ACQUISITION OF GLADSTONE: Management report and analysis of financial position and operating results (Form 10-Q)

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References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Gladstone Acquisition Corporation. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to Gladstone Sponsor, LLC. The following
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Quarterly Report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
that are not historical facts and involve risks and uncertainties that could
cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form
10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
completion of the Proposed Business Combination (as defined below), the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements, including that the conditions of
the Proposed Business Combination are not satisfied. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's final prospectus for its IPO filed with the
U.S. Securities and Exchange Commission (the "SEC"). The Company's securities
filings can be accessed on the EDGAR section of the SEC's website at
www.sec.gov. Except as expressly required by applicable securities law, the
Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise.
Overview
We are a blank check company formed under the laws of the State of Delaware on
January 14, 2021 for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses ("Business Combination"). We intend to
effectuate our Business Combination using cash from the proceeds of the IPO and
the sale of the Private Warrants, our capital stock, debt or a combination of
cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
As of June 30, 2021, the Company had not commenced any operations. All activity
for the period from January 14, 2021 (inception) through June 30, 2021 relates
to the Company's formation and preparation for the IPO. 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 cash and cash equivalents from the
proceeds derived from the IPO. The Company has selected December 31 as its
fiscal year end.
For the three months ended June 30, 2021, we had a net loss of $0.
For the six months ended June 30, 2021, we had a net loss of $688 relating to
formation costs.

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Liquidity and Capital Resources
As of June 30, 2021, the Company had $12,347 of cash in its operating bank
account and a working capital deficit of $441,006.
The Company's liquidity needs up to June 30, 2021 had been satisfied through a
payment from the Sponsor of $25,000 (see Note 5 to the financial statements) for
the Founder Shares to cover certain offering costs and the loan under an
unsecured promissory note from the Sponsor of $240,000 (see Note 5 to the
financial statements). In addition, in order to finance transaction costs in
connection with a Business Combination, the Company's Sponsor or an affiliate of
the Sponsor or certain of the Company's officers and directors may, but are not
obligated to, provide the Company Working Capital Loans (see Note 5 to the
financial statements). As of June 30, 2021, there were no amounts outstanding
under any Working Capital Loans.
On August 9, 2021, the Company consummated its IPO of 10,000,000 Units at $10.00
per Unit, which is discussed in Note 3 to the financial statements, and the sale
of 4,200,000 Private Warrants which is discussed in Note 4 to the financial
statements, at a price of $1.00 in a private placement to the Sponsor that
closed simultaneously with the IPO. On August 18, 2021, the underwriter of the
IPO partially exercised their over-allotment option and purchased an additional
492,480 Units, generating an aggregate of gross proceeds of $4,924,800 (see Note
8 to the financial statements). Simultaneously with the exercise of the
underwriters' over-allotment option, the Sponsor of the Company purchased an
additional 98,496 Private Warrants, generating aggregate gross proceeds of
$98,496 (see Note 8 to the financial statements). As payment for services
including the exercise of the over-allotment option, the underwriters received
209,850 Representative Shares for nominal consideration.
Transaction costs related to the IPO and partial over-allotment exercise and the
over-allotment amounted to $6,265,859 consisting of $3,672,368 of deferred
underwriting commissions, $2,098,500 of fair value of the Representative Shares
and $494,991 of other cash offering costs.
After consummation of the IPO on August 9, 2021, and the partial over-allotment
exercise on August 18, 2021, the Company had $2,023,122 in its operating bank
account, and working capital of $1,475,504.
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.
Off-Balance
Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of June 30, 2021. We do not participate in transactions
that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating
off-balance
sheet arrangements. We have not entered into any
off-balance
sheet financing arrangements, established any special purpose entities,
guaranteed any debt or commitments of other entities, or purchased any
non-financial
assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay the Sponsor
a monthly fee of $10,000 for general and administrative services, including
office space, utilities and administrative support. We began incurring these
fees on August 5, 2021 and will continue to incur these fees monthly until the
earlier of the completion of the Business Combination and our liquidation.

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Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible conversion in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Common stock subject to mandatory
redemption is classified as a liability instrument and measured at fair value.
Conditionally redeemable common stock (including common stock 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, common stock is
classified as stockholders' equity. Our common stock features certain redemption
rights that are considered to be outside of our control and subject to
occurrence of uncertain future events. Accordingly, common stock subject to
possible redemption is presented at redemption value as temporary equity,
outside of the stockholders' equity section of our condensed balance sheets.
Net Loss Per Common Share
Net loss per common share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the period,
excluding common stock subject to forfeiture. Weighted average shares were
reduced for the effect of an aggregate of 375,000 shares of common stock that
were subject to forfeiture if the over-allotment option was not exercised by the
underwriters (see Note 5 to the financial statements). As of June 30, 2021, the
Company did not have any dilutive securities and other contracts that could,
potentially, be exercised or converted into common stock and then share in the
earnings of the Company. As a result, diluted loss per common share is the same
as basic loss per common share for the period presented.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on our
condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal
financial officer or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial and accounting officer,
we conducted an evaluation of the effectiveness of our disclosure controls and
procedures as of the end of the fiscal quarter ended June 30, 2021, as such term
is defined in Rules
13a-15(e)
and
15d-15(e)
under the Exchange Act. Based on this evaluation, our principal executive
officer and principal financial and accounting officer have concluded that
during the period covered by this report, our disclosure controls and procedures
were effective at a reasonable assurance level and, accordingly, provided
reasonable assurance that the information required to be disclosed by us in
reports filed under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.

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Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that
occurred during the quarter ended June 30, 2021 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.

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