Golden Arrow Merger Corp.

Conversion at the lowest VWAP of the preceding five trading days is a floating, discounted conversion feature - the note holder receives more shares as the price falls, so dilution compounds on weakness. Against just 4,084,493 shares outstanding, even a modest conversion is transformative to the count. The $200,000 daily volume condition is itself a warning that liquidity is thin enough for the parties to have negotiated around it.

Two SPAC legacies dominate. The company owes approximately $2.9 million in excise tax under Section 4501 of the Internal Revenue Code on redemptions of Golden Arrow Class A shares by holders in 2023, and has proposed a payment plan to the IRS — a bill created by the SPAC's own redemptions and now carried by a company with 2,061,779 shares outstanding. It has also settled with the Sponsor. Funding runs through an equity line whose puts reach $5,000,000 when the pre-market price is at or above 150% of the prior close, capped at 4.99% of market cap.

The board gives three stated reasons: complying with Nasdaq's $1.00 per share minimum bid price requirement for continued listing, encouraging investor interest and greater liquidity, and helping attract, retain and motivate employees. The first is the binding one — the other two are consequences the company hopes will follow. Against 34,284,298 shares outstanding, whatever ratio the board picks sets the float for every financing that follows, and this company's history shows further issuance is likely.

The denominator of that exchange ratio has been growing. As of June 14, 2024, after giving effect to a subsequent issuance of $17,673,330 of Convertible Notes including an assumed $2,400,000 purchase by the Sponsor, Bolt Threads carried $40,494,592 of principal and accrued interest under the notes — all of which converts into common stock immediately before closing — plus 27,293,219 preferred shares, 11,312,318 common shares, 3,791,027 restricted stock units and 1,824,405 options. The filing says notes issued after June 14, 2024 funded working capital and had no impact on the Equity Value.

The Equity Value is fixed while the target's share count is not, so every dollar of pre-closing financing dilutes the exchange ratio rather than raising the price. This amendment quantifies that: as of June 14, 2024, after giving effect to a further $17,673,330 of Convertible Notes — including an assumed $3,800,000 purchased by the Sponsor — Bolt Threads carried $40,494,592 of principal and accrued interest under those notes, against 11,312,318 common shares and 27,293,219 preferred shares outstanding. The filing states the later notes had no impact on the Equity Value.

Because the consideration is a fixed dollar value divided by a fixed $10.00, the share count going to Bolt Threads holders does not move with GAMC's own trading price or with redemptions — the dilution is set by the agreement, not by the market. Immediately before closing all convertible notes and all preferred stock convert into Bolt Threads common stock, so the exchange ratio is struck on a fully converted base. As of April 30, 2024 that base included $22,969,750 of note principal and accrued interest, 27,293,219 preferred shares and 11,312,318 common shares.