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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 March 31, 2022

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

1934

For the transition period from to

Commission File No. 001-40548

Gobi Acquisition Corp.

(Exact name of registrant as specified in its charter)

Cayman Islands

98-1594224

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

33/F, Three Pacific Place

1 Queen’s Road East Hong Kong

(Address of Principal Executive Offices, Zip Code)

852 2918 0088

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Ordinary Shares par value $0.0001 per share	GOBI	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 definitions 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 May 16, 2022, there were 25,853,388 Class A ordinary shares, $0.0001 par value and 6,385,634 Class B ordinary shares, $0.0001 par value, issued and outstanding.

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GOBI ACQUISITION CORP.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents

		PAGE
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	1

	Unaudited Condensed Statements of Operations for the three months ended March 31, 2022 and for the period from March 16, 2021 (inception) through March 31, 2021	2

	Unaudited Condensed Statements of Changes in Shareholder’s (Deficit) Equity for the three months ended March 31, 2022 and for the period from March 16, 2021 (inception) through March 31, 2021	3

	Unaudited Condensed Statements of Cash Flows for the three months ended March 31, 2022 and for the period from March 16, 2021 (inception) through March 31, 2021	5

	Notes to Unaudited Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18

Item 4.	Controls and Procedures	18

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	20

Item 1A.	Risk Factors	20

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Mine Safety Disclosures	21

Item 5.	Other Information	21

Item 6.	Exhibits	22

SIGNATURES		23

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GOBI ACQUISITION CORP.

CONDENSED BALANCE SHEETS


	March 31, 2022		December 31, 2021
	(unaudited)
Assets:
Current assets:
Cash	$	20,663	$	192,027
Prepaid expenses		1,101,625		1,057,516
Total current assets		1,122,288		1,249,543
Prepaid expense, non-current		254,999		518,692
Investment held in trust account		255,454,933		255,434,087
Total Assets	$	256,832,220	$	257,202,322

Liabilities, Redeemable Class A Ordinary Shares and Shareholders' Deficit:
Current liabilities:
Accrued expenses	$	86,817	$	160,822
Due to related party		91,333		61,333
Working capital loan		1,000,000		1,000,000
Total current liabilities		1,178,150		1,222,155
Deferred underwriters' discount		1,939,888		1,939,888
Total Liabilities	$	3,118,038	$	3,162,043

Commitments and Contingencies (Note 7)
Class A ordinary shares subject to possible redemption, 25,542,537 shares at redemption value as of March 31, 2022 and December 31, 2021		255,454,933		255,434,087

Shareholders’ Deficit:
Preference shares, $0.0001 par value; 3,000,000 shares authorized; none issued and outstanding		—		—
Class A ordinary shares, $0.0001 par value; 300,000,000 shares authorized; 310,851 issued and outstanding (excluding 25,542,537 shares subject to possible redemption) as of March 31, 2022 and December 31, 2021		31		31
Class B ordinary shares, $0.0001 par value; 30,000,000 shares authorized; 6,385,634 shares issued and outstanding as of March 31, 2022 and December 31, 2021		639		639
Additional paid-in capital		—		—
Accumulated deficit		(1,741,421)		(1,394,478)
Total Shareholders’ Deficit		(1,740,751)		(1,393,808)

Total Liabilities, Redeemable Class A Ordinary Shares and Shareholders' Deficit	$	256,832,220	$	257,202,322

The accompanying notes are an integral part of these unaudited condensed financial statements.

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GOBI ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


			For the period from
	For the three		March 16. 2021
	months ended		(Inception) to
	March 31, 2022		March 31, 2021
Formation and operating costs	$	346,943	$	7,125
Loss from operations		(346,943)		(7,125)
Other income
Interest income		20,846		—
Total other income		20,846		—

Net loss	$	(326,097)	$	(7,125)

Basic and diluted weighted average shares outstanding, redeemable Class A ordinary shares		25,542,537		—
Basic and diluted net loss per redeemable Class A ordinary shares	$	(0.01)	$	—
Basic and diluted weighted average shares outstanding, non-redeemable Class A and Class B ordinary shares		6,696,485		6,250,000
Basic and diluted net loss per non-redeemable Class A and Class B ordinary shares	$	(0.01)	$	(0.00)

The accompanying notes are an integral part of these unaudited condensed financial statements.

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GOBI ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

THREE MONTHS ENDED MARCH 31, 2022


	Class A			Class B				Additional
	Ordinary Share			Ordinary Share				Paid-in		Accumulated		Shareholders'
	Shares	Amount		Shares		Amount		Capital		Deficit		Deficit
Balance as of January 1, 2022	310,851	$	31		6,385,634	$	639	$	—	$	(1,394,478)	$	(1,393,808)
Net income (loss)	—		—		—		—		—		(326,097)		(326,097)
Remeasurement of Class A ordinary shares	—		—		—		—		—		(20,846)		(20,846)
Balance as of March 31, 2022	310,851	$	31		6,385,634	$	639	$	—	$	(1,741,421)	$	(1,740,751)

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GOBI ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE PERIOD FROM MARCH 16, 2021 (INCEPTION) THROUGH MARCH 31, 2021


	Class A			Class B			Additional
	Ordinary Share			Ordinary Share			Paid-in		Accumulated		Shareholders'
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance as of March 16, 2021 (Inception)	—	$	—	—	$	—	$	—	$	—	$	—
Class B ordinary shares issued to Sponsor	—		—	7,187,500		719		24,281		—		25,000
Net loss	—		—	—		—		—		(7,125)		(7,125)
Balance as of March 31, 2021	—	$	—	7,187,500	$	719	$	24,281	$	(7,125)	$	17,875

The accompanying notes are an integral part of these unaudited condensed financial statements.

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GOBI ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS


			For the Period from
			March 16, 2021
	Three Months Ended		(inception) through
	March 31, 2022		March 31, 2021
Cash Flows from Operating Activities:
Net loss	$	(326,097)	$	(7,125)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest earned on investments held in Trust Account		(20,846)		—
Changes in operating assets and liabilities:				—
Due to related parties		30,000		—
Prepaid expense		219,584		—
Accrued offering costs and expenses		(74,005)		7,125
Net cash used in operating activities		(171,364)		—

Cash Flows from Financing Activities:
Proceeds from issuance of promissory note to related party		—		25,750
Payment of deferred offering costs		—		(25,750)
Net cash provided by financing activities		—		—

Net Change in Cash		(171,364)		—
Cash, beginning of the period		192,027		—
Cash, end of period	$	20,663	$	—

Supplemental disclosure of cash flow information:
Remeasurement of Class A ordinary shares subject to possible redemption	$	20,846	$	—
Deferred offering costs included in accrued offering costs and expenses	$	—		64,573
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares	$	—	$	25,000

The accompanying notes are an integral part of these unaudited condensed financial statements.

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GOBI ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2022

Note 1—Organization and Business Operation

Gobi Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on March 16, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”). The Company has not selected any Business Combination target and the Company has not, nor has anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any Business Combination target with respect to an initial Business Combination with it.

As of March 31, 2022, the Company had not commenced any operations. All activity for the period from March 16, 2021 (inception) through March 31, 2022 relates to the Company’s formation and the initial public offering (the “IPO”) described below and identifying target for initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on investment from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year end.

The Company’s Sponsor is PAG Investment, LLC, a Cayman Islands limited liability company (the “Sponsor”).

Financing

The registration statement for the Company’s IPO was declared effective on June 28, 2021 (the “Effective Date”). On July 1, 2021, the Company consummated its IPO of 25,000,000 Class A ordinary shares at $10.00 per share, which is discussed in Note 3 (the “Initial Public Offering”), and the sale of 300,000 Class A ordinary shares which is discussed in Note 4 (the “Private Placement”), at a price of $10.00 per share, in a private placement that closed simultaneously with the closing of the IPO On July 14, 2021, the Company consummated the Over-Allotment Closing of its sale of an additional 542,537 Class A Shares pursuant to the partial exercise by the underwriters of their over-allotment option (the “Over-Allotment Option”). The Shares were sold at an offering price of $10.00 per Share, generating gross proceeds of $5,425,370. Simultaneously with the partial exercise of the Over-Allotment Option, the Company sold an additional 10,851 private placement shares to the Sponsor, PAG Investment, LLC, generating gross proceeds to the Company of $108,510.

As of July 14, 2021, transaction costs amounted to $3,359,202 consisting of $1,000,000 of underwriting commissions, $1,750,000 of deferred underwriting commissions and $609,202 of other offering costs.

Liquidity and Capital Resources

As of March 31, 2022, the Company had cash of $20,663 and a working capital deficit of $55,862. As of March 31, 2022, the Company had neither engaged in any operations nor generated any revenues to date. The Company’s only activities since inception have been organizational activities and those necessary to prepare for the Company’s IPO and the Business Combination.

In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, officers, directors and their affiliates intend to loan the Company funds as may be required. On July 23, 2021, the Company received $1,000,000 from the Sponsor under an unsecured promissory note signed on July 19, 2021. On November 20, 2021, the Sponsor signed an agreement to provide $300,000 of loan to the Company as required. On April 21, 2022, the Company received $500,000 from the Sponsor under an unsecured promissory note signed on April 14, 2022.

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Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, closing of the initial public offering and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Additionally, as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2—Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 31, 2022, which contained the audited financial statements and notes thereto. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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Further, 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 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. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of these financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company has $20,663 and $192,027 in cash and no cash equivalents as of March 31, 2022 and December 31, 2021.

Investments Held in Trust Account

At March 31, 2022 and December 31, 2021, funds held in the Trust Account include $255,454,933 and $255,434,087 of investments held in a money market fund characterized as Level 1 investments within the fair value hierarchy under ASC 820 (as defined below), respectively.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation limit of $250,000. At March 31, 2022 and December 31, 2021, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Offering Costs Associated with IPO

The Company complies with the requirements of ASC 34-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that were directly related to the IPO. Offering costs are charged to shareholders’ equity or the statements of operations. Accordingly, on July 14, 2021, (upon the underwriters exercising their over-allotment option), offering costs totaling $3,657,600 (consisting of $1,108,507 of underwriting fee, $1,939,888 of deferred underwriting fee and $609,205 of other offering costs) were recognized.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets.

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Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

●

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Net Loss Per Ordinary Share

The Company has two classes of shares, which are referred to as redeemable ordinary shares and non-redeemable ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. 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 ordinary shares:


	Three Months Ended				For the period from March 16
	March 31, 2022				(inception) Through March 31, 2021
	Class A		Class B		Class A		Class B
Basic and diluted net loss per share
Numerator:
Allocation of net loss	$	(258,362)	$	(67,735)	$	—	$	(7,125)

Denominator:
Weighted average shares outstanding		25,542,537		6,696,485		—		6,250,000
Basic and diluted net loss per share	$	(0.01)	$	(0.01)	$	—	$	(0.00)

Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, 28,750,000 Class A ordinary shares subject to possible redemption is presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheets.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

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ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2022 and December 31, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Note 3— Initial Public Offering

On July 1, 2021, the Company consummated its IPO of 25,000,000 Class A ordinary shares, at a price of $10.00 per share, generating gross proceeds of $250,000,000. PAG Investment LP (the “Fund”), an affiliate of PAG and the sole member of the Sponsor, purchased 20,000,000 Public Shares in the IPO at the public offering price. Shares purchased by the Fund, if any, will not be subject to underwriting discounts and commissions.

The Company paid an underwriting fee at the closing of the IPO of $1,000,000. As of July 1, 2021, an additional fee of $1,750,000 was deferred and will become payable upon the Company’s completion of an initial Business Combination. The deferred portion of the fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination.

On July 14, 2021, the Company consummated the Over-Allotment Closing of its sale of an additional 542,537 Shares pursuant to the partial exercise by the underwriters of their over-allotment option (the “Over-Allotment Option”). The Shares were sold at an offering price of $10.00 per Share, generating gross proceeds of $5,425,370.

All of the 25,542,537 Class A ordinary share sold in the IPO and over-allotment contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary share subject to redemption to be classified outside of permanent equity.

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The Class A ordinary share is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable ordinary share resulted in charges against additional paid-in capital and accumulated deficit.

As of March 31, 2022, the ordinary share reflected on the balance sheets are reconciled in the following table:


Gross proceeds from IPO	$	255,425,370
Less:
Ordinary share issuance costs		(3,657,600)
Plus:
Initial measurement of carrying value to redemption value		3,657,600
Subsequent remeasurement of carrying value to redemption value		29,563
Contingently redeemable ordinary share	$	255,454,933

Note 4—Private Placement

On June 28, 2021, the Company consummated the private placement of an aggregate of 300,000 Class A ordinary shares at a price of $10.00 per Private Placement Share, for an aggregate purchase price of $3,000,000. The Private Placement Shares purchased by the Sponsor are substantially similar to the Public Shares, except that they will be subject to transfer restrictions until 30 days following the consummation of the Company’s initial Business Combination, subject to certain limited exceptions.

On July 14, 2021, simultaneously with the partial exercise of the Over-Allotment Option, the Company sold an additional 10,851 private placement shares to its Sponsor, PAG Investment, LLC, generating gross proceeds to the Company of $108,510.

Note 5—Related Party Transactions

Founder Shares

On March 19, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to cover certain offering costs in consideration for 8,625,000 Class B ordinary shares, par value $0.0001 (the “Founder Shares”). On June 8, 2021, the Sponsor surrendered an aggregate of 1,437,500 Class B ordinary shares for no consideration, which were cancelled, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. On June 8, the Sponsor transferred 25,000 Founder Shares to each of the Company’s independent directors, Thaddeus Beczak, Dan Carroll and Jane J. Su, which shares will not be subject to forfeiture in the event the underwriter’s over-allotment option is not exercised. On June 28, 2021 the Sponsor surrendered an aggregate of 750,000 Class B ordinary shares for no consideration, resulting in the Sponsor holding 6,362,500 Founder’s Shares, up to 187,500 Founder Shares are subject to forfeiture depending on the extent to which the Underwriters’ over-allotment option is exercised. On July 14, 2021, the Sponsor surrendered 51,866 Class B ordinary shares.

The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares and any Class A ordinary shares issuable upon conversion thereof until the earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date on which the Company complete a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property and the Sponsor has agreed not to transfer, assign or sell any of its private placement shares until 30 days after the completion of the initial Business Combination; except, in each case, to certain permitted transferees and under certain circumstances. Any permitted transferees will be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares or private placement shares. The Company refers to such transfer restrictions as the lock-up.

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Notwithstanding the foregoing, if (1) the closing price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (2) if the Company consummates a transaction after the initial Business Combination which results in the shareholders having the right to exchange their shares for cash, securities or other property, the Founder Shares will be released from the lock-up.

Due to Related Party

The Company promised to pay the Sponsor $10,000 per month for office space, administrative and support services for the period from the Effective Date to the consummation of the Company’s initial Business Combination. The Sponsor has committed not to request the payment until the completion of a business combination, and the administrative services expenses shall be waived if the business combination is not completed. Upon the completion of a business combination or liquidation, the Company will cease paying these monthly fees. A total of $91,333 and $61,333 has been accrued as of March 31, 2022 and December 31, 2021, respectively.

Promissory Note—Related Party

On March 19, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the IPO. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2021 or the closing of the IPO. The loans were fully repaid at the closing of the IPO.

Related Party Loans

In addition, in order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor, its affiliates or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $2,000,000 of such Working Capital Loans may be convertible into shares of the post Business Combination entity at a price of $10.00 per share at the option of the lender. Such shares would be identical to the Private Placement Share. Except as set forth above, the terms of the Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans.

On July 19,2021, the Company entered into a promissory note with the Sponsor, under which the Sponsor agreed to loan $1,000,000 to the Company. These loans are non-interest bearing, unsecured and are due at the closing of the initial Business Combination. Upon consummation of a Business Combination, the Sponsor shall have the option, but not the obligation, to convert the principal balance of this note, in whole or in part at the option of the Sponsor, into Class A ordinary shares (“Shares”) of the Company at a price of $10.00 per Share, each Share being identical to the Private Placement Shares. On November 22, 2021, the Sponsor signed a letter of financial support to provide $300,000 of loan to the Company as required. As of March 31, 2022 and December 31, 2021, the Company had $1,000,000 borrowings under the Working Capital Loans. As of March 31, 2022 and December 31, 2021, $1,000,000 was outstanding under the Working Capital Loans.

Administrative Service Fee

Commencing on the date that the Company’s securities are first listed, the Company will pay to an affiliate of the Sponsor $10,000 per month for office space, administrative and support services. The Sponsor committed not to request the payment until the completion of a business combination and the administrative services expenses shall be waived if the business combination is not completed. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three months ended March 31, 2022, the Company incurred $30,000 in connection with such expense. For the period from March 16, 2021 (inception) through March 31, 2021, the Company did not incur any fees for these services.

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Note 6— Recurring Fair Value Measurements

Substantially all of the Company’s investment held in the Trust Account on the condensed balance sheet consist of U. S. Money Market funds which are classified as cash equivalents. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

The following table presents information about the Company’s assets that were measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

Quoted

Significant

Prices In

Other

Active

Observable

Unobservable

March 31,

Markets

Inputs

2022

(Level 1)

(Level 2)

(Level 3)

Assets:

Cash held in Trust Account

255,454,933

—

Quoted

Significant

Prices In

Other

Active

Observable

Unobservable

December 31,

Markets

Inputs

2021

(Level 1)

(Level 2)

(Level 3)

Assets:

Cash held in Trust Account

255,434,087

—

Note 7—Commitments & Contingencies

Registration Rights

The holders of the Founder Shares, Private Placement Shares and any shares that may be issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock-up period, which occurs (i) in the case of the Founder Shares, as described in Note 6, and (ii) in the case of the Private Placement Shares, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

The Company granted the underwriters a 45-day option from the date of the IPO to purchase up to an additional 750,000 Class A ordinary shares to cover over-allotments, if any. The Over-Allotment option was partially exercised on July 14, 2021 and the remaining was expired.

The underwriters were entitled to a cash underwriting discount of two percent (2%) of the gross proceeds of the IPO and the Over-Allotment (not including the proceeds from the Fund). Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO and the Over-Allotment (not including the proceeds from the Fund) upon the completion of the Company’s initial Business Combination.

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Note 8—Shareholders’ Deficit

Preference Shares—The Company is authorized to issue 3,000,000 preference shares with a par value of $0.0001 and provide that preference shares may be issued from time to time in one or more series. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. As of March 31, 2022 and December 31, 2021, there were no preference shares issued or outstanding.

Class A Ordinary Shares— The Company is authorized to issue 300,000,000 Class A ordinary shares with a par value of $0.0001 per share. At March 31, 2022 and December 31, 2021, there were 310,851 Class A ordinary shares issued or outstanding, excluding 25,542,537 shares subject to possible redemption.

Class B Ordinary Shares—The Company is authorized to issue 30,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote for each share of Class B ordinary shares. At March 31, 2022, there were 8,625,000 Class B ordinary shares issued and outstanding. On June 8, 2021, the Sponsor surrendered an aggregate of 1,437,500 Class B ordinary shares for no consideration, which were cancelled, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. On June 8, the Sponsor transferred 25,000 Founder Shares to each of the Company’s independent directors, Thaddeus Beczak, Dan Carroll and Jane J. Su, which shares will not be subject to forfeiture in the event the underwriter’s over-allotment option is not exercised. On June 28, 2021 the Sponsor surrendered an aggregate of 750,000 Class B ordinary shares for no consideration, resulting in the Sponsor holding 6,362,500 Founder Shares, up to 187,500 Founder Shares are subject to forfeiture depending on the extent to which the Underwriters’ over-allotment option is exercised. On July 14, 2021, the Sponsor surrendered 51,866 Class B ordinary shares, so that the initial shareholders collectively owned 20% of the Company’s issued and outstanding ordinary shares after the IPO (excluding the Private Placement Shares). At March 31, 2022 and December 31, 2021, there were 6,385,634 Class B ordinary shares issued or outstanding.

Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Prior to the initial Business Combination, only holders of the Founder Shares will have the right to vote on the election of directors. Holders of the Company’s public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial Business Combination, holders of a majority of the Founder Shares may remove a member of the board of directors for any reason.

The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have redemption rights or be entitled to liquidating distributions from the Trust Account if the Company does not consummate an initial Business Combination) at the time of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares (but, for the avoidance of doubt, not including Private Placement Shares) will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any private placement shares issued to the Sponsor in a private placement to occur concurrently with the closing of the IPO, any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Shares issued to our Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.

Note 9— Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statement was able to be issued. Except as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.

On April 14, 2022, the Company entered into a promissory note with the Sponsor, under which the Sponsor agreed to loan $500,000 to the Company. The note is non-interest bearing, unsecured and will be due at the closing of the initial Business Combination. On April 21, 2022, the Company received the loan of $500,000.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,” “our,” “us” or “we” refer to Gobi Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

We are a blank check company incorporated in the Cayman Islands on March 16, 2021. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The Company is not limited to a particular industry or geographic region for purposes of consummating a business combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

Results of Operations

Our entire activity since inception up to March 31, 2022 was in preparation for our Initial Public Offering and business combination. We will not generate any operating revenues until the closing and completion of our initial Business Combination, at the earliest.

For the three months ended March 31, 2022, we had a net loss of $326,097, which consisted formatting and operating costs of $346,943 offset by interest income of $20,846.

For the period from March 16, 2021 through March 31, 2021, we had a net loss of $7,125, which consisted formatting and operating costs of $7,125.

Liquidity and Capital Resources

As of March 31, 2022, we had cash of $20,663 held outside of the trust account and a working capital deficit of $55,862. As of March 31, 2022, we had neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the initial public offering and searching for a business combination target.

In order to finance transaction costs in connection with a business combination, our Sponsor, officers, directors and their affiliates intend to loan us funds as may be required. On July 23, 2021, we received $1,000,000 from our sponsor under an unsecured promissory note signed on July 19, 2021. On November 20, 2021, our sponsor signed an agreement to provide $300,000 of loan to us as required. On April 21, 2022, we received $500,000 from our sponsor under an unsecured promissory note signed on April 14, 2022.

Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.

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Off-Balance Sheet Arrangements

As of March 31, 2022, we did not have any off-balance sheet arrangements.

Contractual Obligations

Registration and Shareholder Rights

Pursuant to a registration and shareholder rights agreement entered into on June 28, 2021, the holders of the founder shares, private placement shares and any shares that may be issued upon conversion of working capital loans are entitled to registration rights. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement shares, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

In addition, pursuant to the registration and shareholder rights agreement, our Sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the Sponsor holds any securities covered by the registration and shareholder rights agreement.

Promissory Notes

On March 19, 2021, we issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which we could borrow up to $300,000 to cover expenses related to our initial public offering. The Promissory Note was non-interest bearing and has been fully repaid.

Related Party Loans

In addition, in order to finance transaction costs in connection with an intended initial business combination, the Sponsor, its affiliates or certain of our officers and directors may, but are not obligated to, loan we fund as may be required (“Working Capital Loans”). If we complete the initial business combination, we may repay the Working Capital Loans out of the proceeds of the Trust Account released to us. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $2,000,000 of such Working Capital Loans may be convertible into shares of the post business combination entity at a price of $10.00 per share at the option of the lender. Such shares would be identical to the Private Placement Share. Except as set forth above, the terms of the Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans.

On July 19,2021, we entered into a promissory note with our sponsor, under which our sponsor agreed to loan $1,000,000 to us. These loans are non-interest bearing, unsecured and are due at the closing of the initial business combination. Upon consummation of a business combination, our sponsor shall have the option, but not the obligation, to convert the principal balance of this note, in whole or in part at the option of the Sponsor, into our Class A ordinary shares at a price of $10.00 per share, each share being identical to the Private Placement Shares. On November 22, 2021, our sponsor signed a letter of financial support to provide $300,000 of loan to us as required. As of March 31, 2022 and December 31, 2021, we had $1,000,000 borrowings under the Working Capital Loans. As of March 31, 2022 and December 31, 2021, $1,000,000 was outstanding under the Working Capital Loans.

Underwriting Agreement

On June 28, 2021, we entered into an Underwriting Agreement with Citigroup Global Markets Inc., Goldman Sachs (Asia) L.L.C. and UBS Securities LLC, which contains customary representations and warranties and indemnification of the underwriter by the Company.

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Upon the closing of our initial public offering, the underwriters were paid a cash underwriting discount of 2% of the gross proceeds of the initial public offering (not including the proceeds from the Fund), or $1,108,507 in the aggregate. In addition, the underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of the initial public offering (not including the proceeds from the Fund), or $1,939,888 in the aggregate. Subject to the terms of the underwriting agreement, (i) the deferred fee is placed in the trust account and will be released to the underwriters only upon the completion of our initial business combination and (ii) the deferred fee will be waived by the underwriters in the event that we do not complete our initial business combination.

Administrative Services Agreement

The Company entered into an agreement, commencing on June 28, 2021, to pay our Sponsor a total of $10,000 per month for office space, utilities, administrative services and remote support services. The Sponsor has committed not to request the payment until the completion of a business combination, and the administrative services expenses shall be waived if the business combination is not completed. Upon the completion of a business combination or liquidation, the Company will cease paying these monthly fees. A total of $91,333 and $61,333 has been accrued as of March 31, 2022 and December 31, 2021 respectively.

Critical Accounting Policies

Offering Costs Associated with IPO

We comply with the requirements of ASC 34-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that were directly related to the IPO. Offering costs are charged to shareholders’ equity or the statements of operations. Accordingly, on July 14, 2021 (upon the underwriters exercising their over-allotment option), offering costs totaling $3,657,597 (consisting of $1,108,507 of underwriting fee, $1,939,888 of deferred underwriting fee and $609,205 of other offering costs) were recognized.

Fair Value Measurements

Net Loss Per Ordinary Share

We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares.

Ordinary Shares Subject to Possible Redemption

We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, 25,542,537 Class A ordinary shares subject to possible redemption is presented at redemption value as temporary equity, outside of the shareholders’ equity section of our balance sheets.

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Recent Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of March 31, 2022, we were not subject to any market or interest rate risk. The net proceeds of the Initial Public Offering, including amounts in the Trust Account, will be invested in U.S. government securities with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, that invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

We have not engaged in any hedging activities since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.

Item 4. Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2022. Management identified an error in our historical financial statements related to the accounting for the Class A ordinary shares on the balance sheet dated July 1, 2021 included in Exhibit 99.1 to our Form 8-K filed with the SEC on July 8, 2021 (the “Previous Balance Sheet”). Because the Class A ordinary shares issued in the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside of the Company’s control, the Company should have classified all of these redeemable shares in temporary equity and remeasured these redeemable shares to their redemption value (i.e., $10.00 per share) as of the end of first reporting period after the date of the Company’s Initial Public Offering. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Report present fairly in all material respects our financial position, results of operations and cash flows for the periods presented.

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Changes in Internal Control over Financial Reporting

Other than as described below, there was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2022 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Remediation of a Material weakness in Internal Control over Financial Reporting

We recognize the importance of the control environment as it sets the overall tone for the Company and is the foundation for all other components of internal control. Consequently, we designed and implemented remediation measures to address the material weakness previously identified and enhance our internal control over financial reporting. In light of the material weakness, we enhanced our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements, including providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications.

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PART II-OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our final prospectus filed with the SEC on June 28, 2021, except for the following.

We have identified a material weakness in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

As described elsewhere in this Quarterly Report, we identified a material weakness in our internal control over financial reporting related to the accounting for complex financial instruments as a result of the change in classification of all of our redeemable Class A ordinary shares as temporary equity. As a result of this material weakness, our management concluded that our internal control over financial reporting was not effective as of March 31, 2022.

To respond to this material weakness, we have devoted, and plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Any failure to maintain such internal control could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our ordinary shares are listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on our business. Failure to timely file will cause us to be ineligible to utilize short form registration statements on Form S-3 or Form S-4, which may impair our ability to obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our securities.

We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

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Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.

On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies and increasing the potential liability of certain participants in proposed business combination transactions. These rules, if adopted, whether in the form proposed or in revised form, may materially increase the costs and time required to negotiate and complete an initial business combination and could potentially impair our ability to complete an initial business combination.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Simultaneously with the consummation of the Initial Public Offering and the partial exercise of the over-allotment option by the underwriters, our sponsor purchased 310,851 Private Placement Shares, at a price of $10.00 per Private Placement Share to the Sponsor, generating gross proceeds of approximately $3.1 million. A portion of the proceeds from the Private Placement Shares was added to the proceeds from the Initial Public Offering held in the Trust Account.

Of the gross proceeds received from the Initial Public Offering and the partial exercise of the option to purchase additional Shares, $5,425,372.60 was placed in the Trust Account. The net proceeds of the Initial Public Offering and certain proceeds from the Private Placement are invested in U.S. government treasury bills with a maturity of 185 days or less and in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.

We paid a total of approximately $1.1 million in underwriting discounts and commissions related to the Initial Public Offering. In addition, the underwriters agreed to defer $1.9 million in underwriting discounts and commissions.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.


Exhibit Number		Description

31.1*		Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith.

**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Gobi Acquisition Corp.
Date: May 16, 2022	By:	/s/ Jack Li
		Name: Jack Li
		Title: Chief Executive Officer, Chief Financial Officer and Director

Gobi Acquisition Corp. 10-Q