Business context and reporting period
This Form 10-Q covers the three months ended August 31, 2018, and the period from inception on December 28, 2017 through August 31, 2018. The filing is for Greenland Acquisition Corporation (formerly Greenlight Acquisition Corporation), a British Virgin Islands blank-check company formed to pursue a business combination, with an intended focus on businesses operating primarily in China. It had not begun operations or generated revenue. The filing entity differs from the requested company name, Greenland Technologies Holding Corp.; verify that this is the intended filing.
Financial results and liquidity
| Metric | Three months ended August 31, 2018 | Inception through August 31, 2018 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating costs | $82,697 | $91,065 |
| Net loss | $11,631 | $19,999 |
| Basic and diluted loss per share | $0.06 | $0.07 |
At August 31, 2018, cash outside the trust was $911,942; current assets were $1,026,029, current liabilities were $46,129, and total liabilities were $1,024,685, including $978,556 of deferred underwriting fees. Trust assets, invested substantially in U.S. Treasury bills, were $44,071,066. Total assets were $45,097,095. The balance sheet presented $39,072,409 of shares subject to possible redemption as temporary equity and reported shareholders’ equity of $5,000,001. The company reported no long-term debt.
From inception, operating cash use was $159,023, investing cash use was $44,000,000 (funds placed in trust), and financing cash provided was $45,070,965. Cash at period end was $911,942. No operating margin is meaningful because the company had no revenue.
Changes versus the prior comparable period
No prior-year comparable operating period is presented; the company was formed in December 2017 and completed its IPO in July 2018. The quarter’s $11,631 net loss comprised $82,697 of operating costs, offset by $13,853 of interest income and a $57,213 unrealized gain on trust investments.
Outlook, risks, and unusual items
- Management expected to incur further public-company and business-combination due-diligence costs and did not expect operating revenue before a business combination. It believed outside-trust funds would be sufficient for planned expenditures, but warned that underestimated diligence or transaction costs could leave insufficient working capital.
- The company had until July 27, 2019 to complete a business combination, with up to three three-month extensions. Each extension requires a $440,000 sponsor deposit into the trust; the sponsor is not obligated to provide it. If no transaction is completed within the permitted period, public shares are to be redeemed and the company liquidated.
- Public shareholders may redeem shares in connection with a transaction. Significant redemptions or additional financing needs could affect the transaction; any financing could involve issuing securities or incurring debt. Sponsor or affiliate working-capital loans are optional, and up to $1.5 million could be convertible into private units.
- The company reported no material changes to the IPO prospectus risk factors, no legal proceedings, no off-balance-sheet arrangements, and no subsequent events requiring adjustment or disclosure. Management concluded disclosure controls were effective.
- Potentially material filing inconsistencies: the cash-flow reconciliation appears to assign the $57,213 and $13,853 investment-income adjustments oppositely from the statements of operations. The deferred underwriting fee is reported as $978,556 in the balance sheet and notes, but as $978,314 in other filing passages. Verify against the original filing and supporting records.
Important facts for investors to verify
- Confirm that Greenland Acquisition Corporation—not Greenland Technologies Holding Corp.—is the intended issuer and filing.
- Check whether a business-combination target or agreement was identified after the reporting date, and confirm the applicable deadline and extension funding.
- Reconcile the trust balance, outside-trust cash, redeemable-share amount, and the differing deferred underwriting fee figures.
- Review expected transaction and operating costs against the $911,942 of outside-trust cash, including whether any sponsor financing is available.
- Assess dilution and security terms: IPO units included warrants and rights; founder shares, private units, and an underwriter unit purchase option may also result in additional shares.