The accompanying notes are an integral part of these
unaudited financial statements.
The accompanying notes are an integral part of these
unaudited financial statements.
The accompanying notes are an integral part of these
unaudited financial statements.
The accompanying notes are an integral part of these
unaudited financial statements.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Unaudited)
NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS
Abri SPAC I, Inc (“Abri”
or the “Company”) was incorporated in the State of Delaware on March 18, 2021. The Company’s business purpose is to
effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or
more businesses (our “Initial Business Combination”). The Company has selected December 31 as its fiscal year end. Throughout
this report, the terms “our,” “we,” “us,” and the “Company” refer to Abri SPAC I, Inc.
As of March 31, 2022, and the
date of this filing, the Company had not commenced core operations. All activity for the period from March 18, 2021 (inception) through
March 31, 2022 relates to the Company’s formation and raising funds through its initial public offering (“Initial Public Offering”),
which is described below. The Company will not generate any operating revenues until after the completion of the Initial 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 registration statement pursuant
to which the Company registered its securities offered in the Initial Public Offering was declared effective on August 9, 2021. On August
12, 2021, the Company consummated its Initial Public Offering of 5,000,000 units (each, a “Unit” and collectively, the “Units”),
at $10.00 per Unit, generating gross proceeds of $50,000,000 and incurring offering costs of $973,988. The Company granted the underwriter
a 45-day option to purchase up to an additional 750,000 Units at the Initial Public Offering price to cover over-allotments.
Simultaneously with the consummation
of the closing of the Initial Public Offering, the Company completed the private sale of 276,250 units (the “Private Units”)
to Abri Ventures I, LLC, the Company’s sponsor (the “Sponsor”) at a purchase price of $10.00 per Private Unit, generating
gross proceeds to the Company of $2,762,500.
Following the closing of the Initial
Public Offering on August 12, 2021, an amount of $50,000,000 net proceeds from the Initial Public Offering and sale of the Private Units
was placed in a trust account in the United States maintained by Continental Stock Transfer & Trust Company, as trustee (the “Trust
Account”). The funds held in the Trust Account were invested only in U.S. government securities with a maturity of 185 days or less
or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S.
government treasury obligations so that we are not deemed to be an investment company under the Investment Company Act. Except with respect
to interest earned on the funds held in the Trust Account, the Trust Account is intended as a holding place for funds pending the earliest
to occur of: (i) the completion of the Initial Business Combination; (ii) the redemption of any public shares properly submitted in connection
with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or
timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete the initial Business Combination
within 12 months from the closing of the Initial Public Offering (or up to 18 months from the closing of this offering with the mandatory
extensions of the period of time to consummate an Initial Business Combination) or (B) with respect to any other provision relating to
stockholders’ rights or pre-Initial Business Combination activity; or (iii) absent an Initial Business Combination within 12 months
from the closing of the Initial Public Offering (or up to 18 months from the closing of this offering with the mandatory extensions of
the period of time to consummate an Initial Business Combination), the return of the funds held in the Trust Account to the public stockholders
as part of redemption of the public shares.
On August 19, 2021, the underwriters
notified the Company of their intent to exercise of the over-allotment option in part and, on August 23, 2021, the underwriters purchased
733,920 additional Units (the “Additional Units”) at $10.00 per Additional Unit upon the closing of the over-allotment option,
generating additional gross proceeds of $7,339,200. On August 23, 2021, simultaneously with the sale of the Additional Units, the Company
consummated the sale of an additional 18,348 Private Units at $10.00 per additional Private Unit (the “Additional Private Units”),
generating additional gross proceeds of $183,480. A total of $7,339,200 of the net proceeds from the sale of the Additional Units and
the Additional Private Units was deposited in the Trust Account, bringing the aggregate proceeds held in the Trust Account on that date
to $57,339,200.
The stock exchange listing rules
provide that the Initial Business Combination must be with one or more target businesses that together have a fair market value equal
to at least 80% of the value of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions
and taxes payable) at the time of the Company signing a definitive agreement in connection with the Initial Business Combination. The
Company will only complete an Initial Business Combination if the post-Initial Business Combination company owns or acquires 50% or more
of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to
be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
There is no assurance that the Company will be able to successfully effect an Initial Business Combination.
The payment to the Company’s
Sponsor of a monthly fee of $10,000 is for general and administrative services including office space, utilities and secretarial support,
which the Company records as operating expense on its statement of operations. However, pursuant to the terms of such agreement, we may
delay payment of such monthly fee upon a determination by our audit committee that we lack sufficient funds held outside the trust to
pay actual or anticipated expenses in connection with our Initial Business Combination. Any such unpaid amount will accrue without interest
and be due and payable no later than the date of the consummation of our Initial Business Combination. This arrangement is being agreed
to by its Sponsor for our benefit. We believe that the fee charged by our Sponsor is at least as favorable as we could have obtained from
an unaffiliated person. This arrangement will terminate upon completion of our Initial Business Combination or the distribution of the
Trust Account to our public stockholders. Other than the $10,000 per month fee, no compensation of any kind (including finder’s
fees, consulting fees or other similar compensation) will be paid to our insiders, members of our management team or any of our or their
respective affiliates, for services rendered to us prior to or in connection with the consummation of our Initial Business Combination
(regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket expenses
incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due
diligence on suitable target businesses and business combinations, as well as traveling to and from the offices, plants or similar locations
of prospective target businesses to examine their operations. Since the role of present management after our Initial Business Combination
is uncertain, we have no ability to determine what remuneration, if any, will be paid to those persons after our Initial Business Combination.
The funds outside of the Trust
Account are for our working capital requirements in searching for our Initial Business Combination. The allocation such funds represents
our best estimate of the intended uses of these funds. If our estimate of the costs of undertaking due diligence and negotiating our Initial
Business Combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability
and cost of which is currently unascertainable. In this event, we could seek such additional capital through loans or additional investments
from our insiders, members of our management team or third parties, but our insiders, members of our management team or third parties
are not under any obligation to advance funds to, or invest in, us.
We will likely use substantially
all of the net proceeds of this offering, including the funds held in the Trust Account, in connection with our Initial Business Combination
and to pay our expenses relating thereto, including the deferred underwriting commission payable to the underwriter in an amount equal
to 3.0% of the total gross proceeds raised in the offering upon consummation of our Initial Business Combination. To the extent that our
capital stock is used in whole or in part as consideration to effect our Initial Business Combination, the proceeds held in the Trust
Account which are not used to consummate an Initial Business Combination will be disbursed to the combined company and will, along with
any other net proceeds not expended, be used as working capital to finance the operations of the target business. Such working capital
funds could be used in a variety of ways, including continuing or expanding the target business’ operations, for strategic acquisitions
and for marketing, research and development of existing or new products.
To the extent we are unable to
consummate an Initial Business Combination, we will pay the costs of liquidation from our remaining assets outside of the Trust Account.
If such funds are insufficient, our insiders have agreed to pay the funds necessary to complete such liquidation (currently anticipated
to be no more than $15,000) and have agreed not to seek repayment of such expenses.
We believe that we will not have
sufficient available funds to operate for up to the next 12 months (or up to 18 months from the Initial Public Offering if we are required
to extend the period of time to consummate an Initial Business Combination), assuming that our Initial Business Combination is not consummated
during that time. However, if necessary, in order to meet our working capital needs following the consummation of this offering, our insiders
may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole
discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our Initial Business
Combination, without interest, or, at the lender’s discretion, up to $750,000 of the notes may be converted upon consummation of
our Initial Business Combination into additional Private Warrants at a price of $1.00 per warrant. Notwithstanding, there is no guarantee
that the Company will receive such funds. Our stockholders have approved the issuance of the Private Warrants upon conversion of such
notes, to the extent the holder wishes to so convert such notes at the time of the consummation of our Initial Business Combination. If
we do not complete an Initial Business Combination, any loans and advances from our insiders or their affiliates, will be repaid only
from amounts remaining outside our Trust Account, if any.
The Company’s Sponsor, officers
and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect
to their insider shares and any public shares they may hold in connection with the completion of our Initial Business Combination. In
addition, our Sponsor and its officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account
with respect to their insider shares if we fail to complete our Initial Business Combination within the prescribed time frame. However,
if its Sponsor or any of its officers, directors or affiliates acquire public shares in or after this offering, they will be entitled
to liquidating distributions from the Trust Account with respect to such public shares if we fail to complete our Initial Business Combination
within the prescribed time frame.
The Company will provide its public
stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the completion of the Initial Business
Combination either (i) in connection with a stockholder meeting called to approve the Initial Business Combination or (ii) by means of
a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed Initial Business Combination or conduct
a tender offer will be made by the Company, solely in the Company’s discretion. The public stockholders will be entitled to redeem
their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business
days prior to the consummation of the Initial Business Combination 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, divided by the number of then outstanding public shares,
subject to the limitations. The amount in the Trust Account is initially anticipated to be approximately $10.00 per public share.
The shares of common stock
subject to redemption was classified as temporary equity upon the completion of the Initial Public Offering and will subsequently be accreted
to redemption value, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification
(“ASC”) 480 “Distinguishing Liabilities from Equity” (“ASC 480”). In such case, the Company will proceed
with a business combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a business combination
and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Initial
Business Combination.
The Company will have only 12
months from the closing of the Initial Public Offering (the “Combination Period”) to complete the Initial Business Combination.
However, if we are not able to consummate the Initial Business Combination within 12 months, we will be required to extend the period
of time to consummate a business combination up to two times, each by an additional three months (for a total of up to 18 months to complete
an Initial Business Combination). The Sponsor and its affiliates or designees are obligated to fund the Trust Account to extend the time
for the Company to complete its Initial Business Combination. If the Company is unable to complete its Initial Business Combination within
such 12-month period from the closing of the Initial Public Offering or during any mandatory extension period, 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 us to pay our taxes (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Company’s board
of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect
to the warrants, which will expire worthless if the Company fails to complete its Initial Business Combination within the 12-month time
period or during any extension period.
Risks and Uncertainties
Management continues to evaluate
the impact of the COVID-19 pandemic and Russia-Ukraine war on the economy and the capital markets and has concluded that, while it is
reasonably possible that such events could have negative effects on the Company’s financial position, results of its operations,
and/or search for a target company, the specific impacts are 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 these uncertainties.
Going Concern and Management Liquidity Plans
As of March 31, 2022, we had
cash of $5,002 and a working capital deficit of $1,602,564. Our liquidity needs through the date of this filing had been satisfied through
proceeds from notes payable and advances from related party and from the issuance of common stock. Our liquidity needs consist of paying
existing accounts payable, identifying and evaluating prospective business combination candidates, performing due diligence on prospective
target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating
and consummating an initial business combination. Although certain of our initial stockholders, officers and directors or their affiliates
have committed to loan us funds from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, there
is no guarantee that we will receive such funds.
Accordingly, the accompanying
unaudited financial statement has been prepared in conformity with accounting principles generally accepted in the United States of America
(“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and the satisfaction
of liabilities in the normal course of business. The financial statement does not include any adjustments that might result from the outcome
of this uncertainty. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition
plans. Management plans to address this uncertainty during period leading up to the Initial Business Combination. The Company cannot provide
any assurance that its plans to raise capital or to consummate an Initial Business Combination will be successful. Based on the foregoing,
management believes that the Company will not have sufficient working capital and borrowing capacity to meet its needs through the earlier
of the consummation of the Initial Business Combination or one year from this filing. These factors, among others, raise substantial doubt
about our ability to continue as a going concern.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with
the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Certain
information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed
or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the
information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion
of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature,
which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
Unaudited Interim Unaudited financial statements
The accompanying unaudited
financial statements are presented in conformity with U.S. GAAP and pursuant to the rules and regulations of the SEC. In the opinion of
the Company, the unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for
a fair presentation of its financial position as of March 31, 2022, and its results of operations for the three months ended March 31,
2022.
The accompanying unaudited condensed financial statements should be
read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on
February 4, 2022, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2021
is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December
31, 2021. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for
the year ending December 31, 2022 or for any future interim periods.
Emerging Growth Company
We are an “emerging growth
company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the
“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its
periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s unaudited financial statements with another public company which is neither an emerging growth company nor an emerging
growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
Use of Estimates
The preparation of unaudited
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 unaudited financial
statements and the reported amounts of revenues and expenses during the reporting period. 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 unaudited financial statements, which management considered in formulating its estimate, could change
in the near term due to one or more future confirming events. 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 did not have
any cash equivalents as of December 31, 2021 and March 31, 2022.
Marketable Securities Held in Trust Account
Following the closing of the Initial
Public Offering on August 12, 2021, an amount of $57,339,200 from the net proceeds of the sale of the Units in the Initial Public Offering
and the sale of the Private Units, Additional Units and Additional Private Units were placed in the Trust Account and may be invested
only in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule
2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The Trust Account is intended
as a holding place for funds pending the earliest to occur of: (i) the completion of the Initial Business Combination; (ii) the redemption
of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated certificate
of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the Company
does not complete the Initial Business Combination within 12 months from the closing of the Initial Public Offering or (B) with respect
to any other provision relating to shareholders’ rights or pre-Initial Business Combination activity; or (iii) absent an Initial
Business Combination within 12 months from the closing of the Initial Public Offering, the return of the funds held in the Trust Account
to the public shareholders as part of redemption of the public shares.
Offering Costs
Offering costs consist of professional
fees, filing, regulatory and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering.
Offering costs are charged against the carrying value of the ordinary shares or the statements of operations based on the relative value
of the common shares and the Public Warrants to the proceeds received from the Units sold upon the completion of the Initial Public Offering.
Accordingly, on August 12, 2021, offering costs in the aggregate of $973,988 were recognized (including approximately $359,900 for the
fair value of the Representative’s unit purchase price), all of which was allocated to the common shares, reducing the carrying
amount of such shares as of such date.
Warrant Liability
The Company accounts for the
Private Warrants in accordance with the guidance contained in ASC 480, under which the Private Warrants do not meet the criteria for equity
treatment and must be recorded as derivative liabilities. Accordingly, upon issuance, the Company will classify the Private Warrants as
liabilities at their fair value and will adjust the Private Warrants to fair value at each reporting period. This liability is subject
to re-measurement at each balance sheet date until the Private Warrants are exercised or expire, and any change in fair value is recognized
in the Company’s statements of operations. The fair value of the Private Warrants will be initially and subsequently measured at
the end of each reporting period using a Black-Scholes option pricing model.
The Company’s Public Warrants
are accounted for and are presented as equity and measured using a Monte Carlo simulation model.
Common Stock Subject to Possible Redemption
The Company accounts for its
common stock subject to possible redemption in accordance with the guidance in ASC 480. Common stock subject to mandatory redemption is
classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock 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, common stock is classified as stockholders’
equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control
and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption will be presented at redemption
value and as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
The Company has made a policy
election in accordance with ASC 480-10-S99-3A and will recognize changes in redemption value in additional paid-in capital (or accumulated
deficit in the absence of additional paid-in capital) over an 18-month period leading up to an Initial Business Combination. As of March
31, 2022, the Company recorded accretion of approximately $2,832,941 (including $1,099,501 during the three months ended March 31, 2022),
with unrecognized accretion remaining of $3,921,754 as of March 31, 2022. As of December 31, 2021, the Company recorded accretion of $1,733,440,
with unrecognized accretion remaining of $5,015,911 as of December 31, 2021.
Income Taxes
The Company follows the asset
and liability method of accounting for income taxes under ASC 740, “Income Taxes” (“ASC 740). Deferred tax assets and
liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment
date. 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 March 31, 2022. The Company is currently
not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The
Company is subject to income tax examinations by taxing authorities since inception.
The Company recognizes deferred
tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the
Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences,
projected future taxable income, tax-planning strategies, and results of recent operations. The Company has incurred losses from inception
through March 31, 2022 and has deferred tax assets of approximately $666,000 and $316,000 as of March 31, 2022 and December 31, 2021,
respectively. The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation
allowance is required because it is more likely than not that all of the deferred tax assets will not be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible.
The Company has evaluated
its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and
penalties related to any uncertain tax positions through its income tax expense.
The Company is subject to franchise tax filing requirements in the
State of Delaware.
Concentration of Credit Risk
Financial instruments that
potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times,
may exceed the Federal Depository Insurance Coverage. As of March 31, 2022 and December 31, 2021, the Company had not experienced losses
on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements” (“ASC 820”)
approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Fair Value Measurements
Fair value is defined as the
price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants
at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices
(unadjusted) for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active
markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices
for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or
no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques
in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs
used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value
measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair
value measurement.
Derivative Financial Instruments
The Company evaluates its
financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance
with ASC 815, “Derivatives and Hedging” (“ASC 815”). For derivative financial instruments that are accounted for
as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting
date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative
liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of
the instrument could be required within 12 months of the balance sheet date.
Net Loss Per Share
Net
loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period.
Diluted earnings per share is computed similar to basic earnings per share, except the weighted average number of common shares outstanding
are increased to include additional shares from the assumed exercise of share options, if dilutive.
The Company complies with
accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share” (“ASC 260”). The Statements of Operations
include a presentation of income (loss) per common stock subject to possible redemption 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 common stock subject to
possible redemption and non-redeemable shares, the Company first considered the total income (loss) allocable to both sets of shares.
This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share,
any remeasurement of the ordinary shares subject to possible redemption was considered to be dividends paid to the public shareholders.
Subsequent to calculating the total income (loss) allocable to both sets of shares, the Company split the amount to be allocated using
a ratio of 77% for the redeemable public shares and 23% for the non-redeemable shares, reflective of the respective participation rights,
for the three months ended March 31, 2022.
The loss per share presented
in the statement of operations is based on the following:
| For the Three Months Ended March 31, 2022 |
| | |
| |
| Net loss | |
$ | (1,322,607 | ) |
| Accretion of temporary equity to redemption value | |
| (1,099,501 | ) |
| Net loss including accretion of temporary equity to redemption value | |
$ | (2,422,108 | ) |
| | |
Common Shares
Subject to Redemption | | |
Non-redeemable
Common Shares | |
| Basic and diluted net income (loss) per share: | |
| | |
| |
| Numerator: | |
| | |
| |
| Allocation of net loss including accretion of temporary equity | |
$ | (1,861,187 | ) | |
$ | (560,921 | ) |
| Accretion of temporary equity to redemption value | |
| 1,099,501 | | |
| — | |
| Allocation of net loss | |
$ | (761,686 | ) | |
$ | (560,921 | ) |
| | |
| | | |
| | |
| Denominator: | |
| | | |
| | |
| Weighted-average shares outstanding | |
| 5,733,920 | | |
| 1,728,078 | |
| Basic and diluted net loss per share | |
$ | (0.13 | ) | |
$ | (0.32 | ) |
At March 31, 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 our earnings. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
Recent Accounting Pronouncements
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
unaudited financial statements.
Reclassifications
Certain prior year amounts
in the financial statements have been reclassified to conform to the current period’s presentation.
NOTE 3 — INITIAL PUBLIC OFFERING
On August 12, 2021, the Company
consummated its Initial Public Offering of 5,000,000 Units at $10.00 per Unit, generating gross proceeds of $50,000,000 and incurred offering
costs of $2,223,988, consisting of $1,250,000 of underwriting fees and expenses and $973,988 of costs related to the Initial Public Offering.
Additionally, the Company recorded deferred underwriting commissions of $1,500,000 (increasing up to $1,725,000 if the underwriter’s
over-allotment option is exercised in full) payable only upon completion of our Initial Business Combination. The Company granted the
underwriter a 45-day option to purchase up to an additional 750,000 Units at the Initial Public Offering price to cover over-allotments.
Simultaneously with the consummation
of the closing of the Initial Public Offering, the Company completed the private sale of 276,250 Private Units to its Sponsor at a purchase
price of $10.00 per Private Unit, generating gross proceeds to the Company of $2,762,500.
On August 19, 2021, the underwriters
notified the Company of their intent to exercise of the over-allotment option in part and, on August 23, 2021, the underwriters purchased
733,920 Additional Units at $10.00 per Additional Unit upon the closing of the over-allotment option, generating additional gross proceeds
of $7,339,200. On August 23, 2021, simultaneously with the sale of the Additional Units, the Company consummated the sale of an additional
18,348 Additional Private Units, generating additional gross proceeds of $183,480. A total of $7,339,200 of the net proceeds from the
sale of the Additional Units and the Additional Private Units was deposited in the Trust Account.
Since the underwriters did not
exercise their over-allotment option in full, 4,020 shares of common stock issued to the sponsor prior to the IPO and the Private Placement,
were forfeited for no consideration. As of September 20, 2021, a total of $57,339,200 of the net proceeds from our Initial Public Offering
and the Private Placement were deposited in a trust account established for the benefit of the Company’s public stockholders.
We intend to use substantially
all of the net proceeds of the Initial Public Offering, including the funds held in the trust account, in connection with our initial
business combination and to pay our expenses relating thereto, including a deferred underwriting commission payable to the underwriters
in an amount equal to 3.0% of the total gross proceeds raised in the Initial Public Offering upon consummation of our initial business
combination. To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination,
the remaining proceeds held in the trust account, as well as any other net proceeds not expended, will be used as working capital to finance
the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding
the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products.
Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of
our initial business combination if the funds available to us outside of the trust account were insufficient to cover such expenses.
The Private Units were issued
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transactions did not involve a public offering.
NOTE 4 — RELATED PARTY TRANSACTIONS
Sponsor Shares
On April 12, 2021, the Company’s
sponsor, Abri Ventures I, LLC (the “Sponsor”) purchased 1,437,500 shares (the “Founder Shares”) of the Company’s
common stock for an aggregate price of $25,000.
Private Units
On August 12, 2021, our Sponsor
purchased an aggregate of 276,250 Private Units in a private placement that closed simultaneously with the closing of Initial Public Offering.
The Private Units are comprised of one share of common stock and one redeemable warrant, each exercisable to purchase one share of common
stock at $11.50 per share and are otherwise identical to the public warrants in the Initial Public Offering. On August 23, 2021, simultaneously
with the sale of the Additional Units, the Company consummated the sale of an additional 18,348 Additional Private Units, generating additional
gross proceeds of $183,480. All of the proceeds we received from this private placement of units were added to the proceeds from the Initial
Public Offering to pay for the expenses of the Initial Public Offering and to be held in the Trust Account. If we do not complete our
Initial Business Combination within 12 months from the closing of this Initial Public Offering (or up to 18 months), the proceeds of the
sale of the Private Units will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and
the Private Units and underlying warrants will be worthless.
Promissory Note - Related Party
On April 20, 2021, the Company entered a promissory note with its Sponsor
for principal amount received of $300,000 to be used for a portion of the expenses of the Initial Public Offering. The note was non-interest
bearing, unsecured and payable on the earlier of: (i) December 31, 2021 or (ii) the date on which the Company consummated the Initial
Public Offering. As of December 31, 2021, there was a zero balance outstanding under the note.
Convertible Promissory Note — Related Party
On March 8, 2022, the Company
entered a convertible promissory note with its Sponsor for principal amount received of $300,000 to be used for a portion of the expenses
of the Initial Public Offering. The note was non-interest bearing, unsecured and payable on the earlier of: (i) August 12, 2022 (or up
to February 12, 2023, if the period of time to consummate a business combination is extended) or (ii) the date on which the Company consummated
a business combination. At any time, up to a day prior to the closing of a business combination, the holder may convert the principal
amount into private units of the Company at a conversion price of $10.00 per unit. As of March 31, 2022, there was $300,000 outstanding
under the note.
Administrative and Support Services
The Company entered into an administrative
services agreement pursuant to which the Company will pay the Sponsor a total of $10,000 per month for office space, administrative and
support services, which the Company records as operating expense on its statements of operations. Upon the completion of the Initial Business
Combination or our liquidation, the Company will cease paying these monthly fees.
NOTE 5 — COMMITMENTS AND CONTINGENCIES
Merger Agreement
On January 27, 2022, the Company
entered into a Merger Agreement (the “Merger Agreement”) by and among Apifiny Group Inc., a Delaware corporation (“Apifiny”),
the Company, Abri Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), Erez
Simha, solely in his capacity as representative, agent and attorney-in-fact of the Apifiny security holders, and the Sponsor, solely in
its capacity as representative, agent and attorney-in-fact of the Indemnified Party (as defined in the Merger Agreement). Pursuant to
the terms of the Merger Agreement, a business combination between the Company and Apifiny will be effected through the merger of Merger
Sub with and into Apifiny, with Apifiny surviving the merger as a wholly owned subsidiary of Abri (the “Merger”). The board
of directors of the Company has (i) approved and declared advisable the Merger Agreement, the Additional Agreements (as defined in the
Merger Agreement) and the transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related
transactions by the stockholders of the Company.
The Merger is expected to be consummated
after obtaining the required approval by the stockholders of the Company and Apifiny and the satisfaction of certain other customary closing
conditions. As of March 31, 2022, the Merger has not been consummated.
Merger Consideration
Initial Consideration
The total consideration to be
paid at Closing (the “Initial Consideration”) by Abri to Apifiny security holders will be an amount equal to 450 Million shares
of the Company’s common stock and, if the Designation of Series A Preferred Stock Proposal is approved, a number of Series A Preferred
Stock equal to the number of shares of the Company’s common stock to be issued to the holders of Apifiny F Stock as of Closing.
Earnout Payments
In addition to the Initial Consideration,
certain Apifiny security holders (the Earnout Recipients as defined in the Merger Agreement) will also have the contingent right to earn
up to 10,500,000 shares of Abri Common Stock in the aggregate (“Earnout Consideration”) as follows:
| ● | Such
Apifiny security holders will earn 3,000,000 shares of the Earnout Consideration, in the aggregate, if over any twenty (20) consecutive
Trading Days (as defined in the Merger Agreement) during the period beginning on the date of Closing Date (as defined in the Merger Agreement)
and ending on the first anniversary of the Closing Date (the “First Earnout Period”), the VWAP (as defined in the Merger
Agreement) of the Abri Common Stock is greater than or equal to $16.50 per share (the “First Milestone”). |
| ● | Such
Apifiny security holders will earn an additional 3,750,000 shares of the Earnout Consideration, in the aggregate, if over any twenty
(20) consecutive Trading Days during the period beginning on the Closing Date and ending on the second anniversary of the Closing Date
(the “Second Earnout Period”), the VWAP of the Abri Common Stock is greater than or equal to $23.00 per share (the “Second
Milestone”). |
| | ● | Such Apifiny security holders will earn an additional 3,750,000 shares of the Earnout Consideration, in the aggregate, if within any twenty (20) consecutive Trading Days during the period beginning on the Closing Date and ending on the third anniversary of the Closing Date (the “Third Earnout Period” and together with the First Earnout Period and the Second Earnout Period, each, an “Earnout Period” and collectively, the “Earnout Periods”), the Volume Weighted Average Price (“VWAP”) of the Abri Common Stock is greater than or equal to $30.00 per share (the “Third Milestone” and together with the First Milestone and the Second Milestone, the “Earnout Milestones”). |
| ● | Upon
a Change in Control (as defined in the Merger Agreement) during any Earnout Period, if the per share valuation of Abri Common Stock in
connection with such Change in Control is equal to or greater than any applicable Earnout Milestone or Milestones, such Apifiny security
holders will earn the shares of the Earnout Consideration issuable in respect to each applicable Earnout Milestone or Milestones as described
above, which will be released as of immediately prior to the Change of Control. |
The Earnout Consideration (1)
will be issued to the recipients thereof at Closing and (2) will be placed in escrow at Closing.
The Earnout Consideration will
not be released from escrow until it is earned as a result of the occurrence of the applicable Earnout Milestone or in connection with
a Change in Control, as set forth in the fourth bullet above. Shares of the Earnout Consideration not earned on or before the expiration
of the applicable Earnout Period will be forfeited without any consideration and thereupon returned to the Company pursuant to the Earnout
Escrow Agreement.
In the case of any holder of Apifiny
stock options, the applicable shares of the Earnout Consideration will not be released from escrow until the occurrence of the applicable
Earnout Milestone within the applicable Earnout Period, provided that such holder (i) has exercised their stock options prior to the occurrence
of the applicable Earnout Milestone and (ii) continues to be employed by Apifiny or one of its subsidiaries at such time. Shares of the
Earnout Consideration that are not earned by a holder of Apifiny Stock options on or before the third anniversary of the Closing Date
will be forfeited without any consideration and thereupon returned to the Company pursuant to the Earnout Escrow Agreement.
Registration Rights
The holders of the Founder Shares
are entitled to registration rights pursuant to a registration rights agreement that was signed as of the effective date of the Initial
Public Offering. The holders of the 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 Founder Shares can elect to exercise these registration rights at any time commencing three
months prior to the date on which the Founder Shares are to be released from escrow. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to our consummation of our Initial Business Combination.
The holders of the Founder Shares have agreed not to transfer, assign or sell any of the such shares (except to certain permitted transferees)
until, with respect to 50% of such shares, the earlier of six months after the date of the consummation of our Initial Business Combination
and the date on which the closing price of our common stock equals or exceeds $12.50 per share for any 20 trading days within a 30-trading
day period following the consummation of our Initial Business Combination and, with respect to the remaining 50% of such shares, six months
after the date of the consummation of our Initial Business Combination, or earlier in each case if, subsequent to our Initial Business
Combination, we complete a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having
the right to exchange their shares of common stock for cash, securities or other property. The Founder Shares will be held in escrow with
Continental Stock Transfer & Trust Company during the period in which they are subject to the transfer restrictions described above.
Unit Purchase Option
We sold to the underwriters, for
$100, an option to purchase up to a total of 300,000 units (increased to 344,035 units after the over-allotment was exercised in part)
exercisable, in whole or in part, at $11.50 per unit, commencing on the consummation of our Initial Business Combination. The purchase
option may be exercised for cash or on a cashless basis, at the holder’s option, and expires five years from the commencement of
sales in this offering. The option and the 300,000 units, as well as the 300,000 shares of common stock, and the warrants to purchase
300,000 shares of common stock that may be issued upon exercise of the option, have been deemed compensation by FINRA and are therefore
subject to a lock-up for a period of 180 days immediately following the effective date of the registration statement or the commencement
of sales in the Initial Public Offering pursuant to Rule 5110(e)(1) of FINRA’s Rules, during which time the option may not be sold,
transferred, assigned, pledged or hypothecated, or be subject of any hedging, short sale, derivative or put or call transaction that would
result in the economic disposition of the securities. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated
for a one-year period (including the foregoing 180-day period) following the date of the Company’s initial prospectus except to
any underwriter and selected dealer participating in the offering and their bona fide officers or partners. The option grants to holders
demand and “piggy-back” rights of the securities directly and indirectly issuable upon exercise of the option. Notwithstanding
the foregoing, the underwriters and their related persons may not (i) have more than one demand registration right at our expense, (ii)
exercise their demand registration rights more than five (5) years from the effective date of the registration statement, and (iii) exercise
their “piggy-back” registration rights more than seven (7) years from the effective date of the registration statement. We
will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by
the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances
including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the option will
not be adjusted for issuances of shares of common stock at a price below its exercise price. We will have no obligation to net cash settle
the exercise of the purchase option or the warrants underlying the purchase option. The holder of the purchase option will not be entitled
to exercise the purchase option or the warrants underlying the purchase option unless a registration statement covering the securities
underlying the purchase option is effective or an exemption from registration is available. If the holder is unable to exercise the purchase
option or underlying warrants, the purchase option or warrants, as applicable, will expire worthless.
On August 12, 2021, the Company
accounted for the unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the Initial Public Offering resulting
in a charge directly to stockholders’ equity.
NOTE 6 — STOCKHOLDERS’ EQUITY
Common Stock
The Company is authorized to issue
an aggregate of 5,000,000 shares of common stock having a par value of $0.0001 per share. On April 12, 2021, the Company issued 1,437,500
founder shares of common stock at a price of $0.0001 per share for total receivable of approximately of $25,000. These Founder Shares
held by our Sponsor included up to 187,500 shares which were subject to forfeiture by the stockholder if the underwriters of the Company’s
Initial Public Offering did not fully or in part exercise their over-allotment option. On August 19, 2021, the underwriters notified the
Company of their intent to exercise of the over-allotment option in part and, on August 23, 2021, the underwriters purchased 733,920 Additional
Units at $10.00 per Additional Unit upon the closing of the over-allotment option, generating additional gross proceeds of $7,339,200.
On August 23, 2021, simultaneously with the sale of the Additional Units, the Company consummated the sale of an additional 18,348 Additional
Private Units, generating additional gross proceeds of $183,480. The balance of the Additional Private Units, or 402 Private Units, including
4,020 Founder Shares, were forfeited by the Sponsor.
Authorized Stock
Upon the effectiveness of the
Company’s registration statement on August 9, 2021, the Company amended and restated its certificate of incorporation to authorize
the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value
$0.0001 per share.
Public and Private Warrants
Each whole warrant entitles the
registered holder to purchase one common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing
on the later of the completion of an Initial Business Combination and one year from the consummation of the Company’s Initial Public
Offering. The warrants will expire five years after the completion of our Initial Business Combination, or earlier upon redemption.
No public warrants will be exercisable
for cash unless we have an effective and current registration statement covering the shares of common stock issuable upon exercise of
the warrants and a current prospectus relating to such shares. It is our current intention to have an effective and current registration
statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares
in effect promptly following consummation of an Initial Business Combination. Notwithstanding the foregoing, if a registration statement
covering the shares of common stock issuable upon exercise of the public warrants is not effective within 90 days following the consummation
of our Initial Business Combination, public warrant holders may, until such time as there is an effective registration statement and during
any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis.
We may redeem the outstanding
warrants, in whole and not in part, at a price of $0.01 per warrant:
| ● | at any time while the warrants are exercisable; |
| ● | upon a minimum of 30 days’ prior written notice of redemption; |
| ● | if, and only if, the last sales price of our shares of common
stock equals or exceeds $16.50 per share for any 20 trading days within a 30-trading day period ending three business days before we
send the notice of redemption; and |
| ● | if, and only if, there is a current registration statement
in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading
period referred to above and continuing each day thereafter until the date of redemption. |
If the foregoing conditions are
satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption
date. However, the price of the shares of common stock may fall below the $16.50 trigger price as well as the $11.50 warrant exercise
price per share after the redemption notice is issued and not limit our ability to complete the redemption.
The redemption criteria for our
warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price
and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price
declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.
If we call the warrants for redemption
as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless
basis.” In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of shares of
common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants,
multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y)
the fair market value. The “fair market value” shall mean the average reported last sale price of the shares of common stock
for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of
warrants. Whether we will exercise our option to require all holders to exercise their warrants on a “cashless basis” will
depend on a variety of factors including the price of our shares of common stock at the time the warrants are called for redemption, our
cash needs at such time and concerns regarding dilutive share issuances.
Common Stock Subject to Possible Redemption
The Company’s common stock
feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future
events. The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s
common stock are entitled to one vote for each share. As of March 31, 2022 and December 31, 2021, there were 5,733,920 shares of common
stock outstanding subject to possible redemption and are classified outside of permanent equity in the balance sheet.
The common stock subject to possible
redemption reflected on the balance sheet is reconciled in the following table:
| | |
| |
| Gross proceeds from Initial Public Offering | |
$ | 57,339,200 | |
| Less: | |
| | |
| Fair Value of Public Warrants at Issuance | |
| (3,201,883 | ) |
| Offering Costs allocated to common stock subject to possible redemption | |
| (3,547,468 | ) |
| Plus: | |
| | |
| Accretion of common stock subject to possible redemption amount | |
| 2,832,941 | |
| Common stock subject to possible redemption | |
$ | 53,422,790 | |
During the three months ended
March 31, 2022, there was an aggregate accretion cost of $1,099,501 recorded in the statement of stockholders’ equity consisting
of $1,094,157 and $5,344 of current period accretion cost and interest, respectively.
NOTE 7 — WARRANTS
On August 12, 2021, the Company
consummated its Initial Public Offering of 5,000,000 Units at $10.00 per Unit, generating gross proceeds of $50,000,000, with each Unit
consisting of one share of common stock, $0.0001 par value, and one redeemable warrant. The Company granted the underwriter a 45-day option
to purchase up to an additional 750,000 Units at the Initial Public Offering price to cover over-allotments.
Simultaneously with the consummation
of the closing of the Initial Public Offering, the Company completed the private sale of 276,250 Private Units to its Sponsor at a purchase
price of $10.00 per Private Unit, generating gross proceeds to the Company of $2,762,500, with each Private Unit consisting of one share
of common stock, $0.0001 par value, and one redeemable warrant.
Upon consummation of our Initial
Public Offering, we sold to the underwriters, for $100, an option to purchase up to a total of 300,000 units (increased to 344,035 units
after the over-allotment was exercised in part) exercisable, in whole or in part, at $11.50 per unit, commencing on the consummation of
our Initial Business Combination. The purchase option may be exercised for cash or on a cashless basis, at the holder’s option,
and expires five years from the commencement of sales in this offering. The option and the 300,000 units, as well as the 300,000 shares
of common stock, and the warrants to purchase 300,000 shares of common stock that may be issued upon exercise of the option have been
deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date
of our registration statement, or August 9, 2021. As of August 12, 2021, the Company accounted for the unit purchase option, inclusive
of the receipt of $100 cash payment, as an expense of the Initial Public Offering resulting in a charge directly to stockholders’
equity.
On August 19, 2021, the underwriters
notified the Company of their intent to exercise of the over-allotment option in part and, on August 23, 2021, the underwriters purchased
733,920 Additional Units at $10.00 per Additional Unit upon the closing of the over-allotment option, generating additional gross proceeds
of $7,339,200. On August 23, 2021, simultaneously with the sale of the Additional Units, the Company consummated the sale of an additional
18,348 Additional Private Units, generating additional gross proceeds of $183,480, with each Additional Private Unit consisting of one
share of common stock, $0.0001 par value, and one redeemable warrant.
Each Private Unit, Additional
Unit and Additional Private Unit are identical to the Unit from our Initial Public Offering except as described below.
The Sponsor has agreed to waive
its redemption rights with respect to any shares underlying the Private Units (i) in connection with the consummation of a business combination,
(ii) in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing
of our obligation to allow redemption in connection with our Initial Business Combination or certain amendments to our charter prior thereto,
to redeem 100% of our public shares if we do not complete our Initial Business Combination within 12 months from the completion of this
offering (or up to 18 months from the closing of this offering if extended) or with respect to any other provision relating to stockholders’
rights or pre-Initial Business Combination activity and (iii) if we fail to consummate a business combination within 12 months from the
completion of this offering (or up to 18 months from the closing of this offering if extended) or if we liquidate prior to the expiration
of the 18 month period. However, the Sponsor will be entitled to redemption rights with respect to any public shares it holds if we fail
to consummate a business combination or liquidate within the 18-month period.
The Private Units and their component
securities will not be transferable, assignable or salable until 30 days after the consummation of our Initial Business Combination except
to permitted transferees.
The Company evaluated 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 ASC 480 and 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 common
stock, among other conditions for equity classification. Pursuant to such evaluation, the Company further evaluated the Public and Private
Warrants under ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” (“ASC 815-40”),
and concluded that the Private Warrants do not meet the criteria to be classified in stockholders’ equity.
Certain adjustments to the settlement
amount of the Private warrants are based on a variable that is not an input to the fair value of an option as defined under ASC 815 —
40, and thus the warrants are not considered indexed to the Company’s own stock and not eligible for an exception from derivative
accounting. The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon
issuance of the warrants at the closing of the Initial Public Offering. Accordingly, the Company expects to classify each Private Warrant
as a liability at its fair value, with subsequent changes in their respective fair values recognized in the statements of operations and
comprehensive income (loss) at each reporting date.
The Company accounts for the Public
Warrants as equity based on its initial evaluation that the Public Warrants are indexed to the Company’s own stock. The fair value
of the Public Warrants was approximately $0.60 per Public Warrant, which was determined by the Monte Carlo simulation model. The Public
Warrants will be recorded at the amount of allocated proceeds and will not be remeasured every reporting period.
NOTE 8 — FAIR VALUE MEASUREMENTS
The Company carries cash equivalents,
marketable investments, Private Warrants, at fair value. Fair value is based on the price that would be received from selling an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated
by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization
within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement.
The Company determined the
fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.
The Company’s marketable securities held in Trust Account is classified within Level 1 of the fair value hierarchy.
The Company’s warrant liability has been valued
as Level 3 instruments.
The estimated fair value of the
Private Warrants is determined using Level 3 inputs. Inherent in a Black-Scholes pricing model are assumptions related to dividend yield,
term, volatility and risk-free rate. The Company estimates the volatility of its common shares based on management’s understanding
of the volatility associated with instruments of other similar entities. The risk-free interest rate is based on the U.S. Treasury rate
matching the expected term of the warrants. The expected life of the warrants is simulated based on management assumptions regarding the
timing and likelihood of completing our Initial Business Combination. The dividend rate is based on the historical rate, which the Company
anticipates to remain at zero.
The fair value of the Private
Warrants from the private placement that closed simultaneously with the closing of the Initial Public Offering was approximately $176,759,
which was determined by the Black-Scholes Pricing Model with the following assumptions: dividend yield of 0%, term of 5 years, volatility
of 13.5%, exercise price of $11.50 and risk-free rate of 0.81%. The fair value was $103,109 as of March 31, 2022, using the following
assumptions: dividend yield of 0%, term of 5.0 years, volatility of 5.4%, exercise price of $11.50 and risk-free rate of 2.42%, resulting
in a gain on change in fair value of warrant liability of $67,758 for the three months ended March 31, 2022. The fair value was $170,867
as of December 31, 2021, using the following assumptions: dividend yield of 0%, term of 4.5 years, volatility of 11.8%, exercise price
of $11.50 and risk-free rate of 1.19%.
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 indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value:
| | |
| | |
Fair value measurements at
reporting date using: | |
| Description | |
Fair Value | | |
Quoted
prices in
active markets
for identical
liabilities (Level 1) | | |
Significant
other
observable
inputs
(Level 2) | | |
Significant
unobservable inputs
(Level 3) | |
| Assets: | |
| | |
| | |
| | |
| |
| Cash | |
$ | 5,002 | | |
$ | 5,002 | | |
$ | - | | |
$ | - | |
| Marketable securities held in Trust Account – U.S.
Money Market | |
$ | 57,341,407 | | |
$ | 57,341,407 | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Liabilities: | |
| | | |
| | | |
| | | |
| | |
| Warrant liabilities | |
$ | 103,109 | | |
$ | - | | |
$ | - | | |
$ | 103,109 | |
The following table presents information
about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021 and indicates the fair value
hierarchy of the valuation inputs the Company utilized to determine such fair value:
| | |
| | |
Fair value measurements at
reporting date using: | |
| Description | |
Fair Value | | |
Quoted
prices in
active markets
for identical
liabilities (Level 1) | | |
Significant
other
observable
inputs
(Level 2) | | |
Significant
unobservable inputs
(Level 3) | |
| Assets: | |
| | |
| | |
| | |
| |
| Cash | |
$ | 154,942 | | |
$ | 154,942 | | |
$ | - | | |
$ | - | |
| Marketable securities held in Trust Account – U.S. Money Market | |
$ | 57,340,207 | | |
$ | 57,340,207 | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Liabilities: | |
| | | |
| | | |
| | | |
| | |
| Warrant liabilities | |
$ | 170,867 | | |
$ | - | | |
$ | - | | |
$ | 170,867 | |
In some circumstances, the inputs
used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value
measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair
value measurement.
The following table sets forth
a summary of the changes in the fair value of Level 3 derivative liabilities that are measured at fair value on a recurring basis:
| Beginning balance as of January 1, 2022 | |
$ | 170,867 | |
| Change in fair value of derivative liabilities | |
| (67,758 | ) |
| Ending balance as of March 31, 2022 | |
$ | 103,109 | |
NOTE 9 — SUBSEQUENT EVENTS
Management evaluated subsequent
events and transactions that occurred after the balance sheet date, up to the date that the unaudited financial statements were issued.
Based upon this review, other than below, management did not identify any subsequent events that would have required adjustment or disclosure
in the unaudited financial statements other than the below:
Promissory Note – Sponsor
On April 4, 2022, the Company
entered a convertible promissory note with its Sponsor for principal amount received of $500,000 to be used for operating expenses. The
note is non-interest bearing, unsecured and payable on the earlier of: (i) August 12, 2022 (or up to February 12, 2023, if the period
of time to consummate a business combination is extended) or (ii) the date on which the Company consummated a business combination. At
any time, up to a day prior to the closing of a business combination, the holder may convert the principal amount into private units of
the Company at a conversion price of $10.00 per unit.
Supplement to Private Warrant Agreement
On April 13, 2022, the Company
and Continental Stock Transfer & Trust Company (the “Warrant Agent”), entered into a supplement (the “Supplement
to Warrant Agreement”) to the Warrant Agreement, dated as of August 9, 2021 by and between the Company and the Warrant Agent in
connection with the Company’s initial public offering (see Note 3). The Supplement to Warrant Agreement is being made pursuant to
Section 9.8 of the Warrant Agreement which states the Warrant Agreement may be amended by the parties thereto by executing a supplemental
warrant agreement without the consent of any of the warrant holders. The Supplement to Warrant Agreement is being executed solely to correct
an ambiguity provision contained in Section 2.5 of the Warrant Agreement to clarify that the lock-up period for the Private Warrants extends
to 30 days after the completion of the Company’s initial business combination.
Subscription Agreement Amendment
On April 13, 2022, the Company
and the Sponsor entered into an amendment (the “Subscription Agreement Amendment”) to the Private Placement Unit Subscription
Agreement, dated August 9, 2021 by and between the Company and the Sponsor (the “Subscription Agreement”) in connection with
the Company’s initial public offering (see Note 3). Section 10.3 of the subscription Agreement provides the ability to amend the
Subscription Agreement if signed by all parties thereto. The Subscription Agreement is being executed solely to clarify that the lock-up
period for the Private Units extends to 30 days after the completion of the initial business combination.
ITEM 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
References in this report (this
“Quarterly Report”) to “we,” “us” or the “Company” refer to Abri SPAC I, Inc. References
to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor”
refer to Abri Ventures I, LLC. The following discussion and analysis of the Company’s financial condition and results of operations
should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly
Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve
risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes
“forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results
to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly
Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management
for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,”
“intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify
such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s
current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in the forward-looking statements. For information identifying important
factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to
the Risk Factors section of the Company’s Annual Report on Form 10-K, as filed with the SEC on February 4, 2022. The Company’s
filings with the SEC can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result
of new information, future events or otherwise.
Overview
We are a blank check company incorporated
on March 18, 2021 as a Delaware corporation and formed for the purpose of entering into a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or similar Business Combination with one or more businesses or IPO and the sale of the Private
Placement Units, our capital stock, debt or a combination of cash, stock and debt.
As of March 31, 2022, and the
date of this filing, the Company had not commenced core operations. All activity for the period from March 18, 2021 (inception) through
March 31, 2022 relates to the Company’s formation and raising funds through its initial public offering (“Initial Public Offering”),
which is described in Note 3 – Initial Public Offering in Item 1 of this Quarterly Report. The Company will not generate any operating
revenues until after the completion of the Initial 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 outbreak of the COVID-19 coronavirus
has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and potential target
companies may defer or end discussions for a potential business combination with us whether or not COVID-19 affects their business operations.
The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19
or treat its impact, among others. We may be unable to complete a business combination if continued concerns relating to COVID-19 restrict
travel, limiting our ability to conduct meetings to negotiate and consummate transactions in a timely manner with potential investors,
target company’s personnel, or vendors and services providers.
On August 12, 2021, simultaneously
with the consummation of the IPO, we sold to our Sponsor in a Private Placement, 276,250 Private Units at a purchase price of $10.00 per
Private Unit, generating gross proceeds to the Company of $2,762,500. The Private Units are identical to the Public Units.
On August 19, 2021, the underwriters
notified the Company of their intent to exercise of the over-allotment option in part and, on August 23, 2021, the underwriters purchased
733,920 additional Units (the “Additional Units”) at $10.00 per Additional Unit upon the closing of the over-allotment option,
generating additional gross proceeds of $7,339,200. On August 23, 2021, simultaneously with the sale of the Additional Units, the Company
consummated the sale of an additional 18,348 Private Units at $10.00 per additional Private Unit (the “Additional Private Units”),
generating additional gross proceeds of $183,480. A total of $7,339,200 of the net proceeds from the sale of the Additional Units and
the Additional Private Units was deposited in the Trust Account, bringing the aggregate proceeds held in the Trust Account on that date
to $57,339,200.
On January 27, 2022, the Company,
entered into a Merger Agreement (the “Merger Agreement”) by and among Apifiny Group Inc., a Delaware corporation (“Apifiny”),
the Company, Abri Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), Erez
Simha, solely in his capacity as representative, agent and attorney-in-fact of the Apifiny security holders, and the Sponsor, solely in
its capacity as representative, agent and attorney-in-fact of the Indemnified Party (as defined in the Merger Agreement). Pursuant to
the terms of the Merger Agreement, a business combination between Abri and Apifiny will be effected through the merger of Merger Sub with
and into Apifiny, with Apifiny surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). The board
of directors of the Company has (i) approved and declared advisable the Merger Agreement, the Additional Agreements (as defined in the
Merger Agreement) and the transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related
transactions by the stockholders of the Company.
The Merger is expected to be consummated
after obtaining the required approval by the stockholders of the Company and Apifiny and the satisfaction of certain other customary closing
conditions. For further details see Note 5 – Commitments and Contingencies.
Results of Operations
All activities for the three
months ended March 31, 2022 were related to the Company’ organizational activities and identifying a target company for a Business
Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating
income in the form of interest income on marketable securities held in the Trust Account. We are incurring expenses as a result of being
a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended
March 31, 2022, we had net loss of $1,322,607, which consisted of operating costs of $1,395,709, offset by interest income on marketable
securities held in the Trust Account of $5,344 and a change in fair value of warrant liability of $67,758.
For the period from March 18,
2021 (Inception) through March 31, 2021, we had a net loss of $495, which consisted of formation costs.
Liquidity and Capital Resources
Our liquidity needs had been satisfied
prior to the proposed initial business combination through a capital contribution of $25,000 by our sponsor for 1,437,500 shares of our
common stock, or founder shares, and the principal amount of $300,000 received from our sponsor under a promissory note (see Note 4 –
Related Party Transactions).
As of March 31, 2022, we had
marketable securities held in the Trust Account of $57,341,407 consisting of securities held in a money market fund and government bonds
that invests in United States government treasury bills, bonds or notes with a maturity of 180 days or less. Interest income on the balance
in the Trust Account may be used by us to pay taxes. Through March 31, 2022, we did not withdraw any interest earned on the Trust Account
to pay our taxes. We intend to use substantially all of the funds held in the Trust Account, to acquire a target business and to pay our
expenses relating thereto. To the extent that our capital stock is used in whole or in part as consideration to effect a Business Combination,
the remaining funds held in the Trust Account will be used as working capital to finance the operations of the target business. Such working
capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic
acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating
expenses or finders’ fees which we had incurred prior to the completion of our Business Combination if the funds available to us
outside of the Trust Account were insufficient to cover such expenses.
As of March 31, 2022, we had
cash of $5,002 and a working capital deficit of $1,602,564. Our liquidity needs through the date of this filing had been satisfied through
proceeds from notes payable and advances from related party and from the issuance of common stock. Our liquidity needs consist of paying
existing accounts payable, identifying and evaluating prospective business combination candidates, performing due diligence on prospective
target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating
and consummating an initial business combination. Although certain of our initial stockholders, officers and directors or their affiliates
have committed to loan us funds from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, there
is no guarantee that we will receive such funds.
On April 4, 2022, the Company
entered a convertible promissory note with its Sponsor for principal amount received of $500,000 to be used for operating expenses. The
note is non-interest bearing, unsecured and payable on the earlier of: (i) August 12, 2022 (or up to February 12, 2023, if the period
of time to consummate a business combination is extended) or (ii) the date on which the Company consummated a business combination. At
any time, up to a day prior to the closing of a business combination, the holder may convert the principal amount into private units of
the Company at a conversion price of $10.00 per unit see Note 10 – Subsequent Events).
The accompanying financial statement
has been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization
of assets and the satisfaction of liabilities in the normal course of business. The financial statement does not include any adjustments
that might result from the outcome of this uncertainty. Further, we have incurred and expect to continue to incur significant costs in
pursuit of our financing and acquisition plans. Management plans to address this uncertainty during period leading up to the business
combination. The Company cannot provide any assurance that its plans to raise capital or to consummate a business combination will be
successful. Based on the foregoing, management believes that there is a risk that the Company may not have sufficient working capital
and borrowing capacity to meet its needs through the earlier of the consummation of the business combination or one year from this filing.
These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Contractual Obligations
We do not have any long-term debt,
capital lease obligations, operating lease obligations or long-term liabilities other than an agreement to pay our Sponsor a monthly fee
of $10,000 for office space, utilities and secretarial and administrative support. We began incurring these fees on August 9, 2021 and
will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.
In connection with our initial
business combination, we are obligated to pay our expenses relating thereto, including the deferred underwriting commission payable to
our underwriter in an amount equal to 3.0% of the total gross proceeds raised in the offering, or $1,500,000, upon consummation of our
initial business combination.
Upon consummation of our Initial
Public Offering, we sold to our underwriters, for $100, an option to purchase up to a total of 300,000 units (or up to 345,000 if the
over-allotment is exercised in full) exercisable, in whole or in part, at $11.50 per unit, commencing on the consummation of our initial
business combination. The purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expires
five years from the commencement of sales in our Initial Public Offering. The option and the 300,000 units, as well as the 300,000 shares
of common stock, and the warrants to purchase 300,000 shares of common stock that may be issued upon exercise of the option have been
deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date
of our registration statement, or August 9, 2021.
Critical Accounting Policies
The preparation of financial statements
and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities
at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from
those estimates. We have identified the following critical accounting policies:
Derivative Warrant Liabilities
We will account for warrants for shares of the Company’s common
stock that are not indexed to our own stock as liabilities at fair value on the balance sheet in accordance with ASC 815-40. Such warrants
are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense),
net on the statement of operations. We will continue to adjust the liability for changes in fair value until the earlier of the exercise
or expiration of any warrants.
Recent Accounting Standards
Management does not believe that
any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial
statements.
ITEM 3. Quantitative and Qualitative Disclosures
About Market Risk
As a smaller reporting company
we are not required to make disclosures under this Item.
ITEM 4. Controls and Procedures
Disclosure controls and procedures
are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted
under Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is
accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely
decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with
the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation
of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2022, as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer
and principal financial officer has concluded that during the period covered by this report, our disclosure controls and procedures were
effective.
Disclosure controls and procedures
are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized,
and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal financial officer or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal
control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent
fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 1A. Risk Factors
As of the date of this Quarterly
Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the
SEC on February 4, 2022, except for those included below. Any of those risk factors could result in a significant or material adverse
effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem
immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors
from time to time in our future filings with the SEC.
As the number of special purpose acquisition
companies increases, there may be more competition to find an attractive target for an initial business combination. This could increase
the costs associated with completing our initial business combination and may result in our inability to find a suitable target for our
initial business combination.
In recent years, the number
of special purpose acquisition companies that have been formed has increased substantially. Many companies have entered into business
combinations with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets
for their initial business combination, as well as many additional special purpose acquisition companies currently in registration. As
a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify a suitable
target for an initial business combination.
In addition, because there are
more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition
for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical
tensions or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination.
In addition, escalating tensions between Russia and Ukraine and any continuing military incursion of Russia into Ukraine could adversely
impact macroeconomic conditions, give rise to regional instability and result in heightened economic sanctions from the U.S. and the international
community in a manner that adversely affects us and our ability to consummate our initial business combination. This could increase the
cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete our initial business combination.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, investments and results of operations.
We are subject to laws and regulations
enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements.
Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our
business, including our ability to negotiate and complete our Business Combination, investments and results of operations. In addition,
a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business
and results of operations. On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business
combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to
transactions involving shell companies; effectively limiting the use of projections in SEC filings in connection with proposed business
combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and
the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940. These rules, if adopted, whether
in the form proposed or in revised form, and certain positions and legal conclusions expressed by the SEC in connection therewith may
materially adversely affect our ability to negotiate and complete our Business Combination and may increase the costs and time related
thereto.
ITEM 2. Unregistered Sales of Equity Securities
and Use of Proceeds
Simultaneously
with the closing of our Initial Public Offering, we consummated a Private Placement with our Sponsor of 276,250 Private Units at a price
of $10.00 per Private Unit, generating total proceeds of $2,762,500. As of August 12, 2021, a total of $50,000,000 of the net proceeds
from the Initial Public Offering and the Private Placement were deposited in a trust account established for the benefit of the Company’s
public stockholders.
On
August 19, 2021, the underwriters partially exercised the over-allotment option, and the closing of the sale of the additional Units pursuant
to the over-allotment option occurred on August 23, 2021. The issuance by us of 73,920 over-allotment option units at a price of $10.00
per unit resulted in gross proceeds of $7,339,200. Additionally, our Sponsor purchased 18,348 Private Units generating gross proceeds
of $183,480. Since the underwriters did not exercise their over-allotment option in full, 4,020 shares of common stock issued to our Sponsor
prior to the Initial Public Offering and the Private Placement, were forfeited for no consideration. As of that date, a total of $57,339,200
of the net proceeds from our Initial Public Offering and the Private Placement were deposited in a trust account established for the benefit
of the Company’s public stockholders.
We
intend to use substantially all of the net proceeds of the Initial Public Offering, including the funds held in the Trust Account, in
connection with our initial business combination and to pay our expenses relating thereto, including a deferred underwriting commission
payable to the underwriters in an amount equal to 3.0% of the total gross proceeds raised in the Initial Public Offering upon consummation
of our initial business combination. To the extent that our capital stock is used in whole or in part as consideration to effect our initial
business combination, the remaining proceeds held in the trust account, as well as any other net proceeds not expended, will be used as
working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including
continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development
of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred
prior to the completion of our initial business combination if the funds available to us outside of the trust account were insufficient
to cover such expenses.
We
paid a total of $1,250,000 in underwriting discounts and commissions and $512,500 for other costs and expenses related to our Initial
Public Offering.
The Private Units were issued pursuant to Section 4(a)(2)
of the Securities Act of 1933, as amended, as the transactions did not involve a public offering.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
None.
ITEM 6. Exhibits
The following exhibits are filed as part of, or incorporated
by reference into, this Quarterly Report:
| ** | Furnished herewith. This certification is being furnished solely
to accompany this report pursuant to 18 U.S.C. Section 1350 and is not being filed for purposes of Section 18 of the Exchange Act of
1934, as amended, and is not to be incorporated by reference into any filings of the Company, whether made before or after the date hereof,
regardless of any general incorporation language in such filing. |
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| |
ABRI SPAC I, INC. |
| |
|
|
Date: May 16, 2022 |
By: |
/s/ Jeffrey Tirman |
| |
|
Jeffrey Tirman |
| |
|
Chief Executive Officer (Principal Executive Officer) |
Date: May 16, 2022 |
By: |
/s/ Christopher Hardt |
| |
|
Christopher Hardt |
| |
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |
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