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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM         TO        

Commission File Number: 001-40091

 

GORES HOLDINGS VII, INC.

(Exact name of registrant as specified in its Charter)

 

 

Delaware

 

85-3010689

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

6260 Lookout Rd.

 

 

Boulder, CO

 

80301

(Address of principal executive offices)

 

(Zip Code)

 

(310209-3010

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

 

Title of each class

 

Trading Symbols

 

Name of each exchange on which registered

Class A Common Stock

 

GSEV

 

The Nasdaq Stock Market LLC

Warrants

 

GSEVW

 

The Nasdaq Stock Market LLC

Units

 

GSEVU

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes  No 

As of November 10, 2022, there were 55,000,000 shares of the Company’s Class A Common Stock, par value $0.0001 per share, and 13,750,000 shares of the Company’s Class F common stock, par value $0.0001 per share, issued and outstanding.

 

 

 


 

TABLE OF CONTENTS

 

 

Page

PART I—FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

Balance Sheets (Unaudited)

3

 

 

Statements of Operations (Unaudited)

4

 

 

Statements of Changes in Stockholders’ Deficit (Unaudited)

5

 

 

Statements of Cash Flows (Unaudited)

6

 

 

Notes to Interim Financial Statements (Unaudited)

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

 

 

 

Item 4.

Controls and Procedures

24

 

 

PART II—OTHER INFORMATION

25

 

 

 

Item 1.

Legal Proceedings

25

 

 

 

Item 1A.

Risk Factors

25

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

 

 

 

Item 3.

Defaults Upon Senior Securities

28

 

 

 

Item 4.

Mine Safety Disclosures

28

 

 

 

Item 5.

Other Information

29

 

 

 

Item 6.

Exhibits

30

 

 

 

2


 

GORES HOLDINGS VII, INC.

BALANCE SHEETS

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

(unaudited)

 

 

(audited)

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

1,081,223

 

 

$

 

323,050

 

Prepaid assets

 

 

 

401,026

 

 

 

 

1,103,707

 

Total current assets

 

 

 

1,482,249

 

 

 

 

1,426,757

 

Cash, cash equivalents and other investments held in Trust Account

 

 

 

550,504,666

 

 

 

 

550,047,057

 

Total assets

 

$

 

551,986,915

 

 

$

 

551,473,814

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

Accrued expenses, formation and offering costs

 

$

 

2,171,255

 

 

$

 

2,182,321

 

State franchise tax accrual

 

 

 

30,000

 

 

 

 

200,225

 

Public warrants derivative liability

 

 

 

825,000

 

 

 

 

9,418,750

 

Private warrants derivative liability

 

 

 

520,000

 

 

 

 

5,936,666

 

Notes and advances payable – related party

 

 

 

1,700,000

 

 

 

 

1,350,000

 

Total current liabilities

 

 

 

5,246,255

 

 

 

 

19,087,962

 

Deferred underwriting compensation

 

 

 

19,250,000

 

 

 

 

19,250,000

 

Total liabilities

 

$

 

24,496,255

 

 

$

 

38,337,962

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

Class A Common Stock subject to possible redemption, 55,000,000 and 55,000,000 shares at September 30, 2022 and December 31, 2021, respectively (at redemption value of $10 per share)

 

 

 

550,268,166

 

 

 

 

550,000,000

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

Class A Common Stock, $0.0001 par value; 400,000,000 shares authorized

 

 

 

 

 

 

 

 

Class F Common Stock, $0.0001 par value; 40,000,000 shares authorized, 13,750,000 and 13,750,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

 

1,375

 

 

 

 

1,375

 

Additional paid-in-capital

 

 

 

 

 

 

 

 

Accumulated deficit

 

 

 

(22,778,881

)

 

 

 

(36,865,523

)

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ deficit

 

 

 

(22,777,506

)

 

 

 

(36,864,148

)

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$

 

551,986,915

 

 

$

 

551,473,814

 

 

See accompanying notes to the unaudited, interim financial statements.

3


GORES HOLDINGS VII, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three

 

 

 

Three

 

 

Nine

 

 

 

Nine

 

 

 

Months Ended

 

 

 

Months Ended

 

 

Months Ended

 

 

 

Months Ended

 

 

 

September 30, 2022

 

 

 

September 30, 2021

 

 

September 30, 2022

 

 

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees and other expenses

 

 

 

(418,186

)

 

 

 

(1,844,167

)

 

 

 

(1,358,370

)

 

 

 

(3,159,009

)

State franchise taxes, other than income tax

 

 

 

(50,000

)

 

 

 

(50,000

)

 

 

 

(150,000

)

 

 

 

(150,000

)

Gain from change in fair value of warrant liabilities

 

 

 

3,810,833

 

 

 

 

2,129,583

 

 

 

 

14,010,416

 

 

 

 

4,483,333

 

Allocated expense for warrant issuance cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(607,984

)

       Net income from operations

 

 

 

3,342,647

 

 

 

 

235,416

 

 

 

 

12,502,046

 

 

 

 

566,340

 

Other income - interest income

 

 

 

1,054,847

 

 

 

 

7,078

 

 

 

 

1,852,762

 

 

 

 

35,436

 

       Net income before income taxes

 

$

 

4,397,494

 

 

$

 

242,494

 

 

$

 

14,354,808

 

 

$

 

601,776

 

Provision for income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       Net income attributable to common shares

 

$

 

4,397,494

 

 

$

 

242,494

 

 

$

 

14,354,808

 

 

$

 

601,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Class A Common Stock - basic and diluted

 

$

 

0.07

 

 

$

 

0.00

 

 

$

 

0.21

 

 

$

 

(0.71

)

   Class F Common Stock - basic and diluted

 

$

 

0.04

 

 

$

 

0.00

 

 

$

 

0.19

 

 

$

 

(0.71

)

 

See accompanying notes to the unaudited, interim financial statements.

 

 

4


 

GORES HOLDINGS VII, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

 

 

For the Three and Nine Months Ended September 30, 2021

 

 

 

Class A Common Stock

 

 

Class F Common Stock

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Deficit

 

 

Deficit

 

Beginning Balance at January 1, 2021

 

 

-

 

 

$

 

-

 

 

 

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

(4,450

)

 

$

 

(4,450

)

Sale of Class F Common Stock to Sponsor on January 4, 2021 at $0.0001 par value

 

 

-

 

 

 

 

-

 

 

 

 

11,500,000

 

 

 

 

1,150

 

 

 

 

23,850

 

 

 

 

-

 

 

 

 

25,000

 

Stock dividend effected on Class F Common Stock on February 25, 2021

 

 

-

 

 

 

 

-

 

 

 

 

2,300,000

 

 

 

 

230

 

 

 

 

(230

)

 

 

 

-

 

 

 

 

-

 

Excess of fair value paid by founders for warrants

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

6,153,334

 

 

 

 

-

 

 

 

 

6,153,334

 

Forfeited Class F Common Stock by Sponsor

 

 

-

 

 

 

 

-

 

 

 

 

(50,000

)

 

 

 

(5

)

 

 

 

5

 

 

 

 

-

 

 

 

 

-

 

Subsequent measurement of Class A Common Stock subject to redemption against additional paid-in capital

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(6,176,959

)

 

 

 

-

 

 

 

 

(6,176,959

)

Subsequent measurement of Class A Common Stock subject to redemption against accumulated deficit

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(34,861,532

)

 

 

 

(34,861,532

)

Net income

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

359,282

 

 

 

 

359,282

 

Balance at June 30, 2021

 

 

-

 

 

$

 

-

 

 

 

 

13,750,000

 

 

$

 

1,375

 

 

$

 

-

 

 

$

 

(34,506,700

)

 

$

 

(34,505,325

)

Net income

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

242,494

 

 

 

 

242,494

 

Balance at September 30, 2021

 

 

-

 

 

$

 

-

 

 

 

 

13,750,000

 

 

$

 

1,375

 

 

$

 

-

 

 

$

 

(34,264,206

)

 

$

 

(34,262,831

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three and Nine Months Ended September 30, 2022

 

 

 

Class A Common Stock

 

 

Class F Common Stock

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Deficit

 

 

Deficit

 

Balance at January 1, 2022

 

 

-

 

 

$

 

-

 

 

 

 

13,750,000

 

 

$

 

1,375

 

 

$

 

-

 

 

$

 

(36,865,523

)

 

$

 

(36,864,148

)

Net income

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

9,957,314

 

 

 

 

9,957,314

 

Balance at June 30, 2022

 

 

-

 

 

$

 

-

 

 

 

 

13,750,000

 

 

$

 

1,375

 

 

$

 

-

 

 

$

 

(26,908,209

)

 

$

 

(26,906,834

)

Net income

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4,397,494

 

 

 

 

4,397,494

 

Increase in redemption value of Class A common stock subject to redemption

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(268,166

)

 

 

 

(268,166

)

Balance at September 30, 2022

 

 

-

 

 

$

 

-

 

 

 

 

13,750,000

 

 

$

 

1,375

 

 

$

 

-

 

 

$

 

(22,778,881

)

 

$

 

(22,777,506

)

See accompanying notes to the unaudited, interim financial statements

 

5


 

GORES HOLDINGS VII, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Nine Months Ended September 30, 2022

 

 

Nine Months Ended September 30, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 

14,354,808

 

 

$

 

601,776

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

      Issuance costs related to warrant liability

 

 

 

 

 

 

 

607,984

 

      Changes in fair value warrants derivative liabilities

 

 

 

(14,010,416

)

 

 

 

(4,483,333

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

      Changes in state franchise tax accrual

 

 

 

(170,225

)

 

 

 

149,550

 

      Changes in prepaid assets

 

 

 

702,681

 

 

 

 

(1,369,855

)

      Changes in accrued expenses, formation and offering costs

 

 

 

(11,066

)

 

 

 

2,220,979

 

Net cash provided by/(used in) operating activities

 

 

 

865,782

 

 

 

 

(2,272,899

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Cash deposited in Trust Account

 

 

 

 

 

 

 

(550,000,000

)

Interest reinvested in the Trust Account

 

 

 

(457,609

)

 

 

 

(35,436

)

Net cash used in investing activities

 

 

 

(457,609

)

 

 

 

(550,035,436

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of Units in initial public offering

 

 

 

 

 

 

 

550,000,000

 

Proceeds from sale of Private Placement Warrants to Sponsor

 

 

 

 

 

 

 

13,000,000

 

Proceeds from sale of Class F Common Stock to Sponsor

 

 

 

 

 

 

 

25,000

 

Proceeds from notes and advances payable – related party

 

 

 

350,000

 

 

 

 

1,650,000

 

Repayment of notes and advances payable – related party

 

 

 

 

 

 

 

(300,000

)

Payment of underwriters’ discounts and commissions

 

 

 

 

 

 

 

(11,000,000

)

Payment of accrued offering costs

 

 

 

 

 

 

 

(533,975

)

Net cash provided by financing activities

 

 

 

350,000

 

 

 

 

552,841,025

 

Increase in cash

 

 

 

758,173

 

 

 

 

532,690

 

Cash at beginning of period

 

 

 

323,050

 

 

 

 

 

Cash at end of period

 

$

 

1,081,223

 

 

$

 

532,690

 

Supplemental disclosure of non-cash financing activities:

 

 

 

 

 

 

 

 

 

 

Deferred underwriting compensation

 

$

 

 

 

$

 

19,250,000

 

Supplemental disclosure of income and franchise taxes paid:

 

 

 

 

 

 

 

 

 

 

Cash paid for income and state franchise taxes

 

$

 

320,225

 

 

$

 

450

 

 

See accompanying notes to the unaudited, interim financial statements.

6


GORES HOLDINGS VII, INC.

NOTES TO THE UNAUDITED, INTERIM FINANCIAL STATEMENTS

1.       Organization and Business Operations

Organization and General

Gores Holdings VII, Inc. (the “Company”) was incorporated in Delaware on September 14, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). The Company has neither engaged in any operations nor generated any operating revenue to date. The Company’s management has broad discretion with respect to the Business Combination. The Company’s sponsor is Gores Sponsor VII, LLC, a Delaware limited liability company (the “Sponsor”). The Company has selected December 31st as its fiscal year-end.

The Company completed the Public Offering on February 25, 2021 (the “IPO Closing Date”). The Company will not generate any operating revenues until after the completion of its Business Combination, at the earliest. Subsequent to the Public Offering, the Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering and the sale of the Private Placement Warrants (as defined below) held in the Trust Account (as defined below).

Financing

Upon the close of the Public Offering and the sale of the Private Placement Warrants, an aggregate of $550,000,000 was placed in a Trust Account with Computershare, Inc. acting as trustee (the “Trust Account”).

The Company intends to finance a Business Combination with the net proceeds from its $550,000,000 Public Offering and its sale of $13,000,000 of Private Placement Warrants.    

Trust Account

Funds held in the Trust Account can be invested only in U.S. government treasury bills with a maturity of one hundred and eighty-five (185) days or less or in money market funds meeting certain conditions under Rule 2a‑7 under the Investment Company Act of 1940 (the “Investment Company Act”), as amended, that invest only in direct U.S. government obligations. As of September 30, 2022, the Trust Account consisted of cash.

The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to fund regulatory compliance requirements and other costs related thereto (a “Regulatory Withdrawal”) for a maximum 24 months and/or additional amounts necessary to pay franchise and income taxes, if any, none of the funds held in trust will be released until the earliest of: (i) the completion of the Business Combination; or (ii) the redemption of any public shares of common stock properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of such public shares of common stock if the Company does not complete the Business Combination by February 25, 2023; or (iii) the redemption of 100% of the public shares of common stock if the Company is unable to complete a Business Combination by February 25, 2023, subject to the requirements of law and stock exchange rules.

7


Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination. The Business Combination must be with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (less any deferred underwriting commissions and taxes payable on interest income earned) at the time of the Company signing a definitive agreement in connection with the Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

The Company, after signing a definitive agreement for a Business Combination, would either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable, or (ii) provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable. The decision as to whether the Company would seek stockholder approval of the Business Combination or would allow stockholders to sell their shares in a tender offer would be made by the Company, solely in its discretion, and would be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under Nasdaq rules. If the Company seeks stockholder approval, it would complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. Currently, the Company would not redeem its public shares of common stock in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its public shares of common stock and the related Business Combination, and instead may search for an alternate Business Combination.

As a result of the foregoing redemption provisions, the public shares of common stock are recorded at redemption amount and classified as temporary equity, in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) in subsequent periods.

The Company will have until February 25, 2023 to complete its Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest income, but less taxes payable (less up to $100,000 of such net interest income to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation. The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they waived their rights to participate in any redemption with respect to their Founder Shares (as defined below); however, if the Sponsor or any of the Company’s officers, directors or affiliates acquire public shares of common stock, they will be entitled to a pro rata share of the Trust Account in the event the Company does not complete a Business Combination within the required time period.

8


In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the Public Offering.

Emerging Growth Company

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

Special Meeting to allow early redemption and liquidation

On November 3, 2022, the Company filed a preliminary proxy statement relating to a special meeting of shareholders to approve (i) an amendment to the Company’s amended and restated certificate of incorporation (the “Charter Amendment Proposal”) and (ii), an amendment to the Investment Management Trust Agreement, dated February 25, 2021, by and between the Company and Computershare Trust Company, N.A, as trustee (the “Trust Amendment Proposal” and together with the Charter Amendment Proposal, the “Proposals”), which would, if implemented, allow the Company to redeem all of its outstanding Public Shares in advance of the Company’s contractual expiration date of February 25, 2023 by changing the date by which the Company must cease all operations except for the purpose of winding up if it fails to complete a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination (a “Business Combination”) from February 25, 2023 to the later of the date of the special meeting of the stockholders (the “Special Meeting”) or the date of effectiveness of the Charter Amendment (the “Amended Termination Date”).

If the Proposals are approved, and because the Company will not be able to complete an initial Business Combination by the Amended Termination Date, the Company will immediately after the Special Meeting, cease all operations, except for the purpose of winding up and as promptly as reasonably possible, but not more than ten business days thereafter, redeem all Public Shares (the “Mandatory Redemption”). As promptly as reasonably possible following such Mandatory Redemption, and subject to the approval of the Company’s then remaining stockholders and the Board, in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the General Corporation Law of the State of Delaware to provide for claims of creditors and the requirements of other applicable law.

Pursuant to the amended and restated certificate, a Public Stockholder shall be provided with the opportunity to redeem their Public Shares for cash if the Charter Amendment Proposal is approved. Notwithstanding the foregoing, if the Charter Amendment Proposal is approved, and because the Company will not be able to complete an initial Business Combination by the Amended Termination Date, the Company will be obligated to redeem all Public Shares as promptly as reasonably possible after the Amended Termination Date. Therefore, no action is required by our Public Stockholders to redeem their Public Shares. If the Proposals are approved, the Public Shares will be automatically redeemed as part of the Mandatory Redemption.

2.       Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”), and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2022 and December 31, 2021 and the results of operations and cash flows

9


for the periods presented. Operating results for the nine months ended September 30, 2022 and 2021, are not necessarily indicative of results that may be expected for the full year or any other period.

The accompanying unaudited financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2022.  

Net Income/(Loss) Per Common Share

The Company has two classes of shares, which are referred to as Class A Common Stock (the “Common Stock”) and Class F Common Stock (the “Founder Shares”). Earnings and losses are shared pro rata between the two classes of shares. Public and private warrants to purchase 11,208,333 shares of Common Stock at $11.50 per share were issued on February 25, 2021. At September 30, 2022 and December 31, 2021, no warrants have been exercised. The 11,208,333 potential common shares for outstanding warrants to purchase the Company’s stock were excluded from diluted earnings per share for the nine months ended September 30, 2022 and 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income/(loss) per common share is the same as basic net income/(loss) per common share for the period. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net loss per share for each class of common stock:     

 

 

 

For the Three Months Ended September 30, 2022

 

 

For the Three Months Ended September 30, 2021

 

 

For the Nine Months Ended September 30, 2022

 

 

For the Nine Months Ended September 30, 2021

 

 

 

Class A

 

 

Class F

 

 

Class A

 

 

Class F

 

 

Class A

 

 

Class F

 

 

Class A

 

 

Class F

 

Basic and diluted net income/(loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allocation of net income/(loss) including accretion of temporary equity

 

$

 

3,517,995

 

 

$

 

879,499

 

 

$

 

193,995

 

 

$

 

48,499

 

 

$

 

11,483,846

 

 

$

 

2,870,962

 

 

$

 

(31,103,968

)

 

$

 

(9,332,747

)

Increase in redemption value of Class A common stock subject to redemption

 

 

 

268,166

 

 

 

 

(268,166

)

 

 

 

-

 

 

 

 

-

 

 

 

 

268,166

 

 

 

 

(268,166

)

 

 

 

-

 

 

 

 

-

 

Total Numerator:

 

$

 

3,786,161

 

 

$

 

611,333

 

 

$

&