Genesis Growth Tech Acquisition Corp. (ticker: GGAAW), a Special Purpose Acquisition Company (SPAC), recently released its financial statements for the year ended December 31, 2022. The financial results show a net income of $270,298 for Class A ordinary shares and $67,575 for Class B ordinary shares, demonstrating a positive trend for the company in its pursuit of a business combination.
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Established in March 2021, Genesis Growth Tech Acquisition Corp. raised $220 million in gross proceeds from its Initial Public Offering (IPO) of 22,000,000 units in December 2021, with each unit consisting of one Class A ordinary share and one-half of one redeemable warrant.
With the full exercise of the over-allotment option by the underwriters, an additional 3,300,000 units were sold, generating $33 million in additional gross proceeds. The total offering costs, including deferred underwriting fees, were approximately $19 million.
The Cayman Islands-based company follows the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share,” which allows it to calculate net income (loss) per ordinary share by dividing the net income (loss) by the weighted average number of ordinary shares outstanding during the respective period. For the year ended December 31, 2022, Genesis Growth Tech Acquisition Corp. reported basic and diluted net income per ordinary share of $0.01 for Class A and Class B shares.
Income taxes are not reflected in the company’s financial statements since it is considered an exempted company in the Cayman Islands and is not subject to income taxes or filing requirements. The management does not expect any significant change in the total amount of unrecognized tax benefits over the next 12 months.
In the same financial report, the company disclosed that it entered into an administrative support agreement with its sponsor in December 2021.
Under this agreement, the company agreed to reimburse the sponsor $10,000 per month for office space, secretarial, and administrative services, incurring $120,000 in expenses for 2022. As of December 31, 2022, the outstanding balance under this agreement was $130,000.
One of the main objectives of Genesis Growth Tech Acquisition Corp. is to complete a business combination within a specified period – known as the Combination Period.
If successful, the company’s shareholders, including the holders of Founder Shares, Private Placement Warrants, and any warrants issued upon conversion of Working Capital Loans, are entitled to registration rights outlined in a registration and shareholder rights agreement.
As the company continues its pursuit of a successful business combination, net income for both Class A and Class B shares demonstrates a positive financial performance in 2022. However, Genesis Growth Tech Acquisition Corp. is also exposed to risks and uncertainties, such as the ongoing conflict in Ukraine and fluctuations in financial markets, which could have an impact on its financial condition and operations. Despite these uncertainties, the company remains focused on identifying and executing a business combination within the established Combination Period, aiming to generate value for its shareholders.
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