The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Currency expressed in US$, except for number
of shares)
NOTE 1 -
ORGANIZATION AND BUSINESS BACKGROUND
Hainan Manaslu Acquisition Corp. (the “Company”)
is a newly incorporated blank check company incorporated as a Cayman Islands exempted company on September 10, 2021, and formed for the
purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with
one or more businesses (the “Business Combination”). While the Company may pursue an acquisition opportunity in any business,
industry, sector or geographical location, the Company intends to focus on industries that complement the management team’s background,
and to capitalize on the ability of the management team and advisor to identify and acquire a business. However, the Company will not
consummate its initial Business Combination with an entity or business with China operations consolidated through a variable interest
entity (“VIE”) structure.
The Company is an early stage company and emerging
growth company and, as such, the Company is subject to all of the risks associated with early stage companies and emerging growth companies.
The Company has selected December 31 as its fiscal year end.
As of June 30, 2022, the Company had not yet commenced
any operations. All activities through June 30, 2022 related to the Company’s formation and preparation for the initial public offering
(the “Initial Public Offering”). The Company will not generate any operating revenues until after the completion of a Business
Combination, at the earliest. The Company generates non-operating income in the form of interest income from the funds deposited in the
Trust Account (as defined below).
The registration statement for the Company’s
Initial Public Offering was declared effective on August 10, 2022. On August 15, 2022, the Company consummated the Initial Public Offering
of 6,900,000 units (the “Public Units”), which includes 900,000 Public Units upon the full exercise by the underwriter of
its over-allotment option, at US$10.00 per Public Unit, generating gross proceeds of US$69,000,000 to the Company, which is described
in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 341,500 units (the “Private Placement Units”) at a price of US$10.00
per Private Placement Unit in a private placement to Bright Winlong LLC (the “Sponsor”), generating gross proceeds of US$3,415,000
to the Company, which is described in Note 4.
Transaction costs amounted to US$4,258,182, consisting
of US$1,380,000 of underwriting commissions, US$2,242,500 of deferred underwriting commissions and US$635,682 of other offering costs.
In addition, cash of $306,586 that was held in of the Trust Account (as defined below) as of August 15, 2022 and transferred to the company’s
operating account on August 16, 2022 is available for the payment of offering costs and for working capital purposes. The net proceeds
of US$70,035,000 of the Initial Public Offering and the private placement were transferred to the Trust Account on August 15, 2022.
The aggregate amount of US$70,035,000 (US$10.15
per Public Unit) held in a trust account (“Trust Account”) established for the benefit of the Company’s public shareholders
and maintained by Continental Stock Transfer & Trust Company, acting as trustee, will be invested only in U.S. government treasury
bills, with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions
under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Except with respect to
interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the funds in the
Trust Account will not be released until the earliest of (i) the completion of the Company’s initial Business Combination, (ii)
the redemption of any public shares (as defined below) properly tendered in connection with a shareholder vote to amend the Company’s
Amended and Restated Memorandum and Articles of Association to (A) modify the substance or timing of the Company’s obligation to
redeem 100% of its public shares if the Company does not complete its initial Business Combination within nine months from the closing
of the Initial Public Offering (or up to 18 months from the closing of the Initial Public Offering if the Company extends the period of
time to consummate a Business Combination) or (B) with respect to any other provision relating to shareholders’ rights or pre-business
combination activity and (iii) the redemption of all of the Company’s public shares if the Company is unable to complete its initial
Business Combination within nine months from the closing of the Initial Public Offering (or up to 18 months from the closing of the Initial
Public Offering if the Company extends the period of time to consummate a Business Combination), subject to applicable law.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private Placement Units, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Nasdaq rules provide
that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80%
of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the
signing of an agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-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. There
is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its shareholders with
the opportunity to redeem all or a portion of their public shares upon the completion of a Business Combination either (i) in connection
with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. In connection with an Initial
Business Combination, the Company may seek shareholder approval of a Business Combination at a meeting called for such purpose at which
shareholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will
proceed with a Business Combination if the Company has net tangible assets of at least US$5,000,001 after payment of the deferred underwriting
commissions, either immediately prior to, or upon such consummation of, or any greater net tangible asset or cash requirement that may
be contained in the agreement relating to, such Business Combination.
Notwithstanding the foregoing, if the Company
seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s
Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to
15% or more of the public shares without the Company’s prior written consent.
If a shareholder vote is not required and the
Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and
Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the United States Securities
and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would
be included in a proxy statement with the SEC prior to completing a Business Combination.
The shareholders will be entitled to redeem their
public shares for a pro rata portion of the amount then in the Trust Account (initially US$10.15 per public share, subject to increase
of up to an additional US$0.033 per public share per month in the event that the Sponsor elects to extend the period of time to consummate
a Business Combination (see below), plus any pro rata interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their public shares will
not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 7). There will be
no redemption rights upon the completion of a Business Combination with respect to the Company’s rights or warrants. The ordinary
shares will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in
accordance with ASC Topic 480 “Distinguishing Liabilities from Equity.”
The
Company will proceed with a Business Combination if the Company has net tangible assets of at least US$5,000,001, after payment of the
deferred underwriting commissions, either immediately prior to, or upon such consummation of, or any greater net tangible asset or cash
requirement that may be contained in the agreement relating to, such Business Combination and, if
the Company seeks shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If
a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the
Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender
offer rules of the SEC, and file tender offer documents containing substantially the same information as would be included in a proxy
statement with the SEC prior to completing a Business Combination.
The Sponsor and any of the Company’s officers
or directors that may hold Founder Shares (as defined in Note 5) (the “initial shareholders”) are identical to the ordinary
shares included in the Public Units being sold in the Initial Public Offering except that the Founder Shares are subject to certain transfer
restrictions, as described in more detail below: the initial shareholders have entered into a letter agreement with the Company, pursuant
to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares, private placement shares (as defined
below) and public shares in connection with the completion of the initial Business Combination, (ii) to waive their redemption rights
with respect to any Founder Shares, private placement shares and public shares held by them in connection with a shareholder vote to approve
an amendment to the Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of obligation to
provide for the redemption of public shares in connection with an initial Business Combination or to redeem 100% of public shares if the
Company has not consummated the initial Business Combination within the timeframe set forth therein or (B) with respect to any other provision
relating to shareholders’ rights or pre-initial Business Combination activity and (iii) to waive their rights to liquidating distributions
from the Trust Account with respect to their Founder Shares and private placement shares if the Company fails to complete the initial
Business Combination within nine months from the closing of the Initial Public Offering (or up to 18 months from the closing of the Initial
Public Offering if the Company extends the period of time to consummate a Business Combination) (although they will be entitled to liquidating
distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business
Combination within the prescribed time frame).
The
Company will have until May 14, 2023 initially to consummate a Business
Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination within nine months, the
Company may extend the period of time to consummate a Business Combination up to nine times, each by an additional month each time, for
a total of 18 months to complete a Business Combination (the “Combination Period”). In order to extend the time available
for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account US$227,700
(approximately US$0.033 per public share), on or prior to the date of the applicable deadline, for each one month extension. Any funds
which may be provided to extend the time frame will be in the form of a loan to the Company from the Sponsor. The terms of any such loan
have not been definitely negotiated, provided, however, any loan will be interest free and will be repayable only if the Company competes
a Business Combination.
If the Company is unable to complete a Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding 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 (net of taxes payable and
less interest to pay dissolution expenses up to US$60,000), divided by the number of then outstanding public shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the remaining shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal
dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable
law. The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the
Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with
the funds held in the Trust Account that will be available to fund the redemption of the public shares. In the event of such distribution,
it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering
price of US$10.00 per Public Unit.
The Sponsor has agreed that it will be liable
to the Company, if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target
business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below
(i) US$10.15 per share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the
Trust Account due to reductions in the value of the trust assets, except as to any claims by a third party who executed a waiver of any
and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters
of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible
to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have
to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses
or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim
of any kind in or to monies held in the Trust Account.
Going Concern Consideration
At June 30, 2022, the Company had cash balance
of US$18,292, and a net loss of US$12,824 for the six months ended June 30, 2022. The Company has incurred and expects to continue to
incur significant costs in pursuit of its acquisition plans. These conditions raise substantial doubt about the Company’s ability
to continue as a going concern within one year after the date that the unaudited condensed financial statements are issued. Management
has addressed this uncertainty through the Initial Public Offering as discussed in Note 3. There is no assurance that the Company’s
plans to consummate a Business Combination will be successful or successful within the Combination Period. The unaudited condensed financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 –
SIGNIFICANT ACCOUNTING POLICIES
These accompanying unaudited condensed financial
statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.
GAAP”) and pursuant to the rules and regulations of the SEC. The interim financial information provided is unaudited but includes
all adjustments which management considers necessary for the fair presentation of the results for these periods. Operating results for
the three months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December
31, 2022.
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and
proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s financial statements with another public company which is not an emerging growth company which has opted out of
using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statement 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 financial statement, 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.
Deferred offering costs consist of underwriting,
legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering
and that will be charged to shareholders’ equity upon the completion of the Initial Public Offering.
The Company complies with the accounting and reporting
requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting
and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement
and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing
authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The
Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized
tax benefits as of June 30, 2022 and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under
review that could result in significant payments, accruals or material deviation from its position.
The Company may be subject to potential examination by foreign taxing
authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign
tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over
the next twelve months.
The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”)
and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether
the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,
among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the
time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.
For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded
as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
As the warrants issued in the Initial Public Offering
and private placement meet the criteria for equity classification under ASC 480, therefore, the warrants are classified as equity.
| ● | Ordinary
shares subject to possible redemption |
The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary
shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject
to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity.
At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain
redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, as of June 30, 2022, ordinary shares subject to possible redemption are presented at redemption value as temporary equity,
outside of the shareholders’ equity section of the Company’s balance sheet.
Net loss per share is computed by dividing net
loss by the weighted average number of ordinary shares outstanding during the period. As of June 30, 2022 and December 31, 2021, the Company
did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then
share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
Parties, which can be a corporation or individual,
are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are
subject to common control or common significant influence.
| ● | Concentration
of credit risk |
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution. The Company has 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 Topic 820, “Fair Value Measurement,” approximates the
carrying amounts represented in the accompanying unaudited condensed balance sheet, primarily due to their short-term nature.
| ● | 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
condensed financial statements.
NOTE 3 –
INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 6,900,000 Public Units, which includes 900,000 Public Units upon the full exercise by the underwriter of its over-allotment option,
at a purchase price of US$10.00 per Public Unit. Each Public Unit consists of one ordinary share (“public share”), one redeemable
warrant (“Public Warrant”) and one right (“Public Right”) to receive one-tenth (1/10) of one ordinary share. Each
Public Warrant entitles the holder to purchase one ordinary share at an exercise price of US$11.50 per share (see Note 6). Each Public
Right entitles the holder to receive one ordinary share upon consummation of the Company’s Business Combination.
All of the 6,900,000 public shares sold as part
of the Public Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares
if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to
the Company’s Amended and Restated Memorandum and Articles of Association, or in connection with the Company’s liquidation.
In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99,
redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside
of permanent equity.
The Company’s redeemable ordinary share
is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is
probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value
over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later)
to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust
the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize
the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in
absence of retained earnings, additional paid-in capital).
NOTE 4 –
PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Company consummated a private placement of 341,500 Private Placement Units, at a price of US$10.00 per Private Placement
Unit. Each Private Placement Unit consists of one ordinary share (“private placement share”), one redeemable warrant (“Private
Warrant”) and one right (“Private Right”) to receive one-tenth (1/10) of one ordinary share. Each Private Warrant entitles
the holder to purchase one ordinary share at an exercise price of US$11.50 per whole share. Each Private Right entitles the holder to
receive one ordinary share upon consummation of the Company’s Business Combination.
The Private Placement Units are identical to the
Public Units sold in the Initial Public Offering except certain registration rights and transfer restrictions.
NOTE 5 –
RELATED PARTY TRANSACTIONS
Founder
Shares
In September 2021, the Company issued an aggregate
of 1,725,000 founder shares (“Founder Shares”) to the Sponsor, so that the Sponsor owns 20% of the Company’s issued
and outstanding shares after the Initial Public Offering, for an aggregate purchase price of US$25,000 (see Note 6).
Promissory Note — Related Party
On September 24, 2021, the Company issued an unsecured
promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of US$300,000, which was
amended and restated on March 14, 2022 (the “Promissory Note”). The Promissory Note is non-interest bearing and payable on
the earlier of December 31, 2022 or consummation of the Initial Public Offering.
As of June 30, 2022 and December 31, 2021, the
Sponsor advanced the Company an aggregate amount of US$241,234 and US$227,708, respectively. The advances were non-interest bearing and
fully repaid on August 16, 2022.
Related Party Working Capital Loans
In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may,
but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a
Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.
Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to US$1,500,000 of such
loans may be convertible into units at a price of US$10.00 per unit.
Related Party Extensions Loans
The Company will have until nine months from the
consummation of the Initial Public Offering to consummate the initial Business Combination. However, if the Company anticipates that the
Company may not be able to consummate the initial Business Combination within nine months, the Company may, but is not obligated to, extend
the period of time to consummate a Business Combination nine times by an additional one month each time (for a total of up to 18 months
to complete a Business Combination). Pursuant to the terms of the Company’s amended and restated memorandum and articles of association
and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company, in order to extend the time
available for it to consummate its initial Business Combination, the Company’s Sponsor, or its affiliates or designees, upon five
days advance notice prior to the applicable deadline, must deposit into the Trust Account US$227,700 (US$0.033 per share), on or prior
to the date of the applicable deadline. The Sponsor will receive a non-interest bearing, unsecured promissory note equal to the amount
of any such deposit that will not be repaid in the event that the Company is unable to close a Business Combination unless there are funds
available outside the Trust Account to do so. Such notes would either be paid upon consummation of its initial Business Combination, or,
at the lender’s discretion, converted upon consummation of its Business Combination into additional units at a price of US$10.00
per unit, which units shall be identical to the Private Placement Units.
NOTE 6 –
SHAREHOLDERS’ DEFICIT
Ordinary shares
The Company is authorized to issue 500,000,000
ordinary shares, with a par value of US$0.0001 per share. Holders of the ordinary shares are entitled to one vote for each ordinary share.
As of June 30, 2022, 1,725,000 ordinary shares
were issued and outstanding, so that the initial shareholders will own 20% of the issued and outstanding shares after the Initial Public
Offering (excluding the sale of the Private Placement Units and assuming the initial shareholders do not purchase any Public Units in
the Initial Public Offering).
Preference shares
The Company is authorized to issue 500,000 preference
shares, with a par value of US$0.0001 per share. As of June 30, 2022 and December 31, 2021, no preference share was issued.
Rights
Each holder of a right will receive one-tenth
(1/10) of one ordinary share upon consummation of a Business Combination, even if the holder of such right redeemed all shares held by
it in connection with a Business Combination. No fractional shares will be issued upon exchange of the rights. No additional consideration
will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of a Business Combination
as the consideration related thereto has been included in the Public Unit purchase price paid for by investors in the Initial Public Offering.
If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the
definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares
will receive in the transaction on an as-converted into ordinary share basis and each holder of a right will be required to affirmatively
convert its rights in order to receive 1/10 share underlying each right (without paying additional consideration). The shares issuable
upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company).
If the Company is unable to complete a Business
Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive
any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of
the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure
to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company
be required to net cash settle the rights. Accordingly, the rights may expire worthless.
Warrants
Each holder of a warrant is entitled to purchase
one ordinary share at an exercise price of US$11.50. Public Warrants may only be exercised for a whole number of shares. No fractional
shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable after the consummation of a Business
Combination. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering
the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. The Company
has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company
will use its best efforts to file, and within 60 business days following a Business Combination to have declared effective, a registration
statement covering the ordinary shares issuable upon exercise of the warrants. Notwithstanding the foregoing, if a registration statement
covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 60 business days, the holders may,
until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an
effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration
under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants
on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption
or liquidation.
The Company may call the warrants for redemption,
in whole and not in part, at a price of US$0.01 per warrant:
| ● | upon not less than 30 days’ prior written notice of redemption
to each warrant holder, |
| ● | if, and only if, the reported last sale price of the ordinary
share equals or exceeds US$18 per share, for any 20 trading days within a 30 trading days period ending on the third trading day prior
to the notice of redemption to warrant holders, and |
| ● | if, and only if, there is a current registration statement in
effect with respect to the issuance of the ordinary share 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 Company calls the warrants for redemption,
management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,”
as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be
adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization,
merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business
Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not
receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held
outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if (x) the Company issues additional
ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an
issue price or effective issue price of less than US$9.20 per ordinary share (with such issue price or effective issue price to be determined
in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without
taking into account any Founder Shares, Private Placement Units (or any private placement equivalent securities issued to the Sponsor
or its affiliates upon conversion of either Working Capital Loans or extension loans made to the Company) held by the Sponsor or such
affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such
issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination
on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the
ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business
Combination (such price, the “Market Value”) is below US$9.20 per share, the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the US$18.00 per share redemption
trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Units are identical to the
Public Units being sold in the Initial Public Offering except that Private Placement Units will not be transferable, assignable or saleable
until 30 days after the completion of the Company’s Business Combination and will be entitled to registration rights.
NOTE 7 –
COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management has evaluated the impact of the COVID-19
pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s
future financial position and/or search for a target company, there has been a significant impact as of the date of the financial statement.
The financial statements do not include any adjustments that might result from the future outcome of this uncertainty.
Registration Rights
Pursuant to a registration rights agreement
entered into on August 15, 2022, the holders of the Founder Shares, Private Placement Units (including securities contained
therein), and units issuable upon conversion of Working Capital Loans or extension loans (and) are entitled to registration rights
pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding
short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the Company’s completion of initial Business
Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriter Agreement
The underwriters are entitled to a cash underwriting
discount of 3.25% of the gross proceeds of the Initial Public Offering, or US$2,242,500, upon the closing of the Business Combination.
NOTE 8 –
SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the June 30, 2022, up to September 20, 2022 the date that the
unaudited condensed financial statements were available to be issued. Other than as described in these unaudited condensed financial
statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed
financial statements.