GIGL 5 The following discussion of the Company's financial condition and results of operations should be read in conjunction with the Company's financial statements and notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Please see "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form 10-K.
Overview
We are a
We seek to capitalize on the significant experience and contacts of our management team to complete our initial business combination. We believe our management team's distinctive background and record of acquisition and operational success could have a transformative impact on verified target businesses.
Our management team has significant hands-on experience helping companies optimize their existing and new growth initiatives. We intend to apply a unique "Mentor-Investor" philosophy to partner with QT Imaging where we will offer financial, operational and executive mentoring in order to accelerate its growth and development from a privately held entity to a publicly traded company. Further, we intend to share best practices and key learnings, gathered from our management team's operating and investing experience, as well as strong relationships in the advanced medical equipment industries to help shape corporate strategies. Additionally, our management team has operated and invested in leading global advanced medical equipment companies across their corporate life cycles, and has developed deep relationships with key large multi-national organizations and investors. We believe that these relationships and our management team's know-how present a significant opportunity to help drive strategic dialogue, access new customer relationships and achieve global ambitions following the completion of our initial business combination. We believe that we are providing an interesting alternative investment opportunity that capitalizes on key trends impacting the capital markets for advanced medical equipment companies.
We intend to effectuate our initial business combination using cash from the proceeds from the sale of the Public Units in our Offering, the sale of the Private Placement Units to our Founder, the sale of common stock to our Founder, our common equity or any preferred equity that we may create in accordance with the terms of our charter documents, debt, or a combination of cash, common or preferred equity and debt. The Public Units sold in the Offering each consisted of one share of common stock, and one redeemable warrant to purchase our common stock (no fractional shares will be issued upon exercise of the warrants). The Private Placement Units were substantially similar to the Public Units sold in the Offering, but for certain differences in the warrants included in each of them.
The issuance of additional shares of common stock or the creation of one or more classes of preferred stock during our initial business combination:
? may significantly dilute the equity interest of investors in the
Offering who would not have pre-emption rights in respect of any such
issue;
? may subordinate the rights of holders of common stock if the rights,
preferences, designations and limitations attaching to the preferred
shares are senior to those afforded our shares of common stock;
? could cause a change in control if a substantial number of shares of
common stock are issued, which may affect, among other things, our
ability to use our net operating loss carry forwards, if any, and could
result in the resignation or removal of our present officers and
directors;
? may have the effect of delaying or preventing a change of control of us
by diluting the share ownership or voting rights of a person seeking to
obtain control of us; and
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? may adversely affect prevailing market prices for our shares of common stock.
Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:
? default and foreclosure on our assets if our operating revenues after
our initial business combination are insufficient to repay our debt
obligations;
? acceleration of our obligations to repay the indebtedness even if we
make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or
reserves without a waiver or renegotiation of that covenant;
? our immediate payment of all principal and accrued interest, if any, if
the debt is payable on demand;
? our inability to obtain necessary additional financing if any document
governing such debt contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
? our inability to pay dividends on our shares of common stock;
? using a substantial portion of our cash flow to pay principal and
interest on our debt, which will reduce the funds available for
dividends on our common stock if declared, expenses, capital
expenditures, acquisitions and other general corporate purposes;
? limitations on our flexibility in planning for and reacting to changes
in our business and in the industry in which we operate;
? increased vulnerability to adverse changes in general economic, industry
and competitive conditions and adverse changes in government regulation;
and
? limitations on our ability to borrow additional amounts for expenses,
capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to
our competitors who have less debt.
We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful.
The Company's Offering prospectus and Amended and Restated Certificate of
Incorporation provided that the Company initially had until
The Company previously entered into an Investment Management Trust Agreement
(the "IMTA"), dated
In connection with the
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"Extension Note") (and has since been amended three additional times during
2023), respectively, for a collective principal amount of
The Company further amended and restated the Extension Note to reflect
additional principal amounts of
On
On
On
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
For the year ended
For the year ended
For the period from
Liquidity and Capital Resources
On
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Public Units were sold at a price of
Simultaneously with the closing of the Offering, the Company consummated the
closing of the Private Placement to the Sponsor of 795,000 Private Placement
Units, at a price of
Following the closing of the Offering, net proceeds in the amount of
Transaction costs for the Offering amounted to
As of
As of
For the year ended
For the period from
For the year ended
For the period from
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For the year ended
For the period from
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (which
interest shall be net of taxes payable by us). We may withdraw interest to pay
taxes. We estimate our annual franchise tax obligations to be approximately
As of
The Company's initial public offering prospectus and Amended and Restated
Certificate of Incorporation provided that the Company initially had until
In connection with the
If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate
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our business prior to our initial business combination. Moreover, we may need to
obtain additional financing either to consummate our initial business
combination or because we become obligated to redeem a significant number of our
Public Shares upon consummation of our initial business combination, in which
case we may issue additional securities or incur debt in connection with such
business combination. In order to finance operating and/or transaction costs in
connection with a business combination, our Founder, executive officers,
directors, or their affiliates may, but are not obligated to, loan us funds. In
the event that our initial 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
Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
If the Company is unable to consummate its initial Business Combination by
Off-Balance Sheet Arrangements
As of
Contractual Obligations
As of
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Emerging Growth Company
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. We have elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, will adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.
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Net Loss Per Common Share
Our statements of operations and comprehensive loss include a presentation of income per share for common stock subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per share, basic and diluted, for common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account by the weighted-average number of common stock subject to possible redemption outstanding since original issuance.
Net loss per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net loss, adjusted for income or loss on marketable securities attributable to common stock subject to possible redemption, by the weighted-average number of non-redeemable common stock outstanding for the period, basic and diluted.
When calculating our diluted net loss per share, we have not considered the
effect of (i) the incremental number of shares of common stock to settle
warrants sold in the Offering and Private Placement, as calculated using the
treasury stock method and (ii) the shares issued to
In accordance with the two-class method, our net loss is adjusted for net income that is attributable to common stock subject to redemption, as these shares only participate in the income of the Trust Account and not our losses. Accordingly, net loss per common share, basic and diluted, is calculated as follows:
Period from January
19,
2021 (Inception)
Year Ended through
December 31, 2022 December 31, 2021
Common stock subject to possible
redemption
Numerator: Earnings allocable to common
stock subject to redemption
Interest earned on marketable securities
held in Trust Account, net of taxes $ 1,143,783 $ 4,195
Net income attributable to common stock
subject to possible redemptions $ 1,143,783 $ 4,195
Denominator: Weighted-average common
shares subject to redemption
Basic and diluted weighted-average shares
outstanding, common stock subject to
possible redemption 17,954,419 6,296,830
Basic and diluted net income per share,
common stock subject to possible
redemption $ 0.06 $ 0.00
Non-Redeemable common stock
Numerator: Net loss minus net earnings -
Basic and diluted
Net loss $ (2,774,307 ) $ (1,107,730 )
Less: net income attributable to common
stock subject to redemption (1,143,783 ) (4,195 )
Net loss attributable to non-redeemable
common stock $ (3,918,090 ) $ (1,111,925 )
Denominator: Weighted-average
non-redeemable common shares
Weighted-average non-redeemable common
shares outstanding, basic and diluted 6,540,000 8,185,533
Net loss per share, non-redeemable common
stock, basic and diluted $ (0.60 ) $ (0.14 )
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Common stock subject to possible redemption
Common stock subject to mandatory redemption (if any) is classified as a
liability instrument and is measured at fair value. Conditionally redeemable
common stock (including common stock that features redemption rights that are
either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within our control) is classified as
temporary equity. At all other times, common stock is classified as
stockholders' deficit. 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, as of
Warrant Liability
The Company accounts for warrants for shares of the Company's common stock that are not indexed to its own stock as liabilities at fair value on the balance sheets. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense) on the statements of operations and comprehensive loss. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants. At that time, the portion of the warrant liability related to the common stock warrants will be reclassified to additional paid-in capital.
Convertible Promissory Note --
The Company accounts for its Working Capital Note under Accounting Standards Codification ("ASC") 815, Derivatives and Hedging ("ASC 815"). Under ASC 815-15-25, an election can be made at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825, Financial Instruments. The Company has made such election for its Working Capital Note. Using the fair value option, the Working Capital Note is required to be recorded at its initial fair value on the date of issuance, each drawdown date, and each balance sheet date thereafter. Differences between the face value of the Working Capital Note and fair value at each drawdown date are recognized as either an expense in the statements of operations and comprehensive loss (if issued at a premium) or as a capital contribution (if issued at a discount). Changes in the estimated fair value of the Working Capital Note are recognized as non-cash gains or losses in the statements of operations and comprehensive loss.
Recent Accounting Pronouncements
The Company does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's financial statements.
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