GigCapital7 Corp.(GIG) - 2025 Q1 - Quarterly Report

PART I Item 1. Condensed Financial Statements (Unaudited) This section presents the unaudited condensed financial statements of GigCapital7 Corp. for the period ended March 31, 2025, including balance sheets, statements of operations and comprehensive income, shareholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, offering details, related party transactions, shareholders' equity components, and fair value measurements Condensed Balance Sheets | ASSETS / LIABILITIES & EQUITY | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | ASSETS | | | | Cash | $926,474 | $1,344,228 | | Cash & marketable securities in Trust Account | $205,292,683 | $203,188,704 | | Total Assets | $206,535,255 | $204,826,596 | | LIABILITIES & EQUITY | | | | Total Current Liabilities | $149,699 | $173,487 | | Warrant liability | $355,908 | $241,735 | | Total Liabilities | $505,607 | $415,222 | | Class A ordinary shares subject to possible redemption | $205,192,683 | $203,088,704 | | Total Shareholders' Equity | $836,965 | $1,322,670 | - Total assets increased from $204.8 million to $206.5 million, primarily driven by an increase in cash and marketable securities held in the Trust Account[9] - Warrant liability increased from $241,735 to $355,908, reflecting changes in fair value[9] Condensed Statement of Operations and Comprehensive Income | Item | Three Months Ended March 31, 2025 | | :-------------------------------------------- | :-------------------------------- | | Revenues | $— | | General and administrative expenses | $371,833 | | Loss from operations | $(371,833) | | Change in fair value of warrants | $(114,173) | | Interest and dividend income on marketable securities held in Trust Account | $2,103,979 | | Net income and comprehensive income | $1,618,274 | | Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | $0.05 | | Basic and diluted net income per share, Class B non-redeemable ordinary shares | $0.05 | - The company reported net income of $1,618,274 for the three months ended March 31, 2025, primarily driven by interest and dividend income from the Trust Account, offsetting operating expenses and warrant fair value changes[12] Condensed Statement of Shareholders' Equity | Item | Shares | Amount ($) | Additional Paid-In Capital ($) | Retained Earnings ($) | Shareholders' Equity ($) | | :-------------------------------------- | :----------- | :--------- | :----------------------------- | :-------------------- | :----------------------- | | Balances as of December 31, 2024 | 13,333,333 | 1,333 | - | 1,321,337 | 1,322,670 | | Accretion of Class A ordinary shares to redemption value | — | — | (2,103,979) | — | (2,103,979) | | Reclass of negative additional paid-in capital to retained earnings | — | — | 2,103,979 | (2,103,979) | — | | Net income | — | — | — | 1,618,274 | 1,618,274 | | Balance as of March 31, 2025 | 13,333,333 | 1,333 | — | 835,632 | 836,965 | - Total shareholders' equity decreased from $1,322,670 at December 31, 2024, to $836,965 at March 31, 2025, primarily due to accretion of Class A ordinary shares to redemption value and a reclassification, partially offset by net income[15] Condensed Statement of Cash Flows | OPERATING ACTIVITIES | For the Three Months Ended March 31, 2025 | | :-------------------------------------------------------------------------------- | :---------------------------------------- | | Net income | $1,618,274 | | Adjustments to reconcile net income to net cash used in operating activities: | | | Change in fair value of warrant liability | $114,173 | | Interest and dividends earned on cash and marketable securities held in Trust Account | $(2,103,979) | | Net cash used in operating activities | $(417,754) | | Cash at beginning of period | $1,344,228 | | Cash at end of period | $926,474 | - Net cash used in operating activities was $417,754 for the three months ended March 31, 2025, primarily due to the impact of interest and dividends earned on Trust Account assets, despite positive net income[18] Notes to Unaudited Condensed Financial Statements Note 1. Basis of Presentation - GigCapital7 Corp. was incorporated on May 8, 2024, as a Cayman Islands exempted company, formed as a Special Purpose Acquisition Company (SPAC) to effect a business combination[21] - The company completed its initial public offering (IPO) of 20,000,000 public units at $10.00 per unit on August 30, 2024, generating $200 million in gross proceeds, with net proceeds placed in a Trust Account[25][28] - As of March 31, 2025, the company had $926,474 in cash and working capital of $1,039,133, but its ability to continue as a going concern is dependent on completing a Business Combination[38] Note 2. Summary of Significant Accounting Policies - The financial statements are prepared in conformity with GAAP and SEC rules, reflecting normal recurring adjustments[39] - The company is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[41] - Class A ordinary shares subject to possible redemption are classified as temporary equity at redemption value, as their redemption rights are outside the company's control[47] - Warrants not indexed to the company's own shares are accounted for as liabilities at fair value, subject to remeasurement at each balance sheet date[55] Note 3. Offering - On August 30, 2024, the company sold 20,000,000 public units at $10.00 each, consisting of one Class A ordinary share and one redeemable warrant[58] - Public warrants become exercisable 30 days after Business Combination or 12 months from Offering close, expiring five years after Business Combination or earlier upon redemption/liquidation[59] - Simultaneously with the Offering, non-managing investors purchased 2,826,087 Class B ordinary shares at $1.15 per share in a private placement[61] Note 4. Related Party Transactions - The Founder purchased 17,000,000 Class B ordinary shares for $100,000, later forfeiting 2,000,000 shares due to the over-allotment option not being exercised[63] - The Founder also purchased 3,719,000 private placement warrants at $0.01561 per warrant, exercisable for Class A ordinary shares at $11.50 per share[64] - The company has an administrative services agreement to pay GigManagement, LLC, an affiliate of the Founder, $30,000 per month for office space and support[68] Note 5. Shareholders' Equity - As of March 31, 2025, there were no preferred shares issued, 20,000,000 Class A ordinary shares subject to possible redemption, and 13,333,333 Class B ordinary shares issued and outstanding[69][70][71] - A total of 23,719,000 warrants (public and private placement) were outstanding as of March 31, 2025, exercisable at $11.50 per share[75][72] Note 6. Fair Value Instruments - The company uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on observable inputs[77][78] - Private placement warrants are classified as Level 2 financial instruments, valued based on observable data approximating public warrant fair value after public trading commenced[79] | Description | Level | March 31, 2025 | December 31, 2024 | | :-------------------------------------------- | :---- | :------------- | :---------------- | | Assets: | | | | | Cash and marketable securities held in Trust Account | 1 | $205,292,683 | $203,188,704 | | Liabilities: | | | | | Warrant liability | 2 | $355,908 | $241,735 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting its nature as a blank check company, the absence of operating revenues, and its liquidity and capital resources, primarily derived from its initial public offering and private placements Special Note Regarding Forward-Looking Statements - The report includes forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations[83] - The company disclaims any intention or obligation to update or revise forward-looking statements unless required by applicable securities law[83] Overview - GigCapital7 Corp. is a newly organized Private-to-Public Equity (PPE) company, or SPAC, formed to acquire or combine with one or more businesses[84] - The company has not yet selected a specific business combination target and intends to use IPO proceeds, private placement funds, and potentially debt or equity for the acquisition[84] - Issuance of additional ordinary or preferred shares during a business combination may dilute existing investors, subordinate rights, or affect control[85] Results of Operations and Known Trends or Future Events - The company has not engaged in operations or generated revenues to date, with activities focused on organizational tasks, the Offering, and identifying a target business[87] - Net income for the three months ended March 31, 2025, was $1,618,274, primarily from interest income on Trust Account assets, offsetting operating expenses and warrant fair value changes[88] Liquidity and Capital Resources - Liquidity needs have been met through the sale of founder shares, public units ($198.7 million net), private placement warrants ($58,060), and private placement shares ($3.25 million)[89] - As of March 31, 2025, $205,292,683 was held in the Trust Account, invested in U.S. government treasury bills or money market funds[91] - Cash used in operating activities for the three months ended March 31, 2025, was $417,754[92] - The company had $926,474 cash outside the Trust Account as of March 31, 2025, for working capital and due diligence, with potential need for additional financing if current funds are insufficient[95] Off-Balance Sheet Arrangements - As of March 31, 2025, the company has not entered into any off-balance sheet financing arrangements[97] Contractual Obligations - The company has no long-term debt or capital lease obligations, but has agreements to pay $30,000 monthly for administrative services and $20,000 monthly for CFO accounting services[98] Critical Accounting Policies - Key accounting policies include treatment as an Emerging Growth Company, Net Income Per Ordinary Share calculation, classification of Ordinary Shares subject to possible redemption, and Warrant Liability accounting[99][100][101][102][104] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company assesses its exposure to market and interest rate risks, concluding that due to the short-term, U.S. government treasury-backed nature of its Trust Account investments, there is no material exposure to interest rate risk - As of March 31, 2025, the company was not subject to any material market or interest rate risk[105] - Funds in the Trust Account are invested only in U.S. government treasury bills with maturities of 185 days or less or in money market funds investing solely in U.S. government obligations, minimizing interest rate risk[105] Item 4. Controls and Procedures This section details the company's disclosure controls and procedures, confirming their effectiveness as of March 31, 2025, with no material changes in internal control over financial reporting, while also acknowledging the inherent limitations of any control system Disclosure Controls and Procedures - Disclosure controls and procedures are designed to ensure timely recording, processing, summarizing, and reporting of information required under the Exchange Act[106] Evaluation of Disclosure Controls and Procedures - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[107] Changes in Internal Control over Financial Reporting - There have been no material changes in the company's internal control over financial reporting during the most recently completed fiscal quarter[108] Inherent Limitations on Effectiveness of Controls - The effectiveness of any internal control system is subject to inherent limitations, including judgment and the inability to eliminate misconduct completely, providing reasonable, not absolute, assurance[109] PART II Item 1. Legal Proceedings The company reports that it is not currently subject to any material legal proceedings, nor is it aware of any threatened against it or its officers/directors - The company is not currently subject to any material legal proceedings, nor are any threatened against it or its officers or directors[111] Item 1A. Risk Factors This section supplements previously disclosed risk factors with a new one concerning the potential adverse effects of changes in international trade policies, tariffs, and treaties on the company's search for and completion of a business combination, as well as the post-combination business - A new risk factor highlights that changes in international trade policies, tariffs, and treaties may materially adversely affect the company's ability to find and complete an initial business combination[113][114] - Such changes could negatively impact the attractiveness of target businesses, reduce the pool of potential targets, and adversely affect the post-business combination company's operations and financial results[115][116] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the unregistered sales of equity securities, including founder shares, consulting shares, private placement shares, and private placement warrants, all issued under Section 4(a)(2) of the Securities Act to accredited investors. It also outlines the use of proceeds from the initial public offering Founder and Consulting Shares - The Founder purchased a net of 12,207,246 Class B ordinary shares for $100,000, with 2,000,000 shares forfeited due to the over-allotment option not being exercised[117] - An additional 300,000 Class B ordinary shares were sold to a consultant for $3,000 for services related to the Offering[117] - These shares were issued under the Section 4(a)(2) exemption of the Securities Act to accredited investors[118] Private Placement Shares - 2,826,087 Class B ordinary shares were sold to institutional investors at $1.15 per share in a private placement concurrent with the Offering[119] - These shares were issued under the Section 4(a)(2) exemption of the Securities Act to accredited investors[120] Private Placement Warrants - The Founder purchased 3,719,000 private placement warrants at $0.01561 per warrant, exercisable for Class A ordinary shares at $11.50 per share[121] - These warrants were issued under the Section 4(a)(2) exemption of the Securities Act to the Founder, an accredited investor[122] Use of Proceeds - The company's Registration Statement for its $200.0 million Offering was declared effective on August 28, 2024[123] - On August 30, 2024, the company consummated the Offering of 20,000,000 public units at $10.00 per unit, generating $200,000,000 in gross proceeds[125] - As of March 31, 2025, $926,474 in cash was held outside the Trust Account for working capital purposes[126] Item 3. Defaults Upon Senior Securities This item is not applicable to the company - This item is not applicable[128] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[129] Item 5. Other Information The company reports no other information for this item - No other information is reported under this item[130] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1*, 32.2*)[131] - Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE) and the Cover Page Interactive Data File (104) are also filed[131] Signatures - The report was signed on May 6, 2025, by Dr. Avi S. Katz, Chief Executive Officer and Chairman, and Christine M. Marshall, Chief Financial Officer[135]