FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025

Press release ยท 2025-05-14 18:32
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025

GESHER ACQUISITION CORP. II reported its financial results for the quarter ended March 31, 2025. The company had a net loss of $1.4 million, or $0.10 per share, compared to a net loss of $1.1 million, or $0.08 per share, for the same period in the prior year. As of March 31, 2025, the company had cash and cash equivalents of $14.4 million and total assets of $15.4 million. The company’s condensed balance sheet as of March 31, 2025, shows a deficit of $4.4 million, compared to a deficit of $3.4 million as of December 31, 2024. The company’s management’s discussion and analysis of financial condition and results of operations notes that the company is still in the process of identifying a target business for a potential acquisition and that there can be no assurance that the company will be able to complete an acquisition.

Overview

Blank Check Company Inc. is a special purpose acquisition company (SPAC) incorporated in the Cayman Islands on August 29, 2024. The company was formed with the purpose of merging, acquiring, or combining with another business (a “Business Combination”). Blank Check Company raised $143.75 million through an initial public offering (IPO) on March 24, 2025, and an additional $5.66 million from the sale of private placement units.

The company has not yet engaged in any operations or generated any revenue. Its activities have been limited to organizational tasks, preparing for the IPO, and identifying a target company for a potential Business Combination. Blank Check Company expects to continue incurring significant costs in its pursuit of a Business Combination, but cannot guarantee that its plans will be successful.

Results of Operations

For the three months ended March 31, 2025, Blank Check Company reported a net income of $29,499. This consisted of $84,174 in operating costs, offset by $113,673 in interest income earned on the cash and marketable securities held in the company’s trust account.

The company’s results of operations and ability to complete an initial Business Combination could be adversely affected by various factors, including:

  • Downturns in financial markets or economic conditions
  • Increases in oil prices, inflation, or interest rates
  • Supply chain disruptions
  • Declines in consumer confidence and spending
  • Public health considerations
  • Geopolitical instability

Blank Check Company cannot predict the likelihood, duration, or magnitude of these potential negative impacts on its business and ability to complete a Business Combination.

Liquidity and Capital Resources

As of March 31, 2025, Blank Check Company had $144.29 million in cash and marketable securities held in its trust account, and $1.68 million in cash outside the trust account. The company intends to use the funds in the trust account, along with any debt or equity financing, to complete its initial Business Combination.

The company believes it has sufficient funds to meet its working capital needs for at least one year from the date of the financial statements. However, it may need to obtain additional financing to complete a Business Combination or if it is required to redeem a significant number of public shares. The company could issue additional securities or incur debt in connection with a Business Combination.

To mitigate the risk of being deemed an investment company under the Investment Company Act, Blank Check Company may instruct the trustee to liquidate the investments in the trust account and hold the funds in cash or an interest-bearing account.

Contractual Obligations

Blank Check Company has no long-term debt, capital leases, or other long-term liabilities. The company has agreed to pay $10,000 per month to an affiliate of the sponsor for office space, utilities, and administrative support until the earlier of the completion of a Business Combination or the company’s liquidation.

The underwriters of the IPO were entitled to a 2% cash underwriting discount, totaling $2.875 million, which was paid upon the closing of the offering. The underwriters also have a 45-day option to purchase up to an additional 1.875 million units to cover any over-allotments, which they fully exercised.

Critical Accounting Policies

Blank Check Company has identified the following critical accounting policies:

  1. Class A Ordinary Shares Subject to Possible Redemption: The company classifies public shares subject to redemption outside of permanent equity, as the redemption provisions are not solely within the company’s control. The company recognizes changes in redemption value immediately and adjusts the carrying value of redeemable shares to equal the redemption value at the end of each reporting period.

  2. Recent Accounting Pronouncements: The company has evaluated the impact of recent accounting standards updates, including ASU 2023-07 on segment reporting, and does not believe they will have a material effect on its financial statements.

Outlook

Blank Check Company faces uncertainty regarding its ability to successfully complete a Business Combination, as it has not yet identified a target company. The company’s results of operations and financial condition could be adversely impacted by various macroeconomic and geopolitical factors beyond its control. However, the company believes it has sufficient funds to meet its working capital needs for the foreseeable future as it continues to pursue a Business Combination.