Global Blockchain Acquisition Corp. (GBBK) reported significant financial challenges in its latest 10-Q filing for the three and nine months ended September 30, 2024. The company, which has not generated any revenue since its inception on March 18, 2021, recorded a net loss of $174,747 for the third quarter of 2024, a stark contrast to a net income of $461,936 for the same period in 2023. For the nine months ended September 30, 2024, the net loss totaled $210,147, compared to a net income of $3,125,840 in the prior year.
The decline in profitability is attributed to a significant drop in interest income, which fell to $88,707 in Q3 2024 from $1,210,122 in Q3 2023. General and administrative costs also decreased, amounting to $247,996 for the third quarter of 2024, down from $496,433 in the same quarter of 2023. However, the overall financial position remains precarious, with total current assets decreasing to $233,332 as of September 30, 2024, from $476,345 at the end of 2023. Cash held outside the Trust Account plummeted to $16,415 from $305,812 over the same period.
The Trust Account, which is crucial for potential business combinations, saw a reduction in cash and marketable securities, dropping to $8,363,375 as of September 30, 2024, from $26,295,331 at the end of 2023. The company also reported a working capital deficit of $967,514 and an accumulated deficit of $(2,484,295) as of September 30, 2024.
Strategically, GBBK has extended its business combination period to December 12, 2024, following a series of stockholder redemptions. Notably, 14,820,620 shares were redeemed for $155.2 million in August 2023, and an additional 1,683,527 shares were redeemed for $18.5 million in March 2024. The company is currently pursuing a merger with Cardea Corporate Holdings, Inc., which is expected to result in Cardea becoming a wholly-owned subsidiary of GBBK.
Management has expressed substantial doubt regarding the company's ability to continue as a going concern due to its liquidity issues and the potential for mandatory liquidation if a business combination is not completed by the extended deadline. The company is also facing compliance challenges, having transferred its listing from the Nasdaq Global Market to the Nasdaq Capital Market due to a notice of non-compliance regarding total holders.
About Global Blockchain Acquisition Corp.
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