NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
NOTE
1 – ORGANIZATION AND BUSINESS BACKGROUND
AGBA
Acquisition Limited (the “Company”) is a newly organized blank check company incorporated on October 8, 2018, under the laws
of the British Virgin Islands for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing
all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combination
with one or more businesses or entities (an “initial business combination”). Although the Company is not limited to a particular
geographic region, the Company intends to focus on operating businesses in the healthcare, education, entertainment and financial services
sectors that have their principal operations in China.
The
accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally
accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations
of the U.S. Securities and Exchange Commission (the “SEC”).
The
Company’s entire activity from inception up to September 30, 2021 was in preparation for the initial public offering. Since the
initial public offering, the Company’s activity has been limited to the evaluation of business combination candidates. The Company
has selected December 31 as its fiscal year end and tax year end.
Financing
The
registration statement for the Company’s initial public offering (the “Public Offering” as described in Note 3) was
declared effective by the United States Securities and Exchange Commission (“SEC”) on May 14, 2019 . The Company consummated
the Public Offering on May 16, 2019 of 4,600,000 units at $10.00 per unit (the “Public Units”) and sold to the Sponsor to
purchase 225,000 units at $10.00 per unit. The Company received net proceeds of $46,716,219. The Company incurred $2,559,729 in initial
public offering related costs, including $2,175,948 of underwriting fees and $383,781 of initial public offering costs.
Trust
Account
Upon the closing of the Public Offering and the private placement,
$46,000,000 was placed in a trust account (the “Trust Account”) with Continental Stock Transfer & Trust Company acting
as trustee. The funds held in the Trust Account can be invested in United States government treasury bills, bonds or notes, having a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act until
the earlier of (i) the consummation of the Company’s initial Business Combination and (ii) the Company’s failure to consummate
a Business Combination within 36 months from the closing of the Public Offering. Placing funds in the Trust Account may not protect those
funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective
target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies
held in the Trust Account, there is no guarantee that such persons will execute such agreements. The remaining net proceeds (not held
in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general
and administrative expenses. Additionally, the interest earned on the Trust Account balance may be released to the Company to pay the
Company’s tax obligations.
Business
Combination
Pursuant
to Nasdaq listing rules, the Company’s Initial Business Combination must occur with one or more target businesses having an aggregate
fair market value equal to at least 80% of the value of the funds in the Trust Account (excluding any deferred underwriter’s fees
and taxes payable on the income earned on the Trust Account), which the Company refers to as the 80% test, at the time of the execution
of a definitive agreement for our initial business combination, although the Company may structure a business combination with one or
more target businesses whose fair market value significantly exceeds 80% of the trust account balance. If the Company is no longer listed
on Nasdaq, it will not be required to satisfy the 80% test. The Company currently anticipates structuring a business combination to acquire
100% of the equity interests or assets of the target business or businesses.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
The
Company may, however, structure a business combination where the Company merges directly with the target business or where the Company
acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management
team or shareholders or for other reasons, but the Company will only complete such business combination if the post-transaction company
owns 50% or more of the outstanding voting securities of the target or otherwise owns a controlling interest in the target sufficient
for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the equity interests
or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% test.
As
set forth in the memorandum of association, the objects for which are established are unrestricted and the Company shall have full power
and authority to carry out any object not prohibited by the Companies Law or as the same may be revised from time to time, or any other
law of the British Virgin Islands.
The
Company’s amended and restated memorandum and articles of association contains provisions designed to provide certain rights and
protections to our ordinary shareholders prior to the consummation of the initial business combination. These provisions cannot be amended
without the approval of 65% (or 50% if approved in connection with the initial business combination) of the Company’s outstanding
ordinary shares attending and voting on such amendment. Prior to the initial business combination, if the Company seeks to amend any
provisions of the amended and restated memorandum and articles of association relating to shareholders’ rights or pre-business
combination activity, the Company will provide dissenting public shareholders with the opportunity to redeem their public shares in connection
with any such vote on any proposed amendments to the amended and restated memorandum and articles of association. The Company’s
initial shareholders have agreed to waive any redemption rights with respect to any insider shares and any public shares they may hold
in connection with any vote to amend our amended and restated memorandum and articles of association prior to our initial business combination.
The
Company will either seek shareholder approval of any Business Combination at a meeting called for such purpose at which shareholders
may seek to convert their shares into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes
then due but not yet paid, or provide shareholders with the opportunity to sell their shares to the Company by means of a tender offer
for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but
not yet paid. These shares have been recorded at redemption value and are classified as temporary equity, in accordance with Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 Distinguishing Liabilities
from Equity. The Company will proceed with a Business Combination only if it will have net tangible assets of at least $5,000,001
upon consummation of the Business Combination and, solely if shareholder approval is sought, a majority of the outstanding common shares
of the Company voted are voted in favor of the Business Combination.
In
connection with any shareholder vote required to approve any Business Combination,
the Initial Shareholders will agree (i) to vote any of their respective shares, including the common shares sold to the Initial Shareholders
in connection with the organization of the Company (the “Initial Shares”), common shares included in the Private Units sold
in the Private Placement, and any common shares which were initially issued in connection with the Public Offering, whether acquired in
or after the effective date of the Public Offering, in favor of the initial Business Combination and (ii) not to convert such respective
shares into a pro rata portion of the Trust Account or seek to sell their shares in connection with any tender offer the Company engages
in.
On
November 3, 2021, the Company entered into a business combination agreement (the “Business Combination Agreement”), which
provides for a Business Combination between AGBA and TAG Holdings Limited (“TAG”) and certain of TAG’s wholly owned
subsidiaries – OnePlatform Holdings Limited (“OPH”), TAG Asia Capital Holdings Limited (“Fintech”), TAG
International Limited (“B2B”), TAG Asset Partners Limited (“B2BSub)”, and OnePlatform International Limited (“HKSub”).
OPH through its wholly-owned subsidiaries, is engaged in business-to-business (or B2B) services, while Fintech through its wholly-owned
subsidiaries, is engaged in the financial technology or fintech business. B2BSub is a wholly-owned subsidiary of B2B, and HKSub is a
wholly owned subsidiary of B2BSub. In the Business Combination Agreement, B2B, B2BSub, HKSub, OPH, Fintech, together with their respective
subsidiaries are referred to as the “Group Parties”. Pursuant to the Business Combination Agreement, OPH will first become
a subsidiary of B2B through a merger with HKSub, with OPH as the surviving entity (the “OPH Merger”). Subsequently, (i) a
to-be-formed, wholly-owned subsidiary of AGBA (“Merger Sub I”) will merge with and into B2B; and another to-be-formed, wholly-owned
subsidiary of AGBA (“Merger Sub II”) will merge with and into Fintech (together with (i), the “Acquisition Merger”).
In consideration of the Acquisition Merger, AGBA will issue 55,500,000 ordinary shares with a deemed price per share US$10.00 (“Aggregate
Stock Consideration”) as directed by TAG, in its capacity as sole shareholder of B2B and Fintech.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
At
the closing of the Acquisition Merger, AGBA will deliver to such persons as directed by TAG, in its capacity as the sole shareholder
of B2B and Fintech, subject to compliance with applicable law, the Aggregate Stock Consideration less three percent (3%) of the Aggregate
Stock Consideration (the “Holdback Shares”). Subject to the provisions of the Business Combination Agreement, AGBA will release
the Holdback Shares at the end of six (6) months following the closing of the Acquisition Merger, which may be extended for an additional
three-month period (the “Survival Period”), provided that the AGBA will be entitled to retain some or all of the Holdback
Shares to satisfy certain indemnification claims during the Survival Period.
Liquidation
The Company initially had 12 months from the consummation of this offering
to consummate the initial business combination. If the Company does not complete a business combination within 12 months from the consummation
of the Public Offering, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the amended
and restated memorandum and articles of association. As a result, this has the same effect as if the Company had formally gone through
a voluntary liquidation procedure under the Companies Law. Accordingly, no vote would be required from our shareholders to commence such
a voluntary winding up, dissolution and liquidation. However, the Company may extend the period of time to consummate a business combination
eight times (including three times approved by shareholders on February 5, 2021 and two times by shareholders on November 2, 2021 by an
additional three months each time (for a total of up to 36 months to complete a Business Combination). As of the date of this report,
the Company has extended seven times the period of time to consummate a business combination until February 16, 2022. Pursuant to the
terms of the current amended and restated memorandum and articles of association and the trust agreement between the Company and Continental
Stock Transfer & Trust Company, LLC, in order to extend the time available for the Company to consummate our initial business combination,
the Company’s insiders or their affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit
into the trust account $0.15 per public share, on or prior to the date of the applicable deadline. The insiders will receive a non-interest
bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that the Company is unable
to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon
consummation of the Company’s initial business combination, or, at the lender’s discretion, converted upon consummation of
our business combination into additional private units at a price of $10.00 per unit. The Company’s shareholders have approved the
issuance of the private units upon conversion of such notes, to the extent the holder wishes to so convert such notes at the time of the
consummation of the Company’s initial business combination. In the event that the Company receives notice from the Company’s
insiders five days prior to the applicable deadline of their intent to effect an extension, the Company intend to issue a press release
announcing such intention at least three days prior to the applicable deadline. In addition, the Company intends to issue a press release
the day after the applicable deadline announcing whether or not the funds had been timely deposited. The Company’s insiders and
their affiliates or designees are not obligated to fund the trust account to extend the time for the Company to complete our initial business
combination. To the extent that some, but not all, of the Company’s insiders, decide to extend the period of time to consummate
the Company initial business combination, such insiders (or their affiliates or designees) may deposit the entire amount required. If
the Company is unable to consummate the Company’s initial business combination within such time period, the Company will, as promptly
as possible but not more than ten business days thereafter, redeem 100% of the Company’s outstanding public shares for a pro rata
portion of the funds held in the trust account, including a pro rata portion of any interest earned on the funds held in the trust account
and not necessary to pay taxes, and then seek to liquidate and dissolve. However, the Company may not be able to distribute such amounts
as a result of claims of creditors which may take priority over the claims of the Company’s public shareholders. In the event of
dissolution and liquidation, the public rights will expire and will be worthless.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES
These
accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States
of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. The interim financial information provided
is unaudited, but includes all adjustments which management considers necessary for the fair presentation of the results for these periods.
Operating results for the interim period ended September 30, 2021 are not necessarily indicative of the results that may be expected
for the fiscal year ending December 31, 2021. The information included in this Form 10-Q should be read in conjunction with Management’s
Discussion and Analysis, and the financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year
ended December 31, 2020, filed with the SEC on March 26, 2021.
|
●
|
Emerging growth company
|
The
Company is an “emerging growth company,” as defined in Section 2(a) of 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 independent registered public accounting firm 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.
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.
The
preparation of financial statements in conformity with 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 statements 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.
There were no cash equivalents as of September 30, 2021 and December 31, 2020.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
|
●
|
Cash and investments held in trust account
|
At
September 30, 2021, the assets held in the Trust Account are held in cash and US Treasury securities.
The
Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each
balance sheet date. All marketable securities are recorded at their estimated fair value. Unrealized gains and losses for available-for-sale
securities are recorded in other comprehensive loss. The Company evaluates its investments to assess whether those with unrealized loss
positions are other than temporarily impaired. Impairments are considered other than temporary if they are related to deterioration in
credit risk or if it is likely the Company will sell the securities before the recovery of the cost basis. Realized gains and losses
and declines in value determined to be other than temporary are determined based on the specific identification method and are reported
in other (expense) income, net in the statements of operations and comprehensive (loss) income.
The
Company accounts for the Warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Private Warrants
do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants
as liabilities at their fair value and adjusts the Private Warrants to fair value at each reporting period. This liability is subject
to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.
The Private Warrants are valued using a Black Scholes model.
|
●
|
Ordinary shares subject to possible redemption
|
The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in ASC Topic 480 Distinguishing Liabilities from Equity. Ordinary shares
subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares that feature 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) are classified as temporary equity.
At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain
redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, at and September 30, 2021 and December 31, 2020, 3,963,110 and 4,600,000 ordinary shares subject to possible redemption,
respectively, are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
|
●
|
Fair value of financial instruments
|
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily
due to their short-term nature.
The
fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 —
|
Valuations
based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation
adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available
in an active market, valuation of these securities does not entail a significant degree of judgment.
|
|
|
Level 2 —
|
Valuations
based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for
identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally
from or corroborated by market through correlation or other means.
|
|
|
Level 3 —
|
Valuations
based on inputs that are unobservable and significant to the overall fair value measurement.
|
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
The
fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, Fair Value
Measurements and Disclosures, approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash
equivalents, and other current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of September
30, 2021 due to the short maturities of such instruments.
The
following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring
basis as of September 30, 2021 and December 31, 2020, and indicates the fair value hierarchy of the valuation techniques the Company
utilized to determine such fair value.
|
|
September 30,
2021
|
|
|
Quoted
Prices
In Active
Markets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Other
Unobservable
Inputs
|
|
Description
|
|
(Unaudited)
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Securities held in Trust Account*
|
|
$
|
43,355,977
|
|
|
$
|
43,355,977
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities
|
|
$
|
480,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
480,000
|
|
|
|
December 31,
2020
|
|
|
Quoted
Prices
In Active
Markets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Other
Unobservable
Inputs
|
|
Description
|
|
(Audited)
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Securities held in Trust Account*
|
|
$
|
48,249,518
|
|
|
$
|
48,249,518
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities
|
|
$
|
390,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
390,000
|
|
|
*
|
included
in cash and investments held in trust account on the Company’s balance sheet.
|
|
●
|
Concentration of credit risk
|
Financial
instruments that potentially subject the Company to concentration of credit risk consist of cash and trust accounts in a financial institution
which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts
and management believes the Company is not exposed to significant risks on such accounts.
The
Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes , which requires an asset
and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
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 British Virgin Islands is
the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits,
if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September
30, 2020. 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 may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations
may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with
foreign tax laws.
The
Company’s tax provision is zero and it has no deferred tax assets. The Company is considered to be an exempted British Virgin Islands
Company, and is presently not subject to income taxes or income tax filing requirements in the British Virgin Islands or the United States.
The Company calculates net loss per share in accordance
with ASC Topic 260, Earnings per Share. In order to determine the net income (loss) attributable to both the redeemable shares
and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable ordinary shares
and non-redeemable ordinary shares and the undistributed income (loss) is calculated using the total net loss less any dividends paid.
The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between
the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject
to possible redemption was considered to be dividends paid to the public stockholders. As of September 30, 2021, the Company has not considered
the effect of the warrants sold in the Initial Public Offering to purchase an aggregate of 2,412,500 shares in the calculation of diluted
net loss per share, since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants
would be anti-dilutive and the Company did not have any other 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 share is the same as basic
loss per share for the period presented.
The
net loss per share presented in the unaudited condensed statement of operations is based on the following:
|
|
For the
Nine Months
Ended
September 30,
2021
|
|
|
For the
Nine Months
Ended
September 30,
2020
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(515,988
|
)
|
|
$
|
161,193
|
|
Accretion of carrying value to redemption value
|
|
|
(311,620
|
)
|
|
|
-
|
|
Net loss including accretion of carrying value to redemption value
|
|
$
|
(827,608
|
)
|
|
$
|
161,193
|
|
|
|
For the
Three Months
Ended
September 30,
2021
|
|
|
For the
Three Months
Ended
September 30,
2020
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(209,743
|
)
|
|
$
|
(56,687
|
)
|
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
|
|
For the Nine Months Ended
September 30, 2021
|
|
|
For the Nine Months Ended
September 30, 2020
|
|
|
|
Redeemable
Ordinary
shares
|
|
|
Non-Redeemable
Ordinary
shares
|
|
|
Redeemable
Ordinary
shares
|
|
|
Non-Redeemable
Ordinary
shares
|
|
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerators:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net loss
including carrying value to redemption value
|
|
$
|
(618,081
|
)
|
|
$
|
(209,527
|
)
|
|
$
|
124,098
|
|
|
$
|
37,095
|
|
Accretion of carrying value to
redemption value
|
|
|
311,620
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Allocation of net loss
|
|
$
|
(306,461
|
)
|
|
$
|
(209,527
|
)
|
|
$
|
124,098
|
|
|
$
|
37,095
|
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
4,056,087
|
|
|
|
1,375,000
|
|
|
|
4,600,000
|
|
|
|
1,375,000
|
|
Basic and diluted net loss per share
|
|
$
|
(0.08
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.03
|
|
|
$
|
0.03
|
|
|
|
For the Three Months Ended
September 30, 2021
|
|
|
For the Three Months Ended
September 30, 2020
|
|
|
|
Redeemable
Ordinary
shares
|
|
|
Non-Redeemable
Ordinary
shares
|
|
|
Redeemable
Ordinary
shares
|
|
|
Non-Redeemable
Ordinary
shares
|
|
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerators:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net loss
|
|
$
|
(155,717
|
)
|
|
$
|
(54,026
|
)
|
|
$
|
(43,642
|
)
|
|
$
|
(13,045
|
)
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
3,963,110
|
|
|
|
1,375,000
|
|
|
|
4,600,000
|
|
|
|
1,375,000
|
|
Basic and diluted net loss per share
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
Parties,
which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also
considered to be related if they are subject to common control or common significant influence.
|
●
|
Recent accounting pronouncements
|
The
Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material
impact on the results of operations, financial condition, or cash flows, based on the current information.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
NOTE
2 – REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
On
April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement
regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff
Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)”
(the “SEC Statement”). Specifically, the SEC Statement focused on certain provisions that provided for potential changes
to the settlement amounts dependent upon the characteristics of the holder of the warrant, which terms are similar to those contained
in the warrant agreement governing the Company’s warrants. As a result of the SEC Statement, the Company reevaluated the accounting
treatment of the 225,000 warrants that were issued to the Company’s sponsor in a private placement that closed concurrently with
the closing of the Initial Public Offering (the “Private Warrants”). The Company previously accounted for the Private Warrants
as components of equity.
In
further consideration of the guidance in Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging —
Contracts in Entity’s Own Equity (“ASC 815”), the Company concluded that a provision in the warrant agreement related
to certain transfer provisions precludes the Private Warrants from being accounted for as components of equity. As the Private Warrants
meet the definition of a derivative as contemplated in ASC 815, the Private Warrants should be recorded as derivative liabilities on
the balance sheet and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in
accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the Statements of Operations in the period
of change.
In
addition, in preparation of the Company’s consolidated financial statements as of and for the period ended September 30, 2021,
the Company concluded it should revise its consolidated financial statements to classify all ordinary shares subject to possible redemption
in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC Topic 480, Distinguishing
Liabilities from Equity (ASC 480), paragraph 10-S99, redemption provisions not solely within the control of the Company require ordinary
shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its ordinary
shares in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter provides that currently,
the Company will not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Company
considered that the threshold would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed
outside equity. As a result, the Company revised its previously filed financial statements to classify all ordinary shares as temporary
equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance
with ASC 480. The change in the carrying value of redeemable shares of ordinary shares resulted in charges against additional paid-in
capital and accumulated deficit. Pursuant to ASC Topic 250, Accounting Changes and Error Corrections issued by the FASB and Staff Accounting
Bulletin 99, “Materiality” (“SAB 99”) issued by the SEC, the Company determined the impact of the error
was immaterial.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
The
following tables summarize the effect of the revision on each financial statement line item as of the dates, and for the period, as indicated :
|
|
As
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
|
|
|
|
|
|
As
|
|
|
|
Reported
|
|
|
Adjustments #1
|
|
|
Adjustments #2
|
|
|
Revised
|
|
Balance sheet as of May 16, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
550,000
|
|
|
|
-
|
|
|
|
550,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
1,451,012
|
|
|
|
550,000
|
|
|
|
814,052
|
|
|
|
2,815,064
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
40,702,622
|
|
|
|
(550,000
|
)
|
|
|
5,847,378
|
|
|
|
46,000,000
|
|
Ordinary Shares
|
|
|
5,975
|
|
|
|
(4,015
|
)
|
|
|
(585
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
5,006,775
|
|
|
|
4,015
|
|
|
|
(5,010,790
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
|
(12,749
|
)
|
|
|
-
|
|
|
|
(1,650,055
|
)
|
|
|
(1,662,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of June 30, 2019 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
530,000
|
|
|
|
-
|
|
|
|
530,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
1,494,878
|
|
|
|
530,000
|
|
|
|
814,052
|
|
|
|
2,838,930
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
40,749,738
|
|
|
|
(530,000
|
)
|
|
|
5,780,262
|
|
|
|
46,000,000
|
|
Ordinary shares
|
|
|
1,914
|
|
|
|
53
|
|
|
|
(592
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
4,963,720
|
|
|
|
(20,053
|
)
|
|
|
(4,943,667
|
)
|
|
|
-
|
|
Retained Earnings (Accumulated Deficit)
|
|
|
(127,819
|
)
|
|
|
20,000
|
|
|
|
(1,650,055
|
)
|
|
|
(1,757,874
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of September 30, 2019 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
510,000
|
|
|
|
-
|
|
|
|
510,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
1,543,756
|
|
|
|
510,000
|
|
|
|
814,052
|
|
|
|
2,867,808
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
40,874,479
|
|
|
|
(510,000
|
)
|
|
|
5,635,521
|
|
|
|
46,000,000
|
|
Ordinary Shares
|
|
|
1,925
|
|
|
|
50
|
|
|
|
(600
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
4,838,968
|
|
|
|
(40,050
|
)
|
|
|
(4,798,918
|
)
|
|
|
-
|
|
Retained Earnings (Accumulated Deficit)
|
|
|
(264,436
|
)
|
|
|
40,000
|
|
|
|
(1,650,055
|
)
|
|
|
(1,874,491
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
520,000
|
|
|
|
-
|
|
|
|
520,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
1,580,896
|
|
|
|
520,000
|
|
|
|
814,052
|
|
|
|
2,914,948
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
40,978,430
|
|
|
|
(520,000
|
)
|
|
|
5,541,570
|
|
|
|
46,000,000
|
|
Ordinary Shares
|
|
|
1,930
|
|
|
|
52
|
|
|
|
(607
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
4,735,012
|
|
|
|
(30,052
|
)
|
|
|
(4,704,960
|
)
|
|
|
-
|
|
Retained Earnings
|
|
|
164,956
|
|
|
|
30,000
|
|
|
|
(1,650,055
|
)
|
|
|
(1,455,099
|
)
|
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
|
|
As
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
|
|
|
|
|
|
As
|
|
|
|
Reported
|
|
|
Adjustments #1
|
|
|
Adjustments #2
|
|
|
Revised
|
|
Balance sheet as of March 31, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
480,000
|
|
|
|
-
|
|
|
|
480,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
1,621,611
|
|
|
|
480,000
|
|
|
|
814,052
|
|
|
|
2,915,663
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
41,080,277
|
|
|
|
(480,000
|
)
|
|
|
5,399,723
|
|
|
|
46,000,000
|
|
Ordinary Shares
|
|
|
1,941
|
|
|
|
47
|
|
|
|
(613
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
(4,633,154
|
)
|
|
|
(70,047
|
)
|
|
|
(4,563,107
|
)
|
|
|
-
|
|
Retained Earnings
|
|
|
32,185
|
|
|
|
70,000
|
|
|
|
(1,650,055
|
)
|
|
|
(1,547,870
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of June 30, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
430,000
|
|
|
|
-
|
|
|
|
430,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
1,711,966
|
|
|
|
430,000
|
|
|
|
814,052
|
|
|
|
2,956,018
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
41,008,207
|
|
|
|
(430,000
|
)
|
|
|
5,421,793
|
|
|
|
46,000,000
|
|
Ordinary Shares
|
|
|
1,988
|
|
|
|
41
|
|
|
|
(654
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
4,705,177
|
|
|
|
(120,041
|
)
|
|
|
(4,585,136
|
)
|
|
|
-
|
|
Retained Earnings
|
|
|
292,836
|
|
|
|
120,000
|
|
|
|
(1,650,055
|
)
|
|
|
(1,237,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of September 30, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
400,000
|
|
|
|
-
|
|
|
|
400,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
2,205,871
|
|
|
|
400,000
|
|
|
|
814,052
|
|
|
|
3,419,923
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
40,931,736
|
|
|
|
(400,000
|
)
|
|
|
5,468,264
|
|
|
|
46,000,000
|
|
Ordinary Shares
|
|
|
2,034
|
|
|
|
39
|
|
|
|
(698
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
4,781,602
|
|
|
|
(150,039
|
)
|
|
|
(4,631,563
|
)
|
|
|
-
|
|
Retained Earnings
|
|
|
206,149
|
|
|
|
150,000
|
|
|
|
(1,650,055
|
)
|
|
|
(1,293,906
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liabilities
|
|
|
-
|
|
|
|
390,000
|
|
|
|
-
|
|
|
|
390,000
|
|
Deferred underwriting compensation
|
|
|
1,025,948
|
|
|
|
-
|
|
|
|
814,052
|
|
|
|
1,840,000
|
|
Total Liabilities
|
|
|
3,230,972
|
|
|
|
390,000
|
|
|
|
814,052
|
|
|
|
4,435,024
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
40,723,074
|
|
|
|
(390,000
|
)
|
|
|
5,666,926
|
|
|
|
46,000,000
|
|
Ordinary Shares
|
|
|
2,093
|
|
|
|
37
|
|
|
|
(755
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
4,990,205
|
|
|
|
(160,037
|
)
|
|
|
(4,830,168
|
)
|
|
|
-
|
|
Retained Earnings (Accumulated Deficit)
|
|
|
(2,470
|
)
|
|
|
160,000
|
|
|
|
(1,650,055
|
)
|
|
|
(1,492,525
|
)
|
|
|
As
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
|
|
|
As
|
|
|
|
Reported
|
|
|
Adjustments #2
|
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of March 31, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
Deferred underwriting compensation
|
|
$
|
1,025,948
|
|
|
|
814,052
|
|
|
$
|
1,840,000
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
33,510,577
|
|
|
|
6,120,523
|
|
|
|
39,631,100
|
|
Ordinary Shares
|
|
|
2,188
|
|
|
|
(813
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
4,972,087
|
|
|
|
(4,972,087
|
)
|
|
|
-
|
|
Retained Earnings
|
|
|
25,726
|
|
|
|
(1,961,675
|
)
|
|
|
(1,935,949
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred underwriting compensation
|
|
$
|
1,025,948
|
|
|
|
814,052
|
|
|
$
|
1,840,000
|
|
Ordinary Shares Subject to Possible Redemption
|
|
|
33,336,136
|
|
|
|
6,294,964
|
|
|
|
39,631,100
|
|
Ordinary Shares
|
|
|
2,248
|
|
|
|
(873
|
)
|
|
|
1,375
|
|
Additional Paid-in Capital
|
|
|
5,146,468
|
|
|
|
(5,146,468
|
)
|
|
|
-
|
|
Retained Earnings
|
|
|
(148,715
|
)
|
|
|
(1,961,675
|
)
|
|
|
(2,110,390
|
)
|
Adjustment #1 refer to reclassification of public
warrants from warrant liabilities to equity component.
Adjustment #2 refer to reclassification of all
public shares to temporary equity.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
NOTE 3 — CASH AND INVESTMENT HELD IN
TRUST ACCOUNT
As of September 30, 2021, investment securities
in the Company’s Trust Account consisted of $43,355,977 in United States Treasury Bills and $0 in cash. As of December 31, 2020,
investment securities in the Company’s Trust Account consisted of $48,249,518 in United States Treasury Bills and $391 in cash.
The Company classifies its United States Treasury securities as available-for-sale. Available-for-sale marketable securities are recorded
at their estimated fair value on the accompanying September 30, 2021 balance sheet. The carrying value, including gross unrealized holding
gain as other comprehensive income and fair value of held to marketable securities on September 30, 2021 and December 31, 2020 is as follows:
|
|
Carrying Value as of September 30, 2021
(Unaudited)
|
|
|
Gross Unrealized Holding Gain
|
|
|
Fair Value as of September30, 2020
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Securities
|
|
$
|
43,355,977
|
|
|
$
|
-
|
|
|
$
|
43,355,977
|
|
|
|
Carrying Value as of December 31, 2020
|
|
|
Gross Unrealized Holding Gain
|
|
|
Fair Value as of December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Securities
|
|
$
|
48,239,345
|
|
|
$
|
10,173
|
|
|
$
|
48,249,518
|
|
NOTE 4 — PUBLIC OFFERING
On May 16, 2019, the Company sold 4,600,000 units
at a price of $10.00 per Public Unit in the Public Offering. Each Public Unit consists of one ordinary share of the Company, $0.0001 par
value per share (the “Public Shares”), one right (the “Public Rights”) and one warrant (the “Public Warrant”).
Each Public Right entitles the holder to receive one-tenth (1/10) of an ordinary share upon consummation of an initial Business Combination.
Each Public Warrant entitles the holder to purchase one-half (1/2) of an ordinary share upon consummation of an initial Business Combination.
If the Company does not complete its Business
Combination within the necessary time period described in Note 1, the Public Rights will expire and be worthless. Since the Company is
not required to net cash settle the Rights and the Rights are convertible upon the consummation of an initial Business Combination, the
Management determined that the Rights are classified within shareholders’ equity as “Additional paid-in capital” upon
their issuance in accordance with ASC 815-40. The proceeds from the sale are allocated to Public Shares and Rights based on the relative
fair value of the securities in accordance with ASC 470-20-30. The value of the Public Shares and Rights will be based on the closing
price paid by investors.
The Company paid an upfront underwriting discount
of $1,150,000 (2.5%) of the per unit offering price to the underwriter at the closing of the Public Offering, with an additional fee of
$1,025,948 (the “Deferred Discount”) of 2.0% of the gross offering proceeds payable upon the Company’s completion of
the Business Combination. The Deferred Discount will become payable to the underwriter from the amounts held in the Trust Account solely
in the event the Company completes its Business Combination. In the event that the Company does not close the Business Combination, the
underwriter has waived its right to receive the Deferred Discount. The underwriter is not entitled to any interest accrued on the Deferred
Discount.
Simultaneously with the closing of the Public
Offering, the Company consummated a private placement of 210,000 private units, at $10.00 per unit, purchased by the Sponsor.
Simultaneously with the sale of the Over-Allotment
Units, the Company consummated a private placement of 15,000 private units, at $10.00 per unit, purchased by the Sponsor.
The private units are identical to the units sold
in the Public Offering except that the private warrants are non-redeemable and may be exercised on a cashless basis.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
NOTE 5 – RELATED PARTY TRANSACTIONS
Insider Shares
In October 2018, the Company’s Chief Executive
Officer, Gordon Lee, subscribed for an aggregate of 1,000 ordinary shares for an aggregate purchase price of $1, or approximately $0.001
per share. On February 22, 2019, the Company issued an aggregate of 1,149,000 ordinary shares to AGBA Holding Limited for an aggregate
purchase price of $25,000 in cash.
The initial shareholders have agreed, subject
to certain limited exceptions, not to transfer, assign or sell any of their insider shares until, with respect to 50% of the insider shares,
the earlier of six months after the consummation of a Business Combination and the date on which the closing price of the ordinary shares
equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for
any 20 trading days within a 30-trading day period commencing after a Business Combination and, with respect to the remaining 50% of the
insider shares, until the six months after the consummation of a Business Combination, or earlier, in either case, if, subsequent to a
Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of
the Company’s shareholders having the right to exchange their ordinary shares, securities or other property.
Administrative Services Agreement
The Company is obligated to pay AGBA Holding Limited,
a company owned by the insiders, a monthly fee of $10,000 for general and administrative services. However, pursuant to the terms of such
agreement, the Company may delay payment of such monthly fee upon a determination by the Company’s audit committee that the Company
lack sufficient funds held outside the trust to pay actual or anticipated expenses in connection with the initial business combination.
Any such unpaid amount will accrue without interest and be due and payable no later than the date of the consummation of our initial business
combination.
Related Party
Loan
In order to meet the working capital needs following
the consummation of the Public Offering, the initial shareholders, officers and directors or their affiliates may, but are not obligated
to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan
would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without
interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination
into private units at a price of $10.00 per unit (which, for example, would result in the holders being issued units to acquire 55,000
ordinary shares (which includes 5,000 shares issuable upon conversion of rights) and warrants to purchase 25,000 ordinary shares if $500,000
of notes were so converted). The Company’s shareholders have approved the issuance of the units and underlying securities upon conversion
of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination.
If the Company does not complete a business combination, the loans will not be repaid.
Related Party Extensions Loan
The Company initially had 12 months from the consummation
of this offering to consummate the initial business combination. However, the Company may extend the period of time to consummate a business
combination eight times (including three times approved by shareholders on February 5, 2021 (see Note 8) and two times by shareholders
on November 2, 2021) by an additional three months each time (for a total of up to 36 months to complete a business combination). Pursuant
to the terms of the current amended and restated memorandum and articles of association and the trust agreement between us and Continental
Stock Transfer & Trust Company, in order to extend the time available for us to consummate its initial business combination, the Company’s
insiders or their affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust
account $ $0.15 per public share, on or prior to the date of the applicable deadline. The insiders will receive a non-interest bearing,
unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business
combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of
its initial business combination, or, at the lender’s discretion, converted upon consummation of its business combination into additional
private units at a price of $10.00 per unit.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
On each of February 5, May 11, August 11, 2021,
the Company issued an unsecured promissory note, in an amount of $594,467, to the Sponsor, pursuant to which such amount had been deposited
into the Trust Account in order to extend the amount of available time to complete a business combination until November 16, 2021. On
November 10, 2021, the Company issued an unsecured promissory note in an amount of $546,991, to the Sponsor, pursuant to which such amount
had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until February
16, 2022 (see Note 9). The Notes are non-interest bearing and is payable upon the closing of a business combination. In addition, the
Note may be converted, at the lender’s discretion, into additional Private Units at a price of $10.00 per unit.
Related Party Advances
In the event the Sponsor pays for any expense
or liability on behalf of the Company, then such payments would be accounted for as loan to the Company by the Sponsor. The Sponsor, AGBA
Holding Limited, has paid the expenses incurred by the Company an aggregate of $112,406 on a non-interest bearing basis as of September
30, 2021.
As of September 30, 2021 and December 31, 2020,
the Company owed a balance of $902,528 and $790,122 to AGBA Holding Limited.
NOTE 6 – SHAREHOLDER’S DEFICIT
Ordinary Shares
The Company is authorized to issue 100,000,000
ordinary shares at par $0.001.
The Company’s shareholders of record are
entitled to one vote for each share held on all matters to be voted on by shareholders. In connection with any vote held to approve our
initial business combination, all of the initial shareholders, as well as all of the officers and directors, have agreed to vote their
respective ordinary shares owned by them immediately prior to this offering and any shares purchased in this offering or following this
offering in the open market in favor of the proposed business combination.
On February 22, 2019, the Company issued an aggregate
of 1,149,000 founder shares to the sponsor for an aggregate purchase price of $25,000 in cash.
On May 16, 2019, the Company issued 225,000 ordinary
shares under the private placement of 225,000 private units at $10 per unit, to the Sponsor.
On May 16, 2019, the Company sold 4,600,000 units
at a price of $10.00 per Public Unit in the Public Offering.
On February 8, 2020, 636,890 units (including
the same amount of ordinary shares underlying such units) were redeemed by part of shareholders at a price of approximately $10.49 per
share, in an aggregate principal amount of $6,680,520.
As of September 30, 2021 and December 31, 2020,
1,375,000 and 1,375,000 ordinary shares issued and outstanding excluding 3,963,110 and 4,600,000 shares are subject to possible conversion.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
Accumulated Other Comprehensive Income (Loss)
The table below presents the changes in accumulated
other comprehensive income (loss) (“AOCI”), including the reclassification out of AOCI.
|
|
Available-for-sale securities
|
|
Balance as of January 1, 2021
|
|
$
|
10,173
|
|
Other comprehensive income before reclassifications
|
|
|
482
|
|
Amounts reclassified from AOCI into interest income
|
|
|
(10,655
|
)
|
Balance as of September 30, 2021
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Available-for-sale securities
|
|
Balance as of January 1, 2020
|
|
$
|
98,103
|
|
Other comprehensive income before reclassifications
|
|
|
(342,174
|
)
|
Amounts reclassified from AOCI into interest income
|
|
|
254,287
|
|
Balance as of September 30, 2020
|
|
$
|
10,216
|
|
Rights
Except in cases where the Company is not the surviving
company in a business combination, each holder of a right will automatically receive one-tenth (1/10) of an ordinary share upon consummation
of the initial business combination. In the event the Company will not be the surviving company upon completion of the initial business
combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-tenth
(1/10) of a share underlying each right upon consummation of the business combination. The Company will not issue fractional shares in
connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed
in accordance with the applicable provisions of the British Virgin Islands law. As a result, you must hold rights in multiples of 10 in
order to receive shares for all of your rights upon closing of a business combination. If we are unable to complete an initial business
combination within the required time period and the Company redeem the public shares for the funds held in the trust account, holders
of rights will not receive any of such funds for their rights and the rights will expire worthless
Public Warrants
Each public warrant entitles the holder thereof
to purchase one-half (1/2) of one ordinary share at a price of $11.50 per full share, subject to adjustment. Pursuant to the warrant agreement,
a warrant holder may exercise its warrants only for a whole number of shares. This means that only an even number of warrants may be exercised
at any given time by a warrant holder.
No public warrants will be exercisable for cash
unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants
and a current prospectus relating to such ordinary shares. It is the Company’s current intention to have an effective and current
registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary
shares in effect promptly following consummation of an initial business combination.
Notwithstanding the foregoing, if a registration
statement covering the ordinary shares issuable upon exercise of the public warrants is not effective within 90 days following the consummation
of our initial business combination, public warrant holders may, until such time as there is an effective registration statement and during
any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to
an available exemption from registration under the Securities Act. In such event, each holder would pay the exercise price by surrendering
the warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares
underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”
(defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the
ordinary shares for the 10 trading days ending on the day prior to the date of exercise. For example, if a holder held 300 warrants to
purchase 150 shares and the fair market value on the date prior to exercise was $15.00, that holder would receive 35 shares without the
payment of any additional cash consideration. If an exemption from registration is not available, holders will not be able to exercise
their warrants on a cashless basis.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
The warrants will become exercisable on the later
of the completion of an initial business combination and May 13, 2020. The warrants will expire at 5:00 p.m., New York City time, on the
fifth anniversary of our completion of an initial business combination, or earlier upon redemption.
The Company may redeem the outstanding warrants
(including any outstanding warrants issued upon exercise of the unit purchase option issued to Maxim Group LLC), in whole and not in part,
at a price of $0.01 per warrant:
|
●
|
at any time while the warrants are exercisable,
|
|
●
|
upon a minimum of 30 days’ prior written notice of redemption,
|
|
●
|
if, and only if, the last sales price of the ordinary shares equals or exceeds $16.50 per share for any
20 trading days within a 30 trading day period ending three business days before the Company send the notice of redemption, and
|
|
●
|
if, and only if, there is a current registration statement in effect with respect to the ordinary shares
underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day
thereafter until the date of redemption.
|
If the foregoing conditions are satisfied and
the Company would issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption
date. However, the price of the ordinary shares may fall below the $16.50 trigger price as well as the $11.50 warrant exercise price per
full share after the redemption notice is issued and not limit our ability to complete the redemption.
The redemption criteria for the warrants have
been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide
a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as
a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.
If the Company call the warrants for redemption
as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless
basis.” In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of ordinary shares
equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the warrants, multiplied by the
difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value.
The “fair market value” shall mean the average reported last sale price of the ordinary shares for the 10 trading days ending
on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether the Company will
exercise our option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety of factors
including the price of our ordinary shares at the time the warrants are called for redemption, the Company’s cash needs at such
time and concerns regarding dilutive share issuances.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
NOTE 7 – FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for
identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or
liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level
1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical
assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on our
assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about
the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2021, and indicates
the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
|
|
September 30, 2021
|
|
|
Quoted Prices In Active Markets
|
|
|
Significant Other Observable Inputs
|
|
|
Significant Other Unobservable Inputs
|
|
Description
|
|
(Audited)
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Securities held in Trust Account*
|
|
$
|
43,355,977
|
|
|
$
|
43,355,977
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities
|
|
$
|
480,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
480,000
|
|
|
*
|
included in cash and investments held in trust account on the
Company’s balance sheet.
|
The private warrants are accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities on the consolidated balance sheets.
The Company established the initial fair value
for the private warrants on May 16, 2019, the date of the Company’s Initial Public Offering, using a Black-Scholes model. The Company
allocated the proceeds received from the sale of Private Units, first to the private warrants based on their fair values as determined
at initial measurement, with the remaining proceeds recorded as ordinary shares subject to possible redemption, and ordinary shares based
on their relative fair values recorded at the initial measurement date. The warrants were classified as Level 3 at the initial measurement
date due to the use of unobservable inputs.
The key inputs into the binomial model and Black-Scholes
model were as follows at their measurement dates:
|
|
September 30, 2021
|
|
|
December 31,
2020
|
|
|
May 16,
2019
(Initial
measurement)
|
|
Input
|
|
|
|
|
|
|
|
|
|
|
|
|
Share price
|
|
$
|
10.88
|
|
|
$
|
10.54
|
|
|
$
|
10.00
|
|
Risk-free interest rate
|
|
|
0.95
|
%
|
|
|
0.10
|
%
|
|
|
2.18
|
%
|
Volatility
|
|
|
46
|
%
|
|
|
45
|
%
|
|
|
55
|
%
|
Exercise price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Warrant life
|
|
|
5 years
|
|
|
|
5 years
|
|
|
|
5 years
|
|
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
As of September 30, 2021 and December 31, 2020,
the aggregate value of the Private Warrants was $0.48 million. The change in fair value from December 31, 2020 to September 30, 2021 was
approximately $(90,000). The change in fair value from December 31, 2019 to September 30, 2020 was approximately $120,000.
To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the
inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used
had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value
is greatest for investments categorized in Level 3. Level 3 financial liabilities consist of the Private Warrant liability for which there
is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes
in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates
or assumptions and recorded as appropriate.
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management has evaluated 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
future financial position, results of its operations and/or search for a target company, there has been a significant impact as of the
date of these financial statements. The financial statements do not include any adjustments that might result from the future outcome
of this uncertainty.
Registration Rights
The holders of our insider shares as well as the
holders of the Private Units (and all underlying securities) and any securities our initial shareholders, officers, directors or their
affiliates may be issued in payment of working capital loans made to us, will be entitled to registration rights . In addition, the holders
have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation
of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter is entitled to a cash underwriting
discount of six and half percent (6.5%), or $0.65 per unit, of the gross proceeds of the initial public offering. Two and one-half percent
(2.5%), or $0.25 per share, is not contingent and has been paid at the closing of the initial public offering. Four percent (4.0%), or
$0.40 per unit, is contingent on the closing of a business combination and will be deferred by the underwriters and be placed in the Trust
Account. Such deferred amount will only be payable to the underwriters upon closing of a business combination. Further, the deferred amount
paid to the underwriters upon the closing of a business combination will be reduced by two percent (2.0%), or $0.20 per unit, for each
unit that is redeemed by shareholders in connection with the business combination. If the business combination is not consummated, the
deferred amount will be forfeited by the underwriters. The underwriters will not be entitled to any interest accrued on the deferred amount.
AGBA
ACQUISITION LIMITED
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
Unit Purchase Option
The Company sold to Maxim for $100, an option
to purchase 276,000 units exercisable, at $11.50 per unit commencing at any time between the first and fifth anniversary of the effective
date of the registration statement relating to our initial public offering. The purchase option may be exercised for cash or on a cashless
basis, at the holder’s option, and expires on May 13, 2024. The Company accounted for the unit purchase option, inclusive of the
receipt of $100 cash payment, as an expense of the Public Offering resulting in a charge directly to shareholders’ equity. The option
and the units, as well as the ordinary shares and warrants to purchase ordinary shares that may be issued upon exercise of the option,
have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective
date of the registration statement or the commencement of sales in the Public Offering pursuant to Rule 5110(g)(1) of FINRA’s Rules,
during which time the option may not be sold, transferred, assigned, pledged or hypothecated, or be subject of any hedging, short sale,
derivative or put or call transaction that would result in the economic disposition of the securities. Additionally, the option may not
be sold, transferred, assigned, pledged or hypothecated prior to May 13, 2020 except to any underwriters and selected dealer participating
in the offering and their bona fide officers or partners. The option grants to holders demand and “piggy back” rights for
periods of five and seven years, respectively, from the effective date of the registration statement of which forms a part with respect
to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. We will bear
all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders
themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including
in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted
for issuances of ordinary shares at a price below its exercise price.
Right of First Refusal
Subject to certain conditions, the Company granted
Maxim, for a period of 18 months after the date of the consummation of the business combination, a right of first refusal to act as lead
underwriters or minimally as a co-manager, with at least 30% of the economics; or, in the case of a three-handed deal, 20% of the economics,
for any and all future public and private equity and debt offerings. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first
refusal shall not have a duration of more than three years from the effective date of the registration statement for our initial public
offering.
NOTE 9 – SUBSEQUENT EVENTS
On November 3, 2021, the Company entered into
a business combination agreement with TAG Holdings Limited ("TAG") and its wholly-owned subsidiaries TAG International Limited
("B2B"), TAG Asset Partners Limited ("B2BSub"), OnePlatform International Limited ("HKSub"), OnePlatform
Holdings Limited ("OPH"), and TAG Asia Capital Holdings Limited ("Fintech"). See Note 1.
On November 10, 2021, the Company issued unsecured
promissory note in the aggregate principal amount of $546,991 to AGBA Holding Limited in exchange for AGBA Holding Limited depositing
such amount into the Company’s trust account in order to extend the amount of available time to complete a business combination
until February 16, 2022.
On November 10, 2021, 316,503 shares were redeemed by a number of shareholders
at a price of approximately $10.94 per share, in an aggregate principal amount of $3,462,565.