day. The Amended Charter extends the date
by which the Company has to consummate a business combination up to three (3)
times for an additional three (3) months each time, from December 4, 2022 to
September 4, 2023.
On November 25, 2022, Goldenbridge issued an unsecured promissory note in the
aggregate principal amount of $174,561.30 (the "Note") to Auto Services Group
Limited ("SunCar"), the counterparty to the previously announced agreement and
plan of merger dated as of May 23, 2022, pursuant to which a proposed business
combination among SunCar, Goldenbridge, Purchaser and Merger Sub would occur.
The proceeds of the Note have been deposited in the Company's trust account in
connection with extending the business combination completion window until March
4, 2023.
The Company's public shareholders elected to redeem an aggregate of 4,004,387
ordinary shares in connection with the Meeting. Following such redemptions and
the deposit of the extension payment described above, the amount of funds
remaining in the Company's trust account was approximately $18.3 million.
Accordingly, following such redemptions and the deposit of the extension
payment, the Company had 3,561,863 ordinary shares issued and outstanding
(1,816,250 of which are shares held by our initial shareholders and are not
subject to redemption) and the pro rata portion of the funds available in the
trust account was approximately $10.4877 per public share.
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Overview
We are a blank check company incorporated in the British Virgin Islands on
August 12, 2019 and formed for the purpose of entering into a merger, share
exchange, asset acquisition, share purchase, recapitalization, reorganization or
similar business combination with one or more businesses or entities. We intend
to effectuate our initial business combination using cash from the proceeds of
the initial public offering and the sale of the Private Units, our capital
stock, debt or a combination of cash, stock and debt.
We presently have no revenue, have had losses since inception from incurring
formation costs and have had no operations other than the active solicitation of
a target business with which to complete a business combination. We have relied
upon the sale of our securities and loans from our officers and directors to
fund our operations.
On March 4, 2021, the Company consummated its initial public offering of
5,000,000 Unit. Subsequently, on March 9, 2021, the underwriters exercised the
option in full of 750,000 units, which was consummated on March 11, 2021. Each
Public Unit consists of one ordinary share of the Company, no par value per
share (the "Public Shares"), one right (the "Public Rights") and one redeemable
warrant (the "Public Warrants"). Each Public Right entitles the holder to
receive one-tenth (1/10) of an ordinary share upon consummation of an initial
Business Combination. Each Public Warrant entitles the holder to purchase
one-half (1/2) of one ordinary share, and each ten rights entitle the holder
thereof to receive one ordinary share at the closing of a business combination.
The Units were sold at an offering price of $10.00 per Unit, generating gross
proceeds of $5,750,000. Simultaneously with the closing of the initial business
combination, the Company consummated a private placement of 350,000 units at a
price of $10.00 per Private Unit, generating total proceeds of $3,500,000 (the
"Private Placement"). A total of $57,500,000 of the net proceeds from the sale
of Public Units in the initial business combination (including the
over-allotment option units) and the Private Placement were placed in a trust
account established for the benefit of the Company's public shareholders. The
Company incurred $1,837,194 in initial public offering related costs, including
$1,437,500 of underwriting fees and $399,694 of initial public offering costs.
We will not issue fractional shares. As a result, one must (1) exercise warrants
in multiples of two warrants, at a price of $11.50 per full share, to validly
exercise the warrants; and (2) hold rights in multiples of 10 in order to
receive shares for all of the rights upon closing of a business combination.
Our management has broad discretion with respect to the specific application of
the net proceeds of the initial business combination 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
We have neither engaged in any operations nor generated any revenues to date.
Our entire activity from inception up to March 4, 2021 was in preparation for
the initial public offering. Since the initial public offering, our activity has
been limited to the evaluation of business combination candidates, and we will
not be generating any operating revenues until the closing and completion of our
initial business combination. We expect to incur increased expenses as a result
of being a public company (for legal, financial reporting, accounting and
auditing compliance, D&O insurance), as well as for due diligence expenses. We
expect our expenses to increase substantially after this period. However, we
cannot assure you that our plans to complete a business combination will be
successful.
For the six months ended December 31, 2022, we had a net income of $911,117,
which was comprised of change in the fair value of the warrant liability of
$810,000 and interest earned on the marketable securities held in Trust Account
of $612,145, offset by operating costs of $511,028 .
For the six months ended December 31, 2021, we had a net loss of $488,653, which
was comprised of operating costs of $525,644, offset by a change in the fair
value of the warrant liability of $30,000 and interest earned on the marketable
securities held in Trust Account of $6,991.
For the three months ended December 31, 2022, we had a net income of $224,729,
which was comprised of interest earned on the marketable securities held in
Trust Account of $523,240, offset by change in the fair value of the warrant
liability of $10,000 and operating costs of $288,511.
For the three months ended December 31, 2021, we had a net loss of $231,329,
which was comprised of operating costs of $256,376, offset by a change in the
fair value of the warrant liability of $20,000 and interest earned on the
marketable securities held in Trust Account of $5,047.
22
Liquidity and Capital Resources
As of December 31, 2022, we had cash and investments held in the Trust Account
of $18,437,438. Until the consummation of the initial public offering, the
Company's only source of liquidity was an initial purchase of ordinary shares by
the Sponsor, monies loaned by the Sponsor under a certain unsecured promissory
note, advances from the Sponsor and loan from related parties.
On March 4, 2021, we consummated the initial public offering of 5,000,000 Public
Units at a price of $10.00 per unit, generating gross proceeds of $50,000,000.
Subsequently, on March 9, 2021, the underwriters exercised the option in full of
750,000 units at a price of $10.00 per unit, generating gross proceeds of
$7,500,000. Simultaneously with the closing of the initial public offering, we
consummated the sale of 350,000 Private Units, at a price of $10.00 per unit,
generating gross proceeds of $3,500,000.
Following the initial public offering and the exercise of the over-allotment
option, a total of $5,750,000 was placed in the Trust Account. We incurred
$1,837,194 in initial public offering related costs, including $1,437,500 of
underwriting fees and $399,694 of initial public offering Costs.
As of December 31, 2022, we had cash of $59,738 and cash in the Trust Account of
$18,437,438 (including approximately $981,308 of interest income). We intend to
use substantially all of the net proceeds of the initial public offering,
including the funds held in the Trust Account (less taxes payable and deferred
underwriting commissions), to complete our initial business combination. We may
withdraw interest to pay taxes. During the period ended December 31, 2022, we
did not withdraw any of interest income from the Trust Account to pay for income
taxes. To the extent that our capital stock is used in whole or in part as
consideration to effect our initial business combination, the remaining proceeds
held in the Trust Account, as well as any other net proceeds not expended, will
be used as working capital to finance the operations of the target business.
Such working capital funds could be used in a variety of ways including
continuing or expanding the target business' operations, for strategic
acquisitions and for marketing, research and development of existing or new
products. Such funds could also be used to repay any operating expenses or
finders' fees which we had incurred prior to the completion of our business
combination if the funds available to us outside of the Trust Account were
insufficient to cover such expenses.
As of December 31, 2022, we had cash of $59,738 outside of the Trust Account. We
intend to use the funds held outside the Trust Account primarily to identify and
evaluate target businesses, perform business due diligence on prospective target
businesses, travel to and from the offices, plants or similar locations of
prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses,
and structure, negotiate and complete a business combination.
On November 25, 2022, Goldenbridge issued an unsecured promissory note in the
aggregate principal amount of $174,561.30, or the Note, to SunCar. The Note does
not bear interest and matures upon closing of the Company's initial business
combination. In addition, the Note may be converted by SunCar into units of the
Company identical to the units issued in the Company's initial public offering
at a price of $10.00 per unit. The proceeds of the Note have been deposited in
the Company's trust account in connection with extending the business
combination completion window until March 4, 2023.
If the Company does not complete a business combination by March 4, 2023 from
the consummation of the Public Offering, it will trigger an automatic winding
up, dissolution and liquidation pursuant to the terms of the amended and
restated memorandum and articles of association. As a result, this has the same
effect as if the Company had formally gone through a voluntary liquidation
procedure under the Companies Law. Accordingly, no vote would be required from
the Company's shareholders to commence such a voluntary winding up, dissolution
and liquidation. However, if the Company anticipates that the Company may not be
able to consummate its initial business combination by March 4, 2023, the
Company may, but is not obligated to, extend the period of time to consummate a
business combination two times by an additional three months each time (for a
total of up to 30 months to complete a business combination). Pursuant to the
terms of the amended and restated memorandum and articles of association and the
trust agreement entered into between the Company and Continental Stock Transfer
& Trust Company, LLC on the effective date of the Registration Statement, in
order to extend the time available for the Company to consummate the initial
business combination, the Company's insiders or their affiliates or designees,
upon five days advance notice prior to the applicable deadline, must deposit
into the trust account $0.10 per share, on or prior to the date of the
applicable deadline. The insiders will receive a non-interest bearing, unsecured
promissory note equal to the amount of any such deposit that will not be repaid
in the event that the Company is unable to close a business combination unless
there are funds available outside the trust account to do so. Such notes would
either be paid upon consummation of the Company's initial business combination,
or, at the lender's discretion, converted upon consummation of the business
combination into additional private units at a price of $10.00 per unit. The
Company's shareholders have approved the issuance of the private units upon
conversion of such notes, to the extent the holder wishes to so convert such
notes at the time of the consummation of the Company's initial business
combination. In the event that the Company receives notice from the Company's
insiders five days prior to the applicable deadline of their intent to effect an
extension, the Company intends to issue a press release announcing such
intention at least three days prior to the applicable deadline. In addition, the
Company intends to issue a press release the day after the applicable deadline
announcing whether or not the funds had been timely deposited. The Company's
insiders and their affiliates or designees are not obligated to fund the trust
account to extend the time for the Company to complete the initial business
combination. To the extent that some, but not all, of the Company's insiders,
decide to extend the period of time to consummate the Company initial business
combination, such insiders (or their affiliates or designees) may deposit the
entire amount required. If the Company is unable to consummate the Company's
initial business combination within such time period, the Company will, as
promptly as possible but not more than ten business days thereafter, redeem 100%
of the Company's outstanding public shares for a pro rata portion of the funds
held in the trust account, including a pro rata portion of any interest earned
on the funds held in the trust account and not necessary to pay taxes, and then
seek to liquidate and dissolve. However, the Company may not be able to
distribute such amounts as a result of claims of creditors which may take
priority over the claims of the Company's public shareholders. In the event of
dissolution and liquidation, the public rights will expire and will be
worthless.
23
Accordingly, the Company may not be able to obtain additional financing. If the
Company is unable to raise additional capital, it may be required to take
additional measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing operations, suspending the pursuit of a
potential transaction, and reducing overhead expenses. The Company cannot
provide any assurance that new financing will be available to it on commercially
acceptable terms, if at all. These conditions raise substantial doubt about the
Company's ability to continue as a going concern if a Business Combination is
not consummated by March 4, 2023. These unaudited consolidated financial
statements do not include any adjustments relating to the recovery of the
recorded assets or the classification of the liabilities that might be necessary
should the Company be unable to continue as a going concern.
Off-balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered
off-balance sheet arrangements as of December 31, 2022. 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 our Sponsor
a monthly fee of $10,000 for general and administrative services, including
office space, utilities and administrative services to the Company. We began
incurring these fees on June 1, 2020 and will continue to incur these fees
monthly until the earlier of the completion of the business combination and the
Company's liquidation. Also, we are committed to the below:
Registration Rights
The holders of the Founder Shares, the Private Placement Warrants (and their
underlying securities) and the warrants that may be issued upon conversion of
the Working Capital Loans (and their underlying securities) are entitled to
registration rights pursuant to a registration rights agreement signed on the
effective date of the Public Offering. The holders of a majority of these
securities are entitled to make up to two demands that the Company register such
securities. The holders of the majority of the Founder Shares can elect to
exercise these registration rights at any time commencing three months prior to
the date on which these ordinary shares are to be released from escrow. The
holders of a majority of the Private Placement Warrants and warrants issued in
payment of Working Capital Loans made to the Company (or underlying securities)
can elect to exercise these registration rights at any time after the Company
consummates a Business Combination. In addition, the holders have certain
"piggy-back" registration rights with respect to registration statements filed
subsequent to the completion of a Business Combination. The Company will bear
the expenses incurred in connection with the filing of any such registration
statements.
Private Warrants
The Company classifies the Private Warrants as liabilities at their fair value
and adjusts the Private Warrants to fair value at each reporting period. This
liability is subject to re-measurement at each balance sheet date until
exercised, and any change in fair value is recognized in our statement of
operations. The Private Warrants are valued using a Black Scholes model.
Deferred Underwriting Commission and Transaction Fee
Maxim Group LLC ("Maxim") was engaged by Goldenbridge to act as its financial
advisor in connection with a business combination with a special purpose
acquisition company. For its services, Maxim has agreed to be paid entirely,
other than customary expense reimbursement, in Goldenbridge Ordinary Shares,
issued at the same per share price as issued as consideration in the Business
Combination with SunCar, in an amount of such ordinary shares equal to 0.8% of
the equity value of SunCar (the "Transaction Fee"). Assuming a per share price
of $10 per share, such Transaction Fee payable upon consummation of the Business
Combination would be approximately 640,000 PubCo Ordinary Shares (following
exchange of such shares for Goldenbridge Ordinary Shares in the Business
Combination). Other than piggyback rights to registration, Maxim's shares would
have the same rights as other holders of Goldenbridge Ordinary Shares in the
Business Combination. Furthermore, under the terms of the underwriting agreement
in connection with Goldenbridge's IPO, Goldenbridge owes Maxim a deferred
underwriting fee of $2,012,500 upon the completion of the Business Combination
for its role as underwriter in the IPO (the "Deferred Underwriting Commission").
Maxim has rights to reimbursement of out-of-pocket expenses of to $5,000 in the
aggregate, without prior approval of Goldenbridge, and such expenses upon
invoice are payable only upon the successful closing of a business combination.
On March 5, 2021, Maxim exercised its right to acquire an option to purchase up
to a total of 287,500 units of Goldenbridge sold in its IPO (the "Unit Purchase
Option") for $100, provided that Maxim would be required to pay upon exercise of
such option an exercise price of $11.50 per unit. As of December 31, 2022, the
Unit Purchase Option has not been exercised by Maxim.
24
Right of First Refusal
According to its financial advisor agreement with Goldenbridge, Maxim has rights
of first refusal, on a non-exclusive basis, to be underwriter or placement agent
in connection with an equity, equity-linked, convertible or debt financing in
connection with the Business Combination, although Maxim has rights to be a
specified lead in such transaction if it so determines. To date, Maxim has not
exercised this right of first refusal.
Subject to certain conditions, the Company granted Maxim, for a period of 15
months after the date of the consummation of the business combination, a right
of first refusal to act as lead underwriters or minimally as a co-manager, with
at least 30% of the economics; or, in the case of a three-handed deal, 30% of
the economics, for any and all future public and private equity and debt
offerings. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first
refusal shall not have a duration of more than three years from the effective
date of the registration statement.
Critical Accounting Policies
The preparation of unaudited condensed consolidated financial statements and
related disclosures in conformity with accounting principles generally accepted
in the United States of America ("GAAP") requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and income and expenses during the periods reported. Actual results
could materially differ from those estimates. The Company has not identified any
significant accounting policies.
Warrants
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 480,
Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and
Hedging ("ASC 815"). The assessment considers whether the warrants are
freestanding financial instruments pursuant to ASC 480, meet the definition of a
liability pursuant to ASC 480, and whether the warrants meet all of the
requirements for equity classification under ASC 815, including whether the
warrants are indexed to the Company's own ordinary shares and whether the
warrant holders could potentially require "net cash settlement" in a
circumstance outside of the Company's control, among other conditions for equity
classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
equity at the time of issuance. For issued or modified warrants that do not meet
all the criteria for equity classification, the warrants are required to be
recorded as liabilities at their initial fair value on the date of issuance, and
each balance sheet date thereafter. Changes in the estimated fair value of the
warrants are recognized as a non-cash gain or loss on the statements of
operations.
Ordinary Shares Subject To Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in
accordance with the guidance in ASC Topic 480 Distinguishing Liabilities from
Equity. Ordinary share subject to mandatory redemption (if any) is classified as
a liability instrument and is measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares that feature redemption rights that
are either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within the Company's control) are
classified as temporary equity. At all other times, ordinary shares are
classified as shareholders' equity. The Company's ordinary shares feature
certain redemption rights that are considered to be outside of the Company's
control and subject to occurrence of uncertain future events.
Net Loss Per Share
The Company calculates net loss per share in accordance with ASC Topic 260,
Earnings per Share. In order to determine the net income (loss) attributable to
both the redeemable shares and non-redeemable shares, the Company first
considered the undistributed income (loss) allocable to both the redeemable
ordinary shares and non-redeemable ordinary shares and the undistributed income
(loss) is calculated using the total net loss less any dividends paid. The
Company then allocated the undistributed income (loss) ratably based on the
weighted average number of shares outstanding between the redeemable and
non-redeemable ordinary shares. Any remeasurement of the accretion to redemption
value of the ordinary shares subject to possible redemption was considered to be
dividends paid to the public stockholders As of December 31, 2022, the Company
did not have any dilutive securities and other contracts that could,
potentially, be exercised or converted into ordinary shares and then share in
the earnings of the Company. As a result, diluted loss per share is the same as
basic loss per share for the period presented.
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