Global Gas(US:HGAS)2022-03-29 16:58Financial Condition and Risks - As of December 31, 2021, the company had $116,140 in cash and a working capital deficit of $1,681,381, raising substantial doubt about its ability to continue as a going concern[99]. - The company plans to consummate its initial business combination by June 22, 2022, but there is no assurance that this will be successful[99]. - If the business combination is not completed by the deadline, a mandatory liquidation and subsequent dissolution of the company will occur[99]. - The per-share redemption amount for stockholders may be less than $10.00 due to potential claims against the trust account[100][101]. - The company may not have sufficient funds to satisfy indemnification claims of its directors and executive officers, which could discourage stockholders from bringing lawsuits[104]. - If bankruptcy occurs after distributing proceeds from the trust account, stockholders may be viewed as having received preferential transfers, exposing them to potential recovery claims[105][106]. - Stockholders may be held liable for claims by third parties against the company to the extent of distributions received upon redemption of their shares[107]. - The company may incur substantial debt to complete a business combination, which could adversely affect its leverage and financial condition[136]. - The company is solely dependent on completing one business combination, which may limit diversification and negatively impact operations and profitability[137]. - The company may face additional risks associated with cross-border business combinations, including currency fluctuations and regulatory approvals[133]. - The company may face challenges in completing initial business combinations due to compliance obligations under the Sarbanes-Oxley Act, which could increase costs and time[115]. Business Combination and Management - The company may seek business combination opportunities outside of its management's areas of expertise, which could lead to inadequate risk assessment[111]. - The company may enter into a business combination with a target that does not meet its established criteria and guidelines, potentially affecting the success of the combination[112]. - The company is not required to obtain an independent opinion on the fairness of the price paid for target businesses, relying instead on the judgment of its board of directors[113]. - The absence of a specified maximum redemption threshold may allow the company to complete initial business combinations even if a substantial majority of stockholders do not agree[118]. - Initial stockholders control 20% of the outstanding common stock, potentially influencing actions requiring stockholder votes[125]. - The company may need to seek additional financing if the cash portion of the purchase price exceeds available funds, which could lead to restructuring or abandonment of business combinations[124]. - Key personnel may negotiate agreements that could create conflicts of interest in selecting target businesses[129]. - The company may incur substantial costs in investigating target businesses, which would not be recoverable if a business combination is not completed[128]. - The company may have limited ability to assess the management of prospective target businesses, impacting the success of post-combination operations[131]. - If the company fails to complete its initial business combination, public stockholders may only receive their pro rata portion of the funds in the trust account, and warrants may expire worthless[127]. - The company may pursue a private company for its initial business combination, which could result in a less profitable outcome due to limited available information[144]. - The company’s executive officers and directors may have conflicts of interest due to their obligations to other entities, potentially affecting business combination decisions[151]. - The company may engage in business combinations with affiliated entities, which could lead to potential conflicts of interest[154]. - The company cannot assure that it will maintain control of a target business after the initial business combination, potentially affecting operations and profitability[155]. - Key personnel of an acquisition candidate may resign post-combination, which could negatively impact the business[156]. Regulatory and Compliance Issues - The company must ensure that it does not exceed 40% of its assets in investment securities to avoid being classified as an investment company under the Investment Company Act[158]. - The trust account proceeds are restricted to investments in U.S. government securities or money market funds, limiting investment options[159]. - The company must maintain a minimum stockholders' equity of $2.5 million and at least 300 public holders to remain listed on Nasdaq[160]. - If delisted from Nasdaq, the company may face significant adverse consequences, including reduced liquidity and increased regulatory scrutiny[161]. - The company may issue additional shares of Class A common stock or preferred stock, which could dilute existing stockholders' interests[162]. - The company is subject to anti-takeover provisions under Delaware law, which may inhibit a takeover and limit the price investors might be willing to pay for shares[188]. Securities and Market Risks - Warrants will not be exercisable unless the underlying Class A common stock is registered or exempt from registration[165]. - The company plans to file a registration statement for the Class A common stock issuable upon exercise of the warrants within 15 business days after the initial business combination[166]. - The company may require warrant holders to exercise their warrants on a cashless basis under certain conditions, potentially resulting in fewer shares received compared to cash exercise[171]. - If the company issues additional shares of Class A common stock or equity-linked securities for less than $9.20 per share, the exercise price of the warrants will be adjusted to 115% of the higher of the market value and the newly issued price[181]. - The company has the ability to redeem outstanding public warrants at a price of $0.01 per warrant if the closing price of Class A common stock exceeds $18.00 for any 20 trading days within a 30 trading-day period[182]. - The grant of registration rights to initial stockholders may complicate the completion of the initial business combination and adversely affect the market price of Class A common stock[172]. - The initial stockholders will receive additional shares of Class A common stock if certain shares are issued to consummate the initial business combination, potentially increasing their equity stake[173]. - The company may amend agreements related to the initial public offering without stockholder approval, which could impact the value of investments in its securities[174]. - The warrant agreement allows for amendments that may adversely affect public warrant holders with the approval of at least 50% of the outstanding public warrants[175]. - The company may face challenges in consummating an initial business combination if it issues shares at a price below $9.20, affecting the exercise price of warrants[181]. - The existence of registration rights may lead to increased costs or difficulties in concluding the initial business combination[172]. - The company’s warrants may adversely affect the market price of Class A common stock and complicate the initial business combination process[183]. - The company issued warrants to purchase 8,625,000 shares of Class A common stock as part of the initial public offering, along with 4,850,000 private placement warrants at $11.50 per share[184]. - The potential issuance of additional shares upon the exercise of warrants could make the company a less attractive acquisition vehicle, potentially increasing the cost of acquiring target businesses[184]. - Each unit sold in the IPO contains one-half of one public warrant, which may result in the units being worth less than those of other special purpose acquisition companies[186]. Internal Control and Reporting - The company has identified a material weakness in internal control over financial reporting, particularly related to the accounting for complex financial instruments, leading to a restatement of financial statements[202]. - The company is classified as an emerging growth company, allowing it to take advantage of certain exemptions from disclosure requirements, which may affect the attractiveness of its securities to investors[196]. - The company is also a smaller reporting company, which may result in reduced disclosure obligations, making comparisons with other public companies difficult[199]. - Changes in the fair value of warrants, accounted for as liabilities, could materially affect the company's financial results and market price of its common stock[200]. - The company has identified a material weakness in its internal control over financial reporting, particularly related to complex financial instruments[206]. - A prior restatement of financial statements occurred for the balance sheet as of December 22, 2020, and for annual and interim financial statements for 2020 and 2021[206]. - The company is implementing a remediation plan to enhance internal controls, which includes improving processes and increasing communication among personnel[203]. - There is no assurance that the remediation efforts will be successful or that additional material weaknesses will not arise in the future[205]. - Potential litigation risks exist due to the identified material weakness and prior restatements, which could adversely affect the company's operations and financial condition[207]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[269]. Cybersecurity Risks - Cybersecurity risks are significant, especially when engaging with target businesses in the travel sector, which handle sensitive customer data[194].