GSR III Acquisition Corp(GSRT) - 2025 Q2 - Quarterly Report

Part I. Financial Information This part presents the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Item 1. Financial Statements This section presents the unaudited financial statements, including balance sheets, statements of operations, changes in stockholders' deficit, and cash flows, for the periods ended June 30, 2025, and December 31, 2024, along with detailed notes explaining the company's financial position, performance, and accounting policies Balance Sheets Presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Assets | $237,235,415 | $233,347,974 | | Cash and investments held in trust account | $236,273,249 | $231,412,096 | | Total Liabilities | $10,071,120 | $9,249,529 | | Accumulated Deficit | $(9,109,571) | $(7,314,268) | Statements of Operations Details the company's revenues, expenses, and net income or loss for the three and six months ended June 30, 2025, and 2024 Net Income (Loss) and Key Income Components | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative expenses | $535,072 | $30,425 | $1,795,337 | $30,425 | | Interest and dividends earned on investments in trust account | $2,437,888 | $- | $4,861,153 | $- | | Net income (loss) | $1,902,830 | $(30,425) | $3,065,850 | $(30,425) | | Basic and diluted net income (loss) per share, redeemable ordinary shares | $0.07 | $- | $0.11 | $- | Statements of Changes in Stockholders' (Deficit) Equity Outlines the changes in stockholders' deficit, reflecting net income/loss and other equity adjustments for the specified periods Changes in Shareholders' Deficit (Six Months Ended June 30, 2025) | Item | Amount | | :------------------------------------------------- | :------------- | | Balance - December 31, 2024 | $(7,313,651) | | Subsequent measurement of ordinary shares subject to possible redemption | $(4,861,153) | | Net income | $3,065,850 | | Balance - June 30, 2025 | $(9,108,954) | Changes in Shareholders' Equity (Deficit) (Six Months Ended June 30, 2024) | Item | Amount | | :------------------------------------------------- | :------------- | | Balance – December 31, 2023 | $8,502 | | Net loss | $(46,923) | | Balance – June 30, 2024 | $(21,923) | Statements of Cash Flows Reports the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Cash Flows from Operating Activities (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------------- | :----------- | :--- | | Net income (loss) | $3,065,850 | $(30,425) | | Interest and dividends earned on investments held in trust account (adjustment) | $(4,861,153) | $- | | Net cash used in operating activities | $(924,906) | $- | | Cash - end of the period | $862,127 | $- | Notes to Financial Statements Provides detailed explanations of the company's accounting policies, significant transactions, and financial statement line items NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Describes the company's formation as a blank check company, its business combination purpose, and the agreement with Terra Innovatum - GSR III Acquisition Corp. is a blank check company incorporated on May 10, 2023, for the purpose of effecting a business combination[24] - On April 21, 2025, the Company entered into a business combination agreement with Terra Innovatum s.r.l., an Italian limited liability company[26] Financing Overview | Event | Date | Gross Proceeds | | :-------------------- | :----------- | :------------- | | Initial Public Offering | Nov 8, 2024 | $230,000,000 | | Private Placement | Nov 8, 2024 | $4,225,000 | | Trust Account Deposit | Post-IPO | $230,000,000 | - The company's mandatory liquidation risk and liquidity issues raise substantial doubt about its ability to continue as a going concern if a Business Combination is not completed[37][38] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Outlines the key accounting principles and policies applied in the preparation of the financial statements - The financial statements are presented in conformity with GAAP and SEC rules, with certain information condensed or omitted for interim reporting[41][42] - 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[43][44] Cash and Investments Held in Trust Account | Date | Amount | | :---------------- | :------------- | | June 30, 2025 | $236,273,249 | | December 31, 2024 | $231,412,096 | - Class A ordinary shares subject to possible redemption are classified outside of permanent equity, with changes in redemption value recognized immediately[57] NOTE 3. INITIAL PUBLIC OFFERING Details the gross proceeds and unit sales from the company's initial public offering - The Company sold 23,000,000 Units (including over-allotment) at $10.00 per Unit, generating gross proceeds of $230,000,000, which were placed in the Trust Account[64] NOTE 4. PRIVATE PLACEMENT Describes the concurrent private placement of units to the Sponsor and the proceeds generated - Simultaneously with the IPO, 422,500 Private Placement Units were sold to the Sponsor at $10.00 per unit, generating total proceeds of $4,225,000[65] NOTE 5. RELATED PARTY TRANSACTIONS Summarizes transactions and agreements with related parties, including the Sponsor and management - The Sponsor paid $25,000 for 5,750,000 Class B ordinary shares (Founder Shares)[67] - Founder Shares were transferred to independent directors (30,000 shares) and a management team member (225,000 shares) at $0.004348 per share[68][69] Administrative Services Fees Incurred (2025) | Period | Amount | | :---------------------- | :------------- | | Three months ended June 30 | $166,668 | | Six months ended June 30 | $333,336 | - A promissory note from the Sponsor for up to $300,000 was fully repaid by November 8, 2024[73] NOTE 6. COMMITMENTS AND CONTINGENCIES Identifies the company's contractual commitments and potential contingent liabilities - Holders of Founder Shares and Private Placement Units have registration rights, subject to lock-up periods, to require the Company to register their securities[75] NOTE 7. SHAREHOLDERS' DEFICIT Provides details on the composition of shareholders' deficit, including ordinary shares and rights - As of June 30, 2025, there were 422,500 Class A ordinary shares issued and outstanding (excluding 23,000,000 subject to redemption) and 5,750,000 Class B ordinary shares issued and outstanding[77][78] - Class B ordinary shares, held by the Sponsor, have the right to appoint directors and convert into Class A ordinary shares upon a business combination[79][80] - 3,285,714 public rights and 60,357 private rights were issued, entitling holders to one Class A ordinary share upon business combination, but expire worthless if no combination occurs[81][82] NOTE 8. FAIR VALUE MEASUREMENTS Explains the fair value hierarchy and measurement of financial assets and liabilities - The Company uses a three-tier fair value hierarchy (Level 1, 2, 3) for financial assets and liabilities[51][53] Fair Value of Cash and Investments Held in Trust Account (Level 1) | Date | Amount | | :---------------- | :------------- | | June 30, 2025 | $236,273,249 | | December 31, 2024 | $231,412,096 | NOTE 9. SEGMENT INFORMATION States that the company operates as a single segment and identifies key performance measures reviewed by management - The Company operates as a single operating segment, with Co-Chief Executive Officers as the chief operating decision makers[88] - Key measures reviewed by CODM include interest and dividends earned on trust account and formation/operational costs[90] NOTE 10. SUBSEQUENT EVENTS Confirms no material subsequent events requiring disclosure or adjustment were identified - No subsequent events requiring adjustment or disclosure were identified up to the date the financial statements were issued[91] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of GSR III Acquisition Corp. as a blank check company, its IPO and private placement, and the ongoing search for a business combination, including the recently signed agreement with Terra Innovatum. It discusses the company's liquidity, capital resources, and the significant going concern risk due to its nature as a SPAC. Financial results show net income for the current period driven by trust account interest, contrasting with a prior year loss Overview Provides a general description of the company's nature as a blank check company and its operational status - GSR III Acquisition Corp. is a blank check company incorporated on May 10, 2023, for the purpose of effecting a business combination[94] - As of June 30, 2025, the company had not yet commenced operations and generates non-operating income from its Trust Account[95] Initial Public Offering and Private Placement Recaps the details of the company's IPO and concurrent private placement, including proceeds and extension requirements - The Initial Public Offering was consummated on November 8, 2024, generating gross proceeds of $230,000,000 from 23,000,000 units[96] - A concurrent Private Placement generated $4,225,000 from 422,500 units sold to the Sponsor[97] - Extending the business combination period beyond 21 months requires a special resolution (two-thirds shareholder approval) and offers public shareholders redemption rights[98] Business Combination Agreement Details the agreement to combine with Terra Innovatum s.r.l., leading to the company becoming a subsidiary of Pubco - On April 21, 2025, the Company entered into a business combination agreement with Terra Innovatum s.r.l., which will result in the Company becoming a wholly owned subsidiary of a Dutch public limited liability company (Pubco)[99] Liquidity and Capital Resources Discusses the company's cash position, operating cash flows, and potential needs for additional financing Cash Held Outside Trust Account | Date | Amount | | :---------------- | :----------- | | June 30, 2025 | $862,127 | | December 31, 2024 | $1,787,033 | - Cash used in operating activities was $924,906 for the six months ended June 30, 2025, compared to zero in the prior year[101] - The company intends to use substantially all net proceeds from the IPO and trust account funds to acquire a target business and cover related expenses[102] - Additional financing may be required to consummate a business combination or if a significant number of public shares are redeemed[104] Going Concern Consideration Addresses the substantial doubt about the company's ability to continue as a going concern without a completed business combination - Mandatory liquidation and liquidity issues raise substantial doubt about the Company's ability to continue as a going concern if a Business Combination is not completed[105] Financial Position (June 30, 2025) | Metric | Amount | | :---------------------- | :----------- | | Operating bank account | $862,127 | | Working capital | $91,046 | - Management plans to complete a Business Combination before the mandatory liquidation date and anticipates sufficient liquidity, though no assurance can be given[107] Results of Operations Analyzes the company's financial performance, highlighting net income/loss drivers from trust account interest and expenses - The company generates non-operating income from the Trust Account, as it has not yet generated operating revenues[108] Net Income (Loss) Summary | Period | 2025 | 2024 | | :---------------------- | :----------- | :----------- | | Three months ended June 30 | $1,902,830 | $(30,425) | | Six months ended June 30 | $3,065,850 | $(30,425) | - Net income for 2025 periods was primarily driven by non-operating income from the Trust Account and operating account, offset by general and administrative expenses[109][110] Contractual Obligations Outlines the company's ongoing contractual commitments, such as administrative service fees - The Company pays the Sponsor up to $55,556 per month for administrative services, incurring $166,668 for the three months and $333,336 for the six months ended June 30, 2025[111] - A promissory note from the Sponsor for up to $300,000 was fully repaid by November 8, 2024[112] - As of June 30, 2025, there were no outstanding Working Capital Loans[113] Critical Accounting Estimates States that no critical accounting estimates have been identified in the financial statement preparation - The preparation of financial statements requires management to make estimates and judgments, but no critical accounting estimates have been identified[114] Recent Accounting Standards Assesses the potential impact of recently issued accounting standards on the company's financial statements - Management does not believe that any recently issued, but not yet effective, accounting standards would have a material effect on the Company's financial statements[115] Off-Balance Sheet Financing Arrangements Confirms the absence of any off-balance sheet financing arrangements as of the reporting date - As of June 30, 2025, the Company did not have any off-balance sheet financing arrangements[116] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, GSR III Acquisition Corp. is exempt from providing quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[117] Item 4. Controls and Procedures As of June 30, 2025, the company's disclosure controls and procedures were deemed ineffective due to inadequate segregation of duties and insufficient written policies for accounting, IT, and financial reporting. No material changes in internal control over financial reporting occurred during the quarter - As of June 30, 2025, disclosure controls and procedures were not effective due to inadequate segregation of duties and insufficient written policies for accounting, IT, and financial reporting[118] - There was no change in internal control over financial reporting during the fiscal quarter ended June 30, 2025, that materially affected, or is reasonably likely to materially affect, internal control over financial reporting[120] PART II. Other Information This part covers legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings The company reported no legal proceedings - None[123] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[124] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details the consummation of the IPO on November 8, 2024, raising $230 million, and a concurrent private placement raising $4.225 million. Transaction costs amounted to $10,951,368, and $234,040,000 of net proceeds were deposited into a trust account - The Initial Public Offering was consummated on November 8, 2024, selling 23,000,000 Units for gross proceeds of $230,000,000[125] - A Private Placement of 422,500 units generated total proceeds of $4,225,000[126] - Transaction costs amounted to $10,951,368, including $9,200,000 of deferred underwriting fees[127] - A total of $234,040,000 of net proceeds from the IPO and Private Placement were deposited into a trust account[128] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[129] Item 4. Mine Safety Disclosures The company reported no mine safety disclosures - None[130] Item 5. Other Information The company reported no other information - None[131] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Business Combination Agreement, certifications from executive officers, and XBRL-related documents - Key exhibits include the Business Combination Agreement (2.1), Certifications of Principal Executive Officer (31.1, 32.1), Certifications of Principal Financial Officer (31.2, 32.2), and various Inline XBRL documents[132]