The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our unaudited financial
statements and the notes related thereto which are included in "Item 1.
Financial Statements" of this Quarterly Report on Form 10Q. References to the
"Company," "our," "us" or "we" refer to Gores Holdings IX, Inc., a blank check
company incorporated in Delaware on January 19, 2021. References to our
"Sponsor" refer to Gores Sponsor IX LLC, an affiliate of Mr. Alec E. Gores, our
Chairman. References to "Gores" or "The Gores Group" refer to The Gores Group
LLC, an affiliate of our Sponsor. References to our "Public Offering" refer to
the initial public offering of Gores Holdings IX, Inc., which closed on January
14, 2022 (the "IPO Closing Date").
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this
Quarterly Report on Form 10Q including, without limitation, statements under
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the Company's financial position, business strategy and
the plans and objectives of management for future operations, are
forward-looking statements. When used in this Quarterly Report on Form 10Q,
words such as "anticipate," "believe," "estimate," "expect," "intend" and
similar expressions, as they relate to us or the Company's management, identify
forward-looking statements. Such forward-looking statements are based on the
beliefs of management, as well as assumptions made by, and information currently
available to, the Company's management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors detailed in our filings with the SEC. All subsequent written or oral
forward-looking statements attributable to us or persons acting on the Company's
behalf are qualified in their entirety by this paragraph.
Overview
We are a blank check company incorporated on January 19, 2021 as a Delaware
corporation and formed for the purpose of effecting a Business Combination with
one or more target businesses. We completed our Public Offering on January 14,
2022.
We presently have no revenue, have had losses since inception from incurring
formation costs and have had no operations other than the active solicitation of
a target business with which to complete a business combination.
Results of Operations
For the three months ended September 30, 2022, the Company had net income of
$3,991,726 of which $2,066,666 was a non-cash gain related to the change in fair
value of the warrant liability.
For the nine months ended September 30, 2022, the Company had net income of
$8,473,725 of which $7,233,333 was a non-cash gain related to the change in fair
value of the warrant liability.
For the three months ended September 30, 2021, the Company had a net loss of
($6,535).
For the period from January 19, 2021 (inception) to September 30, 2021, the
Company had a net loss of ($6,535).
Our business activities during the quarter mainly consisted of identifying and
evaluating prospective acquisition candidates for a Business Combination. We
believe that we have sufficient funds available to complete our efforts to
effect a Business Combination with an operating business by January 14, 2024.
However, if our estimates of the costs of identifying a target business,
undertaking in-depth due diligence and negotiating a Business Combination are
less than the actual amount necessary to do so, we may have insufficient funds
available to operate our business prior to our Business Combination.
As indicated in the accompanying condensed unaudited financial statements, at
September 30, 2022, the Company had $471,202 in cash and deferred offering costs
of $18,375,000. Further, we expect to continue to incur significant costs in the
pursuit of our acquisition plans. We cannot assure you that our plans to
complete our Business Combination will be successful.
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Liquidity and Capital Resources
On July 8, 2021, the Sponsor purchased 15,093,750 shares of Class F Common
Stock, par value $0.0001 per share, of the Company (the "Founder Shares") for
$25,000, or approximately $0.002 per share. On January 11, 2022, the Sponsor
transferred 25,000 Founder Shares to each of the independent directors at their
original purchase price. On February 28, 2021, the Sponsor forfeited 1,968,750
Founder Shares following the expiration of the unexercised portion of
underwriters' over-allotment option, so that the Founder Shares held by the
Initial Stockholders would represent 20% of the outstanding shares of common
stock. The Founder Shares will automatically convert into shares of Class A
Common Stock at the time of the Business Combination on a one-for-one basis,
subject to adjustment as described in the Company's certificate of
incorporation.
On January 14, 2022, the Company consummated its Public Offering of 52,500,000
Units at a price of $10.00 per Unit, generating gross proceeds of $525,000,000.
On the IPO Closing Date, we completed the private sale of an aggregate of
8,333,333 Private Placement Warrants, each exercisable to purchase one share of
Class A Common Stock at $11.50 per share, to our Sponsor, at a price of $1.50
per Private Placement Warrant, generating gross proceeds, before expenses, of
$12,500,000. After deducting the underwriting discounts and commissions
(excluding the Deferred Discount, which amount will be payable upon consummation
of the Business Combination, if consummated) and the estimated offering
expenses, the total net proceeds from our Public Offering and the sale of the
Private Placement Warrants were $527,000,000, of which $525,000,000 (or $10.00
per share sold in the Public Offering) was placed in the Trust Account. The
amount of proceeds not deposited in the Trust Account was $2,000,000 at the
closing of our Public Offering. Interest earned on the funds held in the Trust
Account may be released to us to fund our Regulatory Withdrawals, for a maximum
of 24 months and/or additional amounts necessary to pay our franchise and income
taxes.
On July 8, 2021, the Company borrowed $300,000 by the issuance of an unsecured
promissory note from the Sponsor for $300,000 to cover expenses related to the
Public Offering. This Note was non-interest bearing and payable on the earlier
of January 31, 2023 or the completion of the Public Offering. The Note was
repaid upon completion of the Public Offering. This facility is no longer
available.
On February 7, 2022, the Sponsor made available to the Company a loan of up to
$4,000,000 pursuant to a promissory note issued by the Company to the Sponsor.
The proceeds from the note will be used for ongoing operational expenses and
certain other expenses in connection with the Business Combination. The note is
unsecured, non-interest bearing and matures on the earlier of: (i) January 31,
2023 or (ii) the date on which the Company consummates the Business Combination.
As of September 30, 2022 and December 31, 2021, the amount advanced by Sponsor
to the Company was $600,000 and $300,000, respectively.
As of September 30, 2022 and December 31, 2021, the Company had cash held
outside of the Trust Account of approximately $471,202 and $147,160,
respectively, which is available to fund our working capital requirements.
Additionally, interest earned on the funds held in the Trust Account may be
released to us to fund our Regulatory Withdrawals, subject to an annual limit of
$900,000, for a maximum of 24 months and/or additional amounts necessary to pay
our franchise and income taxes.
At September 30, 2022 and December 31, 2021, the Company had current liabilities
of $817,003 and $465,816 and working capital (deficit) of $855,167 and
($318,656), respectively, the balances of which are primarily related to
warrants we have recorded as liabilities as described in Notes 2 and 3. Other
amounts are related to accrued expenses owed to professionals, consultants,
advisors and others who are working on seeking a Business Combination as
described in Note 1. Such work is continuing after September 30, 2022 and
amounts are continuing to accrue. Additionally, the warrant liability will not
impact the Company's liquidity until a Business Combination has been
consummated, as they do not require cash settlement until such event has
occurred.
We intend to use substantially all of the funds held in the Trust Account,
including interest (which interest shall be net of Regulatory Withdrawals and
taxes payable) to consummate our Business Combination. Moreover, we may need to
obtain additional financing either to complete a Business Combination or because
we become obligated to redeem a significant number of shares of our Class A
Common Stock upon completion of a Business Combination. Subject to compliance
with applicable securities laws, we would only complete such financing
simultaneously with the completion of our Business Combination. If we are unable
to complete our Business
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Combination because we do not have sufficient funds available to us, we will be
forced to cease operations and liquidate the Trust Account. In addition,
following our Business Combination, if cash on hand is insufficient, we may need
to obtain additional financing in order to meet our obligations. To the extent
that our capital stock or debt is used, in whole or in part, as consideration to
consummate our Business Combination, the remaining proceeds held in our Trust
Account, if any, will be used as working capital to finance the operations of
the target business or businesses, make other acquisitions and pursue our growth
strategy. Following the closing of a Business Combination, we do not expect
there to be remaining proceeds in our Trust Account.
As of September 30, 2022 and December 31, 2021, we did not have any long-term
debt obligations, capital lease obligations, operating lease obligations,
purchase obligations or long-term liabilities. In connection with the Public
Offering, we entered into an administrative services agreement to pay monthly
recurring expenses of $20,000 to an affiliate of the Sponsor for office space,
utilities and secretarial support. The administrative services agreement
terminates upon the earlier of the completion of a Business Combination or the
liquidation of the Company.
The underwriters are entitled to underwriting discounts and commissions of 5.5%
($28,875,000), of which 2.0% ($10,500,000) was paid upon close of the Public
Offering, and 3.5% ($18,375,000) was deferred. The Deferred Discount will become
payable to the underwriters from the amounts held in the Trust Account solely in
the event that the Company completes a Business Combination, subject to the
terms of the underwriting agreement. The underwriters are not entitled to any
interest accrued on the Deferred Discount.
Recently Issued Accounting Pronouncements Not Yet Adopted
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
the Company's financial statements based on current operations of the
Company. The impact of any recently issued accounting standards will be
re-evaluated on a regular basis or if a Business Combination is completed where
the impact could be material.
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