The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENT
(UNAUDITED)
Note 1 – Description of Organization and Business
Operation
A SPAC I Acquisition Corp. (the “Company”)
was incorporated in the British Virgin Islands on April 29, 2021. The Company was incorporated for the purpose of effecting a merger,
share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business
Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination,
the Company intends to focus its search on the technology, media and telecom industries with a focus in the United States and/or Asia
(excluding China).
As of September 30, 2022, the Company had not
commenced any operations. All activities for the period from April 29, 2021 (inception) through September 30, 2022, were related
to the Company’s formation and the initial public offering (“IPO”) described below. The Company will not generate any
operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO (as defined below). The Company
has selected December 31 as its fiscal year end.
The registration statement for the Company’s
IPO became effective on February 14, 2022. On February 17, 2022, the Company consummated the IPO of 6,000,000 units (which does
not include the exercise of the over-allotment option by the underwriters in the IPO) at an offering price of $10.00 per unit (the “Units’),
generating gross proceeds of $60,000,000. Simultaneously with the closing of the IPO, the Company consummated the private placement (“Private
Placement”) with A SPAC (Holdings) Acquisition Corp. (the “Sponsor”) of 2,875,000 warrants (the “Private Warrants”)
at a price of $1.00 per Private Warrant, generating total proceeds of $2,875,000.
Upon the closing of the IPO on February 17,
2022, $60,600,000 ($10.10 per Unit) from the net offering proceeds of the sale of the Units in the IPO and a portion of the sale of the
Private Placement was placed in a trust account (the “Trust Account”) maintained by Continental Stock Transfer& Trust
as a trustee and will be invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market
fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment
Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution
of the Trust Account as described below.
The Company granted the underwriter a 45-day option
to purchase up to an additional 900,000 Units at the IPO price to cover over-allotments (the “Over-Allotment Option Units”),
if any. Subsequently, on February 25, 2022, the over-allotment option was exercised in full. The closing of the Over-Allotment Option
Units occurred on March 1, 2022 simultaneously with the consummation of the private sale of an additional 270,000 Private Warrants to
the sponsor generating gross proceeds of $270,000. A total of $9,090,000, comprised of the net proceeds of the Over-allotment Offering
and proceeds from the Over-allotment Private Placement, was placed in the Trust Account.
Offering costs were $4,918,415 including $1,380,000
of cash underwriting fees, $2,415,000, of deferred underwriting fees, the fair value of the representative shares of $571,448, and $551,967,
of other offering costs.
The Company will provide the holders of the outstanding
Class A ordinary shares sold with the Units (the “Public Shares”) sold in the IPO (the “Public Shareholders”)
with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in
connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision
as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company.
The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account
(initially anticipated to be $10.10 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable).
All of the Public Shares contain a redemption
feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder
vote or tender offer in connection with the Company’s Business Combination and in connection with certain amendments to the Company’s
amended and restated certificate of incorporation (the “Certificate of Incorporation”). Redemptions of the Company’s
Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an agreement relating to
the Company’s Business Combination. If the Company seeks shareholder approval of the Business Combination, the Company will proceed
with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination, or such other vote as required
by law or stock exchange rule. If a shareholder vote is not required by applicable law or stock exchange listing requirements and the
Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Certificate of Incorporation,
conduct the redemptions pursuant to the tender offer rules of the Securities Exchange Commission (the “SEC”) and file
tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is
required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business
or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and
not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor
has agreed to vote its Founder Shares (as defined in Note 4) and any Public Shares purchased during or after the IPO in favor of
approving a Business Combination. Additionally, each Public shareholder may elect to redeem their Public Shares without voting, and if
they do vote, irrespective of whether they vote for or against the proposed transaction.
The Company’s sponsor, officers and directors
(the “Initial Shareholder”) has agreed not to propose an amendment to the Certificate of Incorporation that would affect the
substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business
Combination, unless the Company provides the public shareholders with the opportunity to redeem their Class A ordinary shares in
conjunction with any such amendment.
If the Company is unable to complete a Business
Combination within 12 months from the closing of the IPO (the “Combination Period”) (or up to 18 months from the closing
of this offering if the Company extends the period of time to consummate a Business Combination), the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise
and income taxes (less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares,
which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further
liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the Company’s remaining shareholders and the Company’s Board of Directors, dissolve and liquidate,
subject in each case to the Company’s obligations under British Virgin Islands law to provide for claims of creditors and the requirements
of other applicable law.
The Initial Shareholder have agreed to waive their
liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period.
However, if the Initial Shareholders should acquire Public Shares in or after the IPO, they will be entitled to liquidating distributions
from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination
Period. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution
(including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held
in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered
or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement,
reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed
a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s
indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended
(the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party,
the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility
that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers,
prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any
right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern Consideration
As of September 30, 2022, the Company had cash
of $87,639 and a working capital of $156,887.
The Company has 12 months from the closing of
the IPO to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this
time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution.
The Company has incurred and expects to continue
to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of
the consummation of a Business Combination. In connection with the Company’s assessment of going concern considerations in accordance
with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties
about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial
doubt about the Company’s ability to continue as a going concern. The management’s plan in addressing this uncertainty is
through the Working Capital Loans, as defined below (see Note 5). In addition, if the Company is unable to complete a Business Combination
within the Combination Period (by February 17, 2023), the Company’s board of directors would proceed to commence a voluntary liquidation
and thereby a formal dissolution of the Company. There is no assurance that the Company’s plans to consummate a Business Combination
will be successful within the Combination Period. As a result, management has determined that such additional condition also raise substantial
doubt about the Company’s ability to continue as a going concern. The financial statement does not include any adjustments that
might result from the outcome of this uncertainty.
Risks and Uncertainties
In March 2020, the World Health Organization
declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic which continues to spread throughout the United States
and the world. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of
this pandemic. Management continues to evaluate the impact of the COVID-19 pandemic and the Company has concluded that while it is reasonably
possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is
not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Additionally, as a result of the military action
commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s
ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business
Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent
on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility,
or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this
action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations
and/or ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed 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 Securities and Exchange Commission (“SEC”). The accompanying
unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its IPO as filed with the
SEC on February 15, 2022, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on March 4, 2022. The
interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected
for the year ending December 31, 2022 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company”
as defined in Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (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 an emerging growth
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 that is neither an emerging growth company nor an emerging growth company that has opted
out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
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 $87,639 and $0 in cash as of September 30, 2022 and September
30, 2021, respectively. The Company did not have any cash equivalents for both periods.
Cash and Investments Held in Trust Account
As of September 30, 2022, $70,105,185 were held
in cash and investments in the Trust Account. The Company’s portfolio of investments held in the Trust Account is comprised
of investments in money market funds that invest in U.S. government securities. The estimated fair value of investments held in the Trust
Account are determined using available market information.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Depository Insurance Corporation limit. As of September 30, 2022, the Company has not experienced losses on these accounts and management
believes the Company is not exposed to significant risks on such accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates
the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary
shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability
instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights
that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the
Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity.
The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s
control and subject to the occurrence of uncertain future events. If it is probable that the equity instrument will become redeemable,
the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from
the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument
or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal
the redemption value at the end of each reporting period. The accretion or remeasurement will be treated as a deemed dividend (i.e., a
reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
Subsequently in March 2022, the Company changed
its accounting method to accrete the changes in the redemption value over the period from the date of issuance (or from the date that
it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument. The Company
complies with accounting and disclosure requirements of ASC 250 “Accounting Changes and Error Corrections” which requires
that an entity may voluntarily change an accounting principle only if it justifies the use of an allowable alternative accounting principle
on the basis that it is preferable and meets criteria such as authoritative support, rationality and industry practice. The Company has
adopted the accretion method starting its first quarter ending March 31, 2022 and recognizes changes in redemption value in additional
paid-in capital (or accumulated deficit in the absence of additional paid-in capital) over an expected 12-month period leading up to a
Business Combination.
Net Income (Loss) per Share
The Company complies with accounting and disclosure
requirements of FASB ASC 260, Earnings Per Share. The condensed statements of operations include a presentation of income (loss) per redeemable
share and income (loss) per non-redeemable share following the two-class method of income 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
common shares subject to possible redemption was considered to be dividends paid to the public shareholders. As of September 30,2022,
the Company did not have any dilutive securities and 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 loss per share is the same as basic loss per share for the
period presented.
The net income (loss) per share presented in
the unaudited condensed statement of operations is based on the following:
| |
Three Months Ended September 30, 2022 | | |
Nine Months Ended September 30, 2022 | | |
For the Period from April 7, 2021 (Inception) through September 30, 2021 | |
| |
Redeemable share | | |
Non- redeemable shares | | |
Redeemable shares | | |
Non- redeemable shares | | |
Redeemable shares | | |
Non- redeemable shares | |
Basic and diluted net loss per ordinary share | |
| | |
| | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| | |
| | |
| |
Allocation of net loss | |
$ | (2,309,989 | ) | |
$ | (600,597 | ) | |
$ | (5,361,746 | ) | |
$ | (1,691,406 | ) | |
$ | — | | |
$ | (2,090 | ) |
Accretion of ordinary shares subject to possible redemption to redemption value | |
| 3,118,909 | | |
| — | | |
| 7,079,440 | | |
| — | | |
| — | | |
| — | |
Allocation of net income (loss) | |
| 808,920 | | |
| (600,597 | ) | |
| 1,717,694 | | |
| (1,691,406 | ) | |
| — | | |
| (2,090 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 6,900,000 | | |
| 1,794,000 | | |
| 5,647,253 | | |
| 1,781,473 | | |
| — | | |
| 1,725,000 | |
Basic and diluted net income (loss) per ordinary share | |
$ | 0.12 | | |
$ | (0.33 | ) | |
$ | 0.30 | | |
$ | (0.95 | ) | |
$ | — | | |
$ | (0.00 | ) |
Warrant Instruments
The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance
in ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the instruments
are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments
meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s
own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding.
As discussed in Note 7, the Company determined that upon further review of the warrant agreement, management concluded that the Public
Warrants and Private Placement Warrants issued pursuant to the warrant agreement qualify for equity accounting treatment.
Use of Estimates
The preparation of financial statements in conformity
with U.S. 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 statements and the reported amounts of income
and expenses during the reporting period. Actual results could differ from those estimates.
Income Taxes
The Company complies with the accounting and reporting
requirements of ASC 740, “Income Taxes,” (“ASC 740”) 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.
ASC 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 recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of September 30, 2022. The Company’s management determined that
the British Virgin Islands is the Company’s only major tax jurisdiction. The Company is not currently aware of any issues under
review that could result in significant payments, accruals, or material deviation from its position. There is currently no taxation imposed
by the Government of the British Virgin Islands. In accordance with British Virgin Islands income tax regulations, income taxes are not
levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s management
does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Recent Accounting Pronouncements
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 January 1, 2024 for the Company and should be applied on a full or modified retrospective basis, with early
adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have
on its financial position, results of operations or cash flows.
The Company’s management does not believe
that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the
Company’s financial statements.
Note 3 – Initial Public Offering
Pursuant to the IPO on February 17, 2022
and the full exercising of the over-allotment option on February 25, 2022, the Company sold 6,900,000 Units at a price of $10.00
per Unit. Each Unit and consists of one Class A Ordinary Share, three-fourths (3/4) of one redeemable warrant (“Public Warrant”),
and one right to receive one-tenth (1/10) of one Class A ordinary share at the closing of the Company’s Business Combination
(“Public Right”).
All of the 6,900,000 Public Shares sold as part
of the Units contain a redemption feature which allows for the redemption of such Public Shares 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 amended and restated
certificate of incorporation, or in connection with the Company’s liquidation. In accordance with the SEC and its staff’s
guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control
of the Company require common stock subject to redemption to be classified outside of permanent equity. If it is probable that the equity
instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the
date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption
date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the
instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.
The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings,
additional paid-in capital).
The Company has made a policy election in accordance with ASC 480-10-S99-3A
and recognizes changes in redemption value in accumulated deficit over an expected 12-month period leading up to a Business Combination.
For the three months ended September 30, 2022 and 2021, the Company recorded $3,118,909 and $Nil accretion of carrying value to redemption
value, respectively.
Note 4 – Related Party Transactions
Founder Shares
On April 29, 2021, the Sponsor purchased
2,875,000 shares (the “Founder Shares”) of the Company’s Class B ordinary shares, with no par value (“Class B
ordinary shares”) for an aggregate price of $25,000. Founder Shares have been retroactively restated to reflect a share repurchase
and subscription agreement pursuant to which on July 19, 2021, 2,874,999 Class B ordinary shares were repurchased and cancelled
at an aggregate repurchase price of $25,000 or approximately $0.01 per share, resulting in one Class B ordinary share in issue after
the repurchase. On the same day, the Company issued 2,300,000 Class A ordinary shares to the Sponsor for an aggregate purchase price
of $25,000, or approximately $0.01 per share. Subsequently, on January 14, 2022, the Company canceled 575,000 of such founder shares,
resulting in 1,725,000 founder shares remaining outstanding (of which an aggregate of up to 225,000 shares are subject to forfeiture if
the over-allotment option is not exercised in full or in part by the underwriter).
The Initial Shareholder has agreed to forfeit
up to 225,000 Class A ordinary shares to the extent that the over-allotment option is not exercised in full by the underwriters.
The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the
Founder Shares will represent 20.0% of the Company’s issued and outstanding shares after the IPO. As a result of the underwriters’
election to fully exercise their over-allotment option on February 25, 2022, no Class A ordinary shares are currently subject
to forfeiture.
The Initial Shareholder will agree, subject to
limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) six months
after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last
sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day after the initial Business Combination, or (y) the
date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of
the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Promissory Note - Related Party
On September 4, 2021, the Sponsor agreed
to loan the Company an aggregate of up to $400,000 to cover expenses related to the IPO pursuant to a promissory note (the “Note”).
This loan is non-interest bearing and payable on the completion of the IPO. The Note was fully repaid on April 26, 2022. As
of September 30, 2022, there were no amount outstanding under the Note.
Working Capital Loans
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, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a
Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.
Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,150,000 of such
Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrant
would be identical to the Private Placement Warrants. As of September 30, 2022, there were no Working Capital Loans outstanding.
Note 5 – Private Placement Warrants
Simultaneously with the closing of the IPO and
the over-allotment, the Sponsor purchased an aggregate of 3,145,000 Private Placement Warrants at a price of $1.00 per Private Placement
Warrant, for an aggregate purchase price of $3,145,000. The Private Warrants are identical to the Public Warrants sold in the IPO, except
with respect to certain registration rights and transfer restrictions. The proceeds from the Private Placement Warrants 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 Placement Warrants will be used to fund the redemption of the Public Shares (subject
to the requirements of applicable law), and the Private Placement Warrants and all underlying securities will expire worthless.
Note 6 – Commitments & Contingencies
Registration & Shareholder Rights
The holders of the Founder Shares, the Private
Placement Warrants, and any warrants that may be issued in payment of Working Capital Loans (and all underlying securities) 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 requiring
the Company to register such securities for resale. The holders of a majority of these securities are entitled to make up to three demands
that the Company register such securities. The holders of the majority of the Founders Shares can elect to exercise these registration
rights at any time commencing three months prior to the date on which these ordinary shares are to be released from escrow. The holders
of a majority of the Private Placement Warrants and securities issued in payment of Working Capital Loans can elect to exercise these
registration rights at any time commencing on the date that the Company consummates a Business Combination. In addition, the holders have
certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a
Business Combination. Notwithstanding the foregoing, the underwriter may not exercise its demand and “piggyback” registration
rights after five (5) and seven (7) years, respectively, after the effective date of the IPO and may not exercise its demand
rights on more than one occasion. The registration rights agreement does not contain liquidating damages or other cash settlement provisions
resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the
filing of any such registration statements.
Underwriting Agreement
The Company granted Chardan, the representative
of the underwriters a 45-day option from the date of the prospectus to purchase up to 900,000 additional Units to cover over-allotments,
if any, at IPO price less the underwriting discounts and commissions. On February 25, 2022, the underwriter exercised its over-allotment
option to purchase 900,000 Units, generating gross proceeds to the Company of $9,000,000.
The underwriters were paid a cash underwriting
discount of $0.20 per unit, or $1,380,000 upon the closing of the IPO and over-allotment. In addition, the underwriters will be entitled
to a deferred commission of $0.35 per unit, or $2,415,000, which will be paid upon the closing of a Business Combination from the amounts
held in the Trust Account, subject to the terms of the underwriting agreement.
Representative’s Ordinary Shares
The Company issued to Chardan and/or its designees,
an aggregate of 69,000 Class A ordinary shares “Representative Shares” at the closing of the IPO and over-allotment.
The Representative Shares are identical to the public shares except that Chardan Capital Markets, LLC has agreed not to transfer, assign
or sell any such Representative Shares until the completion of the Company’s initial Business Combination. In addition, Chardan
Capital Markets, LLC has agreed (i) to waive its redemption rights with respect to such shares in connection with the completion of the
Company’s initial Business Combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect
to such shares if the Company fails to complete its initial Business Combination within the Combination Period. The shares have been deemed
compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the commencement
of sales in this offering pursuant to FINRA Rule 5110(e)(1). Pursuant to FINRA Rule 5110(e)(1), these securities will not be the subject
of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any
person for a period of 180 days immediately following the effective date of the registration statement of which this prospectus forms
a part, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the effective
date of the registration statement of which this prospectus forms a part except to any underwriter and selected dealer participating in
the offering and their officers, partners, registered persons or affiliates.
Note 7 – Shareholders’ Equity
Recapitalization
On July 19, 2021, 2,874,999 Class B
ordinary shares were repurchased and cancelled at an aggregate repurchase price of $25,000 or approximately $0.01 per share, resulting
in one Class B ordinary share in issue after the repurchase. On the same day, we issued 2,300,000 Class A ordinary shares to
the sponsor for an aggregate purchase price of $25,000, or approximately $0.01 per share. Subsequently, on January 14, 2022, the
Sponsor surrendered for no consideration and canceled 575,000 of such Class A ordinary shares, resulting in 1,725,000 Class A
ordinary shares remaining outstanding (of which an aggregate of up to 225,000 Class A ordinary shares are subject to forfeiture if
the over-allotment option is not exercised in full or in part by the underwriter).
Ordinary shares
Preference shares—The Company
is authorized to issue 1,000,000 shares of preference shares with such designations, voting and other rights and preferences as may be
determined from time to time by the Company’s Board of Directors. As of September 30, 2022, there were no shares of preference shares
issued or outstanding.
Class A Ordinary shares—The
Company is authorized to issue 100,000,000 shares of Class A ordinary shares with no par value. As of September 30, 2022, there
were 1,794,000 shares of Class A ordinary shares outstanding, excluding 6,900,000 Class A ordinary shares subject to possible
redemption. Of the 1,794,000 Class A ordinary shares outstanding, up to 225,000 shares are subject to forfeiture to the Company by
the Sponsor for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part,
so that the Initial Shareholders will collectively own 20% of the Company’s issued and outstanding ordinary shares after the IPO.
As a result of the underwriters’ election to fully exercise their over-allotment option on February 25, 2022, no Class A
ordinary shares are currently subject to forfeiture.
Class B Ordinary shares—The
Company is authorized to issue 100 Class B ordinary shares with no par value. Holders of Class B ordinary shares are entitled
to one vote for each share. On September 30, 2022, one share Class B ordinary was outstanding, which will automatically be canceled
at the time of the initial Business Combination.
Warrants—As of September 30,
2022, there were 7,891,453 Warrants outstanding. The Company will account for the Warrants as equity instruments. The Public Warrants
will become exercisable on the later of the completion of a Business Combination and twelve months from the effective date of this
registration statement. No 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. Notwithstanding
the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants is
not effective within a specified period 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 Pubic Warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities
Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to
exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business
Combination or earlier upon redemption or liquidation.
Redemption of warrants when the price per ordinary
shares equals or exceeds $16.50
Once the Warrants become exercisable, the Company
may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
in whole and not in part;
| ● | at a price of $0.01 per Warrant; |
| ● | upon a minimum of 30 days’
prior written notice of redemption, which the Company refers to as the “30-day redemption period”; and |
| ● | if, and only if, the last reported
sale price (the “closing price”) of our ordinary shares equals or exceeds $16.50 per share (as adjusted for adjustments to
the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public
shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending
on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
The Company will not redeem the Warrants as described
above unless an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the warrants
is effective and a current prospectus relating to those ordinary shares is available throughout the 30-day redemption period.
No fractional Class A ordinary shares will
be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, the Company will
round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. Please see the section
entitled “Description of Securities—Warrants—Public Warrants” for additional information.
If the Company calls the Public Warrants for redemption,
management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,”
as described in the warrant agreement.
The exercise price and number of Class A
ordinary shares issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a share splits,
share capitalization, share dividends, reorganizations, recapitalizations and the like. However, the Warrants will not be adjusted for
issuances of Class A ordinary shares at a price below their respective exercise prices. Additionally, in no event will the Company
be required to net cash settle the Warrants. If the Company is unable to complete a Business Combination within the Combination Period
and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to
their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect
to such warrants. Accordingly, the Warrants may expire worthless.
In addition, if the Company issues additional
Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination
at an issue price or effective issue price of less than $9.20 per share of ordinary shares (with such issue price or effective issue price
to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Initial Shareholders
or their affiliates, without taking into account any Founder Shares held by them prior to such issuance) (the “Newly Issued Price”),
(y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and
(z) the volume weighted average trading price of the Company’s Class A ordinary shares during the 20 trading day period
starting on the trading day prior to the day on which the Company consummates 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 greater
of (i) the Market Value or (ii) the Newly Issued Price, and the $16.50 share redemption trigger price described below under
“Description of Securities — Redeemable Warrants” will be adjusted (to the nearest cent) to be equal to 165% of
the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants will be identical
to the Public Warrants underlying the Units being sold in the IPO, except that the Private Placement Warrants (i) they will not be
redeemable by the Company, (ii) they may be transferred, assigned or sold by the Sponsor to the Permitted Transferees and (iii) they
may be exercised by the holders on a cashless basis.
Rights—Except in cases where
the Company is not the surviving company in a Business Combination, each holder of a Public Right will automatically receive one-tenth
(1/10) of one share of ordinary shares upon consummation of a Business Combination, even if the holder of a Public Right converted all
shares held by him, her or it in connection with a Business Combination or an amendment to the Company’s Certificate of Incorporation
with respect to its pre-business combination activities. In the event that the Company will not be the surviving company upon completion
of a Business Combination, each holder of a Public 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 Public Right upon consummation of the Business Combination. No additional consideration
will be required to be paid by a holder of Public Rights in order to receive his, her or its additional ordinary shares upon consummation
of a Business Combination. The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates
of the Company). If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving
entity, the definitive agreement will provide for the holders of Public Rights to receive the same per share consideration the holders
of the ordinary shares will receive in the transaction on an as-converted into ordinary shares basis.
The Company will not issue fractional shares in
connection with an exchange of Public 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 General Corporation Law. As a result, the holders of the Public
Rights must hold rights in multiples of 10 in order to receive shares for all of the holders’ rights upon closing of a Business
Combination. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the
funds held in the Trust Account, holders of Public Rights will not receive any of such funds with respect to their Public Rights, nor
will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Rights,
and the Public Rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders
of the Public Rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle
the rights. Accordingly, the rights may expire worthless.
Note 8 – 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 that are measured at fair value on a recurring basis as of September 30, 2022 and indicates the fair value
hierarchy of the valuation inputs the Company utilized to determine such fair value.
| |
| | |
Quoted Prices in | | |
Significant Other | |
Significant Other |
| |
September 30, | | |
Active Markets | | |
Observable Inputs | |
Unobservable Inputs |
| |
2022 | | |
(Level 1) | | |
(Level 2) | |
(Level 3) |
Assets | |
| | |
| | |
| |
|
Marketable securities held in trust account | |
$ | 70,105,185 | | |
$ | 70,105,185 | | |
— | |
— |
The following table presents information about
the Company’s equity instrument that are measured at fair value on a non-recurring basis at February 2, 2022, and indicates the
fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| |
February 2, | | |
| |
| |
2022 | | |
Level | |
Equity instrument: | |
| | |
| |
Representative shares | |
$ | 571,448 | | |
| 3 | |
The Company used several models (i.e., Monte Carlo,
PWERM and Finnerty) to value the Representative Shares granted to Chardan. The key inputs were (i) risk-free rate of 1.02%, (ii) volatility
of 7.9%, (iii) estimated term of 0.93 years, resulting in the fair value of the 69,000 representative shares was approximately $571,448
or $8.28 per share.
Note 9 – Subsequent Events
In accordance with ASC 855, “Subsequent
Events”, the Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that
the financial statement was issued. Based on this review, the Company did not identify any subsequent events that would have required
adjustment or disclosure in the financial statement.