Global Star Acquisition(GLST) - 2023 Q2 - Quarterly Report

Financial Position - Total assets as of June 30, 2023, amounted to $97.6 million, a slight increase from $96.3 million at December 31, 2022[18] - The company’s total current liabilities increased to $946,984 as of June 30, 2023, from $603,629 at December 31, 2022[18] - The company experienced an accumulated deficit of $2,989,070 as of June 30, 2023, compared to $2,328,390 at December 31, 2022[18] - The total stockholders' deficit increased to $2,988,778 as of June 30, 2023, from $2,328,098 at December 31, 2022[18] - The company has a working capital deficit of $335,804 as of June 30, 2023, which includes interest earned on the trust account available for tax obligations[45] - As of June 30, 2023, the company had cash of $301,966 in its operating bank accounts[45] - The company had cash and marketable securities of $97,103,477 held in the Trust Account as of June 30, 2023, designated for an initial Business Combination[45] Income and Earnings - The company reported a net income of $547,774 for the three months ended June 30, 2023, compared to a net income of $963,152 for the six months ended June 30, 2023[22] - For the six months ended June 30, 2023, the company reported a net income of $963,152 compared to a net loss of $706 for the same period in 2022[30] - The company reported a basic and diluted net income per Class A common stock subject to possible redemption of $0.05 for the three months ended June 30, 2023[22] - For the three months ended June 30, 2023, the Company reported a net income of $547,774, driven by interest income of $1,146,110 from marketable securities[142] - For the six months ended June 30, 2023, the net income was $963,152, with total interest income of $2,155,537[143] Operational Costs - Operational costs for the three months ended June 30, 2023, were $368,264, compared to $25 for the same period in 2022[22] - The company incurred operating costs of $368,254 for the three months ended June 30, 2023[142] - The company incurred $31,666 and $61,666 in administrative expenses for the three and six months ended June 30, 2023, respectively[96] Initial Public Offering (IPO) - The company generated gross proceeds of $80,000,000 from its initial public offering (IPO) by selling 8,000,000 units at $10.00 per unit[36] - The company sold 8,000,000 units at a price of $10.00 per unit during the Initial Public Offering, generating gross proceeds of $80,000,000[84] - An additional 1,200,000 units were sold at the same price during the overallotment, generating additional gross proceeds of $12.0 million[98] - The company recorded transaction costs of $4,788,510 related to the IPO, including $920,000 in underwriting fees[39] - Offering costs associated with the Initial Public Offering totaled $648,510, primarily for preparation costs[63] - The underwriters received a cash underwriting discount of $0.20 per Unit, totaling $1,840,000, upon the closing of the Initial Public Offering[99] - A deferred fee of $0.35 per Unit, amounting to $3,220,000, will be payable to the underwriters only if a Business Combination is completed[99] Business Combination and Merger Agreement - The Company announced a definitive Merger Agreement with K Enter Holdings Inc., involving a merger with K Wave Media Ltd., expected to be listed on The Nasdaq Stock Market[50] - The Company has until September 22, 2023, to consummate a Business Combination, with the possibility of extending this period up to 21 months[43] - The Company extended the deadline for its initial business combination from September 22, 2023, to June 22, 2024, with stockholders approving the Charter Amendment on August 22, 2023[125] - The Merger Agreement involves merging with K Enter Holdings Inc. and K Wave Media Ltd. as part of the Proposed Business Combination[140] Cash Flow and Financing - Cash flows from operating activities resulted in a net cash used of $694,918 for the six months ended June 30, 2023, compared to a net cash provided of $76,109 in the prior year[30] - The company may need to raise additional capital to complete a Business Combination or to meet obligations if a significant number of Public Shares are redeemed[48] - The Company issued a promissory note in the principal amount of $1,600,000 to the Sponsor for working capital expenses, which may be converted into units at $10.00 per unit[124] - The Sponsor extended a line of credit of up to $1,600,000 to finance transaction costs, which may be converted into common stock at $10.00 per share[159] Stockholder Activity - Stockholders redeemed 4,052,066 shares at approximately $10.55 per share, resulting in approximately $42,753,728 being removed from the Trust Account[125] - Following the redemption, the remaining shares of Class A common stock outstanding were 5,147,934[125] Tax and Regulatory Matters - The effective tax rate for the three months ended June 30, 2023, was 29.6%, compared to 0.0% for the same period in 2022[71] - The Company has not recognized any unrecognized tax benefits or accrued interest and penalties as of June 30, 2023[70] - The Company must deposit $125,000 into the Trust Account for the September extension[125] Internal Controls and Compliance - The company has identified a material weakness in its disclosure controls and procedures related to financial reporting as of June 30, 2023[172] - The company continues to evaluate steps to remediate identified material weaknesses, which may be time-consuming and costly[173] - There were no changes in internal control over financial reporting that materially affected the company's internal control during the fiscal quarter ended June 30, 2023[175] - The company does not expect disclosure controls and procedures to prevent all errors and instances of fraud, providing only reasonable assurance[174] Accounting and Reporting Standards - The company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[57] - The company has not experienced losses on its cash accounts, which may exceed the FDIC coverage limit of $250,000[76] - The company does not believe that any recently issued accounting standards will have a material effect on its financial statements[82] - The company is assessing the impact of recent accounting standards, including ASU No. 2020-06, which simplifies accounting for convertible instruments[167] - The company has made control improvements to enhance the efficacy of review processes related to accounting standards for related party transactions[173]