UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
or
| 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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
||
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| The Stock Market LLC | ||||
| The Stock Market LLC | ||||
| The Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.
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).
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 the 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 | ☐ |
| ☒ | 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
As of May 20, 2024, a total of shares of common stock, par value $0.0001 per share, were issued and outstanding.
Goal Acquisitions Corp.
Quarterly Report on Form 10-Q
Table of Contents
| -2- |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
GOAL ACQUISITIONS CORP.
CONDENSED BALANCE SHEETS
| March 31, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Restricted Cash | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Due from Sponsor | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Marketable securities held in the trust account | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Due to Trust Account | ||||||||
| Sponsor loans issued under the Expense Advancement Agreement | ||||||||
| Income taxes payable | ||||||||
| Excise tax payable attributable to redemption of common stock | ||||||||
| Advances - Related Party | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Warrant liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES (NOTE 6) | ||||||||
| Common stock subject to possible redemption, and shares at redemption value at March 31, 2024 and December 31, 2023, respectively | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, $ par value per share; shares authorized; issued and outstanding at March 31, 2024 and December 31, 2023 | ||||||||
| Common stock, $ par value per share; shares authorized; shares issued and outstanding at March 31, 2024 and December 31, 2023 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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GOAL ACQUISITIONS CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating costs | $ | $ | ||||||
| Business combination expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest income on marketable securities held in the trust account | ||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Total other income, net | ||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding, common stock subject to possible redemption | ||||||||
| Basic and diluted net loss per share, common stock subject to possible redemption | $ | ) | $ | ) | ||||
| Weighted average shares outstanding, non-redeemable common stock | ||||||||
| Basic and diluted net loss per share, non-redeemable common stock | $ | ) | $ | ) | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| -4- |
GOAL ACQUISITIONS CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2024
| Common Stock | Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance as of January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Remeasurement of common stock subject to possible redemption | — | |||||||||||||||||||
| Excise tax payable attributable to redemption of common stock | — | ( | ) | ( | ) | |||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2023
| Common Stock | Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance as of January 1, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Remeasurement of common stock subject to possible redemption | — | ( | ) | ( | ) | |||||||||||||||
| Excise tax payable attributable to redemption of common stock | — | ( | ) | ( | ) | |||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| -5- |
GOAL ACQUISITIONS CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Interest earned on cash and investments held in the trust account | ( | ) | ( | ) | ||||
| Change in fair value of warrant liabilities | ||||||||
| Changes in current assets and current liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ||||||||
| Income taxes payable | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Principal deposited in Trust Account in connection with monthly extension deposits | ( | ) | ||||||
| Cash withdrawn from Trust Account to pay franchise and income taxes | ||||||||
| Cash withdrawn from Trust Account for redemption of common shares | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash Flows from Financing Activities: | ||||||||
| Redemption of common shares | ( | ) | ( | ) | ||||
| Proceeds from sponsor loans issued under the Expense Advancement Agreement | ||||||||
| Repayment of advances from Sponsor | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net Change in Cash and Restricted Cash | ( | ) | ||||||
| Cash and Restricted Cash – Beginning | ||||||||
| Cash and Restricted Cash – Ending | $ | $ | ||||||
| Supplemental Disclosure of Non-cash Financing Activities: | ||||||||
| Remeasurement of common shares subject to redemption | $ | ( | ) | $ | ||||
| Excise tax payable attributable to redemption of common stock | $ | $ | ||||||
| Accrual of amount to be funded by Sponsor for overwithdrawal of Trust Account | $ | $ | ||||||
| Reconciliation of Cash and Restricted Cash: | ||||||||
| Cash – Beginning of Year | $ | $ | ||||||
| Restricted Cash – Beginning of Year | $ | $ | ||||||
| Cash and Restricted Cash – Beginning of Year | $ | $ | ||||||
| Cash – End of Year | $ | $ | ||||||
| Restricted Cash – End of Year | $ | $ | ||||||
| Cash and Restricted Cash – End of Year | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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GOAL ACQUISITIONS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization, Business Operations and Going Concern
Organization and General
Goal Acquisitions Corp. (the “Company”) was incorporated in Delaware on October 26, 2020. 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 (the “Business Combination”). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on businesses that service the sports industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of March 31, 2024, the Company had not yet commenced any operations. All activity from October 26, 2020 (inception) through March 31, 2024, relates to the Company’s formation and the initial public offering (“IPO”) described below, and, since the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on marketable securities held in the trust account and will recognize changes in the fair value of warrant liabilities as other income (expense).
Financing
The
registration statement for the Company’s IPO was declared effective on February 10, 2021 (the “Effective Date”). On
February 16, 2021, the Company consummated the IPO of units (the “Units” and, with respect to the common stock
included in the Units being offered, the “Public Shares”), at $ per Unit, generating gross proceeds of $
Simultaneously
with the closing of the IPO, the Company consummated the sale of units (the “Private Units”), at a price of $
per Private Unit to Goal Acquisition Sponsor, LLC (the “Sponsor”), generating total gross proceeds of $
The
Company granted the underwriters in the IPO a 45-day option to purchase up to additional Units to cover over-allotments, if
any. On February 24, 2021, the underwriters exercised the over-allotment option in full, and the closing of the issuance and sale of
the additional Units (the “Over-Allotment Units”). The issuance by the Company of the Over-Allotment Units at a
price of $ per unit resulted in total gross proceeds of $
Transaction
costs amounted to $
Trust Account
Following
the closing of the IPO on February 16, 2021 and the underwriters’ full exercise of the over-allotment option on February 24, 2021,
$
Initial Business Combination
The Company will provide holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a 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 Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $ per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the IPO in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
On February 7, 2023, the Company’s stockholders approved an amendment to the Investment Management Trust Agreement (the “First Trust Agreement Amendment”), dated February 10, 2021 (the “Investment Management Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company (“Continental”), to change the date on which Continental must commence liquidation of the amount on deposit in the trust account (the “Trust Account”) established in connection with the Company’s IPO from February 16, 2023 to March 18, 2023, subject to extension by the board of directors for up to five additional thirty-day periods (the latest of which such date (August 15, 2023 if the board of directors exercises all five extensions). The Board exercised all five additional thirty-day extensions.
| -7- |
On February 7, 2023, the Company’s stockholders also approved an amendment (the “First Charter Amendment”) to the Amended and Restated Certificate of Incorporation of the Company (the “Charter”) to (i) extend the initial period of time by which the Company has to consummate an initial business combination through August 15, 2023 and (ii) make other related administrative and technical changes in the Charter, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement the Company filed with the SEC on January 9, 2023. The Company filed the First Charter Amendment with the Secretary of State of the State of Delaware on February 8, 2023.
In
connection with the Company’s stockholders’ approval and implementation of the First Charter Amendment, the holders of
shares of the Company’s common stock exercised their right to redeem their shares for cash at a redemption price of approximately
$ per share, for an aggregate redemption amount of approximately $
On August 14, 2023, the Company’s stockholders approved an amendment (the “Second Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between the Company Continental, to change the date on which Continental must commence liquidation of the amount on deposit in the Trust Account established in connection with the Company’s initial public offering from August 16, 2023 to August 23, 2023, subject to extension by the board of directors on a day-by-day basis, with the ability to extend up to seven days at a time in advance, for a maximum of ninety-days, or November 15, 2023.
On August 14, 2023, the Company’s stockholders also approved an amendment (the “Second Charter Amendment”) to the Charter to (i) extend the initial period of time by which the Company has to consummate an initial business combination to November 14, 2023 and (ii) make other administrative and technical changes in the Charter in connection with the new termination date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. The Company filed the Second Charter Amendment with the Secretary of State of the State of Delaware on August 14, 2023.
In
connection with the stockholders’ approval and implementation of the Second Charter Amendment proposal, the holders of
Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $ per share, for an aggregate
redemption amount of $
On
November 8, 2023, the Company held a meeting and approved an amendment to the Charter (the “Third Charter Amendment”) to
extend the initial period of time by which the Company has to consummate an initial business combination to February 10, 2024. In connection
with the stockholders’ approval and implementation of the Third Charter Amendment proposal, the holders of Public Shares
exercised their right to redeem their shares for cash at a redemption price of approximately $ per share, for an aggregate redemption
amount of $
On February 7, 2024, the Company approved an amendment to the Investment Management Trust Agreement (the “Third Trust Agreement Amendment”), dated February 10, 2021, by and between the Company and Continental Stock Transfer & Trust Company to change the date on which Continental must commence liquidation of the amount on deposit in the trust account established in connection with the Company’s initial public offering from February 10, 2024 to August 8, 2024 (the “New Termination Date”).
On February 7, 2024, the Company’s stockholders also approved an amendment to the Charter (the “Fourth Charter Amendment”) to the Charter to (i) extend the period of time by which the Company has to consummate an initial business combination to the New Termination Date and (ii) make other administrative and technical changes in the Charter in connection with the New Termination Date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. The Company filed the Fourth Charter Amendment with the Secretary of State of the State of Delaware on February 7, 2024.
On February 12, 2024, the Company received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that it was no longer in compliance with the Nasdaq Listing Rules. The Company has filed an appeal of this decision and will present it’s case in front of a Nasdaq Hearings Panel was held on April 16, 2024. On May 7, 2024, the Company received the decision from the Panel notifying the Company that the trading in the Company’s securities was suspended at the open of trading on May 9, 2024. The Company has 15 days of window to appeal; as of the date of this filing the Company has not yet determined if an appeal will be filed.
In
connection with the stockholders’ approval and implementation of the Fourth Charter Amendment proposal, the holders of Public
Shares exercised their right to redeem their shares for cash at a redemption price of approximately $ per share, for an aggregate
redemption amount of approximately $
The
Company will proceed with a Business Combination if the Company has net tangible assets of at least $
Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
| -8- |
The Sponsor and the Company’s officers and directors have agreed (a) to waive redemption rights with respect to the Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Charter (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination and certain amendments to the Charter or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
As
a result of the stockholder approval of the Trust Agreement Amendment, the Company will have until the New Termination Date to complete
a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the
Combination Period and stockholders do not approve any further amendment to the Charter to further extend the New Termination Date, the
Company 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 $
The holders of the Founder Shares have agreed to waive liquidation distributions with respect to such shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquired Public Shares in or after the IPO, such Public Shares would be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the IPO price per Unit ($).
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to 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) $ 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 trust assets, in each case net of the interest which may be withdrawn to pay the Company’s tax obligation and up to
$
Amended and Restated Business Combination Agreement and Merger Agreement
On February 8, 2023, the Company entered into an Amended and Restated Business Combination Agreement (the “Amended and Restated Business Combination Agreement”) with Goal Acquisitions Nevada Corp., a Nevada corporation (“Goal Nevada”), Digital Virgo Group, a French corporation (société par actions simplifiée) (“Digital Virgo”), all shareholders of Digital Virgo (the “Digital Virgo Shareholders”), and IODA S.A., in its capacity as the “DV Shareholders Representative” (as defined in the Amended and Restated Business Combination Agreement), which amends and restates the Business Combination Agreement, dated as of November 17, 2022, by and among the Company, Digital Virgo, and certain other parties in its entirety.
Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Company and Goal Nevada entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will, prior to the Closing (as defined in the Merger Agreement), reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger (the “Reincorporation Merger”).
Pursuant to the Amended and Restated Business Combination Agreement and after the consummation of the Reincorporation Merger, Digital Virgo will acquire all of the outstanding shares of Goal Nevada whereby the outstanding shares of Goal Nevada will be exchanged for shares of Digital Virgo by means of a statutory share exchange under Nevada law (the “Exchange”).
The Amended and Restated Business Combination Agreement and the Exchange, as well as the Merger Agreement and the Reincorporation Merger, were approved by the board of directors of the Company.
The Amended and Restated Business Combination Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the transactions contemplated by the Amended and Restated Business Combination Agreement is subject to certain conditions as further described therein.
The Merger Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the proposed Merger is subject to certain conditions as further described in the Merger Agreement.
| -9- |
The Reincorporation Merger and the Exchange
Subject to, and in accordance with, the terms and conditions of the Merger Agreement, the Company will, prior to the Closing, reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger. Each unit of the Company (which is comprised of one share of common stock of the Company and one warrant to purchase one share of common stock of the Company), share of common stock of the Company and warrant to purchase shares of common stock of the Company issued and outstanding immediately prior to the effective time of the Reincorporation Merger will be converted, respectively, into units of Goal Nevada, shares of common stock of Goal Nevada and warrants to purchase shares of common stock of Goal Nevada (respectively, “Goal Nevada Units,” “Goal Nevada Shares” and “Goal Nevada Warrants”) on a one-for-one basis, which will have substantially identical rights, preferences and privileges as the units sold in the Company’s IPO and simultaneous private placement, the Company’s common stock, par value $ per share, and the warrants which were included in the units that were sold in the Company’s IPO and simultaneous private placement.
Pursuant to the Amended and Restated Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, Digital Virgo will effect a series of related transactions, in each case, upon the terms and subject to the conditions set forth in the Amended and Restated Business Combination Agreement, including the following:
| ● | Prior to the Closing, Digital Virgo will convert into a French public limited company (société anonyme); | |
| ● | After
the conversion into a French public limited company (société anonyme) and prior to the Closing, Digital Virgo
and the Digital Virgo Shareholders intend to effect a placement of ordinary shares of Digital Virgo to certain institutional and
other investors (the “PIPE Investors”) through both primary and/or secondary offerings (the “PIPE Investment”),
including the sale of a number of Digital Virgo ordinary shares held by the Digital Virgo Shareholders in exchange for $ | |
| ● | Immediately
after the PIPE Investment, Digital Virgo will |
Subject to, and in accordance with, the terms and conditions of the Amended and Restated Business Combination Agreement, at the Closing, (i) Digital Virgo will acquire all of the issued outstanding Goal Nevada Shares pursuant to articles of exchange filed with the Nevada Secretary of State in accordance with the Nevada Revised Statutes, whereby each issued and outstanding Goal Nevada Share will be exchanged for one Digital Virgo Class A Ordinary Share by means of the Exchange and (ii) each Goal Nevada Warrant will be automatically exchanged for one warrant issued by Digital Virgo that will be exercisable for one Digital Virgo Class A Ordinary Share. All outstanding Goal Nevada Units will be separated into their underlying securities immediately prior to the Exchange.
In addition, at the Closing, (i) Class C preferred shares, par value € per share, of Digital Virgo (the “DV Earnout Shares”) will be issued to and deposited with one or more escrow agents and will be disbursed to the Digital Virgo Shareholders, in whole or in part, after the Closing, if both an earnout milestone based on “EBITDA” (as defined in the Amended and Restated Business Combination Agreement) and a share price milestone are met and (ii) Class C preferred shares, par value € per share, of Digital Virgo (the “Sponsor Earnout Shares”) will be issued to and deposited with an escrow agent and will be disbursed to the Sponsor, after the Closing, if a share price milestone is met. The earnout milestone will be met if Digital Virgo’s EBITDA for any fiscal year ending on or before December 31, 2027 is equal or greater than $, in which case DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders. The share price milestone will be met if Digital Virgo’s share price is equal to or greater than $ for at least 20 out of 30 consecutive trading days (counting only those trading days in which there is trading activity) from the period starting from the date immediately following the Closing Date and ending on December 31, 2026, in which case DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders and all of the Sponsor Earnout Shares will be released to the Sponsor. Any DV Earnout Shares remaining in the earnout escrow account that have not been released to the Digital Virgo Shareholders will be released to Digital Virgo, and any Sponsor Earnout Shares remaining in the earnout escrow account that have not been released to the Sponsor will be released to Digital Virgo. The Class C preferred shares of Digital Virgo will have identical rights to the Digital Virgo Class A Ordinary Shares except that the Class C preferred shares will have no voting rights. If and when the Class C preferred shares are released from escrow to the Digital Virgo Shareholders or the Sponsor, as applicable, such shares shall automatically be converted into Digital Virgo Class A Ordinary Shares, on a one-for-one basis, with full voting rights as of their respective date of disbursement by the escrow agent. “EBITDA” means the “Adjusted EBITDA” of Digital Virgo as currently calculated by Digital Virgo for its reporting requirements under its existing credit facility.
The Sponsor has agreed to forfeit shares of common stock of the Company for no consideration effective as of the Closing.
The Company has received two notices from Digital Virgo purporting to unilaterally terminate the Amended and restated Business Combination Agreement pursuant to Section 8.03(d) of the Amended and Restated Business Combination Agreement. Since receipt of that correspondence, the Company attempted to communicate with Digital Virgo have about these matters to resolve the dispute and proceed with the transaction, but Digital Virgo has refused. Therefore, the Company commenced Arbitration with the International Chamber of Commerce (“ICC”) as prescribed within the Amended and restated Business Combination Agreement to enforce its rights under this agreement.
On April 29, 2024 the SEC issued an order declaring Digital Virgo’s Registration Statement abandoned. Digital Virgo Group S.A. had a filed a registration statement to register securities under Section 6(a) of the Securities Act of 1933. This registration statement had been on file for more than nine months and not yet become effective. Digital Virgo failed to respond to notice under Rule 479 that the registration statement would be declared abandoned unless it was timely amended or withdrawn; in view of the foregoing, the SEC ordered that the statement be declared abandoned.
| -10- |
Other Agreements
The Amended and Restated Business Combination Agreement contemplates the execution of various additional agreements and instruments, including, among others, an Amended and Restated Sponsor Support Agreement, Amended and Restated Investor Rights Agreement, and Amended and Restated Initial Shareholders Forfeiture Agreement.
Use of Funds Restricted for Payment of Taxes
From
inception to date, the Company has withdrawn a total of $
As of the date of these financial statements, the Company has not yet filed its corporate tax return and intends to remit payment for income taxes upon completion of the return.
Liquidity, Capital Resources and Going Concern
As
of March 31, 2024, the Company had $
In
order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or its
affiliates may, but are not obligated to, loan us funds as may be required. If the Company completes a Business Combination, the Company
will repay such loaned amounts. In the event that a 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 for such repayment.
Up to $
The Company will need to raise additional capital through loans or additional investments from the Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and the Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, the Company 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 us on commercially acceptable terms, if at all.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements - Going Concern,” the Company has until the New Termination Date, currently August 8, 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 and an extension of the period of time the Company has to complete a business combination has not been approved by the Company’s stockholders, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company has determined that the Company’s insufficient capital and mandatory liquidation, should a business combination not occur, and an extension not approved by the stockholders of the Company, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after August 8, 2024. The Company intends to continue to complete a business combination, including the transactions contemplated by the Amended and Restated Business Combination Agreement (the “Transaction”), before the mandatory liquidation date. The Company is within 12 months of its mandatory liquidation date as of the date that these financial statements were issued.
The Company’s 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.
| -11- |
Risks and Uncertainties
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these unaudited condensed financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
Under the current rules and regulations of the SEC the Company is not deemed an investment company for purposes of the Investment Company Act of 1940 (the “Investment Company Act”); however, on March 30, 2022, the SEC proposed new rules (the “Proposed Rules”) relating, among other matters, to the circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The Proposed Rules provide a safe harbor for companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the Proposed Rules would require a company to file a Current Report on Form 8-K announcing that it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective date of the SPAC’s registration statement for its initial public offering. The company would then be required to complete its initial business combination no later than 24 months after the effective date of such registration statement.
There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, which includes the Company like ours. The Company did not enter into a definitive business combination agreement within 18 months after the effective date of our registration statement relating to our IPO and there is a risk that we may not complete our initial business combination within 24 months of such date. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company. If the Company is deemed to be an investment company for purposes of the Investment Company Act, the Company may be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate. If the Company is required to liquidate, the Company’s investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of the Company’s stock and warrants following such a transaction.
Currently, the funds in the Company’s Trust account are held only in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. The Investment Company Act defines an investment company as any issuer which (i) is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities; (ii) is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding; or (iii) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of Government securities and cash items) on an unconsolidated basis.
The longer that the funds in the Company’s Trust account are held in money market funds, there is a greater risk that the Company may be considered an unregistered investment company. In the event the Company is deemed an investment company under the Investment Company Act, whether based upon the Company’s activities, the investment of the Company’s funds, or as a result of the Proposed Rules being adopted by the SEC, the Company may determine that we are required to liquidate the money market funds held in the Company Trust account and may thereafter hold all funds in our trust account in cash until the earlier of consummation of the Company’s business combination or liquidation. As a result, if the Company is to switch all funds to cash, the Company will likely receive minimal interest, if any, on the funds held in the Company’s Trust account after such time, which would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.
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 (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its stockholders 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. The IR Act applies only to repurchases that occur after December 31, 2022.
On
February 7, 2023, the Company’s stockholders elected to redeem shares for a total of $
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Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, a vote by stockholders to extend the period of time to complete a Business Combination 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 a 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, including the Transaction.
Note 2 — 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 (“U.S. 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 U.S. 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 filed with the SEC on April 16, 2024. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.
Emerging Growth Company Status
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 auditor 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 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.
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Use of Estimates
The preparation of unaudited condensed financial statements in conformity with U.S. 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 and Restricted Cash
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had
Marketable Securities Held in the Trust Account
At
March 31, 2024 and December 31, 2023, the Trust Account had $
Sponsor Loan Conversion Option
The Company accounts for its Sponsor Loan Conversion Option (as defined in Note 5) exercisable for promissory notes payable to the Sponsor issued under the Expense Advancement Agreement under ASC 815, Derivatives and Hedging (“ASC 815”). The Sponsor Loan Conversion Option qualifies as an embedded derivative under ASC 815 and is required to be reported at fair value.
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair 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 is 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 the occurrence of uncertain future events. Accordingly, as of March 31, 2024 and December 31, 2023, respectively, and shares of common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets, respectively.
The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the IPO, the Company recognized the remeasurement 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 deficit.
As of March 31, 2024, the common stock subject to possible redemption reflected in the balance sheets are reconciled in the following table:
| Shares | Amount | |||||||
| Common stock subject to possible redemption, December 31, 2023 | $ | |||||||
| Plus: | ||||||||
| Remeasurement of common stock subject to possible redemption carrying value to redemption value | — | ( | ) | |||||
| Less: | ||||||||
| Redemption of common shares | ( | ) | ( | ) | ||||
| Common stock subject to possible redemption, March 31, 2024 | $ | |||||||
| -14- |
Net
loss per common stock is computed by dividing net loss by the weighted average number of common stock outstanding for each of the periods.
The calculation of diluted loss per common stock does not consider the effect of the warrants that would be anti-dilutive. The warrants
are exercisable to purchase
| For the Three Months Ended March 31, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
Common stock subject to redemption | Common stock not subject to redemption | Common stock subject to redemption | Common stock not subject to redemption | |||||||||||||
| Basic and diluted net loss per common stock: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic and diluted net loss per common stock | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature, other than discussed in Note 8.
Derivative warrant liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The
Company accounts for its
Income Taxes
The
Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition
of deferred tax assets and liabilities for both the expected impact of differences between the 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. Our effective tax rate was (
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.
The
Company recognizes accrued interest and penalties related to income taxes and unrecognized tax benefits as income tax expense. There
were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023. During the three months ended March 31, 2024, the Company’s provision for income taxes included $
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.
While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the timing of any Business Combination expenses and the actual interest income that will be recognized during the year. The Company has taken a position as to the calculation of income tax expense in a current period based on ASC740-270-25-3 which states, “If an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through March 31, 2024.
| -15- |
Recent Accounting Standards
In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The adoption of ASU 2020-06 is not expected to have an impact on the Company’s financial position, results of operations or cash flows.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The FASB issued this ASU to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Note 3 — Initial Public Offering
The
Company sold Units, at a purchase price of $ per Unit in its IPO on February 16, 2021.
On February 16, 2021, an aggregate of $ per Unit sold in the IPO was held in the Trust Account and will be held as cash or invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act.
On February 24, 2021, the underwriters of the IPO exercised the over-allotment option in full to purchase Units.
Following
the closing of the IPO on February 16, 2021 and the underwriters’ full exercise of over-allotment option on February 24, 2021,
$
| -16- |
Note 4 — Private Units
Simultaneously
with the closing of the IPO on February 16, 2021, the Sponsor purchased an aggregate of Private Units at a price of $ per
Private Unit, for an aggregate purchase price of $
On
February 24, 2021, simultaneously with the issuance and sale of the Over-Allotment Units, the Company consummated the sale of an additional
Private Units to the Sponsor, generating gross proceeds of $
Note 5 — Related Party Transactions
Founder Shares
On
November 24, 2020, the Sponsor purchased an aggregate of shares of the Company’s common stock for an aggregate price
of $ (the “Founder Shares”). The Founder Shares include an aggregate of up to shares subject to forfeiture
by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Sponsor will
collectively own
The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until after the completion of a Business Combination.
Promissory Note — Related Party
Concurrently
with the filing of the Company’s registration statement on Form S-1 on January 21, 2021, the Company issued an unsecured promissory
note to the Sponsor (the “Promissory Note”), pursuant to which the Company was authorized to borrow up to an aggregate principal
amount of $
Related Party Loans
In
order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s
officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds
of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the
Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust
Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest,
or, at the lender’s discretion, up to $
Sponsor Loans Issued Under Expense Advancement Agreement
Effective
as of November 4, 2021, upon approval of the Board of Directors, the Company entered into an Expense Advancement Agreement with Goal
Acquisitions Sponsor, LLC (the “Funding Party”). Pursuant to the Expense Advancement Agreement, the Funding Party has agreed
to advance to the Company from time to time, upon request by the Company, a maximum of $
As
of March 31, 2024 and December 31, 2023, the available balance under the Expense Advancement Agreement was $
As
of March 31, 2024 and December 31, 2023, respectively, the aggregate balance outstanding on the Sponsor loans issued was $
| -17- |
Advances – Related Party
During
the period ended March 31, 2024, the Company repaid the Sponsor $
Note 6 — Commitments & Contingencies
Arbitrations
When Digital Virgo refused to close the Business Combination in July of 2023, the Company engaged several law firms to assist with enforcement of the Company’s rights and remedies under the Amended and Restated Business Combination Agreement. The Company requested Arbitration with the ICC and the case will be decided by a panel of three Arbitrators according to ICC rules and applying Delaware law. As of the date of this Form 10-Q, the arbitration is still in process.
In the normal course of business, the Company may be involved in various arbitrations. The Company assesses its liabilities and contingencies in connection with outstanding arbitrations, if any, utilizing the latest information available. When a loss contingency is not both probable and estimable, the Company does not establish an accrual.
Based on currently available information, the outcome of the Company’s outstanding matters is still unknown as of the date of this filing. Currently, the aggregate potential loss related to the various arbitrations is not expected to exceed an aggregate amount of $2.0 million.
Registration Rights
The holders of the Founder Shares and Representative Shares, which are the shares of common stock issued to EarlyBirdCapital, Inc. (“EarlyBird”) and its designees prior to the consummation of the Company’s IPO, as well as the holders of the Private Units and any units that may be issued in payment of Working Capital Loans made to the Company, are entitled to registration rights pursuant to an agreement signed prior to the Effective Date of the IPO. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Representative Shares, Private Units and units issued in payment of Working Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a business combination. Notwithstanding anything to the contrary, EarlyBird may only make a demand on one occasion and only during the five-year period beginning on the Effective Date of the IPO. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination; provided, however, that EarlyBird may participate in a “piggy-back” registration only during the seven-year period beginning on the Effective Date of the IPO. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Business Combination Marketing Agreement
In
connection with the IPO, the Company engaged EarlyBird as an advisor in connection with a Business Combination to assist the Company
in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce
the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination,
assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and
public filings in connection with the Business Combination. The Company agreed to pay EarlyBird a cash fee for such services upon the
consummation of a Business Combination in an amount equal to
On
November 5, 2021 the Company entered into an agreement with EarlyBird together with JMP Securities LLC (“JMP”) and JonesTrading
Institutional Services LLC (“JonesTrading”) (together, the “Advisors”) to assist the Company in the possible
private placement of equity securities and/or debt securities to provide financing to the Company in connection with a Business Combination.
Deferred Legal Fees
As
of March 31, 2024 and December 31, 2023, the Company has incurred legal costs of $
Service Provider Agreements
From
time to time the Company has entered into and may enter into agreements with various services providers and advisors, including investment
banks, to help us identify targets, negotiate terms of potential Business Combinations, consummate a Business Combination and/or provide
other services. In connection with these agreements, the Company may be required to pay such service providers and advisors fees in connection
with their services to the extent that certain conditions, including the closing of a potential Business Combination, are met. If a Business
Combination does not occur, the Company would not expect to be required to pay these contingent fees. There can be no assurance that
the Company will complete a Business Combination. On July 6, 2023, the Company entered into an agreement with an advisor for an aggregate
fee of $
In July of 2023, Digital Virgo purported to terminate the Amended and Restated Business Combination Agreement, and the Company is pursuing all available remedies in ICC arbitration.
| -18- |
Note 7 — Stockholders’ Deficit
Preferred Stock — The Company is authorized to issue shares of preferred stock with a par value of $ with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31, 2024 and December 31, 2023, there were shares of preferred stock issued or outstanding.
Common
Stock — The Company is authorized to issue shares of common stock with a par value of $ per share. On
December 16, 2020, the Company effected a stock dividend of of a share of common stock for each outstanding share of common stock,
and as a result our Sponsor holds founder shares of which an aggregate of up to shares were subject to forfeiture by
the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part. Because of the underwriters’
full exercise of the over-allotment option on February 24, 2021,
Warrants
— The Public Warrants will become exercisable 30 days after the completion of a Business Combination. No warrants will
be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable
upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration
statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period
following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement
and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless
basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that
exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public
Warrants will expire
Once the warrants become exercisable, the Company may redeem the Public Warrants:
| ● | in whole and not in part; | |
| ● | at
a price of $ | |
| ● | upon not less than 30 days’ prior written notice of redemption to each warrant holder (the “30-day redemption period”); | |
| ● | ||
| ● | if, and only if, there is a current registration statement in effect with respect to the share of common stock underlying such warrants. |
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
| -19- |
The Private Warrants are identical to the Public Warrants underlying the Units being sold in the IPO, except that the Private Warrants and the common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Representative Shares — The Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the Effective Date of the registration statement related to the IPO pursuant to FINRA Rule 5110(g)(1). Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the Effective Date of the registration statements related to the IPO, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the Effective Date of the registration statements related to the IPO except to any underwriter and selected dealer participating in the IPO and their bona fide officers or partners.
The holders of the Representative Shares have agreed not to transfer, assign or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the completion of a 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 a Business Combination within the Combination Period.
Note 8 — Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| March 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| 2024 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Description | ||||||||||||||||
| Assets: | ||||||||||||||||
| Marketable securities held in the trust account | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liabilities | ||||||||||||||||
| Sponsor Loan Conversion Option | ||||||||||||||||
| December 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| 2023 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Description | ||||||||||||||||
| Assets: | ||||||||||||||||
| Marketable securities held in the trust account | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liabilities | ||||||||||||||||
| Sponsor Loan Conversion Option | ||||||||||||||||
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Warrant Liabilities
The Company utilizes a Monte Carlo simulation model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility of comparable companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
The aforementioned warrant liabilities are not subject to qualified hedge accounting. There were no transfers between Levels 1, 2 or 3 during the period ended March 31, 2024 and December 31, 2023.
March 31, 2024 | December 31, 2023 | |||||||
| Stock price | $ | $ | ||||||
| Strike price | $ | $ | ||||||
| Term (in years) | ||||||||
| Volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Dividend yield | % | % | ||||||
The following table presents the changes in the fair value of warrant liabilities for the period ended March 31, 2024:
| Private Placement Warrants | ||||
| Fair value as of December 31, 2023 | $ | |||
| Change in fair value | ||||
| Fair value as of March 31, 2024 | $ | |||
Sponsor Loan Conversion Option
The Company established the fair value for the Sponsor Loan Conversion Option using a Monte-Carlo method model, which is considered to be a Level 3 fair value measurement.
The following table provides quantitative information regarding Level 3 fair value measurements for the Sponsor Loan Conversion Option:
March 31, 2024 | December 31, 2023 | |||||||
| Stock price | $ | $ | ||||||
| Strike price of warrants | $ | $ | ||||||
| Strike price of debt conversion | $ | $ | ||||||
| Term (in years) | ||||||||
| Volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
There
was
Note 9 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed financial statements were issued. Based upon this review, other than disclosed below or within these financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
On
April 1, 2024,
On
April 23, 2024,
On
April 23, 2024, the Sponsor funded $
As discussed in Note 1, on May 7, 2024, the Company received the decision from the Panel notifying the Company that the trading in the Company’s securities was suspended at the open of trading on May 9, 2024. The Company has 15 days of window to appeal; as of the date of this filing the Company has not yet determined if an appeal will be filed.
| -21- |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This Quarterly Report on Form 10-Q includes forward-looking statements. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Factors that might cause or contribute to such forward-looking statements include, but are not limited to, those set forth in the Risk Factors section of the Company’s final prospectus for the Company’s initial public offering filed with the SEC on February 11, 2021 and the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2024. The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this report.
Overview
We are a blank check company incorporated on October 26, 2020 as a Delaware corporation and 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”). The registration statement for the Company’s IPO was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on February 10, 2021. On February 16, 2021, the Company consummated the IPO of 22,500,000 units (the “Units”) at a price of $10.00 per Unit, for total gross proceeds of $225,000,000. On February 24, 2021, the underwriters exercised the over-allotment option in full resulting in the closing of the issuance and sale of an additional 3,375,000 Units (the “Over-Allotment Units”). The issuance by the Company of the Over-Allotment Units at a price of $10.00 per unit resulted in total gross proceeds of $33,750,000. Each Unit consists of one shares of common stock, $0.0001 par value, and one redeemable warrant entitling its holder to purchase one share of common stock at a price of $11.50 per share.
Simultaneously with the closing of the IPO, the Company consummated the sale of 600,000 units (the “Private Units”), at a price of $10.00 per Private Unit. On February 24, 2021, simultaneously with the issuance and sale of the Over-Allotment Units, the Company consummated the sale of an additional 67,500 Private Units (together with the IPO Private Placement, the “Private Placements”), generating gross proceeds of $6,675,000.
Results of Operations
For the three months ended March 31, 2024, we had a net loss of $593,058. We had investment income of $33,368 on the amount held in the Trust Account. We recognized a $2,363 loss on the change in the fair value of the warrant liability. We incurred $436,762 of operating costs and business combination expenses. We also incurred a $187,301 provision for income taxes.
For the three months ended March 31, 2023, we had a net loss of $390,290. We had investment income of $1,829,146 on the amount held in Trust. We recognized a $219 loss on the change in the fair value of the warrant liability. We incurred $1,845,219 of operating costs and business combination expenses. We also recognized a $373,998 provision for income taxes.
Proposed Business Combination
On February 8, 2023, we entered into an Amended and Restated Business Combination Agreement (the “Amended and Restated Business Combination Agreement”) with Goal Acquisitions Nevada Corp., a Nevada corporation (“Goal Nevada”), Digital Virgo Group, a French corporation (société par actions simplifiée) (“Digital Virgo”), all shareholders of Digital Virgo (the “Digital Virgo Shareholders”), and IODA S.A., in its capacity as the “DV Shareholders Representative” (as defined in the Amended and Restated Business Combination Agreement), which amends and restates the Business Combination Agreement, dated as of November 17, 2022, by and among the Company, Digital Virgo, and certain other parties in its entirety.
Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Company and Goal Nevada entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will, prior to the Closing (as defined in the Merger Agreement), reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger (the “Reincorporation Merger”).
Pursuant to the Amended and Restated Business Combination Agreement and after the consummation of the Reincorporation Merger, Digital Virgo will acquire all of the outstanding shares of Goal Nevada whereby the outstanding shares of Goal Nevada will be exchanged for shares of Digital Virgo by means of a statutory share exchange under Nevada law (the “Exchange”).
The Amended and Restated Business Combination Agreement and the Exchange, as well as the Merger Agreement and the Reincorporation Merger, were approved by the board of directors of the Company.
The Amended and Restated Business Combination Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the transactions contemplated by the Amended and Restated Business Combination Agreement is subject to certain conditions as further described therein.
| -22- |
The Merger Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the proposed Merger is subject to certain conditions as further described in the Merger Agreement.
In July of 2023, Digital Virgo purported to unilaterally terminate the Amended and Restated Business Combination Agreement and has refused to negotiate. Therefore the Company commenced arbitration to before the International Chamber of Commerce (“ICC”) to enforce the Company’s rights under the Amended and Restated Business Combination Agreement.
Extension and Redemptions
On February 7, 2023, our stockholders approved an amendment (the “First Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021 (the “Investment Management Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company (“Continental”), to change the date on which Continental must commence liquidation of the amount on deposit in the trust account (the “Trust Account”) established in connection with the Company’s initial public offering from February 16, 2023 to March 18, 2023, subject to extension by the board of directors for up to five additional thirty-day periods (the latest of which such date is August 15, 2023 if the board of directors exercises all five extensions). The Board exercised all five additional thirty-day extensions.
On February 7, 2023, our stockholders also approved an amendment (the “First Charter Amendment”) to the Amended and Restated Certificate of Incorporation of the Company (the “Charter”) to (i) extend the initial period of time by which the Company has to consummate an initial business combination to through August 15, 2023 and (ii) make other related administrative and technical changes in the Charter, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement that the Company filed with the SEC on January 9, 2023. The Company filed the First Charter Amendment with the Secretary of State of the State of Delaware on February 8, 2023.
In connection with our stockholders’ approval and implementation of the Charter Amendment Proposal, the holders of 16,328,643 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.13 per share, for an aggregate redemption amount of approximately $165,489,173. Following such redemptions, 9,546,357 Public Shares remained outstanding.
On August 14, 2023, our stockholders approved an amendment (the “Second Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between us and Continental, to change the date on which Continental must commence liquidation of the amount on deposit in the Trust Account established in connection with the Company’s initial public offering from August 16, 2023 to August 23, 2023, subject to extension by the board of directors on a day-by-day basis, with the ability to extend up to seven days at a time in advance, for a maximum of ninety-days to November 15, 2023.
On August 14, 2023, our stockholders also approved an amendment (the “Second Charter Amendment”) to the “Charter to (i) extend the period of time by which we have to consummate an initial business combination to November 15, 2023 and (ii) make other administrative and technical changes in the Charter in connection with the new termination date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. We filed the Second Charter Amendment with the Secretary of State of the State of Delaware on August 14, 2023.
In connection with the stockholders’ approval and implementation of the Second Charter Amendment, the holders of 8,708,098 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.50 per share, for an aggregate redemption amount of $91,398,232. Following such redemptions, 838,259 Public Shares remained outstanding.
On November 8, 2023, we held a meeting and our stockholders’ approved an amendment to the Charter (the “Third Charter Amendment”) to extend the period of time by which we have to consummate an initial business combination to February 10, 2024. In connection with the stockholders’ approval and implementation of the Third Charter Amendment, the holders of 571,909 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of $6,077,050. Following such redemptions, 266,360 Public Shares remained outstanding.
On February 7, 2024, the stockholders’ approved an amendment (the “Third Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between us and Continental Stock Transfer & Trust Company to change the date on which Continental must commence liquidation of the amount on deposit in the trust account established in connection with our initial public offering from February 10, 2024 to August 8, 2024 (the “New Termination Date”).
In connection with the stockholders’ approved an amendment to the Charter (the “Fourth Charter Amendment”), the holders of 52,181 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of approximately $554,562. Following such redemptions, 214,169 Public Shares remain outstanding.
See the proxy statements filed by us with the SEC on January 9, 2023 and July 27, 2023 and the Current Report on Form 8-K filed by us with the SEC on February 8, 2023 and August 14, 2023, February 7, 2024 for additional information.
| -23- |
Use of Funds Restricted for Payment of Taxes
From inception to date, the Company has withdrawn a total of $2,090,813 of interest from the Trust Account of which $541,719 was paid for franchise taxes. The Company recorded a receivable due from the Sponsor and a related payable to the Trust for an amount of $1,461,178 as of March 31, 2024. The receivable reflects the amount due to be reimbursed to the Trust Account from the Sponsor for the funds used for operating expenses. As of March 31, 2024, the Company has restricted cash of $87,916 and a receivable from the Sponsor of $1,461,178. The Company intends to deposit $1,461,178 back into the Trust Account, or use the $1,461,178 (or a portion thereof) for tax obligations until a deposit is made into the trust on a future date.
As of the date of this Form 10-Q, the Company has not yet filed it’s corporate tax return for the year ended December 31, 2023 and intends to remit payment for income taxes upon completion of the return.
Liquidity, Capital Resources and Going Concern
As of March 31, 2024, we had $87,916 in cash and a working capital deficit of $12,658,963. In addition, in order to finance transaction costs in connection with a Business Combination, our initial stockholders, or certain of our officers and directors may, but are not obligated to, provide us with working capital loans (see Note 5 of the accompanying unaudited condensed financial statements). There are currently no amounts outstanding under any working capital loans.
In addition, in May 2021, we received a commitment letter from the Sponsor whereby the Sponsor committed to fund any working capital shortfalls through the earlier of an initial Business Combination or our liquidation. The loans would be issued as required and each loan would be evidenced by a promissory note, up to an aggregate of $300,000. In August 2021, we received a new commitment letter from the Sponsor to increase such loan amount up to $500,000. The loans will be non-interest bearing, unsecured and payable upon the consummation of our initial Business Combination or at the holder’s discretion, convertible into warrants of the Company at a price of $2.00 per warrant.
Effective as of November 4, 2021, upon approval of the Board of Directors, we entered into an Expense Advancement Agreement with Goal Acquisitions Sponsor, LLC (the “Funding Party”). Pursuant to the Expense Advancement Agreement, the Funding Party has agreed to advance to us from time to time, upon request by us, a maximum of $1,500,000 in the aggregate, in each instance issued pursuant to the terms of a promissory note, as may be necessary to fund our expenses relating to the investigation and selection of a target business and other working capital requirements prior to completion of any potential Business Combination. On April 28, 2023 the Company executed its first amendment to the Expense Advancement Agreement and increased the maximum funding allowable under the agreement to $2,000,000.
Pursuant to the terms of the Expense Advancement Agreement, if we complete a Business Combination, we will repay all outstanding loaned amounts. No interest accrues on the unpaid principal balance of any Promissory Note. The Funding Party cannot seek repayment from the trust account for amounts owed under the Expense Advancement Agreement. All loans from the Funding Party are convertible into warrants to purchase shares of common stock (the “Conversion Warrants”), at the option of the Funding Party. The number of Conversion Warrants granted will be equal to the portion of the principal amount of the Promissory Note being converted, divided by $2.00, as amended per First Amendment to the Expense Advance Agreement, (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction related to our common stock occurring after the date of the Expense Advancement Agreement), rounded up to the nearest whole number of shares. The Conversion Warrants shall be identical to those warrants that were issued in a private placement that closed concurrently with our initial public offering. The holders of Conversion Warrants or shares of common stock underlying the Conversion Warrants are entitled to certain demand and piggyback registration rights pursuant to the terms of the Expense Advancement Agreement. All previously outstanding commitments from the Sponsor have been consolidated under the Expense Advancement Agreement, effective November 4, 2021.
Until consummation of its Business Combination, the Company will be using the funds not held in the trust account, and any additional Working Capital Loans for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or its affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we will 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 working capital loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units. To date, the Company had no borrowings under the working capital loans.
We will need to raise additional capital through loans or additional investments from the Sponsor, stockholders, officers, directors, or third parties. Our officers, directors and the Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we 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. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern one year from the date that our financial statements included in this Quarterly Report on Form 10-Q are issued.
| -24- |
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements – Going Concern,” the Company has until the New Termination Date, currently November 14, 2023 to consummate a business combination. On August 14, 2023, the Company’s stockholders approved another amendment to the Investment Management Trust Agreement to change the date on which Continental must commence liquidation of the Trust Account to the New Termination Date. It is uncertain that we will be able to consummate a business combination by this time. If a business combination is not consummated by this date and an extension of the period of time the Company has to complete a business combination has not been approved by the Company’s stockholders, there will be a mandatory liquidation and subsequent dissolution of the Company. We have determined that our insufficient capital and mandatory liquidation, should a business combination not occur, and an extension not approved by the stockholders of the Company, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 14, 2023. We intend to continue to complete a business combination, including the Transaction, before the mandatory liquidation date. The Company is within 12 months of its mandatory liquidation date as of the time of filing of this Quarterly Report on Form 10-Q.
Our 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.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of this Quarterly Report on Form 10-Q and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of this Quarterly Report on Form 10-Q.
Under the current rules and regulations of the SEC we are not deemed an investment company for purposes of the Investment Company Act of 1940 (the “Investment Company Act”); however, on March 30, 2022, the SEC proposed new rules (the “Proposed Rules”) relating, among other matters, to the circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The Proposed Rules provide a safe harbor for companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the Proposed Rules would require a company to file a Current Report on Form 8-K announcing that it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective date of the SPAC’s registration statement for its initial public offering. The company would then be required to complete its initial business combination no later than 24 months after the effective date of such registration statement.
There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours. We did not enter into a definitive business combination agreement within 18 months after the effective date of our registration statement relating to our initial public offering and there is a risk that we may not complete our initial business combination within 24 months of such date. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company. If we were deemed to be an investment company for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate. If we are required to liquidate, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock and warrants following such a transaction.
Currently, the funds in our trust account are held only in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. The Investment Company Act defines an investment company as any issuer which (i) is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities; (ii) is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding; or (iii) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of Government securities and cash items) on an unconsolidated basis.
The longer that the funds in the trust account are held in money market funds, there is a greater risk that we may be considered an unregistered investment company. In the event we are deemed an investment company under the Investment Company Act, whether based upon our activities, the investment of our funds, or as a result of the Proposed Rules being adopted by the SEC, we may determine that we are required to liquidate the money market funds held in our trust account and may thereafter hold all funds in our trust account in cash until the earlier of consummation of our business combination or liquidation. As a result, if we were to switch all funds to cash, we will likely receive minimal interest, if any, on the funds held in our trust account after such time, which would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of our Company.
| -25- |
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies:
Warrant Liabilities
We account for the warrants issued in connection with our initial public offering in accordance with Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815”), under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the Statement of Operations in the period of change.
Common stock subject to possible redemption
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” 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 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 the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of both March 31, 2024 and December 31, 2023, 214,169 and 266,350 shares of common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ 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. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit.
Net Loss Per Common Share
The Company has one class of common stock. The common stock sold in the IPO is subject to possible redemption. The 25,875,000 common stock underlying the outstanding warrants were excluded from diluted earnings per common stock for the period ended March 31, 2024 and 2023 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The FASB issued this ASU to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows.
In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for the fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The adoption of ASU 2020-06 is not expected to have an impact on our financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
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JOBS Act
On April 5, 2012, the JOBS Act was signed into law. 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 elected 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.
As an “emerging growth company”, we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
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 March 31, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (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 not effective.
We have previously identified deficiencies in our internal controls over financial reporting which we determined are material weaknesses. Our internal controls did not detect error in (i) the classification related to our accounting for complex financial instruments, (ii) the proper safeguarding of trust assets and the monitoring process of the use of trust funds, and (iii) accruals. The Company has begun to develop a remediation plan which is more fully described below.
Remediation Plan
After identifying the material weaknesses, we have commenced our remediation efforts by taking the following steps:
| ● | We have expanded and improved our review process for complex securities and related accounting standards. | |
| ● | We have increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. | |
| ● | We are establishing additional monitoring and oversight controls designed to ensure the accuracy and completeness of our financial statements and related disclosures. | |
| ● | We have improved our review of material agreements to ensure adherence to various stipulations in the agreement, specifically the Trust Agreement, where we improved our monitoring process on the use of funds from the Trust Account to be paid for taxes. |
The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2024 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.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
In September of 2023, the Company commenced arbitration with the International Chamber of Commerce (“ICC”) against Digital Virgo for breach of the Amended and Restated Business Combination Agreement, seeking damages and equitable remedies. Digital Virgo has asserted a counterclaim for a “Termination Fee” as defined in the Amended and Restated Business Combination Agreement. Apart from the ICC Arbitration, there is no material litigation, arbitration or governmental proceeding currently pending against us or any of our officers or directors in their capacity as such, and we and our officers and directors have not been subject to any such proceeding in the 12 months preceding the date of this annual report on Form 10-K.
Item 1A. Risk Factors.
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
During
the fiscal quarter ended March 31, 2024, none of the Company’s directors or executive officers
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Item 6. Exhibits.
| * | Filed herewith. |
| ** | This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filings of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
| # | The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Company hereby undertakes to furnish supplementally a copy of any omitted schedule to the SEC upon its request; provided, however, that the Company may request confidential treatment for any such schedules so furnished. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GOAL ACQUISITIONS CORP. | ||
| Date: May 20, 2024 | By: | /s/ William T. Duffy |
| Name: | William T. Duffy | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Harvey Schiller, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Goal Acquisitions Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 20, 2024 | By: | /s/ Harvey Schiller |
| Harvey Schiller | ||
Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William T. Duffy, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Goal Acquisitions Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 20, 2024 | By: | /s/ William T. Duffy |
| William T. Duffy | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Goal Acquisitions Corp. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: May 20, 2024 | By: | /s/ Harvey Schiller |
| Harvey Schiller | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Goal Acquisitions Corp. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: May 20, 2024 | By: | /s/ William T. Duffy |
| William T. Duffy | ||
Chief Financial Officer (Principal Financial Officer) |
Condensed Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock subject to possible redemption, shares | 214,169 | 266,350 |
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 100,000,000 | 100,000,000 |
| Common stock, shares issued | 7,286,250 | 7,286,250 |
| Common stock, shares outstanding | 7,286,250 | 7,286,250 |
Condensed Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|
| Balance at Dec. 31, 2022 | $ 729 | $ (3,905,257) | $ (3,904,528) | |
| Balance, shares at Dec. 31, 2022 | 7,286,250 | |||
| Excise tax payable attributable to redemption of common stock | (1,654,892) | (1,654,892) | ||
| Remeasurement of common stock subject to possible redemption | (1,922,323) | (1,922,323) | ||
| Net loss | (390,290) | (390,290) | ||
| Balance at Mar. 31, 2023 | $ 729 | (7,872,762) | (7,872,033) | |
| Balance, shares at Mar. 31, 2023 | 7,286,250 | |||
| Balance at Dec. 31, 2023 | $ 729 | (12,073,300) | (12,072,571) | |
| Excise tax payable attributable to redemption of common stock | (5,546) | (5,546) | ||
| Remeasurement of common stock subject to possible redemption | 122,555 | 122,555 | ||
| Net loss | (593,058) | (593,058) | ||
| Balance at Mar. 31, 2024 | $ 729 | $ (12,549,349) | $ (12,548,620) | |
| Balance, shares at Mar. 31, 2024 | 7,286,250 |
Pay vs Performance Disclosure - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Pay vs Performance Disclosure [Table] | ||
| Net Income (Loss) | $ (593,058) | $ (390,290) |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Insider Trading Arrangements [Line Items] | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Organization, Business Operations and Going Concern |
3 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
| Organization, Business Operations and Going Concern | Note 1 — Organization, Business Operations and Going Concern
Organization and General
Goal Acquisitions Corp. (the “Company”) was incorporated in Delaware on October 26, 2020. 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 (the “Business Combination”). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on businesses that service the sports industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of March 31, 2024, the Company had not yet commenced any operations. All activity from October 26, 2020 (inception) through March 31, 2024, relates to the Company’s formation and the initial public offering (“IPO”) described below, and, since the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on marketable securities held in the trust account and will recognize changes in the fair value of warrant liabilities as other income (expense).
Financing
The registration statement for the Company’s IPO was declared effective on February 10, 2021 (the “Effective Date”). On February 16, 2021, the Company consummated the IPO of units (the “Units” and, with respect to the common stock included in the Units being offered, the “Public Shares”), at $ per Unit, generating gross proceeds of $225,000,000.
Simultaneously with the closing of the IPO, the Company consummated the sale of units (the “Private Units”), at a price of $ per Private Unit to Goal Acquisition Sponsor, LLC (the “Sponsor”), generating total gross proceeds of $6,000,000.
The Company granted the underwriters in the IPO a 45-day option to purchase up to additional Units to cover over-allotments, if any. On February 24, 2021, the underwriters exercised the over-allotment option in full, and the closing of the issuance and sale of the additional Units (the “Over-Allotment Units”). The issuance by the Company of the Over-Allotment Units at a price of $ per unit resulted in total gross proceeds of $33,750,000. On February 24, 2021, simultaneously with the issuance and sale of the Over-Allotment Units, the Company consummated the sale of an additional Private Units (together with the IPO Private Placement, the “Private Placements”), generating gross proceeds of $675,000.
Transaction costs amounted to $5,695,720 consisting of $5,175,000 of underwriting discount, and $520,720 of other offering costs.
Trust Account
Following the closing of the IPO on February 16, 2021 and the underwriters’ full exercise of the over-allotment option on February 24, 2021, $258,750,000 ($ per Unit) from the net proceeds of the sale of the Units in the IPO, the sale of Over-Allotment Units, and the sale of the Private Units was placed in a Trust Account, which are held as cash or invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the funds in the Trust Account.
Initial Business Combination
The Company will provide holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a 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 Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $ per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the IPO in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
On February 7, 2023, the Company’s stockholders approved an amendment to the Investment Management Trust Agreement (the “First Trust Agreement Amendment”), dated February 10, 2021 (the “Investment Management Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company (“Continental”), to change the date on which Continental must commence liquidation of the amount on deposit in the trust account (the “Trust Account”) established in connection with the Company’s IPO from February 16, 2023 to March 18, 2023, subject to extension by the board of directors for up to five additional thirty-day periods (the latest of which such date (August 15, 2023 if the board of directors exercises all five extensions). The Board exercised all five additional thirty-day extensions.
On February 7, 2023, the Company’s stockholders also approved an amendment (the “First Charter Amendment”) to the Amended and Restated Certificate of Incorporation of the Company (the “Charter”) to (i) extend the initial period of time by which the Company has to consummate an initial business combination through August 15, 2023 and (ii) make other related administrative and technical changes in the Charter, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement the Company filed with the SEC on January 9, 2023. The Company filed the First Charter Amendment with the Secretary of State of the State of Delaware on February 8, 2023.
In connection with the Company’s stockholders’ approval and implementation of the First Charter Amendment, the holders of shares of the Company’s common stock exercised their right to redeem their shares for cash at a redemption price of approximately $ per share, for an aggregate redemption amount of approximately $165,489,173. Following such redemptions, Public Shares remained outstanding.
On August 14, 2023, the Company’s stockholders approved an amendment (the “Second Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between the Company Continental, to change the date on which Continental must commence liquidation of the amount on deposit in the Trust Account established in connection with the Company’s initial public offering from August 16, 2023 to August 23, 2023, subject to extension by the board of directors on a day-by-day basis, with the ability to extend up to seven days at a time in advance, for a maximum of ninety-days, or November 15, 2023.
On August 14, 2023, the Company’s stockholders also approved an amendment (the “Second Charter Amendment”) to the Charter to (i) extend the initial period of time by which the Company has to consummate an initial business combination to November 14, 2023 and (ii) make other administrative and technical changes in the Charter in connection with the new termination date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. The Company filed the Second Charter Amendment with the Secretary of State of the State of Delaware on August 14, 2023.
In connection with the stockholders’ approval and implementation of the Second Charter Amendment proposal, the holders of Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $ per share, for an aggregate redemption amount of $91,398,232. Following such redemptions, Public Shares remained outstanding.
On November 8, 2023, the Company held a meeting and approved an amendment to the Charter (the “Third Charter Amendment”) to extend the initial period of time by which the Company has to consummate an initial business combination to February 10, 2024. In connection with the stockholders’ approval and implementation of the Third Charter Amendment proposal, the holders of Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $ per share, for an aggregate redemption amount of $6,077,050. Following such redemptions, Public Shares remained outstanding.
On February 7, 2024, the Company approved an amendment to the Investment Management Trust Agreement (the “Third Trust Agreement Amendment”), dated February 10, 2021, by and between the Company and Continental Stock Transfer & Trust Company to change the date on which Continental must commence liquidation of the amount on deposit in the trust account established in connection with the Company’s initial public offering from February 10, 2024 to August 8, 2024 (the “New Termination Date”).
On February 7, 2024, the Company’s stockholders also approved an amendment to the Charter (the “Fourth Charter Amendment”) to the Charter to (i) extend the period of time by which the Company has to consummate an initial business combination to the New Termination Date and (ii) make other administrative and technical changes in the Charter in connection with the New Termination Date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. The Company filed the Fourth Charter Amendment with the Secretary of State of the State of Delaware on February 7, 2024.
On February 12, 2024, the Company received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that it was no longer in compliance with the Nasdaq Listing Rules. The Company has filed an appeal of this decision and will present it’s case in front of a Nasdaq Hearings Panel was held on April 16, 2024. On May 7, 2024, the Company received the decision from the Panel notifying the Company that the trading in the Company’s securities was suspended at the open of trading on May 9, 2024. The Company has 15 days of window to appeal; as of the date of this filing the Company has not yet determined if an appeal will be filed.
In connection with the stockholders’ approval and implementation of the Fourth Charter Amendment proposal, the holders of Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $ per share, for an aggregate redemption amount of approximately $554,562. Following such redemptions, Public Shares remain outstanding.
The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the then outstanding shares of common stock present and entitled to vote at the meeting to approve the Business Combination are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Charter, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.
Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor and the Company’s officers and directors have agreed (a) to waive redemption rights with respect to the Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Charter (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination and certain amendments to the Charter or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
As a result of the stockholder approval of the Trust Agreement Amendment, the Company will have until the New Termination Date to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period and stockholders do not approve any further amendment to the Charter to further extend the New Termination Date, the Company 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 $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The holders of the Founder Shares have agreed to waive liquidation distributions with respect to such shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquired Public Shares in or after the IPO, such Public Shares would be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the IPO price per Unit ($).
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to 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) $ 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 trust assets, in each case net of the interest which may be withdrawn to pay the Company’s tax obligation and up to $100,000 for liquidation expenses, 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 (even if such waiver is deemed to be unenforceable) and except as to any claims under the Company’s indemnity of the underwriters of IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (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. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (with the exception of its independent registered public accountant), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Amended and Restated Business Combination Agreement and Merger Agreement
On February 8, 2023, the Company entered into an Amended and Restated Business Combination Agreement (the “Amended and Restated Business Combination Agreement”) with Goal Acquisitions Nevada Corp., a Nevada corporation (“Goal Nevada”), Digital Virgo Group, a French corporation (société par actions simplifiée) (“Digital Virgo”), all shareholders of Digital Virgo (the “Digital Virgo Shareholders”), and IODA S.A., in its capacity as the “DV Shareholders Representative” (as defined in the Amended and Restated Business Combination Agreement), which amends and restates the Business Combination Agreement, dated as of November 17, 2022, by and among the Company, Digital Virgo, and certain other parties in its entirety.
Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Company and Goal Nevada entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will, prior to the Closing (as defined in the Merger Agreement), reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger (the “Reincorporation Merger”).
Pursuant to the Amended and Restated Business Combination Agreement and after the consummation of the Reincorporation Merger, Digital Virgo will acquire all of the outstanding shares of Goal Nevada whereby the outstanding shares of Goal Nevada will be exchanged for shares of Digital Virgo by means of a statutory share exchange under Nevada law (the “Exchange”).
The Amended and Restated Business Combination Agreement and the Exchange, as well as the Merger Agreement and the Reincorporation Merger, were approved by the board of directors of the Company.
The Amended and Restated Business Combination Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the transactions contemplated by the Amended and Restated Business Combination Agreement is subject to certain conditions as further described therein.
The Merger Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the proposed Merger is subject to certain conditions as further described in the Merger Agreement.
The Reincorporation Merger and the Exchange
Subject to, and in accordance with, the terms and conditions of the Merger Agreement, the Company will, prior to the Closing, reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger. Each unit of the Company (which is comprised of one share of common stock of the Company and one warrant to purchase one share of common stock of the Company), share of common stock of the Company and warrant to purchase shares of common stock of the Company issued and outstanding immediately prior to the effective time of the Reincorporation Merger will be converted, respectively, into units of Goal Nevada, shares of common stock of Goal Nevada and warrants to purchase shares of common stock of Goal Nevada (respectively, “Goal Nevada Units,” “Goal Nevada Shares” and “Goal Nevada Warrants”) on a one-for-one basis, which will have substantially identical rights, preferences and privileges as the units sold in the Company’s IPO and simultaneous private placement, the Company’s common stock, par value $ per share, and the warrants which were included in the units that were sold in the Company’s IPO and simultaneous private placement.
Pursuant to the Amended and Restated Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, Digital Virgo will effect a series of related transactions, in each case, upon the terms and subject to the conditions set forth in the Amended and Restated Business Combination Agreement, including the following:
Subject to, and in accordance with, the terms and conditions of the Amended and Restated Business Combination Agreement, at the Closing, (i) Digital Virgo will acquire all of the issued outstanding Goal Nevada Shares pursuant to articles of exchange filed with the Nevada Secretary of State in accordance with the Nevada Revised Statutes, whereby each issued and outstanding Goal Nevada Share will be exchanged for one Digital Virgo Class A Ordinary Share by means of the Exchange and (ii) each Goal Nevada Warrant will be automatically exchanged for one warrant issued by Digital Virgo that will be exercisable for one Digital Virgo Class A Ordinary Share. All outstanding Goal Nevada Units will be separated into their underlying securities immediately prior to the Exchange.
In addition, at the Closing, (i) Class C preferred shares, par value € per share, of Digital Virgo (the “DV Earnout Shares”) will be issued to and deposited with one or more escrow agents and will be disbursed to the Digital Virgo Shareholders, in whole or in part, after the Closing, if both an earnout milestone based on “EBITDA” (as defined in the Amended and Restated Business Combination Agreement) and a share price milestone are met and (ii) Class C preferred shares, par value € per share, of Digital Virgo (the “Sponsor Earnout Shares”) will be issued to and deposited with an escrow agent and will be disbursed to the Sponsor, after the Closing, if a share price milestone is met. The earnout milestone will be met if Digital Virgo’s EBITDA for any fiscal year ending on or before December 31, 2027 is equal or greater than $, in which case DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders. The share price milestone will be met if Digital Virgo’s share price is equal to or greater than $ for at least 20 out of 30 consecutive trading days (counting only those trading days in which there is trading activity) from the period starting from the date immediately following the Closing Date and ending on December 31, 2026, in which case DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders and all of the Sponsor Earnout Shares will be released to the Sponsor. Any DV Earnout Shares remaining in the earnout escrow account that have not been released to the Digital Virgo Shareholders will be released to Digital Virgo, and any Sponsor Earnout Shares remaining in the earnout escrow account that have not been released to the Sponsor will be released to Digital Virgo. The Class C preferred shares of Digital Virgo will have identical rights to the Digital Virgo Class A Ordinary Shares except that the Class C preferred shares will have no voting rights. If and when the Class C preferred shares are released from escrow to the Digital Virgo Shareholders or the Sponsor, as applicable, such shares shall automatically be converted into Digital Virgo Class A Ordinary Shares, on a one-for-one basis, with full voting rights as of their respective date of disbursement by the escrow agent. “EBITDA” means the “Adjusted EBITDA” of Digital Virgo as currently calculated by Digital Virgo for its reporting requirements under its existing credit facility.
The Sponsor has agreed to forfeit shares of common stock of the Company for no consideration effective as of the Closing.
The Company has received two notices from Digital Virgo purporting to unilaterally terminate the Amended and restated Business Combination Agreement pursuant to Section 8.03(d) of the Amended and Restated Business Combination Agreement. Since receipt of that correspondence, the Company attempted to communicate with Digital Virgo have about these matters to resolve the dispute and proceed with the transaction, but Digital Virgo has refused. Therefore, the Company commenced Arbitration with the International Chamber of Commerce (“ICC”) as prescribed within the Amended and restated Business Combination Agreement to enforce its rights under this agreement.
On April 29, 2024 the SEC issued an order declaring Digital Virgo’s Registration Statement abandoned. Digital Virgo Group S.A. had a filed a registration statement to register securities under Section 6(a) of the Securities Act of 1933. This registration statement had been on file for more than nine months and not yet become effective. Digital Virgo failed to respond to notice under Rule 479 that the registration statement would be declared abandoned unless it was timely amended or withdrawn; in view of the foregoing, the SEC ordered that the statement be declared abandoned.
Other Agreements
The Amended and Restated Business Combination Agreement contemplates the execution of various additional agreements and instruments, including, among others, an Amended and Restated Sponsor Support Agreement, Amended and Restated Investor Rights Agreement, and Amended and Restated Initial Shareholders Forfeiture Agreement.
Use of Funds Restricted for Payment of Taxes
From inception to date, the Company has withdrawn a total of $2,090,813 of interest from the Trust Account of which $541,719 was paid for franchise taxes. Of the aggregate withdrawals, $1,549,094 was restricted for the payment of the Company’s income taxes. The Company utilized $1,461,178 of these withdrawals towards funding operating expenses, as well as the monthly extension deposits. As such, the Company recorded a receivable due from the Sponsor and a related payable to the Trust for $1,461,178 as of March 31, 2024. The receivable reflects the amount due to be reimbursed to the Trust Account from the Sponsor for the funds used for funding operating expenses as well as the monthly extension deposits. As of March 31, 2024, the Company has restricted cash of $87,916 and a receivable from the Sponsor of $1,461,178. The Company intends to deposit $1,461,178 back into the Trust Account, or use the $1,461,178 (or a portion thereof) for tax obligations until a deposit is made into the trust on a future date.
As of the date of these financial statements, the Company has not yet filed its corporate tax return and intends to remit payment for income taxes upon completion of the return.
Liquidity, Capital Resources and Going Concern
As of March 31, 2024, the Company had $87,916 in restricted cash and a working capital deficit of $12,658,963. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s initial stockholders, or certain of our officers and directors may, but are not obligated to, provide us with working capital loans. There are currently no amounts outstanding under any working capital loans. See Note 5 for a description of all the Sponsor and other related party funding transactions.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or its affiliates may, but are not obligated to, loan us funds as may be required. If the Company completes a Business Combination, the Company will repay such loaned amounts. In the event that a 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 for such repayment. Up to $1,500,000 of such working capital loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units. To date, the Company had no borrowings under the working capital loans.
The Company will need to raise additional capital through loans or additional investments from the Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and the Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, the Company 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 us on commercially acceptable terms, if at all.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements - Going Concern,” the Company has until the New Termination Date, currently August 8, 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 and an extension of the period of time the Company has to complete a business combination has not been approved by the Company’s stockholders, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company has determined that the Company’s insufficient capital and mandatory liquidation, should a business combination not occur, and an extension not approved by the stockholders of the Company, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after August 8, 2024. The Company intends to continue to complete a business combination, including the transactions contemplated by the Amended and Restated Business Combination Agreement (the “Transaction”), before the mandatory liquidation date. The Company is within 12 months of its mandatory liquidation date as of the date that these financial statements were issued.
The Company’s 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.
Risks and Uncertainties
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these unaudited condensed financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
Under the current rules and regulations of the SEC the Company is not deemed an investment company for purposes of the Investment Company Act of 1940 (the “Investment Company Act”); however, on March 30, 2022, the SEC proposed new rules (the “Proposed Rules”) relating, among other matters, to the circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The Proposed Rules provide a safe harbor for companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the Proposed Rules would require a company to file a Current Report on Form 8-K announcing that it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective date of the SPAC’s registration statement for its initial public offering. The company would then be required to complete its initial business combination no later than 24 months after the effective date of such registration statement.
There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, which includes the Company like ours. The Company did not enter into a definitive business combination agreement within 18 months after the effective date of our registration statement relating to our IPO and there is a risk that we may not complete our initial business combination within 24 months of such date. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company. If the Company is deemed to be an investment company for purposes of the Investment Company Act, the Company may be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate. If the Company is required to liquidate, the Company’s investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of the Company’s stock and warrants following such a transaction.
Currently, the funds in the Company’s Trust account are held only in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. The Investment Company Act defines an investment company as any issuer which (i) is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities; (ii) is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding; or (iii) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of Government securities and cash items) on an unconsolidated basis.
The longer that the funds in the Company’s Trust account are held in money market funds, there is a greater risk that the Company may be considered an unregistered investment company. In the event the Company is deemed an investment company under the Investment Company Act, whether based upon the Company’s activities, the investment of the Company’s funds, or as a result of the Proposed Rules being adopted by the SEC, the Company may determine that we are required to liquidate the money market funds held in the Company Trust account and may thereafter hold all funds in our trust account in cash until the earlier of consummation of the Company’s business combination or liquidation. As a result, if the Company is to switch all funds to cash, the Company will likely receive minimal interest, if any, on the funds held in the Company’s Trust account after such time, which would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.
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 (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its stockholders 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. The IR Act applies only to repurchases that occur after December 31, 2022.
On February 7, 2023, the Company’s stockholders elected to redeem shares for a total of $165,489,173. On August 17, 2023, the Company’s stockholders elected to redeem shares for a total of $91,398,232. On November 8, 2023, the Company’s stockholders elected to redeem shares for a total of $6,077,050. On February 14, 2024, the Company’s stockholders elected to redeem shares for a total of $554,562. As a result of such redemptions, the Company has recorded a 1% excise tax liability in the aggregate amount of $2,635,190 on the Company’s balance sheets as of March 31, 2024. The liability does not impact the Company’s statements of operations and is offset against additional paid-in capital or accumulated deficit if additional paid-in capital is not available. This excise tax liability can be offset by future share issuances within the same fiscal year which will be evaluated and adjusted in the period in which the issuances occur. Should the Company liquidate , the excise tax liability will not be due.
Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, a vote by stockholders to extend the period of time to complete a Business Combination 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 a 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, including the Transaction.
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| Significant Accounting Policies | Note 2 — 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 (“U.S. 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 U.S. 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 filed with the SEC on April 16, 2024. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.
Emerging Growth Company Status
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 auditor 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 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 unaudited condensed financial statements in conformity with U.S. 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 and Restricted Cash
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of March 31, 2024 and December 31, 2023. At March 31, 2024 and December 31, 2023, the Company had $87,916 and $ of restricted cash, respectively, related to funds withdrawn from the Trust Account reserved for the payment of income and state franchise taxes.
Marketable Securities Held in the Trust Account
At March 31, 2024 and December 31, 2023, the Trust Account had $2,291,890 and $2,862,207 held in money market funds which are invested primarily in U.S. Treasury securities, respectively. From inception through March 31, 2024, the Company withdrew an aggregate of $2,090,813 of interest income from the Trust Account to pay its franchise and income tax obligations and an aggregate amount of principal and interest of $263,519,017 in connection with redemptions and deposited $1,552,500 in connection with extension payments. During the period ended March 31, 2024, $0 was deposited into the Trust Account in connection with the monthly extension deposits (as discussed in Note 1).
Sponsor Loan Conversion Option
The Company accounts for its Sponsor Loan Conversion Option (as defined in Note 5) exercisable for promissory notes payable to the Sponsor issued under the Expense Advancement Agreement under ASC 815, Derivatives and Hedging (“ASC 815”). The Sponsor Loan Conversion Option qualifies as an embedded derivative under ASC 815 and is required to be reported at fair value.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. At March 31, 2024 and December 31, 2023, the Company had not experienced losses on this account.
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair 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 is 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 the occurrence of uncertain future events. Accordingly, as of March 31, 2024 and December 31, 2023, respectively, and shares of common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets, respectively.
The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the IPO, the Company recognized the remeasurement 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 deficit.
As of March 31, 2024, the common stock subject to possible redemption reflected in the balance sheets are reconciled in the following table:
Net loss per common stock is computed by dividing net loss by the weighted average number of common stock outstanding for each of the periods. The calculation of diluted loss per common stock does not consider the effect of the warrants that would be anti-dilutive. The warrants are exercisable to purchase 25,875,000 shares of common stock in the aggregate.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature, other than discussed in Note 8.
Derivative warrant liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The Company accounts for its 667,500 private placement warrants (the “Private Placement Warrants”) included as part of the Private Units as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised or expired, and any change in fair value is recognized in the Company’s statement of operations. The fair value of warrants issued by the Company in connection with the Private Units have been estimated using Monte-Carlo simulations at each measurement date (see Note 8).
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the 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. Our effective tax rate was (1.14%) and (2,295.59%) for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate differs from the statutory rate of 21% for the three months ended March 31, 2024 due to non-deductible meals and entertainment, changes in fair value in warrant liability, non-deductible business combination costs and valuation allowance change. For the three months ended March 31, 2023, the effective tax rate differs from the statutory rate of 21% due to business combination related expenses and 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.
The Company recognizes accrued interest and penalties related to income taxes and unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023. During the three months ended March 31, 2024, the Company’s provision for income taxes included $180,626 for interest and penalties. The $180,626 is included in income taxes payable on the Company’s condensed balance sheets as of March 31, 2024. 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.
While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the timing of any Business Combination expenses and the actual interest income that will be recognized during the year. The Company has taken a position as to the calculation of income tax expense in a current period based on ASC740-270-25-3 which states, “If an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through March 31, 2024.
Recent Accounting Standards
In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The adoption of ASU 2020-06 is not expected to have an impact on the Company’s financial position, results of operations or cash flows.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The FASB issued this ASU to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
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Initial Public Offering |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Initial Public Offering | |
| Initial Public Offering | Note 3 — Initial Public Offering
The Company sold Units, at a purchase price of $ per Unit in its IPO on February 16, 2021. Each Unit consists of one share of common stock and one warrant to purchase one share of common stock (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment.
On February 16, 2021, an aggregate of $ per Unit sold in the IPO was held in the Trust Account and will be held as cash or invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act.
On February 24, 2021, the underwriters of the IPO exercised the over-allotment option in full to purchase Units.
Following the closing of the IPO on February 16, 2021 and the underwriters’ full exercise of over-allotment option on February 24, 2021, $258,750,000 was placed in the Trust Account.
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Private Units |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Private Units | |
| Private Units | Note 4 — Private Units
Simultaneously with the closing of the IPO on February 16, 2021, the Sponsor purchased an aggregate of Private Units at a price of $ per Private Unit, for an aggregate purchase price of $6,000,000.
On February 24, 2021, simultaneously with the issuance and sale of the Over-Allotment Units, the Company consummated the sale of an additional Private Units to the Sponsor, generating gross proceeds of $675,000.
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Related Party Transactions |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 5 — Related Party Transactions
Founder Shares
On November 24, 2020, the Sponsor purchased an aggregate of shares of the Company’s common stock for an aggregate price of $ (the “Founder Shares”). The Founder Shares include an aggregate of up to shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Sponsor will collectively own 20% of the Company’s issued and outstanding shares after the IPO (assuming the Sponsor does not purchase any Public Shares in the IPO and excluding the Private Shares). On December 16, 2020, the Company effected a stock dividend of of a share of common stock for each outstanding share of common stock, and as a result our Sponsor holds founder shares of which an aggregate of up to shares were subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part. Because of the underwriters’ full exercise of the over-allotment option on February 24, 2021, 843,750 shares are no longer subject to forfeiture.
The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until after the completion of a Business Combination.
Promissory Note — Related Party
Concurrently with the filing of the Company’s registration statement on Form S-1 on January 21, 2021, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company was authorized to borrow up to an aggregate principal amount of $200,000. In May 2021, the Sponsors agreed to increase the capacity (aggregate principal) on the Promissory Note to $300,000, and in August 2021, the Sponsors agreed to increase the capacity (aggregate principal) on the Promissory Note to $500,000. The Promissory Note is non-interest bearing and payable on the earliest of (i) April 30, 2021, (ii) the consummation of the IPO or (iii) the date on which the Company determines not to proceed with the IPO. As of November 4, 2021, the outstanding balance on the Promissory Note of $175,551 was consolidated into the Company’s Expense Advancement Agreement.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units. To date, the Company had no borrowings under the Working Capital Loans. At March 31, 2024 and December 31, 2023, no such Working Capital Loans were outstanding.
Sponsor Loans Issued Under Expense Advancement Agreement
Effective as of November 4, 2021, upon approval of the Board of Directors, the Company entered into an Expense Advancement Agreement with Goal Acquisitions Sponsor, LLC (the “Funding Party”). Pursuant to the Expense Advancement Agreement, the Funding Party has agreed to advance to the Company from time to time, upon request by the Company, a maximum of $1,500,000 in the aggregate, in each instance issued pursuant to the terms of the form of promissory note, as may be necessary to fund the Company’s expenses relating to the investigation and selection of a target business and other working capital requirements prior to completion of any potential Business Combination. All previously outstanding commitments from the Sponsor have been consolidated under the Expense Advancement Agreement, effective November 4, 2021. On April 28, 2023 the Company executed its first amendment to the Expense Advancement Agreement and increased the maximum funding allowable under the agreement to $2,000,000.
As of March 31, 2024 and December 31, 2023, the available balance under the Expense Advancement Agreement was $0. At the Sponsor’s option, at any time prior to payment in full of the principal balance of any promissory note issued under the Expense Advancement Agreement, the Sponsor may elect to convert all or any portion of the outstanding principal amount of the promissory note into that number of warrants (the “Conversion Warrants”) equal to: (i) the portion of the principal amount of the promissory note being converted, divided by (ii) $, per the First Amendment to the Expense Advance Agreement, (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction related to the Common Stock after issuance of the promissory note, rounded up to the nearest whole number) (the “Sponsor Loan Conversion Option”). The Sponsor Loan Conversion Option qualifies as an embedded derivative under ASC 815 and is required to be recognized at fair value with subsequent changes in fair value recognized in Company’s statements of operations each reporting period until the Convertible Note is repaid or converted.
As of March 31, 2024 and December 31, 2023, respectively, the aggregate balance outstanding on the Sponsor loans issued was $2,000,000, and the fair value of the Sponsor Loan Conversion Option was $0.
Advances – Related Party
During the period ended March 31, 2024, the Company repaid the Sponsor $5,000 for amounts advanced for other operating expenses under a separate arrangement and received $677,232 funding from the Sponsor. As of March 31, 2024, there was a $677,232 balance owed under advances – related party.
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Commitments & Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments & Contingencies | Note 6 — Commitments & Contingencies
Arbitrations
When Digital Virgo refused to close the Business Combination in July of 2023, the Company engaged several law firms to assist with enforcement of the Company’s rights and remedies under the Amended and Restated Business Combination Agreement. The Company requested Arbitration with the ICC and the case will be decided by a panel of three Arbitrators according to ICC rules and applying Delaware law. As of the date of this Form 10-Q, the arbitration is still in process.
In the normal course of business, the Company may be involved in various arbitrations. The Company assesses its liabilities and contingencies in connection with outstanding arbitrations, if any, utilizing the latest information available. When a loss contingency is not both probable and estimable, the Company does not establish an accrual.
Based on currently available information, the outcome of the Company’s outstanding matters is still unknown as of the date of this filing. Currently, the aggregate potential loss related to the various arbitrations is not expected to exceed an aggregate amount of $2.0 million.
Registration Rights
The holders of the Founder Shares and Representative Shares, which are the shares of common stock issued to EarlyBirdCapital, Inc. (“EarlyBird”) and its designees prior to the consummation of the Company’s IPO, as well as the holders of the Private Units and any units that may be issued in payment of Working Capital Loans made to the Company, are entitled to registration rights pursuant to an agreement signed prior to the Effective Date of the IPO. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Representative Shares, Private Units and units issued in payment of Working Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a business combination. Notwithstanding anything to the contrary, EarlyBird may only make a demand on one occasion and only during the five-year period beginning on the Effective Date of the IPO. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination; provided, however, that EarlyBird may participate in a “piggy-back” registration only during the seven-year period beginning on the Effective Date of the IPO. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Business Combination Marketing Agreement
In connection with the IPO, the Company engaged EarlyBird as an advisor in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company agreed to pay EarlyBird a cash fee for such services upon the consummation of a Business Combination in an amount equal to 3.5% of the gross proceeds of the IPO (exclusive of any applicable finders’ fees which might become payable). The agreement was subsequently revised as discussed below.
On November 5, 2021 the Company entered into an agreement with EarlyBird together with JMP Securities LLC (“JMP”) and JonesTrading Institutional Services LLC (“JonesTrading”) (together, the “Advisors”) to assist the Company in the possible private placement of equity securities and/or debt securities to provide financing to the Company in connection with a Business Combination. The Company shall pay the Advisors a cash fee (the “Transaction Fee”) equal to the greater of (A) $4,000,000, or (B) 5% of the gross proceeds received from the sale of securities to parties that are not excluded investors as set forth in the agreement. All fees paid to the Advisors hereunder shall be paid 40% to JMP, 30% to JonesTrading, and 30% to EarlyBird. The Transaction Fee shall be paid to the Advisors by withholding such fee from the proceeds received.
Deferred Legal Fees
As of March 31, 2024 and December 31, 2023, the Company has incurred legal costs of $4,646,020 and $4,585,962, respectively, related to its prospective initial Business Combination. These costs are deferred until the completion of the Company’s initial Business Combination and are included in accounts payable and accrued expenses on the Company’s balance sheets.
Service Provider Agreements
From time to time the Company has entered into and may enter into agreements with various services providers and advisors, including investment banks, to help us identify targets, negotiate terms of potential Business Combinations, consummate a Business Combination and/or provide other services. In connection with these agreements, the Company may be required to pay such service providers and advisors fees in connection with their services to the extent that certain conditions, including the closing of a potential Business Combination, are met. If a Business Combination does not occur, the Company would not expect to be required to pay these contingent fees. There can be no assurance that the Company will complete a Business Combination. On July 6, 2023, the Company entered into an agreement with an advisor for an aggregate fee of $1,000,000 that will become due and payable upon consummation of the Company’s initial Business Combination in connection with the Digital Virgo deal.
In July of 2023, Digital Virgo purported to terminate the Amended and Restated Business Combination Agreement, and the Company is pursuing all available remedies in ICC arbitration.
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Stockholders’ Deficit |
3 Months Ended | |||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||
| Stockholders’ Deficit | Note 7 — Stockholders’ Deficit
Preferred Stock — The Company is authorized to issue shares of preferred stock with a par value of $ with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31, 2024 and December 31, 2023, there were shares of preferred stock issued or outstanding.
Common Stock — The Company is authorized to issue shares of common stock with a par value of $ per share. On December 16, 2020, the Company effected a stock dividend of of a share of common stock for each outstanding share of common stock, and as a result our Sponsor holds founder shares of which an aggregate of up to shares were subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part. Because of the underwriters’ full exercise of the over-allotment option on February 24, 2021, 843,750 shares are no longer subject to forfeiture. The Company considered the above stock dividend to be in substance a stock split due to the dividend being part of the Company’s initial capitalization. The dividend was therefore valued at par and offset to additional paid-in capital. At March 31, 2024 and December 31, 2023, there were shares of common stock issued and outstanding, excluding and shares of common stock subject to possible redemption, respectively.
Warrants — The Public Warrants will become exercisable 30 days after the completion of a Business Combination. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once the warrants become exercisable, the Company may redeem the Public Warrants:
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
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 a 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 their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates 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 greater of (i) the Market Value or (ii) the price at which we issue the additional shares of common stock or equity-linked securities.
The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
The Private Warrants are identical to the Public Warrants underlying the Units being sold in the IPO, except that the Private Warrants and the common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Representative Shares — The Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the Effective Date of the registration statement related to the IPO pursuant to FINRA Rule 5110(g)(1). Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the Effective Date of the registration statements related to the IPO, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the Effective Date of the registration statements related to the IPO except to any underwriter and selected dealer participating in the IPO and their bona fide officers or partners.
The holders of the Representative Shares have agreed not to transfer, assign or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the completion of a 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 a Business Combination within the Combination Period.
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Fair Value Measurements |
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| Fair Value Measurements | Note 8 — Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Warrant Liabilities
The Company utilizes a Monte Carlo simulation model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility of comparable companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
The aforementioned warrant liabilities are not subject to qualified hedge accounting. There were no transfers between Levels 1, 2 or 3 during the period ended March 31, 2024 and December 31, 2023.
The following table presents the changes in the fair value of warrant liabilities for the period ended March 31, 2024:
Sponsor Loan Conversion Option
The Company established the fair value for the Sponsor Loan Conversion Option using a Monte-Carlo method model, which is considered to be a Level 3 fair value measurement.
The following table provides quantitative information regarding Level 3 fair value measurements for the Sponsor Loan Conversion Option:
There was no change in fair value for the Sponsor Loan Conversion Option for the period ended March 31, 2024. There were no transfers in or out of Level 3 from other levels in the fair value hierarchy during the period ended March 31, 2024 for the Sponsor Loan Conversion Option.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Note 9 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed financial statements were issued. Based upon this review, other than disclosed below or within these financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
On April 1, 2024, the Company received written notice from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, in addition to the Company’s non-compliance with the 36-month requirement to complete a business combination with an operating company as required under Nasdaq IM-5101 and as previously disclosed, the Company no longer satisfies the minimum $35 million market value of listed securities requirement and the minimum 500,000 publicly held shares requirement for continued inclusion on The Nasdaq Capital Market, as set forth Nasdaq Listing Rules 5550(b)(2) and 5550(a)(4), respectively.
On April 23, 2024, Goal Acquisitions Corp. (the “Company”) received written notice (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, in addition to the Company’s non-compliance with the 36-month requirement to complete a business combination with an operating company as required under Nasdaq IM-5101, and the Company no longer satisfying the minimum $35 million market value of listed securities requirement and the minimum 500,000 publicly held shares requirement for continued inclusion on The Nasdaq Capital Market, as set forth Nasdaq Listing Rules 5550 (b)(2) and 5550(a)(4), respectively, the Company has not paid certain fees required by Nasdaq Listing Rule 5250(f).
On April 23, 2024, the Sponsor funded $244,000 to the Company for other operating expenses.
As discussed in Note 1, on May 7, 2024, the Company received the decision from the Panel notifying the Company that the trading in the Company’s securities was suspended at the open of trading on May 9, 2024. The Company has 15 days of window to appeal; as of the date of this filing the Company has not yet determined if an appeal will be filed. |
Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | 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 (“U.S. 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 U.S. 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 filed with the SEC on April 16, 2024. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.
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| Emerging Growth Company Status | Emerging Growth Company Status
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 auditor 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 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.
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| Use of Estimates | Use of Estimates
The preparation of unaudited condensed financial statements in conformity with U.S. 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.
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| Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of March 31, 2024 and December 31, 2023. At March 31, 2024 and December 31, 2023, the Company had $87,916 and $ of restricted cash, respectively, related to funds withdrawn from the Trust Account reserved for the payment of income and state franchise taxes.
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| Marketable Securities Held in the Trust Account | Marketable Securities Held in the Trust Account
At March 31, 2024 and December 31, 2023, the Trust Account had $2,291,890 and $2,862,207 held in money market funds which are invested primarily in U.S. Treasury securities, respectively. From inception through March 31, 2024, the Company withdrew an aggregate of $2,090,813 of interest income from the Trust Account to pay its franchise and income tax obligations and an aggregate amount of principal and interest of $263,519,017 in connection with redemptions and deposited $1,552,500 in connection with extension payments. During the period ended March 31, 2024, $0 was deposited into the Trust Account in connection with the monthly extension deposits (as discussed in Note 1).
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| Sponsor Loan Conversion Option | Sponsor Loan Conversion Option
The Company accounts for its Sponsor Loan Conversion Option (as defined in Note 5) exercisable for promissory notes payable to the Sponsor issued under the Expense Advancement Agreement under ASC 815, Derivatives and Hedging (“ASC 815”). The Sponsor Loan Conversion Option qualifies as an embedded derivative under ASC 815 and is required to be reported at fair value.
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| Concentration of Credit Risk | Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. At March 31, 2024 and December 31, 2023, the Company had not experienced losses on this account.
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| Common Stock Subject to Possible Redemption |
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair 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 is 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 the occurrence of uncertain future events. Accordingly, as of March 31, 2024 and December 31, 2023, respectively, and shares of common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets, respectively.
The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the IPO, the Company recognized the remeasurement 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 deficit.
As of March 31, 2024, the common stock subject to possible redemption reflected in the balance sheets are reconciled in the following table:
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| Net Loss Per Common Stock |
Net loss per common stock is computed by dividing net loss by the weighted average number of common stock outstanding for each of the periods. The calculation of diluted loss per common stock does not consider the effect of the warrants that would be anti-dilutive. The warrants are exercisable to purchase 25,875,000 shares of common stock in the aggregate.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature, other than discussed in Note 8.
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| Derivative warrant liabilities | Derivative warrant liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The Company accounts for its 667,500 private placement warrants (the “Private Placement Warrants”) included as part of the Private Units as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised or expired, and any change in fair value is recognized in the Company’s statement of operations. The fair value of warrants issued by the Company in connection with the Private Units have been estimated using Monte-Carlo simulations at each measurement date (see Note 8).
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| Income Taxes | Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the 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. Our effective tax rate was (1.14%) and (2,295.59%) for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate differs from the statutory rate of 21% for the three months ended March 31, 2024 due to non-deductible meals and entertainment, changes in fair value in warrant liability, non-deductible business combination costs and valuation allowance change. For the three months ended March 31, 2023, the effective tax rate differs from the statutory rate of 21% due to business combination related expenses and 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.
The Company recognizes accrued interest and penalties related to income taxes and unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023. During the three months ended March 31, 2024, the Company’s provision for income taxes included $180,626 for interest and penalties. The $180,626 is included in income taxes payable on the Company’s condensed balance sheets as of March 31, 2024. 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.
While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the timing of any Business Combination expenses and the actual interest income that will be recognized during the year. The Company has taken a position as to the calculation of income tax expense in a current period based on ASC740-270-25-3 which states, “If an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through March 31, 2024.
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| Recent Accounting Standards | Recent Accounting Standards
In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The adoption of ASU 2020-06 is not expected to have an impact on the Company’s financial position, results of operations or cash flows.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The FASB issued this ASU to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements. |
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Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Redeemable Common Stock | As of March 31, 2024, the common stock subject to possible redemption reflected in the balance sheets are reconciled in the following table:
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| Schedule of Computation of Basic and Diluted Net Income Per Share |
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Fair Value Measurements (Tables) |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value Measurement of Financial Assets and Liabilities | The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
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| Schedule of Fair Value Input Measurement | The aforementioned warrant liabilities are not subject to qualified hedge accounting. There were no transfers between Levels 1, 2 or 3 during the period ended March 31, 2024 and December 31, 2023.
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| Schedule of Changes in Fair Value of Warrant Liabilities | The following table presents the changes in the fair value of warrant liabilities for the period ended March 31, 2024:
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| Schedule of Sponsor Loan Conversion Option | The following table provides quantitative information regarding Level 3 fair value measurements for the Sponsor Loan Conversion Option:
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Schedule of Redeemable Common Stock (Details) - USD ($) |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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| Accounting Policies [Abstract] | ||
| Common stock subject to possible redemption shares, beginning balance | 266,350 | |
| Common stock subject to possible redemption amount, beginning balance | $ 2,853,639 | |
| Remeasurement of common stock subject to possible redemption carrying value to redemption value | $ (122,555) | $ 1,922,323 |
| Redemption of common shares, shares | (52,181) | |
| Redemption of common shares, amount | $ (554,562) | |
| Common stock subject to possible redemption shares,ending balance | 214,169 | |
| Common stock subject to possible redemption amount, ending balance | $ 2,176,522 | |
Schedule of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Allocation of net loss | $ (593,058) | $ (390,290) |
| Common Stock Subject To Redemption [Member] | ||
| Allocation of net loss | $ (18,910) | $ (270,437) |
| Weighted-average shares outstanding, basic | 239,973 | 16,440,673 |
| Weighted-average shares outstanding, diluted | 239,973 | 16,440,673 |
| Basic net loss per common stock | $ (0.08) | $ (0.02) |
| Diluted net loss per common stock | $ (0.08) | $ (0.02) |
| Common Stock Not Subject To Redemption [Member] | ||
| Allocation of net loss | $ (574,148) | $ (119,853) |
| Weighted-average shares outstanding, basic | 7,286,250 | 7,286,250 |
| Weighted-average shares outstanding, diluted | 7,286,250 | 7,286,250 |
| Basic net loss per common stock | $ (0.08) | $ (0.02) |
| Diluted net loss per common stock | $ (0.08) | $ (0.02) |
Significant Accounting Policies (Details Narrative) - USD ($) |
3 Months Ended | 41 Months Ended | |||
|---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Cash Equivalents, at Carrying Value | $ 0 | ||||
| Restricted cash | $ 87,916 | $ 87,916 | |||
| Money market funds held in trust account | 2,291,890 | 2,291,890 | 2,862,207 | ||
| Interest income from trust account to pay for franchise and income tax | 2,090,813 | ||||
| Cash withdrawn from Trust Account for redemption of common shares | 263,519,017 | ||||
| Deposits for extension payments | 1,552,500 | 1,552,500 | |||
| Deposit into Trust Account | 0 | ||||
| Cash, FDIC insured amount | $ 250,000 | $ 250,000 | $ 250,000 | ||
| Common stock subject to possible redemption, shares | 214,169 | 214,169 | 266,350 | ||
| Effective tax rate | 1.14% | 2295.59% | |||
| Effective Statutory tax rate | 21.00% | 21.00% | |||
| Interest and penalties | $ 180,626 | $ 180,626 | |||
| Income taxes payable | $ 180,626 | $ 180,626 | |||
| Private Placement [Member] | |||||
| Warrants | 667,500 | 667,500 | |||
| Warrant [Member] | |||||
| Warrants to purchase common stock | 25,875,000 | 25,875,000 | |||
Initial Public Offering (Details Narrative) - USD ($) |
Feb. 24, 2021 |
Feb. 16, 2021 |
Mar. 31, 2024 |
|---|---|---|---|
| Shares issued price per share | $ 10.00 | $ 10.00 | |
| Holder [Member] | Common Stock [Member] | |||
| Warrants exercise price | $ 11.50 | ||
| IPO [Member] | |||
| Sale of stock units | 22,500,000 | ||
| Sale of stock price per share | $ 10.00 | ||
| Stock unit description | Each Unit consists of one share of common stock and one warrant to purchase one share of common stock (“Public Warrant”). | ||
| Shares issued price per share | $ 10.00 | $ 10.00 | |
| Over-Allotment Option [Member] | |||
| Shares issued price per share | $ 10.00 | ||
| Stock issued stock options exercised | 3,375,000 | ||
| Common stock held in trust | $ 258,750,000 | ||
| Over-Allotment Option [Member] | Underwriters [Member] | |||
| Stock issued stock options exercised | 3,375,000 |
Private Units (Details Narrative) - USD ($) |
Feb. 24, 2021 |
Feb. 16, 2021 |
|---|---|---|
| Private Placement [Member] | ||
| Sale of stock shares | 67,500 | |
| Sponsor [Member] | Private Placement [Member] | ||
| Sale of stock shares | 600,000 | |
| Sale of stock, per share | $ 10.00 | |
| Sale of stock, value | $ 6,000,000 | |
| Sponsor [Member] | Over-Allotment Option [Member] | ||
| Sale of stock shares | 67,500 | |
| Sale of stock, value | $ 675,000 |
Commitments & Contingencies (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Jul. 06, 2023 |
Nov. 05, 2021 |
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Advisor fee description | The Company shall pay the Advisors a cash fee (the “Transaction Fee”) equal to the greater of (A) $4,000,000, or (B) 5% of the gross proceeds received from the sale of securities to parties that are not excluded investors as set forth in the agreement. All fees paid to the Advisors hereunder shall be paid 40% to JMP, 30% to JonesTrading, and 30% to EarlyBird. The Transaction Fee shall be paid to the Advisors by withholding such fee from the proceeds received. | |||
| Legal costs | $ 4,646,020 | $ 4,585,962 | ||
| Advisor fee | $ 1,000,000 | |||
| Early Bird Capital Inc [Member] | ||||
| Shares issued | 150,000 | |||
| Gross proceeds percentage | 3.50% |
Stockholders’ Deficit (Details Narrative) - $ / shares |
3 Months Ended | ||||
|---|---|---|---|---|---|
Feb. 24, 2021 |
Dec. 16, 2020 |
Nov. 24, 2020 |
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Subsidiary, Sale of Stock [Line Items] | |||||
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
| Preferred stock, shares issued | 0 | 0 | |||
| Preferred stock, shares outstanding | 0 | 0 | |||
| Common stock, shares authorized | 100,000,000 | 100,000,000 | |||
| Common stock, par value | $ 0.0001 | $ 0.0001 | |||
| Common stock dividends per share | $ 0.125 | ||||
| Common stock, shares issued | 7,286,250 | 7,286,250 | |||
| Common stock, shares outstanding | 7,286,250 | 7,286,250 | |||
| Common stock subject to possible redemption shares | 214,169 | 266,350 | |||
| Warrants expire term | 5 years | ||||
| Public Warrants [Member] | |||||
| Subsidiary, Sale of Stock [Line Items] | |||||
| Warrant per share | $ 0.01 | ||||
| Warrant exercisable description | if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending three business days before the Company sends to the notice of redemption to the warrant holders | ||||
| Public Warrants [Member] | Warrant Agreement [Member] | |||||
| Subsidiary, Sale of Stock [Line Items] | |||||
| Warrant exercisable description | 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 a 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 their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates 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 greater of (i) the Market Value or (ii) the price at which we issue the additional shares of common stock or equity-linked securities. | ||||
| Sponsor [Member] | |||||
| Subsidiary, Sale of Stock [Line Items] | |||||
| Common stock dividends per share | $ 0.125 | ||||
| Stock issued during period shares new issues | 6,468,750 | ||||
| Common stock shares subject to forfeiture | 843,750 | 750,000 | |||
| Underwriters [Member] | Over-Allotment Option [Member] | |||||
| Subsidiary, Sale of Stock [Line Items] | |||||
| Common stock not subject to forfeiture | 843,750 |
Schedule of Fair Value Measurement of Financial Assets and Liabilities (Details) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Assets: | ||
| Marketable securities held in the trust account | $ 2,291,890 | $ 2,862,207 |
| Liabilities: | ||
| Warrant liabilities | 5,025 | 2,662 |
| Sponsor Loan Conversion Option | ||
| Fair Value, Inputs, Level 1 [Member] | ||
| Assets: | ||
| Marketable securities held in the trust account | 2,291,890 | 2,862,207 |
| Liabilities: | ||
| Warrant liabilities | ||
| Sponsor Loan Conversion Option | ||
| Fair Value, Inputs, Level 2 [Member] | ||
| Assets: | ||
| Marketable securities held in the trust account | ||
| Liabilities: | ||
| Warrant liabilities | ||
| Sponsor Loan Conversion Option | ||
| Fair Value, Inputs, Level 3 [Member] | ||
| Assets: | ||
| Marketable securities held in the trust account | ||
| Liabilities: | ||
| Warrant liabilities | 5,025 | 2,662 |
| Sponsor Loan Conversion Option |
Schedule of Changes in Fair Value of Warrant Liabilities (Details) - Private Placement [Member] - Warrant [Member] |
3 Months Ended |
|---|---|
|
Mar. 31, 2024
USD ($)
| |
| Subsidiary, Sale of Stock [Line Items] | |
| Fair value beginning balance | $ 2,662 |
| Change in valuation inputs or other assumptions | 2,363 |
| Fair value ending balance | $ 5,025 |
Fair Value Measurements (Details Narrative) |
Mar. 31, 2024
USD ($)
|
|---|---|
| Fair Value Disclosures [Abstract] | |
| Fair value of sponsor loan conversion option | $ 0 |
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) |
Apr. 23, 2024 |
Apr. 01, 2024 |
|---|---|---|
| Subsequent Event [Line Items] | ||
| Subsequent event, description | Goal Acquisitions Corp. (the “Company”) received written notice (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, in addition to the Company’s non-compliance with the 36-month requirement to complete a business combination with an operating company as required under Nasdaq IM-5101, and the Company no longer satisfying the minimum $35 million market value of listed securities requirement and the minimum 500,000 publicly held shares requirement for continued inclusion on The Nasdaq Capital Market, as set forth Nasdaq Listing Rules 5550 (b)(2) and 5550(a)(4), respectively, the Company has not paid certain fees required by Nasdaq Listing Rule 5250(f | the Company received written notice from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, in addition to the Company’s non-compliance with the 36-month requirement to complete a business combination with an operating company as required under Nasdaq IM-5101 and as previously disclosed, the Company no longer satisfies the minimum $35 million market value of listed securities requirement and the minimum 500,000 publicly held shares requirement for continued inclusion on The Nasdaq Capital Market, as set forth Nasdaq Listing Rules 5550(b)(2) and 5550(a)(4), respectively |
| Other operating expenses from sponsor | $ 244,000 |
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