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 quarter ended June 30, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-41381
GLOBAL BLOCKCHAIN ACQUISITION CORP.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | | 87-2045077 |
(State or other jurisdiction of
incorporation or organization) | | (I.R.S. Employer
Identification No.) |
6555 Sanger Road, Suite 200
Orlando, Florida 32827
(Address of principal executive offices)
(407) 720-9250
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class | | Trading Symbol(s) | | Name of each exchange on which
registered |
Common Stock, par value $0.0001 per share | | GBBK | | The NASDAQ Stock Market LLC |
Redeemable warrants, each warrant exercisable for one share of common stock at an exercise price of $11.50 per whole share | | GBBKW | | The NASDAQ Stock Market LLC |
Rights, each entitling the holder to receive one-tenth of one share of common stock | | GBBKR | | The NASDAQ Stock Market LLC |
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 days. Yes ☒ No
☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
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 12b-2 of the Exchange Act). Yes ☒ No ☐
As
of August 14, 2023, there were 7,191,880 shares of common stock, par
value $0.0001 per share, issued and outstanding.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
CONDENSED BALANCE SHEETS
| |
June 30, | | |
December 31, | |
| |
2023 | | |
2022 | |
| |
| (Unaudited) | | |
| | |
ASSETS | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash | |
$ | 1,007,688 | | |
$ | 765,243 | |
Prepaid expenses | |
| 359,787 | | |
| 528,415 | |
Due from related party | |
| 32,900 | | |
| 22,740 | |
Total Current Assets | |
| 1,400,375 | | |
| 1,316,398 | |
| |
| | | |
| | |
Marketable securities held in Trust Account | |
| 180,288,751 | | |
| 177,564,388 | |
TOTAL ASSETS | |
$ | 181,689,126 | | |
$ | 178,880,786 | |
| |
| | | |
| | |
LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accrued offering costs and expenses | |
$ | 193,282 | | |
$ | 240,602 | |
Income taxes payable | |
| 678,349 | | |
| 486,593 | |
Total Liabilities | |
| 871,631 | | |
| 727,195 | |
| |
| | | |
| | |
Commitments and contingencies | |
| | | |
| | |
Common stock subject to possible redemption, $0.0001 par value; 17,250,000 shares at redemption value of $10.44 and $10.26 as of June 30, 2023 and December 31, 2022, respectively | |
| 180,005,623 | | |
| 176,918,016 | |
| |
| | | |
| | |
Stockholders’ Equity | |
| | | |
| | |
Common Stock, $0.0001 par value, 100,000,000 shares authorized; 4,762,500 shares issued and outstanding, excluding 17,250,000 shares subject to possible redemption, as of June 30, 2023 and December 31, 2022, respectively | |
| 476 | | |
| 476 | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding | |
| — | | |
| — | |
Additional paid-in capital | |
| — | | |
| 10,482 | |
Retained earnings | |
| 811,396 | | |
| 1,224,617 | |
Total Stockholders’ Equity | |
| 811,872 | | |
| 1,235,575 | |
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY | |
$ | 181,689,126 | | |
$ | 178,880,786 | |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| |
For the Three Months Ended June 30, | | |
For the Six Months Ended June 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| |
| | |
| | |
| | |
| |
Formation and operational costs | |
$ | 224,797 | | |
$ | 233,774 | | |
$ | 523,703 | | |
$ | 241,764 | |
Loss from operations | |
| (224,797 | ) | |
| (233,774 | ) | |
| (523,703 | ) | |
| (241,764 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income: | |
| | | |
| | | |
| | | |
| | |
Interest earned on marketable securities held in Trust Account | |
| 2,109,817 | | |
| 174,724 | | |
| 4,008,363 | | |
| 174,724 | |
Total other income | |
| 2,109,817 | | |
| 174,724 | | |
| 4,008,363 | | |
| 174,724 | |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) before provision for income taxes | |
| 1,885,020 | | |
| (59,050 | ) | |
| 3,484,660 | | |
| (67,040 | ) |
Provision for income taxes | |
| (432,561 | ) | |
| (25,993 | ) | |
| (820,756 | ) | |
| (25,993 | ) |
Net income (loss) | |
$ | 1,452,459 | | |
$ | (85,043 | ) | |
$ | 2,663,904 | | |
$ | (93,033 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding of redeemable shares | |
| 17,250,000 | | |
| 9,453,297 | | |
| 17,250,000 | | |
| 4,752,762 | |
Basic and diluted net income (loss) per common share, redeemable shares | |
$ | 0.07 | | |
$ | (0.01 | ) | |
$ | 0.12 | | |
$ | (0.01 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding of non-redeemable shares | |
| 4,762,500 | | |
| 4,295,192 | | |
| 4,762,500 | | |
| 4,025,625 | |
Basic and diluted net income (loss) per common share, non-redeemable shares | |
$ | 0.07 | | |
$ | (0.01 | ) | |
$ | 0.12 | | |
$ | (0.01 | ) |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2023
| |
Common Stock | | |
Additional Paid in | | |
Retained | | |
Total Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Earnings | | |
Equity | |
Balance – December 31, 2022 | |
| 4,762,500 | | |
$ | 476 | | |
$ | 10,482 | | |
$ | 1,224,617 | | |
$ | 1,235,575 | |
Accretion of stock subject to redemption amount | |
| — | | |
| — | | |
| (10,482 | ) | |
| (1,449,869 | ) | |
| (1,460,351 | ) |
Net income | |
| — | | |
| — | | |
| — | | |
| 1,211,445 | | |
| 1,211,445 | |
Balance – March 31, 2023 (unaudited) | |
| 4,762,500 | | |
| 476 | | |
| — | | |
| 986,193 | | |
| 986,669 | |
Accretion of stock subject to redemption amount | |
| — | | |
| — | | |
| — | | |
| (1,627,256 | ) | |
| (1,627,256 | ) |
Net income | |
| — | | |
| — | | |
| — | | |
| 1,452,459 | | |
| 1,452,459 | |
Balance – June 30, 2023 (unaudited) | |
| 4,762,500 | | |
$ | 476 | | |
$ | — | | |
$ | 811,396 | | |
$ | 811,872 | |
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2022
| |
Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Total Stockholder’s | |
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Equity | |
Balance – December 31, 2021 | |
| 4,312,500 | | |
$ | 431 | | |
$ | 24,569 | | |
$ | (7,048 | ) | |
$ | 17,952 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| (7,990 | ) | |
| (7,990 | ) |
Balance – March 31, 2022 (unaudited) | |
| 4,312,500 | | |
| 431 | | |
| 24,569 | | |
| (15,038 | ) | |
| 9,962 | |
Sale of 8,537,500 Private Placement Warrants | |
| — | | |
| — | | |
| 8,537,500 | | |
| — | | |
| 8,537,500 | |
Issuance of Representative Shares | |
| 450,000 | | |
| 45 | | |
| 3,463,629 | | |
| — | | |
| 3,463,674 | |
Fair value of Public Warrants at issuance | |
| — | | |
| — | | |
| 3,379,730 | | |
| — | | |
| 3,379,730 | |
Allocated value of transaction costs to Common Stock | |
| — | | |
| — | | |
| (340,594 | ) | |
| — | | |
| (340,594 | ) |
Accretion of stock subject to redemption amount | |
| — | | |
| — | | |
| (13,322,073 | ) | |
| — | | |
| (13,322,073 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| (85,043 | ) | |
| (85,043 | ) |
Balance – June 30, 2022 (unaudited) | |
| 4,762,500 | | |
$ | 476 | | |
$ | 1,742,761 | | |
$ | (100,081 | ) | |
$ | 1,643,156 | |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2022 | |
Cash Flows from Operating Activities: | |
| | |
| |
Net income (loss) | |
$ | 2,663,904 | | |
$ | (93,033 | ) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
| | | |
| | |
Interest earned on marketable securities held in Trust Account | |
| (4,008,363 | ) | |
| (174,724 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| 168,628 | | |
| (734,548 | ) |
Accrued offering costs and expenses | |
| (47,320 | ) | |
| 87,194 | |
Due from related party | |
| (10,160 | ) | |
| (22,740 | ) |
Income taxes payable | |
| 191,756 | | |
| 25,993 | |
Net cash used in operating activities | |
| (1,041,555 | ) | |
| (911,858 | ) |
| |
| | | |
| | |
Cash Flows from Investing Activities: | |
| | | |
| | |
Investment of cash in Trust Account | |
| — | | |
| (175,087,500 | ) |
Cash withdrawn from Trust Account to pay franchise and income taxes | |
| 1,284,000 | | |
| | |
Net cash provided by (used in) investing activities | |
| 1,284,000 | | |
| (175,087,500 | ) |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Proceeds from sale of Units, net of underwriting discounts paid | |
| — | | |
| 169,050,000 | |
Proceeds from sale of Private Placement Warrants | |
| — | | |
| 8,537,500 | |
Repayment of promissory note – related party | |
| — | | |
| (546,343 | ) |
Payment of deferred offering costs | |
| — | | |
| (481,498 | ) |
Net cash provided by financing activities | |
| — | | |
| 176,559,659 | |
| |
| | | |
| | |
Net Change in Cash | |
| 242,445 | | |
| 560,301 | |
Cash – Beginning of period | |
| 765,243 | | |
| 464,071 | |
Cash – End of period | |
$ | 1,007,688 | | |
$ | 1,024,372 | |
| |
| | | |
| | |
Supplementary cash flow information: | |
| | | |
| | |
Cash paid for taxes | |
$ | 629,000 | | |
$ | — | |
| |
| | | |
| | |
Non-cash financing activities: | |
| | | |
| | |
Offering costs included in accrued offerings costs | |
$ | — | | |
$ | 95,000 | |
Issuance of Representative Shares as consideration for transaction costs | |
$ | — | | |
$ | 3,463,674 | |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
GLOBAL BLOCKCHAIN ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Global Blockchain Acquisition Corp. (the “Company”)
is a newly organized blank check company incorporated in Delaware on March 18, 2021. The Company was formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses
(“Business Combination”).
As of June 30, 2023, the Company had not commenced
any operations. All activity through June 30, 2023 relates to the Company’s formation and initial public offering (the “Initial
Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying target company for a Business
Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the
earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public
Offering. The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s
Initial Public Offering was declared effective on May 9, 2022. On May 12, 2022, the Company completed the Initial Public Offering of 17,250,000
units (the “Units” and, with respect to the shares included in the Units being offered, the “Public Shares”),
which includes the full exercise by the underwriter of its over-allotment option in the amount of 2,250,000 Units, at $10.00 per Unit,
generating gross proceeds of $172,500,000, which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 8,537,500 warrants at a price of $1.00 per Private Placement Warrant in a private
placement to the Sponsor, I-Bankers Securities, Inc. (“I-Bankers”) and Dawson James Securities, Inc. (“Dawson James”)
(together, the “Private Placement Warrants”), generating gross proceeds of $8,537,500, which is described in Note 4.
Transaction costs amounted to $7,597,200, consisting
of $3,450,000 of underwriting fees, and $4,147,200 of other offering costs, which includes the fair value of the issuance of representative
shares of $3,463,674.
The Company’s Business Combination must
be with one or more target businesses that together have a fair market value equal to at least 80% of the value of the assets held in
the Trust Account (as defined below) (excluding taxes payable on the interest earned on the Trust Account) at the time of the signing
a definitive agreement in connection with the initial Business Combination. However, 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. There is no assurance that the Company will be able to successfully effect a Business Combination.
Following the closing of the Initial Public Offering
on May 12, 2022, an amount of $175,087,500 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering
and private placement were placed in a Trust Account (“Trust Account”) and were invested in United States government treasury
bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions
under Rule 2a-7 under the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held
in the trust account that may be released to the Company to pay the Company’s taxes, if any, the proceeds from the Initial Public
Offering will not be released from the trust account until the earliest of (i) the completion of the initial Business Combination, (ii)
the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated
certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares
if the Company does not complete the initial Business Combination within the combination period, or (B) with respect to any other provision
relating to stockholders’ rights or pre-Business Combination activity, or (iii) the redemption of all of the Company’s public
shares if the Company is unable to complete the Business Combination within the combination period, subject to applicable law. The proceeds
deposited in the trust account could become subject to the claims of the Company’s creditors, if any, which could have priority
over the claims of the Company’s public stockholders. The proceeds held in the trust account may be invested by the trustee only
in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States
Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will
be restricted to these instruments, the Company believes it will meet the requirements for the exemption provided in Rule 3a-1 promulgated
under the Investment Company Act. If the Company was deemed to be subject to the Investment Company Act, compliance with these additional
regulatory burdens would require additional expenses for which it has not allotted funds and may hinder its ability to consummate a Business
Combination. If the Company is unable to complete its initial Business Combination, its public stockholders may receive only approximately
$10.15 per share on the liquidation of its trust account and its warrants will expire worthless.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
The Company will provide its public stockholders
with the opportunity to redeem all or a portion of their public shares upon the completion of its initial 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 proposed Business Combination or conduct a tender offer will be made by
the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the
terms of the transaction would require it to seek stockholder approval under the law or stock exchange listing requirement. The Company
will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of its
initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account
as of two business days prior to the consummation of its initial Business Combination, including interest (which interest shall be net
of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in
the trust account is initially anticipated to be $10.15 per public share. The per share amount the Company will distribute to investors
who properly redeem their shares will not be reduced by the business combination marketing fee payable to I-Bankers and Dawson James.
The shares of common stock subject to redemption
were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance
with Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case,
the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation
of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted
in favor of the Business Combination.
If the Company is unable to complete an initial
Business Combination prior to May 12, 2024 (if the Company extends the period of time to consummate a Business Combination), it 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 (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution
expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and
its board of directors, dissolve and liquidate, subject in each case to its obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s
warrants, which will expire worthless if the Company fail to complete its Business Combination within the combination period.
The Sponsor, holders of the representative shares,
officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed (i) to waive their redemption
rights with respect to their Founder Shares and public shares in connection with the completion of the Company’s initial Business
Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if
the Company fails to complete its initial Business Combination within the combination period (although they will be entitled to liquidating
distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its Business Combination
within the prescribed time frame). The Sponsor, officers and directors have agreed to vote their Founder Shares and any public shares
purchased during or after the Initial Public Offering in favor of its initial Business Combination.
The Sponsor has agreed that it will be liable
to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target
business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to
below (i) $10.15 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation
of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be released to the
Company to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust
Account and except as to any claims under indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under 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.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
Liquidity and Going Concern
As of June 30, 2023, the Company had $1,007,688
in operating cash, $180,288,751 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem
its common stock in connection therewith and working capital of $528,744. Until the consummation of a Business Combination, the Company
will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due
diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring,
negotiating and consummating the Business Combination.
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”
the Company has until as late as May 12, 2024, 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 Company's liquidity position and mandatory liquidation,
should a Business Combination not occur, and potential subsequent dissolution, raise substantial doubt about the Company’s ability
to continue as a going concern. Management intends to complete a Business Combination; however, the Company cannot guarantee that a Business
Combination will take place. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required
to liquidate after May 12, 2024.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s
financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as
of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Additionally, as a result of the military action
commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s
ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business
Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent
on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility,
or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this
action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations
and/or ability to consummate a Business Combination are not yet determinable. The unaudited condensed financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Inflation Reduction Act of 2022
On August 16, 2022, the Inflation Reduction Act
of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise
tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded
foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its
shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased
at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the
fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition,
certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority
to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any redemption or other repurchase that occurs
after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether
and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise
would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business
Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE”
or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination
but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury.
In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment
of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business
Combination and in the Company’s ability to complete a Business Combination.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
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 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are
necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022 filed
with the SEC on March 31, 2023. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of
the results to be expected for the period ending December 31, 2023 or for any future periods.
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 non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company
nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used.
Use of Estimates
The preparation of the unaudited condensed 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 unaudited condensed 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 unaudited condensed 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 did not have any cash equivalents
as of June 30, 2023 and December 31, 2022.
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 of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related
to the Initial Public Offering. Offering costs were charged to temporary equity and permanent equity based on relative fair values of
the equity instruments purchased, upon the completion of the Initial Public Offering.
Offering costs consist of legal, accounting, underwriting
fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs
amounting to $7,597,200 were charged to common stock subject to possible redemption upon the completion of Initial Public Offering.
As of June 30, 2023 and December 31, 2022, there
were no amounts recorded under deferred offering costs in the accompanying condensed balance sheets.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
Warrant Instruments
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 common stock, 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 additional paid-in capital 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 at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed
the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the
characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for
equity classification under ASC 815 and therefore are classified in equity.
Common Stock Subject to Possible Redemption
The Company accounts for its common stock subject
to possible redemption in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity.” common stock
subject to mandatory redemption are classified as a liability instrument and are measured at redemption 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 the Company’s control) are classified as temporary equity. At all other
times, common stock are classified as stockholders’ equity. The Company’s common stock feature certain redemption rights that
are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common
stock subject to possible redemption are presented at redemption value as temporary equity, outside of the permanent deficit section of
the Company’s balance sheets.
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting
period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption
amount value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital and accumulated.
At June 30, 2023 and December 31, 2022, the common
stock reflected in the balance sheet is reconciled in the following table:
Gross proceeds | |
$ | 172,500,000 | |
Less: | |
| | |
Proceeds allocated to Public Warrants | |
| (3,379,730 | ) |
Common stock issuance costs | |
| (7,256,606 | ) |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 15,054,352 | |
Common stock subject to possible redemption, December 31, 2022 | |
| 176,918,016 | |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 3,087,607 | |
Common stock subject to possible redemption, June 30, 2023 | |
$ | 180,005,623 | |
Income Taxes
ASC 740-270-25-2 requires that an annual effective
tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company
accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets
and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets
and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally
requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not
be realized. As of June 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded
against it. The Company’s effective tax rate was 22.95% and 44.02% for the three months ended June 30, 2023 and 2022, respectively,
and 23.55% and 38.77% for the six months ended June 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory
tax rate of 21% for the three and six months ended June 30, 2023 and 2022, due to the valuation allowance on the deferred tax assets.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position 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. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest
and penalties as of June 30, 2023 and December 31, 2022. 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 has identified the United States as
its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and
compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits
will materially change over the next twelve months.
Net Income (Loss) per Common Share
Net income (loss) per common share is computed
by dividing net income (loss) by the weighted average number of common shares outstanding for the period.
The Company’s condensed statements of operations
include a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class
method of income (loss) per share. Net income per common share, basic and diluted, for redeemable common stock is calculated by dividing
the interest income earned on the Trust Account, by the weighted average number of redeemable common stock outstanding since original
issuance. Net income (loss) per common share, basic and diluted, for common stock is calculated by dividing the net income (loss), adjusted
for income (loss) attributable to redeemable common stock, net of applicable franchise and income taxes, by the weighted average number
of common stock outstanding for the period. Common stock includes the Founder Shares as these shares do not have any redemption features
and do not participate in the income earned on the Trust Account.
The following table reflects the calculation of
basic and diluted net income (loss) per common share (in dollars, except per share amounts):
| |
For the Three Months Ended June 30, | |
| |
2023 | | |
2022 | |
| |
Redeemable | | |
Non- Redeemable | | |
Redeemable | | |
Non- Redeemable | |
| |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income (loss) | |
$ | 1,138,213 | | |
$ | 314,246 | | |
$ | (58,475 | ) | |
$ | (26,569 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 17,250,000 | | |
| 4,762,500 | | |
| 9,453,297 | | |
| 4,295,192 | |
Basic and diluted net income (loss) per common share | |
$ | 0.07 | | |
$ | 0.07 | | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2022 | |
| |
Redeemable | | |
Non- Redeemable | | |
Redeemable | | |
Non- Redeemable | |
| |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income (loss) | |
$ | 2,087,557 | | |
$ | 576,347 | | |
$ | (50,370 | ) | |
$ | (42,663 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 17,250,000 | | |
| 4,762,500 | | |
| 4,752,762 | | |
| 4,025,625 | |
Basic and diluted net income (loss) per common share | |
$ | 0.12 | | |
$ | 0.12 | | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
Concentration of Credit Risk
The Company has significant cash balances at financial
institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access
to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying balance sheets, primarily due to their short-term nature.
Recent Accounting Standards
In June 2016, the FASB issued Accounting Standards
Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on
Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented
at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events,
including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported
amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting
companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal
years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material
impact on its financial statements.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited
condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
In the Initial Public Offering, the Company sold
17,250,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 Units,
at a purchase price of $10.00 per Unit. Each unit that the Company sold in the Initial Public Offering had a price of $10.00 and consists
of one share of common stock, one redeemable warrant, and one right, which right entitles the holder to one-tenth share of common stock
upon the consummation the Business Combination.
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Company’s Sponsor, I-Bankers and Dawson James purchased an aggregate of 8,537,500 warrants at a price of $1.00
per warrant ($8,537,500 in the aggregate) in a private placement. Of such amount, (i) 6,812,500 warrants were purchased by the Sponsor,
(ii) 1,466,250 warrants were purchased by I-Bankers and (iii) 258,750 warrants were purchased by Dawson James.
The private placement warrants (including the
common stock issuable upon exercise of the private placement warrants) will (with limited exceptions) not be transferable, assignable
or salable until 30 days after the completion of the initial Business Combination and they will not be redeemable by the Company so long
as they are held by the original holders or their permitted transferees. Otherwise, the private placement warrants have terms and provisions
that are identical to those of the warrants being sold as part of the units in the Initial Public Offering. If the private placement warrants
are held by holders other than the original holders or 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 being sold in the Initial Public
Offering.
If holders of the private placement warrants elect
to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares
of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants,
multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y)
the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the
10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In August 2021, the Sponsor paid $25,000, or approximately
$0.006 per share, to cover certain of the offering costs in exchange for an aggregate of 4,312,500 shares of common stock, par value $0.0001
per share (the “Founder Shares”).
The initial stockholders have 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
or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the initial Business
Combination that results in all of the Company’s public stockholders having the right to exchange their shares of common stock for
cash, securities or other property (except as described herein under “Principal Stockholders — Transfers of Founder Shares.
Private Placement Warrants and Underlying Securities”). The Company refers to such transfer restrictions throughout this Report
as the “lock-up”.
Notwithstanding the foregoing, if the last sale
price of the 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 30-trading day period commencing at least 150 days after the initial Business Combination,
the Founder Shares will be released from the lock-up.
Administrative Services Agreement
The Company entered into an agreement, commencing
on May 9, 2022, to pay an affiliate of the Company’s officers a total of $5,000 per month for office space, utilities, secretarial
support and other administrative and consulting services. Upon completion of the Company’s Business Combination or its liquidation,
the Company will cease paying these monthly fees. For the three and six months ended June 30, 2023, the Company incurred $18,000 and $36,000 for
these services, respectively. For the three and six months ended June 30, 2022, the Company incurred $1,500 and $13,000 for these
services, respectively.
Promissory Note — Related Party
On August 17, 2021, the Sponsor issued an unsecured
promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal
amount of $600,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2021 or (ii) the
consummation of the Initial Public Offering. As of June 30, 2023 and December 31, 2022, there were no outstanding under the Promissory
Note. The outstanding amount of $546,343 was repaid at the closing of the Initial Public Offering on May 12, 2022. Borrowings under the
Promissory Note are no longer available.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
Due from Related Party
As of June 30, 2023 an amount of $32,900 is due
to the Company from the Sponsor for funds held outside the operating account. The original purpose of the funds held outside the operating
account was to be under the $250,000 Federal Deposit Insurable Corporation (“FDIC”) threshold. As of December 31, 2022 an
amount of $22,740 is due to the Company from the Sponsor for miscellaneous fees the Company paid on its behalf and a sum of the funds
to be held outside of trust for working capital purposes of approximately $22,000.
Related Party Loans
In order to finance transaction costs in connection
with an intended initial Business Combination, the initial stockholders or an affiliate of the initial stockholders or certain of the
Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital
Loans”). If the Company completes the initial Business Combination, the Company would repay such loaned amounts out of the proceeds
of the Trust Account released to the Company. Otherwise, such loans would be repaid only out of funds held outside the Trust Account.
In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the
Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000
of such loans may be convertible, at the option of the lender, into warrants at a price of $1.00 per warrant of the post Business Combination
entity. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise
period. As of June 30, 2023 and December 31, 2022, there were no amounts outstanding under the Working Capital Loans.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the founder shares, the private
placement warrants (and underlying securities) and private placement warrants that may be issued upon conversion of working capital loans
(and any underlying securities) are entitled to registration rights pursuant to a registration rights agreement. The holders of these
securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition,
the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the
completion of the initial Business Combination. However, the registration rights agreement provides that the Company will not permit any
registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period described
above “— Transfers of Founder Shares, Private Placement Warrants and Underlying Securities.” The Company will bear the
expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were paid a cash underwriting
discount of two percent (2%) of the gross proceeds of the Initial Public Offering, or $3,450,000.
Business Combination Marketing Agreement
At the closing of the offering, the Company engaged
I-Bankers and Dawson James as advisors in connection with the Company’s business combination to (i) assist the Company in preparing
presentations for each potential business combination; (ii) assist the Company in arranging meetings with stockholders, including making
calls directly to stockholders, to discuss each potential business combination and each potential target’s attributes and providing
regular market feedback, including written status reports, from these meetings and participate in direct interaction with stockholders,
in all cases to the extent legally permissible; (iii) introduce The Company to potential investors to purchase securities in connection
with each potential business combination; and assist the Company with the preparation of any press releases and filings related to each
potential business combination or target. Pursuant to the business combination marketing agreement, I-Bankers and Dawson James are not
obligated to assist the Company in identifying or evaluating possible acquisition candidates. Pursuant to the Company’s agreement
with I-Bankers and Dawson James, the advisory fees payable to I-Bankers and Dawson James will collectively be 3.5% of the gross proceeds
of our initial public offering, including the proceeds from the full exercise of the underwriters’ over-allotment option.
Representative’s Shares
The Company issued (i) to I-Bankers Securities
(and/or their designees) 382,500 shares of common stock upon the consummation of the Initial Public Offering and (ii) to Dawson James
(and/or their designees) 67,500 shares upon the consummation of the Initial Public Offering. The Company determined the fair value of
the representative shares to be $3,463,674 (or $7.70 per share) using the Probability Weighted Expected Return Model. The fair value of
the shares granted to the underwriters utilized the following assumptions: (1) expected volatility of 2.4%, (2) risk-free interest rate
of 1.93%, (3) expected life of 0.97 years, and (4) no dividend. To arrive to the assumptions used in the valuation, comparable for 15
pre-business combination Companies (selected based on industry or sector focus, size, warrant coverage and the remaining term to complete
their business combination), were selected. The implied volatility was based on the current quoted prices of the warrants and underlying
stock. The risk-free interest rate was based on a 0.5 to 2 year US treasury rate. I-Bankers and Dawson James (and/or their respective
designees) have agreed not to transfer, assign or sell any such shares until the completion of the initial Business Combination. In addition,
I-Bankers and Dawson James (and/or their respective designees) have agreed (i) to waive their redemption rights with respect to such shares
in connection with the completion of the initial Business Combination and (ii) to waive their rights to liquidating distributions from
the Trust Account with respect to such shares if the Company fails to complete its initial Business Combination within the combination
period.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
NOTE 7. STOCKHOLDERS’ EQUITY
Common Stock — The Company
is authorized to issue a total of 100,000,000 shares of common stock with a par value of $0.0001 each. On August 17, 2021, the Company
issued 4,312,500 shares of common stock to its initial stockholders for $25,000, or approximately $0.006 per share. The Founder Shares
include an aggregate of up to 562,500 shares subject to forfeiture if the over-allotment option is not exercised by the underwriters in
full. As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are currently subject
to forfeiture.
Common stockholders of record are entitled to
one vote for each share held on all matters to be voted on by stockholders. Unless specified in the Company’s amended and restated
certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative
vote of a majority of the Company’s common stock that are voted is required to approve any such matter voted on by the stockholders.
There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares
voted for the election of directors can elect all of the directors (prior to consummation of the initial Business Combination). The Company’s
stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available
therefor. At June 30, 2023 and December 31, 2022, there were 4,762,500 shares of common stock issued and outstanding, excluding 17,250,000
shares subject to possible redemption.
Preferred Stock — The Company
is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per stock with such designation, rights and preferences
as may be determined from time to time by the Company’s board of directors. At June 30, 2023 and December 31, 2022, there were no
shares of preferred stock issued or outstanding.
Warrants — As of June 30,
2023 and December 31, 2022, there were 17,250,000 Public Warrants outstanding. Each warrant entitles the holder to purchase one share
of common stock at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, If (x) the Company issues additional
shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business
Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective
issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor
or its affiliates, without taking into account any Founder Shares held by the Sponsor or its affiliates, as applicable, prior to such
issuance) (the “newly issued price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the
total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date
of the completion of its initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the common
stock during the 20 trading day period starting on the trading day prior to the day on which the Company completes its initial Business
Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the higher of the Market Value and the newly issued price, and the $18.00 per share redemption
trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the newly issued price.
The warrants will become exercisable 30 days after
the completion of its initial Business Combination, and will expire five years after the completion of the Company’s initial Business
Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable,
but in no event later than 15 business days, after the closing of the initial Business Combination, the Company will use its reasonable
best efforts to file, and within 60 business days after the closing of the initial Business Combination, to have declared effective, a
registration statement relating to the shares of common stock issuable upon exercise of the warrants and to maintain the effectiveness
of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the
provisions of the warrant agreement. Notwithstanding the above, if the common stock is at the time of any exercise of a warrant not listed
on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of
the Securities Act, the Company may, at the Company’s option, require holders of public warrants who exercise their warrants to
do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects,
it will not be required to file or maintain in effect a registration statement, but will use its best efforts to qualify the shares under
applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per share
of common stock equals or exceeds $18.00.
Once the warrants become exercisable, the Company
may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
|
● |
in whole and not in part |
|
|
|
|
● |
at a price of $0.01 per warrant; |
|
|
|
|
● |
upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the 30-day redemption period; and |
|
|
|
|
● |
if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
The Company will not redeem the warrants unless
an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants
is effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except
if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act.
The Company may not redeem the warrants when a holder may not exercise such warrants.
GLOBAL BLOCKCHAIN ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2023
If the Company calls the warrants for redemption
as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so
on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,”
the Company’s management will consider, among other factors, the Company’s cash position, the number of warrants that are
outstanding and the dilutive effect on the Company’s stockholders of issuing the maximum number of shares of common stock issuable
upon the exercise of the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number
of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined
below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common
stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders
of warrants.
NOTE 8. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical
assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with
sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1
inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical
assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on assessment
of the assumptions that market participants would use in pricing the asset or liability.
At June 30, 2023, assets held in the Trust Account
were comprised of $180,288,751 in a money market fund which is invested primarily in U.S. Treasury Securities. Through June 30, 2023,
Company had withdrawn $1,284,000 of the income earned on the Trust Account to pay taxes obligations. U.S. Treasury Securities are accounted
for as trading securities and accordingly, changes in fair value are recorded in the statements of operations.
At December 31, 2022, assets held in the Trust
Account were comprised of $177,564,388 in a money market fund which is invested primarily in U.S. Treasury Securities. Through December
31, 2022, Company did not withdraw any of the income earned on the Trust Account. U.S. Treasury Securities are accounted for as trading
securities and accordingly, changes in fair value are recorded in the statements of operations.
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022
and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
June 30, 2023 |
|
Level |
|
|
Fair Value |
|
Assets: |
|
|
|
|
|
|
Marketable securities held in Trust Account –Money Market Fund |
|
|
1 |
|
|
$ |
180,288,751 |
|
December 31, 2022 | |
Level | | |
Fair Value | |
Assets: | |
| | | |
| | |
Marketable securities held in Trust Account –Money Market Fund | |
| 1 | | |
$ | 177,564,388 | |
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were available to be issued.
Based upon this review, other than noted below, the Company did not identify any subsequent events that would have required adjustment
or disclosure in the unaudited condensed financial statements.
The
Company held a meeting on August 8, 2023 to vote on the proposal to amend the Company’s amended and restated certificate of incorporation
to extend the date by which the Company must consummate a business combination or, if it fails to do so, cease its operations and redeem
or repurchase 100% of the shares of the Company’s common stock issued in the Company’s initial public offering, from August
12, 2023, monthly for up to nine additional months at the election of the Company, ultimately until as late as May 12, 2024 (the “Extension”,
and such extension date the “Extended Date”). In connection with the vote, 14,820,620 shares of the Company’s common stock
were redeemed with a total redemption payment of $155,196,226.
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
References in this report (the “Quarterly
Report”) to “we,” “us” or the “Company” refer to Global Blockchain Acquisition Corp.. References
to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor”
refer to Global Blockchain Sponsor, LLC. The following discussion and analysis of the Company’s financial condition and results
of operations should be read in conjunction with the unaudited condensed 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 completion of a Business Combination, 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, including that the conditions of a Business Combination are not satisfied. 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 of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange
Commission (the “SEC”). 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.
Overview
We are a blank check company formed under the
laws of the State of Delaware on March 18, 2021 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our Business Combination
using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or
a combination of cash, stock and debt.
We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from March 18, 2021 (inception) through June 30, 2023 were organizational activities,
those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination.
We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating
income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2023, we had
net income of $1,452,459, which consists of interest income on marketable securities held in the Trust Account of $2,109,817, offset by
the formation and operational costs of $224,797 and provision for income taxes of $432,561.
For the three months ended June 30, 2022, we had
a net loss of $85,043, which consists of operating costs of $233,774 and provision for income taxes of $25,993, offset by interest income
on marketable securities held in the Trust Account of $174,724.
For the six months ended June 30, 2023, we had
net income of $2,663,904, which consists of interest income on marketable securities held in the Trust Account of $4,008,363, offset by
the formation and operational costs of $523,703 and provision for income taxes of $820,756.
For the six months ended June 30, 2022, we had
a net loss of $93,033, which consists of operating costs of $241,764 and provision for income taxes of $25,993, offset by interest income
on marketable securities held in the Trust Account of $174,724.
Liquidity and Capital Resources
On May 12, 2022, we completed the Initial Public
Offering of $17,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial
Public Offering, we completed the sale of 8,537,500 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a
private placement to the Sponsor, generating gross proceeds of $8,537,500.
On May 12, 2022, in connection with the underwriters’
exercise of their over-allotment option in full, we consummated the sale of an additional 2,250,000 Units at a price of $10.00 per Unit,
generating total gross proceeds of $2,250,000.
For the six months ended June 30, 2023, cash used
in operating activities was $1,041,555. Net income of $2,663,904 was affected by interest earned on marketable securities held in the
Trust Account of $4,008,363. Changes in operating assets and liabilities provided $302,904 of cash for operating activities.
For the six months ended June 30, 2022, cash used
in operating activities was $911,858. Net income of $ 93,033 was affected by interest earned on marketable securities held in the Trust
Account of $174,724. Changes in operating assets and liabilities provided $644,101 of cash for operating activities.
As of June 30, 2023, we had marketable securities
held in the Trust Account of $180,288,751 (including approximately $5,201,251 of interest income) consisting of U.S. Treasury Bills with
a maturity of 185 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through June 30, 2023,
we have withdrawn $1,284,000 of interest earned from the Trust Account to pay taxes obligations.
We intend to use substantially all of the funds
held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete
our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our
Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the
target business or businesses, make other acquisitions and pursue our growth strategies.
As of June 30, 2023 we had cash of $1,007,688.
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.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their
affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the
Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of
such loans may be convertible, at the option of the lender, into warrants at a price of $1.00 per warrant of the post Business Combination
entity.
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”
the Company has until as late as May 12, 2024, 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 the mandatory liquidation, should
a Business Combination not occur, and potential subsequent dissolution, raise substantial doubt about the Company’s ability to continue
as a going concern. Management intends to complete a Business Combination; however, the Company cannot guarantee that a Business Combination
will take place. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate
after May 12, 2024.
The
Company held a meeting on August 8, 2023 to vote on the proposal to amend the Company’s amended and restated certificate of incorporation
to extend the date by which the Company must consummate a business combination or, if it fails to do so, cease its operations and redeem
or repurchase 100% of the shares of the Company’s common stock issued in the Company’s initial public offering, from August
12, 2023, monthly for up to nine additional months at the election of the Company, ultimately until as late as May 12, 2024 (the “Extension”,
and such extension date the “Extended Date”). In connection with the vote, 14,820,620 shares of the Company’s common stock
were redeemed with a total redemption payment of $155,196,226.
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 for a reasonable period of time, which is considered to be one year from the
issuance date of the unaudited condensed financial statements. These unaudited condensed 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 Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of June 30, 2023. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of one of our executive
officers a monthly fee of $5,000 for office space, utilities, secretarial support and other administrative and consulting services. We
began incurring these fees on May 9, 2022 and will continue to incur these fees monthly until the earlier of the completion of the Business
Combination and our liquidation.
Prior to the closing of our Initial Public Offering,
we engaged I-Bankers and Dawson James as advisors in connection with our business combination to (i) assist us in preparing presentations
for each potential business combination; (ii) assist us in arranging meetings with our stockholders, including making calls directly to
stockholders, to discuss each potential business combination and each potential target’s attributes and providing regular market
feedback, including written status reports, from these meetings and participate in direct interaction with stockholders, in all cases
to the extent legally permissible; (iii) introduce us to potential investors to purchase our securities in connection with each potential
business combination; and assist us with the preparation of any press releases and filings related to each potential business combination
or target. Pursuant to the business combination marketing agreement, I-Bankers and Dawson James are not obligated to assist us in identifying
or evaluating possible acquisition candidates. Pursuant to our agreement with I-Bankers and Dawson James, the advisory fees payable to
I-Bankers and Dawson James will collectively be 3.5% of the gross proceeds of the Initial Public Offering, including the proceeds from
the full exercise of the underwriters’ over-allotment option.
Critical Accounting Policies
The preparation of unaudited condensed financial
statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially
differ from those estimates. We have identified the following critical accounting policies:
Common stock Subject to Possible Redemption
We account for our Common stock subject to possible
redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities
from Equity.” Shares of Common stock subject to mandatory redemption is classified as a liability instrument and is measured at
fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that is either within the control
of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is 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 occurrence of uncertain future events. Accordingly, shares of Common stock
subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of our balance sheets.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed
by dividing net income (loss) by the weighted average number of common stock outstanding during the period, excluding common stock subject
to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 562,500 shares of common stock that are subject
to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). At June 30, 2023 2022, the Company did not
have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in
the earnings of the Company. As a result, diluted income (loss) per common share is the same as basic income (loss) per common share for
the period presented.
Critical Accounting Estimates
Critical accounting estimates are those estimates
made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had
or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant. Provide qualitative
and quantitative information necessary to understand the estimation uncertainty and the impact the critical accounting estimate has had
or is reasonably likely to have on financial condition or results of operations to the extent the information is material and reasonably
available. This information should include why each critical accounting estimate is subject to uncertainty and, to the extent the information
is material and reasonably available, how much each estimate and/or assumption has changed over a relevant period, and the sensitivity
of the reported amount to the methods, assumptions and estimates underlying its calculation.
Recent Accounting Standards
In June 2016, the FASB issued Accounting Standards
Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on
Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented
at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events,
including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported
amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting
companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal
years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material
impact on its financial statements.
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed 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 non-emerging growth
companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements
as of public company effective dates.
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 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 independent registered public accounting firm’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.
Item 3. Quantitative and Qualitative Disclosures
About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed
to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported
within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our
management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
Under the supervision and with the participation
of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation
of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2023, as such term is
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal
financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures
were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed
by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the
SEC’s rules and forms.
Changes in Internal Control over Financial
Reporting
There was no change in our internal control over
financial reporting that occurred during the fiscal quarter of 2023 covered by this Quarterly Report on Form 10-Q that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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 Annual Report on Form 10-K filed with the SEC. As
of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed
with the SEC.
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds.
On May 12, 2022, we consummated the Initial Public
Offering of 17,250,000 Units. The Units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $172,500,000.
I-Bankers Securities, Inc acted as sole book-running manager and Dawson James Securities, Inc. acted as co-manager, of the Initial Public
Offering. The securities in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-264396).
The Securities and Exchange Commission declared the registration statements effective on May 9, 2022.
Simultaneously with the closing of the Initial
Public Offering, the Company’s Sponsor, I-Bankers and Dawson James purchased an aggregate of 8,537,500 warrants at a price of $1.00
per warrant ($8,537,500 in the aggregate) in a private placement. Of such amount, (i) 6,812,500 warrants were purchased by the Sponsor,
(ii) 1,466,250 warrants were purchased by I-Bankers and (iii) 258,750 warrants were purchased by Dawson James.
The Private Warrants are identical to the warrants
underlying the Units sold in the Initial Public Offering, except that the Private Warrants are not transferable, assignable or salable
until after the completion of a Business Combination, subject to certain limited exceptions.
On May 12, 2022, the underwriters exercised their
over-allotment option in full, resulting in the sale of an additional 2,250,000 Units for gross proceeds of $22,500,000. In connection
with the underwriters’ exercise of their over-allotment option, the Company also consummated the sale of an additional 8,537,500
Private Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $8,537,500. A total of $175,087,500 was
deposited into the Trust Account.
Of the gross proceeds received from the Initial
Public Offering, the exercise of the over-allotment option and the Private Units, an aggregate of $173,440,300 was placed in the Trust
Account.
We paid a total of $3,450,000 in underwriting
discounts and commissions and $4,147,200 for other costs and expenses related to the Initial Public Offering.
For a description of the use of the proceeds generated
in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
During the period covered by this Quarterly Report,
none of the Company’s directors or executive officers has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule
10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended).
Item 6. Exhibits
The following exhibits are filed as part of, or
incorporated by reference into, this Quarterly Report on Form 10-Q.
SIGNATURES
In accordance with the requirements
of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
GLOBAL BLOCKCHAIN ACQUISITION CORP. |
|
|
|
Date: August 14, 2023 |
By: |
/s/ Max Hooper |
|
Name: |
Max Hooper |
|
Title: |
Chief Executive Officer |
|
|
|
Date: August 14, 2023 |
By: |
/s/ Jonathan Morris |
|
Name: |
Jonathan Morris |
|
Title: |
Chief Financial Officer |
22
0.01
0.01
0.07
0.12
0.01
0.01
0.07
0.12
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In connection with the Quarterly Report of Global
Blockchain Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023, as filed with the
Securities and Exchange Commission (the “Report”), I, Max Hooper, Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
In connection with the Quarterly Report of Global
Blockchain Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023 as filed with the Securities
and Exchange Commission (the “Report”), I, Jonathan Morris, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: