The accompanying notes are an integral part of the unaudited financial statements.
UNAUDITED
NOTES TO THE FINANCIAL STATEMENTS
Note
1 – Description of Organization and Business Operations
Organization
and General
Alpha
Star Acquisition Corporation (the “Company”) is a blank check company incorporated in the Cayman Islands on March 11,
2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses (“Business Combination”). The Company has selected December 31
as its fiscal year-end.
Although
the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company
intends to focus on businesses that have a connection to the Asian market. The Company is an early stage and emerging growth company
and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The
Company’s sponsor is A-Star Management Corporation, a British Virgin Islands incorporated company (the “Sponsor”).
The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company
will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering (the “IPO”).
The
Company has 9 months from the closing of the IPO (or up to 21 months from the closing of our initial public offering if we extend
the period of time to consummate a business combination) to consummate a Business Combination (the “Combination
Period”). If the Company fails to consummate a Business Combination within the Combination Period, it will trigger its
automatic winding up, liquidation and subsequent dissolution pursuant to the terms of the Company’s 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 the Company’s
stockholders to commence such a voluntary winding up, liquidation and subsequent dissolution.
The
Company’s IPO was declared effective on December 13, 2021. On December 15, 2021, the Company consummated the IPO of 11,500,000 units
which includes an additional 1,500,000 units as a result of the underwriters’ fully exercise of the over-allotment, at
$10.00 per Unit, generating gross proceeds of $115,000,000, which is described in Note 3.
Concurrently
with the closing of the IPO, the Company consummated the sale of 330,000 units (the “Private Placement”) at a price
of $10.00 per Private Unit in a private placement to A-Star Management Corporation, generating gross proceeds of $3,300,000, which
is described in Note 4.
The
Trust Account
As
of December 15, 2021, a total of $115,682,250 of
the net proceeds from the IPO and the Private Placement transaction completed with the Sponsor was deposited in a trust account
established for the benefit of the Company’s public stockholders with Wilmington Trust, National Association acting as
trustee. The amount exceeding $115,000,000,
$682,254, had
been transfer to the Company’s escrow cash account as its working capital. At March 31, 2022, the Company had working capital
of $288,185,
which excludes $115,010,130 of
marketable securities held in the trust account and the liability for deferred underwriting commissions of $2,875,000.
The
funds held in the Trust Account are invested only in United States government treasury bills, bonds or notes having a maturity of
180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company
Act of 1940 and that invest solely in United States government treasuries. Except with respect to interest earned on the funds held in
the Trust Account that may be released to the Company to pay its income or other tax obligations, the proceeds will not be released from
the Trust Account until the earlier of the completion of a Business Combination or the Company’s liquidation.
Liquidity
and Going Concern
As
of March 31, 2022, the Company had cash $188,773 in
its escrow account and working capital of $288,185,
which excludes $115,010,130 of
marketable securities held in the trust account and the liability for deferred underwriting commissions of $2,875,000.
The
Company’s liquidity needs to date have been satisfied through a payment of $25,000 from the Sponsor to cover certain expenses
on behalf of the Company in exchange for the issuance of the Founder Shares and the proceeds from the consummation of the Private Placement
not held in the Trust Account to provide working capital needed to identify and seek to consummate a Business Combination.
In
order to finance transaction costs in connection with a Business Combination, the 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 related party loans up to $1,500,000. As of March 31,
2022, the Company had no borrowings under the related party loans.
If
the Company’s estimate of the costs of identifying a target business, undertaking due diligence and negotiating a Business Combination
are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate our business prior to
our initial Business Combination. Moreover, the Company may need to obtain additional financing either to complete its Business Combination
or because the Company has become obligated to redeem a significant number of its Public Shares upon completion of its Business Combination,
in which case the Company may issue additional securities or incur debt in connection with such Business Combination. In addition, we
have until September 15, 2023 (the “Liquidation Date”) to consummate a business combination.
In
connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”)
205-40, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined
that if the Company is unable to complete a Business Combination by the Liquidation Date, then the Company may cease all operations except
for the purpose of liquidating. The uncertainty surrounding the date for mandatory liquidation and subsequent dissolution raise substantial
doubt about the Company’s ability to continue as a going concern. Management expects to close the Business Combination prior to
the Liquidation Date. If the Company is unable to close the Business Combination or raise additional capital, it may be required to take
additional measures to conserve liquidity, which could include, but not necessarily include or be limited to, curtailing operations,
suspending the pursuit of a potential transaction and reducing overhead expenses. The Company cannot provide any assurance that new financing
will be available to it on commercially acceptable terms or if at all. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern through the Liquidation Date if a Business Combination is not consummated. These financial statements
do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going concern.
Management
believes that, on March 31, 2022, the company has insufficient working capital to cover its short term operating needs. The Company has
no revenue before the Business Combination. Its business plan is dependent on the completion of a financing transaction and the Company’s
cash and working capital as March 31, 2022 are not sufficient to complete its planned activities for the upcoming year. These factors
raise substantial doubt about the Company’s ability to continue as a going concern one year from the date the financial statement
is issued.
Note
2 – Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying financial statement of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted
in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission
(“SEC”).
These unaudited financial statements should be read in conjunction
with the Company’s audited consolidated financial statements and the notes thereto included in the Annual Report for the year ended
December 31, 2021, which are included in Form 10-K filed on March 30, 2022.
Emerging
Growth Company
The
Company is an emerging growth company as defined by Section 2(a) of 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 no
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosures obligations regarding executive compensation in its periodic reports and proxy statements, and exceptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payment 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 an 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 statement with another public company which
is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The preparation of
financial statement in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the
estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which
management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The
initial valuation of the public warrants and private warrants (as defined in Note 7) and ordinary shares subject to redemption
required management to exercise significant judgement in its estimates. Accordingly, the actual results could differ significantly
from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had $188,773 and $387,858 cash held in escrow and did not have any cash equivalents as of March 31, 2022 and December
31, 2021, respectively.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $250,000. As of March 31, 2022 and December 31, 2021, the Company
had not experienced losses on this account respectively.
Marketable
Securities Held in Trust Account
The
Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the
balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of
investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying
condensed statements of operations. The estimated fair values of investments held in Trust Account are determined using available
market information. The Company had $115,010,130
and $115,000,744
of marketable securities held in the trust account as of March 31, 2022 and December 31, 2021, respectively.
Offering
Costs Associated with the Initial Public Offering
Offering
costs consist of underwriting, legal, accounting, registration and other expenses incurred through the balance sheet date that are directly
related to the IPO. As of March 31, 2022, offering costs amounted to $5,669,696 consisting of $2,300,000 of underwriting fees,
$2,875,000 of deferred underwriting fees, and $494,696 of other offering costs. The Company complies with the requirements
of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses of Offering”. The Company allocates offering
costs between public shares, public rights and public warrants based on the estimated fair values of public shares, public warrants,
and public rights at the date of issuance.
Ordinary
Shares Subject to Possible Redemption
The
Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption is
classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares
that feature redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified
as stockholders’ 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, ordinary shares subject to possible
redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s
balance sheet.
All
of the 11,500,000 ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such
Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with
the Business Combination and in connection with certain amendments to the Company’s Certificate of Incorporation. Accordingly,
all of the 11,500,000 shares
of ordinary shares are presented as temporary equity.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares
to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary
shares are affected by charges against additional paid-in capital and accumulated deficit if additional paid in capital equals to
zero.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities approximates the carrying amounts represented in the accompanying balance sheet,
primarily due to the short-term nature.
Net
Income (Loss) per Share
The
Company complies with accounting and disclosure requirements of FASB 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 shares and non-redeemable 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 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.
The
calculation of diluted income (loss) per ordinary shares does not consider the effect of the warrants issued in connection with the (i) Initial
Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events.
The warrants are exercisable to purchase 5,915,000 shares of ordinary shares in the aggregate. As of March 31, 2022, the
Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares
and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary shares is the same as basic net income
(loss) per ordinary share for the periods presented.
The
net income (loss) per share presented in the statement of operations is based on the following:
| Schedule of
income loss per share | |
| | | |
| | |
| | |
For the
Three months ended
March 31,
2022 | | |
For the
Period from
March 11, 2021 (Inception) to
March 31,
2021 | |
| Net loss | |
$ | (179,479 | ) | |
$ | - | |
| Schedule of basic and diluted net income (loss) per share | |
| | | |
| | | |
| | | |
| | |
| | |
For the
Three months ended
March 31,
2022 | | |
For the
period from
March 11,
2021
(inception) to
March 31,
2022 | |
| | |
Non-redeemable
shares | | |
Redeemable
shares | | |
Non-redeemable
shares | | |
Redeemable
shares | |
| Basic and Diluted net income (loss) per share: | |
| | | |
| | | |
| | | |
| | |
| Numerators: | |
| | | |
| | | |
| | | |
| | |
| Allocation of net loss | |
$ | (39,118 | ) | |
$ | (140,361 | ) | |
$ | - | | |
$ | - | |
| Allocation of net income (loss) | |
$ | (39,118 | ) | |
$ | (140,361 | ) | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Denominators: | |
| | | |
| | | |
| | | |
| | |
| Weighted-average shares outstanding | |
| 3,205,000 | | |
| 11,500,000 | | |
| 2,875,000 | | |
| - | |
| Basic and diluted net income (loss) per share | |
$ | (0.01 | ) | |
$ | (0.01 | ) | |
$ | 0.00 | | |
$ | - | |
Income
Taxes
The
Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax
assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities
and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition. The Company has identified the Cayman Islands as its only “major” tax jurisdiction, as
defined. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring
recognition in the Company’s financial statement. Since the Company was incorporated on March 11, 2021, the evaluation was performed
for the period ended March 31, 2022 which will be the only period subject to examination. The Company believes that its income tax positions
and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial
position. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component
of income tax expense.
The provision for income
taxes was deemed to be immaterial for three months ended March 31, 2022 and for the period end from March 11, 2021 to March 31,
2021.
Warrants
The
Company evaluates the Public and Private Warrants as either equity-classified or liability-classified instruments based on
an assessment of the warrants’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815,
Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments
pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for
equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other
conditions for equity classification. Pursuant to such evaluation, both Public and Private Warrants are classified in stockholders’
equity.
Recently
Issued Accounting Standards
In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —
Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain
financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash
conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity
classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible
debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the
diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible
instruments. ASU 2020-06 is effective on January 1, 2022 and should be applied on a full or modified retrospective basis,
with early adoption permitted beginning on January 1, 2021. As of March 31, 2022, management does not believe that any recently
effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial
statements.
Note
3 – Initial Public Offering
On
December 15, 2021, the Company consummated the initial public offering and sale of 11,500,000 units (including the issuance
of 1,500,000 units as a result of the underwriters’ fully exercise of the over-allotment) at a price of $10.00 per
Unit, generating gross proceeds of $115,000,000. Each Unit consists of one ordinary share, one redeemable warrant (each a “Warrant”,
and, collectively, the “Warrants”), and one right to receive one-seventh (1/7) of an ordinary share upon the consummation
of a Business Combination. Each two redeemable warrants entitle the holder thereof to purchase one ordinary share, and each seven rights
entitle the holder thereof to receive one ordinary share at the closing of a Business Combination. No fractional shares issued upon separation
of the Units, and only whole Warrants will trade.
Note
4 – Private Placement
Concurrently
with the consummation of the IPO, A-Star Management Corporation, the Sponsor, purchased an aggregate of 330,000 units at a
price of $10.00 per Private Unit for an aggregate purchase price of $3,300,000 in a private placement. The Private Units are
identical to the public Units except with respect to certain registration rights and transfer restrictions. The proceeds from the Private
Units were added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination
within the Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares
(subject to the requirements of applicable law), and the Private Units and all underlying securities will expire worthless.
Note
5 – Related Party Transactions
Founder
Shares
On
March 11, 2021, the Company issued one ordinary share to the Sponsor for no consideration. On April 6, 2021, the Company cancelled
the one share for no consideration and the Sponsor purchased ordinary shares for an aggregate price of $25,000.
The 2,875,000 founder
shares (for purposes hereof referred to as the “Founder Shares”) include an aggregate of up to 375,000 shares subject
to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the
Sponsor will collectively own 20% of the Company’s issued and outstanding shares after the Proposed Offering. On December 15, 2021,
the underwriters exercised the over-allotment option in full, so there are no Founder Shares subject to forfeiture as of March 31, 2022.
The
Sponsor and each Insider agrees that it, he or she shall not (a) Transfer 50% of their Founder Shares until the earlier of (A) six
months after the consummation of the Company’s initial Business Combination or (B) the date on which the closing price of
the Ordinary Shares equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after the Company’s
initial Business Combination or (b) Transfer the remaining 50% of their Founder Shares until six months after the date of the consummation
of the Company’s initial Business Combination, or earlier in either case, if subsequent to the Company’s initial Business
Combination the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in
all of the Company’s stockholders having the right to exchange their Ordinary Shares for cash, securities or other property (the
“Founder Shares Lock-up Period”).
Administrative
Services Agreement
The
Company entered into an administrative services agreement, commencing on December 13, 2021, through the earlier of the Company’s
consummation of a Business Combination or its liquidation, to pay to the Sponsor a total of $10,000 per month for office space,
secretarial and administrative services provided to members of the Company’s management team. From January
1, 2022 through March 31, 2022 and from March 11, 2021 (inception) through March 31, 2021, the Company incurred $30,000
and nil 0 in fees for these services respectively.
Sponsor
Promissory Note — Related Party
On
March 26, 2021, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to
an aggregate principal amount of $ (the
“Promissory Note”). The Promissory Note is non-interest bearing and payable on the earlier of (i) December 31,
2021 or (ii) the consummation of the Proposed Offering. The loan repaid as $ allotted
to the payment of offering expense. Sponsor promissory note balance were nil 0
and nil 0 as of March 31, 2022 and December 31, 2021 respectively.
In addition, in order to finance transaction costs in connection with
an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but
are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts.
In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust
account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such
loans may be convertible into units at a price of $10.00 per unit (which, for example, would result in the holders being issued 150,000
ordinary shares, 150,000 rights and 150,000 warrants to purchase 75,000 shares if $1,500,000 of notes were so converted) at the option
of the lender. The units would be identical to the placement units issued to the initial holder. The terms of such loans by our officers
and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans
from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds
and provide a waiver against any and all rights to seek access to funds in our trust account.
Note
6 – Commitments and Contingencies
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could
have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific
impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Underwriters
Agreement
The
Company granted the underwriters, a 45-day option to purchase up to 1,500,000 Units (over and above the 10,000,000 units referred to
above) solely to cover over-allotments at $10.00 per Unit. On December 15, 2021, the underwriters exercised the over-allotment option
in full to purchase 1,500,000 Units at a purchase price of $10.00 per Unit.
On
December 15, 2021, the Company paid a cash underwriting commission of 2.0% of the gross proceeds of the IPO, or $2,300,000.
The
underwriters are entitled to a deferred underwriting commission of 2.5% of the gross proceeds of the IPO, or $2,875,000, which will
be paid from the funds held in the Trust Account upon completion of the Company’s initial Business Combination subject to the terms
of the underwriting agreement. The Company has the deferred underwriting commissions $2,875,000 and $2,875,000 as current liabilities
as of March 31, 2022 and December 31, 2021, respectively.
Registration
Rights
The
holders of the Founder Shares will be entitled to registration rights pursuant to a registration rights agreement to be signed prior
to or on the effective date of the IPO. The holders of these securities are entitled to make up to three demands, excluding
short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration
rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the
Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Note
7 – Stockholders’ Deficit
Ordinary
Shares
The
Company is authorized to issue 50,000,000 ordinary shares, with a par value of $0.001 per share. Holders of the ordinary
shares are entitled to one vote for each ordinary share. At March 31, 2022, there were 3,205,000 ordinary shares issued
and outstanding, excluding 11,500,000 shares subject to possible redemption. The Sponsor has agreed to forfeit 375,000 ordinary
shares to the extent that the over-allotment option is not exercised in full by the underwriters. On December 15, 2021, the underwriters
fully exercised the over-allotment option, as such there are no ordinary shares subject to forfeiture. As of March 31, 2021, the Company’s historical stockholders’
equity was retrospectively restated to the first period, the amount of shares to the Company by the Sponsor for $ at par
value $0.0001, with additional paid-in capital $ in April 2021, includes of up to 375,000 shares subject to forfeiture, as over-allotment
option is fully exercised by the underwriters.
Public
Warrants
Pursuant
to the Initial Public Offering, the Company sold 11,500,000 Units at a price of $10.00 per Unit for a total of $115,000,000.
The total amount of ordinary shares subject to possible redemption is 11,500,000. Each Unit consists of one ordinary share, one
right to acquire one-seventh (1/7) of an ordinary share, and one redeemable warrant (“Public Warrant”) to purchase one-half
of one ordinary share at a price of $11.50 per share, subject to adjustment.
Each
warrant entitles the holder to purchase one-half ordinary share at a price of $11.50 per share commencing 30 days after the completion
of its initial business combination and expiring five years from after the completion of an initial business combination. No fractional
warrant will be issued and only whole warrants will trade. The Company may redeem the warrants at a price of $0.01 per warrant upon
30 days’ notice, only in the event that the last sale price of the ordinary shares is at least $18.00 per share for any 20 trading
days within a 30-trading day period ending on the third day prior to the date on which notice of redemption is given, provided there
is an effective registration statement and current prospectus in effect with respect to the ordinary shares underlying such warrants
during the 30 day redemption period. If a registration statement is not effective within 60 days following the consummation
of a business combination, warrant holders may, until such time as there is an effective registration statement and during any period
when the Company 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
addition, if (a) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection
with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share (with
such issue price or effective issue price to be determined in good faith by our board of directors), (b) the aggregate gross proceeds
from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our
initial business combination, and (c) the volume weighted average trading price of the ordinary shares during the 20 trading
day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price,
the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent)
to be equal to 115% of the Market Value, and the last sales price of the ordinary shares that triggers the Company’s right
to redeem the Warrants will be adjusted (to the nearest cent) to be equal to 180% of the Market Value.
Private
warrants
The
private warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering.
Rights
Except
in cases where the Company is not the surviving Company in a business combination, the holders of the rights will automatically receive 1/7 of
a share of ordinary shares upon consummation of the Company’s 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 1/7 of a share underlying each right upon consummation of the business combination. As
of March 31, 2022, no rights had been issued.
Note
8 – Fair Value Measurements
The
Company complies with ASC 820, “Fair Value Measurements”, for its financial assets and liabilities that are re-measured and
reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair
value at least annually. ASC 820 determines fair value to be the price that would be received to sell an asset or would be paid to transfer
a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date.
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 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.
At
March 31, 2022 and December 31, 2021, assets held in the trust account were entirely comprised of marketable securities.
The
following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31,
2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair
value.
| Schedule of fair value, assets and liabilities measured on recurring basis | |
| | |
| | |
| |
| Assets March 31, 2022 | |
Quoted Prices in
Active Markets
(Level 1) | | |
Significant Other
Observable Inputs
(Level 2) | | |
Significant Other
Unobservable Inputs
(Level 3) | |
| Marketable Securities held in Trust Account | |
$ | 115,010,130 | | |
$ | - | | |
$ | - | |
| Assets December 31, 2021 | |
Quoted Prices in
Active Markets
(Level 1) | | |
Significant Other
Observable Inputs
(Level 2) | | |
Significant Other
Unobservable Inputs
(Level 3) | |
| Marketable Securities held in Trust Account | |
$ | 115,000,744 | | |
$ | - | | |
$ | - | |
Note
9 – Subsequent Events
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to May 13, 2022 the date
the financial statement was available to be issued. Based upon the review, the Company did not identify any subsequent events that would
have required adjustment or disclosure in the financial statement.