UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment
No. 2)
(Mark One)
☒ ANNUAL
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 2022
☐ TRANSITION
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 001-41000
TG Venture Acquisition Corp.
(Exact name of issuer as specified in its charter)
| Delaware |
|
86-1985947 |
| (State or Other Jurisdiction of Incorporation) |
|
(I.R.S. Employer Identification No.) |
| 1390 Market Street, Suite 200 San Francisco, California 94102 |
|
(628) 251-1369 |
| (Address of Principal Executive Offices) |
|
(Registrant’s Telephone Number) |
Securities registered under Section 12(b) of
the Exchange Act:
| Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
| Units, each consisting of one share of Class A Common Stock and one Redeemable Warrant |
|
TGVC.U |
|
Nasdaq Global Market |
| Class A Common Stock, par value $0.0001 per share |
|
TGVC |
|
Nasdaq Global Market |
| Warrants, each exercisable for one share Class A Common Stock for $11.50 per share |
|
TGVC.W |
|
Nasdaq Global Market |
Securities registered under Section 12(g) of
the Exchange Act: None.
Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
☐ No ☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ |
Accelerated filer ☐ |
| Non-accelerated filer ☒ |
Smaller reporting company ☒ |
| |
Emerging growth company ☒ |
If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report. ☐
If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officer during the relevant recovery period pursuant to Section 249.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐
No ☒
The aggregate market value of the voting and
non-voting common equity held by non-affiliates of the registrant on June 30, 2022 (the last business day of the registrant’s
most recently completed second fiscal quarter) was approximately $0. The aggregate market value was computed by reference to the
last sale price ($0 price per share) of such common equity as of that date.
As of March 29, 2023, the registrant
had 1,335,696 shares of Class A common stock (1,335,696 of which are subject to possible redemption) and 2,889,149 shares
of Class B common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
INTRODUCTORY NOTE
“TGV”, “TG Venture”,
“the Company”, “we”, “us” and “our” refer to TG Venture Acquisition Corp., a Delaware
corporation, unless the context otherwise requires.
Special Note Regarding Forward-Looking
Statements
This report contains forward-looking statements
and information that are based on the beliefs of our management as well as assumptions made by and information currently available
to us. Such statements should not be unduly relied upon. Forward-looking statements include statements about our expectations,
beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present
facts or conditions. Forward-looking statements and information can generally be identified by the use of forward-looking terminology
or words, such as “anticipate,” “approximately,” “believe,” “continue,” “estimate,”
“expect,” “forecast,” “intend,” “may,” “ongoing,” “pending,”
“perceive,” “plan,” “potential,” “predict,” “project,” “seeks,”
“should,” “views” or similar words or phrases or variations thereon, or the negatives of those words or
phrases, or statements that events, conditions or results “can,” “will,” “may,” “must,”
“would,” “could” or “should” occur or be achieved and similar expressions in connection with
any discussion, expectation or projection of future operating or financial performance, costs, regulations, events or trends. The
absence of these words does not necessarily mean that a statement is not forward-looking.
Forward-looking statements and information
are based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and
changes in circumstances that are difficult to predict. These statements reflect our current view concerning future events and
are subject to risks, uncertainties and assumptions. There are important factors that could cause actual results to vary materially
from those described in this report as anticipated, estimated or expected, as well as general conditions in the economy, petrochemicals
industry and capital markets, Securities and Exchange Commission (the “SEC”) regulations which affect trading
in the securities of “penny stocks,” and other risks and uncertainties. Except as required by law, we assume no obligation
to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated
in any forward-looking statements, even if new information becomes available in the future. Depending on the market for our stock
and other conditional tests, a specific safe harbor under the Private Securities Litigation Reform Act of 1995 may be available.
Notwithstanding the above, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), expressly state that the
safe harbor for forward-looking statements does not apply to companies that issue penny stock. Because we may from time to time
be considered to be an issuer of penny stock, the safe harbor for forward-looking statements may not apply to us at certain times.
Explanatory Note
This Amendment (this “Amendment”)
to the annual report on Form 10-K (File No.001-41000), initially filed on March 29, 2023 and amended on August 14, 2023 (the “Original
10-K”), is being filed to update disclosure in response to comments from the Securities and Exchange Commission, most of
which pertain to our sponsor being based in Hong Kong.
This Amendment may not reflect events occurring after
the filing of the Original 10-K, nor does it modify or update those disclosures in the items not described in the above paragraph of
this Explanatory Note. Accordingly, this Amendment should be read in conjunction with the Original 10-K and our other reports filed with
the SEC subsequent to the filing of our Original 10-K, including any amendments to those filings.
In addition, pursuant to Rule 12b-15 under the
Securities Exchange Act of 1934, as a result of this Amendment, the certifications pursuant to Section 302 and Section 906
of the Sarbanes-Oxley Act of 2002, filed and furnished, respectively, as exhibits to the Original 10-K have been re-executed and re-filed
as of the date of this Amendment and are included as exhibits hereto.
TABLE OF CONTENTS
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Overview
TG Venture Acquisition
Corp. (the “Company” or “TG Venture”) is a blank check company whose business purpose is to effect a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses,
which we refer to as our initial business combination. We have not selected any specific business combination target and we have
not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination
target with respect to an initial business combination with us. Our efforts to identify a prospective target business will not
be limited to a particular industry or geographic region, although we intend to initially focus our search on identifying a prospective
target business in the technology industries in the United States and other developed countries, with a special focus within the
space technology, financial technology, technology, media and telecom (“TMT”) industries
and related sectors. Though our sponsor is a Hong Kong company, a majority of our management are located outside of the People’s
Republic of China (the “PRC”) (including Hong Kong and Macau) and we will not undertake our initial
business combination with any entity that conducts a majority of its business or is headquartered in the PRC (including Hong Kong
and Macau).
THERE
ARE LEGAL AND OPERATIONAL RISKS ASSOCIATED WITH TGVC’S SPONSOR BEING BASED IN HONG KONG. SUCH RISKS COULD RESULT IN A MATERIAL
CHANGE IN TGVC’S OPERATIONS AND ITS ABILITY TO CONSUMMATE A BUSINESS COMBINATION. FOR EXAMPLE, RELEVANT ORGANIZATIONS OF
MAINLAND CHINA’S GOVERNMENT HAVE MADE RECENT STATEMENTS OR RECENTLY TAKEN REGULATORY ACTIONS RELATED TO CYBERSECURITY, DATA
SECURITY, ANTI-MONOPOLY, AND OVERSEAS LISTINGS OF MAINLAND CHINA-BASED BUSINESSES. IN ADDITION, RELEVANT MAINLAND CHINA GOVERNMENT
AGENCIES HAVE RECENTLY TAKEN ANTI-TRUST ENFORCEMENT ACTION AGAINST CERTAIN MAINLAND CHINA-BASED BUSINESSES. IF THE MAINLAND CHINA
GOVERNMENT WERE TO EXPAND THE SCOPE OF SUCH ACTIONS TO REGULATE NON-MAINLAND CHINA-BASED COMPANIES, SUCH REGULATION COULD IMPACT
TGVC’S ABILITY TO CONDUCT ITS BUSINESS AND ACCEPT FOREIGN INVESTMENT.
ALTHOUGH
TGVC DOES NOT HAVE SUBSIDIARIES OR OPERATIONS IN MAINLAND CHINA, GIVEN HONG KONG IS A SPECIAL ADMINISTRATIVE REGION OF THE PRC
AND GIVEN THE MAINLAND CHINA GOVERNMENT’S SIGNIFICANT OVERSIGHT OVER THE CONDUCT OF BUSINESS OPERATIONS IN THE PRC, THE
LEGAL AND OPERATIONAL RISKS ASSOCIATED WITH OPERATING IN MAINLAND CHINA ALSO APPLY TO OPERATIONS IN HONG KONG.
Corporate Information
TG Venture was incorporated
in Delaware in 2021. Our principal executive offices are located at 1390 Market Street, Suite 200 San Francisco, CA 94102. Our
corporate website is https://tgventureacquisition.com/
IPO
On
November 5, 2021, TG Venture consummated its initial public offering (the “IPO”) of 11,500,000 units (the “Units”),
which included 1,500,000 Units upon a full exercise of the underwriters’ over-allotment option. Each Unit consists of one
share of Class A common stock of the Company, par value $0.0001 per share (“Class A Common Stock”), and one
redeemable warrant of the Company (each whole warrant, a “Warrant”), with each Warrant entitling the holder
thereof to purchase one share of Class A Common Stock for $11.50 per share. The Units were sold at a price of $10.00 per Unit,
generating gross proceeds to the Company of $115,000,000.
On
November 5, 2021, simultaneously with the consummation of the IPO, the Company completed the private sale (the “Private
Placement”) of an aggregate of 5,500,000 Warrants (the “Private Placement Warrants”) to Tsangs Group
Holdings Limited (the “Sponsor”) at a purchase price of $1.00 per Private Placement Warrant, generating gross
proceeds to the Company of $5,500,000. Each of the Private Placement Warrants are exercisable to purchase one share of Class A
Common Stock at a price of $11.50 per share.
A
total of $117,300,000 of the proceeds from the IPO and the sale of the Private Placement Warrants was placed in a U.S.-based trust
account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee.
We
initially filed a registration statement for the IPO on a Registration Statement on Form S-1 with the SEC on August 13, 2021, as amended,
and it was declared effective on November 2, 2021 (File No. 333-258773) (the “IPO Registration Statement”); the “IPO
Prospectus” filed in connection with our IPO pursuant to Rule 424(b)(4) was filed with the SEC on November 3, 2021.
Business Combination Agreement
On
December 5, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”)
by and among (i) The Flexi Group Limited, a business company with limited liability incorporated under the laws of the British
Virgin Islands (the “Flexi”), (ii) The Flexi Group Holdings, Ltd., a business company with limited liability
incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of Flexi (“PubCo”
and, together with Flexi, the “Flexi Group”), (iii) The Flexi Merger Co. Ltd., a business company with
limited liability incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of PubCo (“Merger
Sub 1”), and (iv) Flexi Merger Co. LLC, a Delaware limited liability company and a direct wholly owned subsidiary
of PubCo (“Merger Sub 2” and, Merger Sub 2, PubCo and Merger Sub 1, each, individually, an “Acquisition
Entity”).
Capitalized
terms used in this section, but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.
Pursuant
to the Business Combination Agreement, subject to the terms and conditions set forth therein, (i) Merger Sub 1 will merge
with and into Flexi (the “Initial Merger”), whereby the separate existence of Merger Sub 1 will cease
and Flexi will be the surviving entity of the Initial Merger and become a wholly owned subsidiary of PubCo, and (ii) following
confirmation of the effective filing of the documents required to implement the Initial Merger, Merger Sub 2 will merge with and
into TGVC (the “SPAC Merger” and together with the Initial Merger, the “Mergers”),
the separate existence of Merger Sub 2 will cease and the Company will be the surviving entity of the SPAC Merger and a direct
wholly owned subsidiary of PubCo.
As
a result of the Mergers, among other things, (i) each outstanding Flexi Ordinary Share will be cancelled in exchange for the right
to receive such number of PubCo Ordinary Shares that is equal to the Company Exchange Ratio, (ii) each outstanding SPAC Unit will
be automatically detached and the holder thereof will be deemed to hold one share of SPAC Class A Common Stock and one SPAC Warrant,
(iii) each outstanding share of SPAC Class B Common Stock will automatically convert into SPAC Class A Common Stock, (iv) each
outstanding share of SPAC Class A Common Stock will be cancelled in exchange for the right to receive such number of PubCo Ordinary
Shares that is equal to the SPAC Exchange Ratio, and (v) each outstanding SPAC Warrant will be assumed by PubCo and converted into
a warrant to purchase PubCo Ordinary Shares (each, an “Assumed SPAC Warrant”).
Earnout
The
Business Combination Agreement, subject to the terms and conditions set forth therein, provides that Flexi shareholders as of the
Initial Merger will have the right to receive up to an aggregate of 2,900,000 additional PubCo Ordinary Shares based on the total
annual revenues of PubCo in each of the two fiscal years following the Closing Date.
On August 10, 2023, we entered into an amendment (the “First
Amendment”) to the Business Combination Agreement. The First Amendment revises the earnout periods set forth in the Business
Combination Agreement to provide that Flexi shareholders may receive earnout shares based on PubCo revenue targets achieved during the
first two full fiscal years following the closing of the business combination to be effected pursuant thereto.
Representations, Warranties and Covenants
The
Business Combination Agreement contains customary representations and warranties of the parties, which will not survive the Closing.
Many of the representations and warranties are qualified by materiality or Company Material Adverse Effect (with respect to Flexi)
or SPAC Material Adverse Effect (with respect to the Company). “Material Adverse Effect” as used in the Business Combination
Agreement means with respect to Flexi or the Company, as applicable, any event, state of facts, development, change, circumstance,
occurrence or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse
effect on (i) the business, assets and liabilities, results of operations or financial condition of the applicable party and its
subsidiaries, taken as a whole or (ii) the ability of such party or any of its subsidiaries to consummate the Transactions, in
each case subject to certain customary exceptions. Certain of the representations are subject to specified exceptions and qualifications
contained in the Business Combination Agreement or in information provided pursuant to certain disclosure schedules to the Business
Combination Agreement.
The
Business Combination Agreement also contains pre-closing covenants of the parties, including obligations of the parties to operate
their respective businesses in the ordinary course consistent with past practice, and to refrain from taking certain specified
actions without the prior written consent of the other applicable parties, in each case, subject to certain exceptions and qualifications.
Additionally, the parties have agreed not to solicit, negotiate or enter into competing transactions, as further provided in the
Business Combination Agreement. The covenants do not survive the Closing (other than those that are to be performed after the Closing).
As
promptly as practicable after the execution of the Business Combination Agreement, the Company and PubCo have agreed to prepare
and file with the SEC, a Registration Statement on Form F-4 (as amended, the “F-4 Registration Statement”)
in connection with the registration under the Securities Act of 1933, as amended (the “Securities Act”),
of the offer and issuance of the PubCo Ordinary Shares and Assumed SPAC Warrants to be issued pursuant to the Business Combination
Agreement The F-4 Registration Statement will contain a proxy statement/prospectus for the purpose of (i) the Company soliciting
proxies from its shareholders to approve the Business Combination Agreement, the Transactions and related matters (the “the
Company Shareholder Approval”) at a special meeting of the Company shareholders (the “Shareholder Meeting”),
(ii) providing the Company’s shareholders an opportunity, in accordance with its organizational documents and initial public
offering prospectus, to redeem their shares of SPAC Class A Common Stock (collectively, the “Redemptions”),
and (iii) PubCo’s offering and issuance of the PubCo Ordinary Shares and Assumed Warrants in connection with the Transactions.
PubCo
agreed to take all action within its power so that effective at the Closing, the board of directors of PubCo will consist of no
less than five individuals, two of whom may be designated by the Sponsor, and a majority of whom shall be independent directors
in accordance with Nasdaq requirements, and which shall comply with all diversity requirements under applicable Law.
In
addition, prior to Closing, PubCo agreed to amend and restate its Memorandum of Association and Articles of Association (the “PubCo
Governing Documents”). The PubCo Governing Documents will include customary provisions for a memorandum of association
and articles of association of a British Virgin Islands publicly traded company that is traded on Nasdaq.
Conditions to the Parties’ Obligations
to Consummate the Mergers
Under
the Business Combination Agreement, the parties’ obligations to consummate the Transactions are subject to a number of customary
conditions for special purpose acquisition companies, including, among others, the following: (i) the approval of the Mergers and
the other shareholder proposals required to approve the Transactions by the Company’s and Flexi’s shareholders, (ii)
all specified approvals or consents (including governmental and regulatory approvals) have been obtained and all waiting, notice,
or review periods have expired or been terminated, as applicable, (iii) the effectiveness of the F-4 Registration Statement, (iv)
PubCo’s initial listing application with Nasdaq shall have been conditionally approved and, immediately following the Closing,
PubCo shall satisfy any applicable initial and continuing listing requirements of Nasdaq and PubCo shall not have received any
notice of non-compliance therewith, and (v) the PubCo Ordinary Shares and Assumed SPAC Warrants having been approved for listing
on Nasdaq, subject to round lot holder requirements.
In
addition to these customary closing conditions, the Company must also hold net tangible assets of at least $5,000,001 immediately
prior to Closing, net of Redemptions and liabilities (including the Company’s transaction expenses).
The
obligations of the Company to consummate the Transactions are also subject to, among other things (i) the representations and warranties
of Flexi and of each Acquisition Entity being true and correct, subject to the materiality standards contained in the Business
Combination Agreement, (ii) material compliance by Flexi and each Acquisition Entity with its pre-closing covenants, and (iii)
the absence of a Company Material Adverse Effect.
In
addition, the obligations of Flexi to consummate the Transactions are also subject to, among other things (i) the representations
and warranties of the Company being true and correct, subject to the materiality standards contained in the Business Combination
Agreement, (ii) material compliance by the Company with its pre-closing covenants, and (iii) the absence of a SPAC Material Adverse
Effect.
Termination Rights
The
Business Combination Agreement contains certain termination rights, including, among others, the following: (i) upon the mutual
written consent of the Company and Flexi, (ii) if the consummation of the Transactions is prohibited by governmental order, (iii)
if the Closing has not occurred on or before May 5, 2023, (iv) in connection with a breach of a representation, warranty, covenant
or other agreement by Flexi or the Company which is not capable of being cured or is not cured within 30 days after receipt of
notice of such breach, (v) by either the Company or Flexi if the board of directors of the other party publicly changes its recommendation
with respect to the Business Combination Agreement and Transactions and related shareholder approvals under certain circumstances
detailed in the Business Combination Agreement, (vi) by either the Company or Flexi if the Shareholder Meeting is held and the
Company Shareholder Approval is not received, (vii) by the Company if the requisite Company Audited Financial Statements and PCAOB-compliant
unaudited financials of Flexi for the first, second and third quarters of 2022 (to the extent required in accordance with the Business
Combination Agreement) have not been delivered by January 4, 2023, with respect to the first and second quarters, and January 16,
2023, with respect to the third quarter, or (viii) by the Company if Flexi does not receive the written consent of its shareholders
to the Business Combination Agreement and related approvals within five business days after the F-4 Registration Statement has
become effective.
None
of the parties to the Business Combination Agreement are required to pay a termination fee or reimburse any other party for its
expenses as a result of a termination of the Business Combination Agreement. However, each party will remain liable for willful
and material breaches of the Business Combination Agreement prior to termination.
Trust Account Waiver
Flexi
and each Acquisition Entity agreed that it and its affiliates will not have any right, title, interest or claim of any kind in
or to any monies in the Company’s trust account held for its public shareholders, and agreed not to, and waived any right
to, make any claim against the trust account (including any distributions therefrom).
The
Business Combination Agreement is filed as Exhibit 2.1 to this Annual Report on Form 10-K and the foregoing description thereof
is qualified in its entirety by reference to the full text of the Business Combination Agreement. The Business Combination Agreement
provides investors with information regarding its terms and is not intended to provide any other factual information about the
parties. In particular, the assertions embodied in the representations and warranties contained in the Business Combination Agreement
were made as of the execution date of the Business Combination Agreement only and are qualified by information in confidential
disclosure schedules provided by the parties to each other in connection with the signing of the Business Combination Agreement.
These disclosure schedules contain information that modifies, qualifies, and creates exceptions to the representations and warranties
set forth in the Business Combination Agreement. Moreover, certain representations and warranties in the Business Combination Agreement
may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. Accordingly,
you should not rely on the representations and warranties in the Business Combination Agreement as characterizations of the actual
statements of fact about the parties.
Shareholder Support Agreement
Contemporaneously
with the execution of the Business Combination Agreement, PubCo, Flexi and certain Flexi shareholders entered into a Shareholder
Support Agreement, pursuant to which, among other things, certain Flexi shareholders agreed (i) to vote their Flexi shares in favor
of the Business Combination Agreement (including by execution of a written consent), the Mergers and the other Transactions, (ii)
to waive any rights to seek appraisal or rights of dissent in connection with the Business Combination Agreement, the Mergers and
the transactions contemplated thereby; and (iii) to consent to the termination of all shareholder agreements with Flexi (with certain
exceptions), effective at Closing, subject to the terms and conditions contemplated by the Shareholder Support Agreement. Flexi
shareholders party to the Shareholder Support Agreement collectively have a sufficient number of votes to approve the Business
Combination Agreement, the Mergers and the other Transactions.
The
Shareholder Support Agreement and all of its provisions will terminate and be of no further force or effect upon the earlier of
the Closing and termination of the Business Combination Agreement pursuant to its terms. Upon such termination of the Shareholder
Support Agreement, all obligations of the parties under the Shareholder Support Agreement will terminate; provided, however,
that such termination will not relieve any party thereto from liability arising in respect of any breach of the Shareholder Support
Agreement prior to such termination.
Sponsor Support Agreement
Contemporaneously
with the execution of the Business Combination Agreement, the Company entered into a Sponsor Support Agreement with the Sponsor,
PubCo, Flexi, and certain members of the Company’s board of directors and management team (the “Holders”),
pursuant to which, among other things, the Sponsor and the Holders agreed to vote their the Company shares in favor of the Business
Combination Agreement (including by execution of a written consent), the Mergers and the other Transactions, subject to the terms
and conditions contemplated by the Sponsor Support Agreement.
The
Sponsor Support Agreement and all of its provisions will terminate and be of no further force or effect upon the earlier to occur
of Closing and termination of the Business Combination Agreement pursuant to its terms.
Lock-Up Agreement
Concurrently
with the execution of the Business Combination Agreement, the Company and PubCo entered into separate Lock-Up Agreements (each
a “Lock-Up Agreement”) with Sponsor, certain members of the Company’s board of directors and management
team, and certain Flexi shareholders, pursuant to which 95% of the PubCo Ordinary Shares to be received by such shareholders will
be locked-up and subject to transfer restrictions for a period of time following the Closing, as described below, subject to certain
exceptions. That portion of the securities held by such shareholders will be locked-up until the earliest of: (i) the six month
anniversary of the date of the Closing, (ii) subsequent to the Business Combination, if the last sale price of PubCo Ordinary Shares
equals or exceeds $12.00 per share (adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like),
for any 20 trading days within any 30-trading day period commencing at least 150 days after the date of the Business Combination,
and (iii) the date after the Closing on which PubCo completes a liquidation, merger, capital stock exchange, reorganization or
other similar transaction which results in all of PubCo’s shareholders having the right to exchange their equity holdings
in PubCo for cash, securities or other property.
Registration Rights Agreement
Concurrently
with the execution of the Business Combination Agreement, PubCo entered into a Registration Rights Agreement (the “Registration
Rights Agreement”) with Sponsor and certain Flexi shareholders pursuant to which, among other things, PubCo agreed
to provide Sponsor and such shareholders with certain rights relating to the registration for resale under the Securities Act of
the PubCo Ordinary Shares and Assumed Warrants that they received in the Mergers.
Forms
of the foregoing agreements related to the Business Combination Transaction are filed as exhibits to this Annual Report, and the
foregoing description thereof is qualified in its entirety by reference to the full text of the respective agreement.
The
transaction is expected to be completed in the second quarter of 2023, subject to regulatory approvals and other customary closing
conditions. After closing, The Flexi Group’s ordinary shares are expected to trade on the Nasdaq Stock Market LLC under ticker
symbol FLXG.
Nasdaq Listing
On June
22, 2023, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”)
indicating that, based upon the closing bid price of the Company’s Class A common stock for the last 30 consecutive business days
and its number of publicly held shares, the Company no longer meets Nasdaq Listing Rule 5450(b)(3)(C), which requires listed companies
to maintain a minimum market value of publicly held shares (“MVPHS”) of at least $15 million.
Nasdaq
Listing Rule 5810(c)(3)(D) provides a compliance period of 180 calendar days, or until December 19, 2023 (the “First Compliance
Date”), in which to regain compliance with this requirement. If the Company’s market value of publicly held shares is $15
million or more for a minimum of 10 consecutive business days during the 180-day compliance period, Nasdaq will provide written notice
of compliance to the Company. If the Company fails to regain compliance with the Nasdaq continued listing standards, Nasdaq will provide
notice that the Company’s class A common stock will be subject to delisting. The Company would then be entitled to appeal that determination
to a Nasdaq hearings panel.
On August 11, 2023, the
Company received a written notice from Nasdaq indicating that the Company is no longer in compliance with the minimum Market Value of
Listed Securities (“MVLS”) of $50,000,000 required for continued listing on The Nasdaq Global Market, as set forth in Nasdaq
Listing Rule 5450(b)(2)(A) (the “MVLS Requirement”). The Notice has no effect at this time on the listing of the Company’s
securities on Nasdaq.
In accordance with Nasdaq
Listing Rule 5810(c)(3)(C), the Company has a period of 180 calendar days, or until February 7, 2024 (the “Second Compliance
Date,” together with the First Compliance Date, the “Compliance Dates”), to regain compliance with the MVLS Requirement.
To regain compliance, the Company’s MVLS must close at $50,000,000 or more for a minimum of 10 consecutive business days prior
to the Compliance Date. In the event the Company does not regain compliance with the MVLS Requirement prior to the Compliance Date, Nasdaq
will notify the Company that its securities are subject to delisting, at which point the Company may appeal the delisting determination
to a Nasdaq hearings panel.
The notifications
have no immediate effect on the listing of the Company’s Class A common stock on Nasdaq Global Market. The Company intends to actively
monitor its MVPHS and MVLS between now and the respective Compliance Dates, and may, if appropriate, evaluate available options including
applying for a transfer to The Nasdaq Capital Market to resolve the deficiency and regain compliance with the requirements. While the
Company is exercising diligent efforts to maintain the listing of its securities on Nasdaq Global, there can be no assurance that the
Company will be able to regain or maintain compliance with Nasdaq Global listing standards or satisfy the requirements necessary to transfer
the listing of its securities to The Nasdaq Capital Market.
PRC
Limitations and Concerns
Our
company is a Delaware corporation with no subsidiaries in mainland China. We do not maintain operations in mainland China, do not generate
revenues from mainland China, and do not provide services or conduct sales or marketing activities in mainland China or to residents
in mainland China. We have committed not to undertake our initial business combination with any entity
that is based in, located in or has its principal business operations in China (including Hong Kong and Macau), and have conducted a
target search outside of China. We will not conduct an initial business combination with any target company that conducts operations
through variable interest entities (“VIEs”), which are a series of contractual arrangements used to provide the economic
benefits of foreign investment in Chinese-based companies where Chinese law prohibits direct foreign investment in the operating companies.
As of the date of this filing, we have not been contacted by any Chinese authorities in connection
with our operations or the consummation of our initial business combination.
The
Sponsor is not incorporated in mainland China and none of its subsidiaries are incorporated in mainland China.
It does not maintain operations in mainland China, does not generate revenues from mainland China, and does not provide services
or conduct sales or marketing activities in mainland China or to residents in mainland China. As of the date of this filing, the
Sponsor has not been contacted by any Chinese authorities in connection with the operation of TGVC’s business or consummation
of the Business Combination. However, we have significant ties to China, because the Sponsor is a Hong Kong company.
As of the date of this filing,
we have not been contacted by any Chinese authorities in connection with our operations or consummation of the Business Combination.
Our PRC legal counsel, Han Kun Law Offices, has advised that, as of the date of this filing, neither TGVC nor the Sponsor is required
to obtain permissions or approvals from the CSRC, the CAC, or any other PRC governmental agency to operate our business or to consummate
the Business Combination. TGVC’s Hong Kong legal counsel, DLA Piper Hong Kong, has advised that, as of the date of this filing,
neither TGVC nor the Sponsor is required to obtain permissions or approvals from any Hong Kong governmental agency to operate TGVC’s
business or to consummate the Business Combination.
If
the Sponsor (i) fails to receive or maintain any required permissions or approvals, (ii) inadvertently concludes that such permissions
or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and the Sponsor is required to
obtain such permissions or approvals in the future, it may result in additional costs and expenses incurred by the Sponsor and/or
us to ensure compliance or to pay applicable fines or sanctions, or to comply with other orders or regulatory actions, and we
and/or the Sponsor may no longer be permitted to continue their current business operations, which could adversely affect their
financial condition and results of operations, or even our ability to consummate the Business Combination. In addition, if any
or all of the foregoing were to occur, this could significantly limit or completely hinder the post Business Combination entity’s
ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline
or become worthless.
Given
the risks and uncertainties of doing business in China discussed elsewhere in this report, the location and ties of the Sponsor to China
may make us a less attractive partner to a target company not based in China, which may thus increase the likelihood that we will not
consummate a business combination. Our ties to the PRC may make us less likely to consummate a business combination with any target company
outside of the PRC, which may result in non-PRC target businesses having increased leverage over us in negotiating an initial business
combination knowing that if we do not complete our initial business combination within a certain timeframe, we may be unable to complete
our initial business combination with any target business. If we fail to complete an initial business combination in the prescribed timeframe,
we will cease all our operations and would redeem our public shares and liquidate, in which case our public shareholders may receive only
$10.83 per share, or less than such amount in certain circumstances, based on the amount available in our trust account on a per share
basis, and our warrants will expire worthless. See
“Risk Factors — We may not be able to consummate our initial business combination within the required time period, in which
case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.” on
page 30.
Hong
Kong is a Special Administrative Region of the PRC and enjoys its own limited autonomy as defined by the Basic
Law, which is a national law of the PRC and the constitutional document for Hong Kong. Hong Kong’s legal system, which is
different from that of the PRC, is based on common law and has its own laws and regulations.
Pursuant
to the Basic Law, national laws of the PRC shall not be applied in Hong Kong, except for those relating to defense, foreign affairs
and other matters outside the autonomy of Hong Kong, which may be listed in Annex III of the Basic Law and applied locally by
promulgation or local legislation. While the National People’s Congress of the People’s Republic of China (the “National
People’s Congress”) has the power to amend the Basic Law, the Basic Law expressly provides that no amendment to the
Basic Law shall contravene the established basic policies of the PRC regarding Hong Kong. As a result, national laws of the PRC
not listed in Annex III of the Basic Law (and any regulatory notices issued pursuant to those national laws) do not apply in Hong
Kong. Nonetheless, the legal and operations risks associated with operating in mainland China apply to companies with operations
in Hong Kong.
Since
our Sponsor is based in Hong Kong, a Special Administrative Region of China, there is no guarantee that certain existing or future
laws of the PRC will not become applicable to a company such as us. For more information, see “Risk Factors—Risks
Related to Acquiring or Operating Businesses in the PRC, including Hong Kong - We may, in the future, face legal or operational
risks associated with our Sponsor being based in Hong Kong, which could result in a material change in our operations and jeopardize
our ability to consummate a business combination.”
Given
the PRC government’s significant oversight over the conduct of business operations in mainland China
and in Hong Kong, and in light of (a) China’s recent extension of authority into Hong Kong and (b) the fact that rules and
regulations in China can change quickly with little or no advance notice, there are risks and uncertainties that we and the Sponsor
cannot foresee at this time. For example, (i) the government of Hong Kong may (x) enact similar laws and regulations to those in
mainland China, which may seek to exert control over business combinations conducted by Hong Kong-based entities or sponsors or
(y) implement laws on such business activities to be more aligned with mainland China, and (ii) certain PRC laws and regulations
may become applicable in Hong Kong in the future. To the extent that any PRC laws and regulations become applicable to us or the
Sponsor, we or the Sponsor may be subject to the risks and uncertainties associated with the evolving laws and regulations of the
PRC, their interpretation and implementation, and the legal and regulatory system in the PRC more generally, including with respect
to the enforcement of laws and the possibility of changes of rules and regulations with little or no notice. If certain PRC laws
and regulations, including existing laws and regulations and those enacted or promulgated in the future, were to become applicable
to companies such as us or the Sponsor in the future, the application of such laws and regulations may have a material adverse
impact on our business, financial condition, results of operations, and prospects, our ability to consummate the Business Combination
and our ability to offer securities to investors, any of which may, in turn, cause the value of our securities to significantly
decline or become worthless.
Relevant
organizations of the PRC government have made recent statements or recently taken regulatory actions related to cybersecurity,
data security, anti-monopoly, and overseas listings of PRC-based businesses. For example, in addition to the Data Security Law
of the People’s Republic of China (the “Data Security Law”) and the Measures for Cybersecurity Review issued
by the Cyberspace Administration of China (“CAC”) that became effective on February 15, 2022 (the “Cybersecurity
Review Measures”), relevant PRC government agencies have recently taken anti-trust enforcement action against certain PRC-based
businesses. Our management understands that such enforcement action was taken pursuant to the PRC Anti-Monopoly Law that applies
to monopolistic activities in domestic economic activities in mainland China and monopolistic activities outside mainland China
that eliminate or restrict market competition in mainland China. In addition, in July 2021, the PRC government provided new guidance
on PRC-based companies raising capital outside of the PRC, including through arrangements called VIEs. In light of such developments,
the SEC has imposed enhanced disclosure requirements on PRC-based companies seeking to register securities with the SEC. To date,
the Cybersecurity Review Measures have not impacted our ability to conduct our business, accept foreign investment or list our
securities on the Nasdaq because neither we nor the Sponsor are PRC-based businesses and because neither we nor the Sponsor engage
in the types of activities regulated by the Cybersecurity Review Measures. However, if the PRC government were to expand the scope
of the Cybersecurity Review Measures to regulate non- PRC-based companies, such regulation could impact our ability to conduct
our business and accept foreign investment.
Additionally,
on February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) published the Trial Administrative
Measures of the Overseas Securities Offering and Listing by Domestic Companies and several supporting guidelines (collectively, the
“Overseas Listing Filing Rules”), which became effective on March 31, 2023 and regulate both direct and indirect
overseas offering and listing of PRC-based companies by adopting a filing-based regulatory regime. According to the Overseas Listing
Filing Rules, if the issuer meets both of the following criteria ( “Criteria for CSRC Filing”), the overseas securities
offering and listing conducted by such issuer shall be deemed as an indirect overseas offering and listing: (i) 50% or more of the
issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial
statements for the most recent accounting year is accounted for by domestic companies; and (ii) the main parts of the issuer’s
business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior
managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China. As of the
date of this filing, neither TGVC nor the Sponsor meet the Criteria for CSRC Filing above.
Changes in the policies,
regulations, rules and the enforcement of laws of the PRC government may be made quickly with little or no advance notice. Recent
statements by the PRC government have indicated an intent of that government to exert more oversight and control over offerings
that are conducted overseas and/or foreign investment in PRC-based issuers. The PRC government may intervene or influence the
operations of PRC-based issuers at any time, and may exert more control over offerings conducted overseas and/or foreign investment
in PRC-based issuers.
If
the PRC government determines that we or the Sponsor is a PRC-based issuer, if the PRC government takes any other actions to exert more
oversight and control over offerings that are conducted overseas, if the PRC rules and regulations become applicable in Hong Kong, or
if the PRC government’s statements and regulatory actions otherwise apply to us or the Sponsor, the PRC government would be able
to intervene in and influence our or the Sponsor’s operations at any time and such governmental or regulatory interference could
result in a material change in TGVC’s operations and its ability to consummate the Business Combination and/or the value of our
securities. To date, the Cybersecurity Review Measures have not impacted our ability to conduct our business, accept foreign investment
or list its securities on the Nasdaq because neither we nor the Sponsor are mainland PRC-based businesses and because neither we nor
the Sponsor engage in the types of activities regulated by the Cybersecurity Review Measures. However, if the PRC government were to
expand the scope of the Cybersecurity Review Measures to regulate non-mainland PRC-based companies, such regulation could impact our
ability to conduct our business and accept foreign investment.
Further our Sponsor currently
owns approximately 39.95% of our issued and outstanding shares. As a result, we may be considered a “foreign person” under
rules promulgated by the Committee on Foreign Investment in the United States (“CFIUS”) and may not be able to complete an
initial business combination with a U.S. target company since such initial business combination may be subject to U.S. foreign investment
regulations and review by a U.S. government entity such as CFIUS, or ultimately prohibited. As a result, the pool of potential targets
with which we could complete an initial business combination may be limited. See “Risk Factors — We may not be able to
complete an initial business combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment
regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), or ultimately
prohibited.” on page 31.
Although
we are a Delaware corporation, the Sponsor is a Hong Kong company and certain of our directors and officers are nationals or residents
of jurisdictions other than the United States and most of their assets are located outside of the United States. As a result,
it may be difficult or impossible for our stockholders to effect service of process upon the Sponsor, us or our managements inside
China, or to obtain swift and equitable enforcement of laws that do exist or to obtain enforcement of the judgment of one court
by a court of another jurisdiction. See “Risk Factors
— Risks Related to Acquiring or Operating Businesses in the PRC” under the subheading “Our
Stockholders may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in
mainland China or Hong Kong against us, the Sponsor and certain of their directors and officers.” on page
35 and the section “Enforceability of Civil Liabilities” on page 51.
Our
PRC legal counsel, Han Kun Law Offices, has advised that, as of the date of this filing, neither we nor the Sponsor is required to obtain
permissions or approvals from the CSRC, the CAC, or any other PRC governmental agency to operate TGVC’s business and to consummate
our initial business combination. This conclusion is based on the fact that: (i)we are a Delaware corporation without subsidiaries, operations
and revenues in mainland China, and have committed not to undertake our initial business combination with any entity that is based in,
located in or has its principal business operations in China (including Hong Kong and Macau), and it has conducted a target search outside
of China, (ii) the Sponsor is a Hong Kong company without subsidiaries, operations and revenues in mainland China, (iii) Flexi is
a British Virgin Islands company without subsidiaries, operations and revenues in mainland China, and only some of Flexi’s business
operations are conducted in Hong Kong through its Hong Kong subsidiary, and (iv) pursuant to the Basic Law, national laws of the PRC shall
not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to defense and foreign
affairs, as well as other matters outside the autonomy of Hong Kong). However, since the PRC governmental agencies have certain discretion
in administration, interpretation and enforcement of the laws and regulations of the PRC, and in light of the recent statements and regulatory
actions by the PRC governmental agencies, such as those related to the administration over illegal securities activities and the supervision
on overseas listings by PRC-based companies, we and the Sponsor may become subject to the risks of the uncertainty of any future regulatory
actions of the PRC governmental agencies. In addition, Flexi and PubCo may also become subject to the laws and regulations of the PRC
to the extent that it commences business and customer facing operations in mainland China as a result of any future partnership, acquisition,
expansion, or organic growth. Furthermore, our Hong Kong legal counsel, DLA Piper Hong Kong,
has advised that, as of the date of this filing, neither TGVC nor the Sponsor is required to obtain permissions or approvals from any
Hong Kong governmental agency to operate our business or to consummate the Business Combination.
Neither
we nor the Sponsor have relied, and do not expect to rely, on dividends or other distributions on equity from any of our subsidiaries
for our cash requirements. Although we have no plans to declare cash dividends, if we determine to pay cash dividends to the our stockholders
in the future, it may depend on receipt of funds from one or more subsidiaries.
If,
in the future, (i) we were to have any PRC-based subsidiaries or (ii) we were to be considered by the PRC government to be a PRC-based
subsidiary of the Sponsor, such subsidiaries, or us, as applicable, would be subject to certain restrictions on their ability to pay
dividends under PRC laws and regulations. In particular, any PRC subsidiaries may pay dividends only out of their respective accumulated
after-tax profits after making up losses as determined in accordance with PRC accounting standards and regulations. In addition, any
PRC subsidiaries would be required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a statutory
reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Such reserve funds would not be permitted
to be distributed to TGVC as dividends. At its discretion, any PRC subsidiaries would be permitted to allocate a portion of its after-tax
profits based on PRC accounting standards to a discretionary common reserve.
Any
future PRC subsidiaries would likely generate a portion of their revenue in Renminbi, which is not freely convertible into other currencies.
As a result, any restriction on currency exchange may limit the ability of any such PRC subsidiaries to use their Renminbi revenues to
pay dividends to us. In addition, the PRC Enterprise Tax Law (“EIT Law”) and its implementation rules provide that a withholding
tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted
or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where
the non-PRC-resident enterprises are incorporated.
Furthermore,
if certain procedural requirements are satisfied, the payment of current account items, as defined in the relevant PRC laws and regulations,
including profit distributions and trade and service related foreign exchange transactions, can be made in foreign currencies without
prior approval from the PRC’s State Administration of Foreign Exchange (“SAFE”) or its local branches. However, where
Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses, such as the repayment of
loans denominated in foreign currencies, approval from or registration with competent government authorities or their authorized banks
is required. The PRC government may take measures at its discretion from time to time to restrict access to foreign currencies for current
account or capital account transactions. To the extent we desire to use funds from any future PRC subsidiaries to fund our operations,
the foreign exchange control system could prevent us from obtaining sufficient foreign currencies to satisfy our foreign currency demands,
and we may not be able to pay dividends in foreign currencies to any offshore intermediate holding companies or ultimate parent company,
or to our shareholders or investors. Further, we cannot assure you that new regulations or policies will not be promulgated in the future,
which may further restrict the remittance of Renminbi into or out of the PRC. We cannot assure you, in light of the restrictions in place,
or any amendment to be made from time to time, that our future PRC subsidiaries, if any, will be able to satisfy their respective payment
obligations that are denominated in foreign currencies, including the remittance of dividends outside of the PRC.
For
a detailed description of risks associated with the cash transfer through
the post combination organization, see “Transfers of Cash to and from our Post Business Combination Subsidiaries” on page
33 and “Risk Factors — Risks Related to Acquiring or Operating Businesses in the PRC” under the subheadings “Cash-Flow
Structure of a Post-Acquisition Company Based in China” on page 33 and “Exchange controls that exist in the PRC may limit
our ability to utilize our cash flow effectively following our initial business combination” on page 34. To date, we have not pursued
an initial business combination with a PRC-based entity and there have not been any capital contribution or shareholder loans by us to
any PRC entities, we do not yet have any subsidiaries, and we have not received, declared or made any dividends or distributions.
Pursuant
to the Holding Foreign Companies Accountable Act (“HFCA Act”), the Public Company Accounting Oversight Board (United States)
(the “PCAOB”) issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate
completely registered public accounting firms headquartered in (1) mainland China of the PRC because of a position taken by one or more
authorities in mainland China and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken
by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms
which are subject to these determinations.
In
December 2020, Congress enacted the HFCA Act, and the SEC released interim final amendments that begin to address the components of this
Act. In November 2021, the SEC approved PCAOB Rule 6100, which establishes a process for determining which registered public accounting
firms the board is unable to inspect or investigate completely. In December 2021, the SEC adopted amendments to finalize its rules under
the HFCA Act that set forth submission and disclosure requirements for commission-identified issuers identified under the Act, specify
the processes by which the SEC will identify and notify Commission-Identified Issuers, and implement trading prohibitions after three
consecutive years of identification.
In
December 2022, Congress passed the omnibus spending bill and the President signed it into law. This spending bill included the enactment
of provisions to accelerate the timeline for implementation of trading prohibitions from three years to two years. Separately, on December
15, 2022, the PCAOB published its determination that in 2022, the PCAOB was able to inspect and investigate completely registered public
accounting firms headquartered in mainland China and Hong Kong. This determination reset the now two-year clock for compliance with the
trading prohibitions for identified issuers audited by these firms. The amendment had originally been passed by the U.S. Senate in June
2021, as the “Accelerating Holding Foreign Companies Accountable Act.”
Our auditor, Marcum LLP, is a United States
accounting firm and is subject to regular inspection by the PCAOB. Marcum LLP is headquartered in New York, NY, not mainland China or
Hong Kong and was not identified as a firm subject to the PCAOB’s Determination Report announced on December 16, 2021. As a result,
we do not believe that HFCA Act and related regulations will affect us. Nevertheless, trading in our securities may be prohibited under
the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditor, and that as a result an exchange may determine
to delist our securities. Moreover, on August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory
Commission and the Ministry of Finance of the People’s Republic of China – the first step toward opening access for the PCAOB
to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong completely, consistent with
U.S. law. The Statement of Protocol is intended to grant to the PCAOB complete access to the audit work papers, audit personnel, and
other information it needs to inspect and investigate any firm it chooses, with no loopholes and no exceptions.
PROPOSED BUSINESS
We are a newly organized
blank check company incorporated on February 8, 2021 as a Delaware corporation whose business purpose is to effect a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses,
which we refer to as our initial business combination. To date, our efforts have been limited to organizational activities as well
as activities related to the IPO. Though our sponsor is a Hong Kong company, a majority of our management are located outside of
China (including Hong Kong and Macau) and we will not undertake our initial business combination with any entity that conducts
a majority of its business or is headquartered in China (including Hong Kong and Macau). We have not selected any specific business
combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly,
with any business combination target with respect to an initial business combination with us. We have generated no operating revenues
to date and we do not expect that we will generate operating revenues until we consummate our initial business combination.
The Company plans to take
a differentiated approach compared to the recent plethora of special purpose acquisition company (“SPAC”) issuances
by focusing its initial business combination search on the following industry segments:
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Artificial Intelligence (“AI”) and Machine Learning |
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Robotic Process Automation (“RPA”) |
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Edge Computing |
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Quantum Computing |
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Virtual Reality (“VR”) |
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Augmented Reality |
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Blockchain |
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Space Exploration |
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Internet of Things |
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5G Data and Telecommunications |
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Cybersecurity |
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AI Powered Drug Discovery |
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Hydrogen Energy |
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Electrical Vehicle Charging Infrastructure |
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Financial Technology |
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Technology, media and telecom TMT |
We will not be limited to
any particular industry, sector or geographic region in our identification and acquisition of a business combination target, except
that we will not undertake our initial business combination with any entity that conducts a majority of its business or is headquartered
in China (including Hong Kong and Macau). However, we believe that we have created a significant competitive advantage compared
to other SPACs that have chosen to pursue potential business combinations with a much wider targeted mandate. With nearly 420 active
SPACs as of June 11, 2021 still searching for a business combination, target companies have never had more choices nor do they
necessarily know which SPACs to approach. By assembling a management team and board of directors with highly successful operating
and investing track records in the industries we seek to pursue, we believe that we will be the preferred SPAC partner for the
highest quality assets within our focus areas. In addition, our management team and board of directors have vast experience both
investing in and leading various organizations, both public and private, and domestic and international government agencies. This
experience base affords us the opportunity to leverage our robust network of contacts to execute our focused strategy across the
globe.
We also intend to concentrate
our efforts on identifying businesses with enterprise values less than $1.25 billion. We believe that this segment of the
market is underserved and has greater valuation arbitrage opportunities and more favorable competitive dynamics compared to many
SPACs that are targeting assets with enterprise values greater than $2 billion. In 2020, the average SPAC initial public offering
raised gross proceeds of $336 million. Raising less capital in our IPO will enable us to offer target companies at our preferred
valuation range a more compelling transaction structure versus larger SPACs that may be seeking a similar asset. In addition, we
can maintain a higher degree of agility and flexibility should we choose to pursue a business with an enterprise value greater
than $1.25 billion by leveraging our public stock as additional currency for the merger consideration.
We believe we have the right
team, strategy and market opportunity to identify, acquire and manage a “best-in-class” business with the ultimate
mandate of delivering an attractive return to all stakeholders.
Our co-Founders, Pui Lan
Patrick Tsang (Chairman and CEO) and Philip Rettger (CFO and Director), are industry pioneers, visionary investors, serial entrepreneurs
and deeply experienced operators with an extensive deal-making history. Over the course of their careers, Mr. Tsang and Mr. Rettger
have founded, controlled, assembled and financed enterprises across various segments and industries, including cable, broadcast,
cellular, fiber, satellite, communications technologies, wireless broadband, energy and technology invention and project development.
As pioneering investors, they have brought value and profits to stockholders of numerous businesses through rollups, acquisitions,
mergers, both independently and in partnerships with other public corporations, and private equity firms.
Mr. Tsang and Mr. Rettger
have shown repeated foresight in identifying and investing in key trends that have shaped the global space technology, financial
technology and TMT markets. In bringing vision into reality, they
have consistently built cohesive executive teams and culture-led organizations to execute within competitive markets.
Mr. Tsang currently serves
as Chairman of Tsangs Group, a fourth-generation Single-Family Office. Tsangs Group
has made concentrated investments in companies, businesses and assets across multiple sectors, and currently has operations in
over 50 countries spanning 6 continents. In most circumstances, Tsangs Group prefers to make investments in a project of early
stage in a particular sector and subsequently seek to make complementary investments in that sector to achieve improved economies
of scale, market penetration and operating efficiencies.
The co-Founders have proven
their extensive deal-making abilities throughout their careers and created significant stockholder value across numerous high-profile
transactions including:
Tsangs Group became the
early-stage investor and strategic advisor to Pulse Evolution Group in 2018, which subsequently acquired the German listed Nexway
Group, and the combined group rebranded as FaceBank Group in 2018. On April 2020, FaceBank Group completed the merger with fuboTV,
the largest vMVPD streaming platform in the US with primary focus on channels that distribute live sports including NFL, MLB, NBA,
NHL and international soccer. fuboTV became successfully listed on the New York Stock Exchange in October 2020 (FUBO:US). When
comparing with the valuation at the time when Tsangs Group came in, the share price of fuboTV reached $62 at the end of December
2020; Tsangs Group achieved an approximately 300 times return in 2 years on this investment.
Under the leadership of
Patrick Tsang (Chairman of our sponsor), the Original IPO Opportunities SP1 (formerly known as OX Global Fund SPC-OX Global Fund
IPO Opportunities SP1), managed by Original Asset Management Limited (wholly owned by Patrick Tsang and a SFC regulated company)
has been actively involved in the sourcing and investment in the highly sought-after IPO investment opportunities in Asia, Japan,
Korea and the US. The performance of the Fund in 2020 was quite promising with a return of 42.89% for the year then ended.
Patrick Tsang founded Vale
International Group Limited, which changed its name to Fragrant Prosperity Holdings Limited. It was established to undergo acquisitions
of businesses in the financial and technology sectors in Europe and Asia. It has been listed on the London Stock Exchange since
September 2016. Patrick came in as GBP0.0233 per share and the share price was GBP0.07 on April 10, 2021, achieving a return of
200%.
Tsangs Group was an investor
of Live Company Group (“LVCG”), a leading Live Events and Entertainment company. LVCG was founded in 2017 and is trading
on the AIM market of the London Stock Exchange. LVCG acquired BRICKLIVE Group and the Parallel Live Group. BRICKLIVE holds events
that have received widespread acclaim of partner-driven shows designed to showcase the benefits of LEGO-brand toys as an educational
tool worldwide. During the very short period of 9 months, Tsangs Group achieved a total return of 33%.
No Permission Required from the Chinese Authorities for the Business Combination
We are a Delaware corporation with no subsidiaries in the PRC. We
do not maintain operations in the PRC, do not generate revenues from the PRC, and do not provide services or conduct sales or marketing
activities in the PRC or to residents in the PRC. We have committed not to undertake our initial
business combination with any entity that is based in, located in or has its principal business operations in China (including
Hong Kong and Macau), and we have conducted a target search outside of China. As of the date of this filing, we have not
been contacted by any Chinese authorities in connection with our operations or consummation of the Business Combination.
We
have committed not to undertake our initial business combination with any entity that is based in, located in or has its principal
business operations in the PRC, and we have conducted a target search outside of the PRC.
The
Sponsor is not incorporated in mainland China and none of its subsidiaries are incorporated in mainland China. It does not maintain
operations in mainland China, does not generate revenues from mainland China, and does not provide services or conduct sales or
marketing activities in mainland China or to residents in mainland China. None of the Sponsor’s officers and directors are
located in mainland China. As of the date of this filing, the Sponsor has not been contacted by any Chinese authorities in connection
with the operation of our business or the consummation of the Business Combination.
Flexi
is a British Virgin Islands company. Cash of the surviving entity of the business combination with Flexi (“PubCo”)is
expected to be primarily held by that entity and its subsidiaries located in Hong Kong, Singapore, Malaysia, Australia and Vietnam,
and it does not believe that there are any significant restrictions on its ability to distribute these funds to PubCo from their
respective distributable profits or other distributable reserves in accordance with applicable laws. While PubCo does not currently
have any mainland China subsidiaries, there would be restrictions on the ability of any future mainland China subsidiaries to
pay dividends under mainland China laws and regulations. In particular, any of PubCo’s future mainland China subsidiaries
would be permitted to pay dividends only out of their respective accumulated after-tax profits after making up losses as determined
in accordance with mainland China accounting standards and regulations. In addition, any of PubCo’s future mainland China
subsidiaries would be required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a statutory
reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Such reserve funds could not be distributed
to PubCo as dividends. At its discretion, any future mainland China subsidiary could allocate a portion of its after-tax profits
based on mainland China accounting standards to a discretionary common reserve.are incorporated in mainland China. It does not
maintain operations in mainland China, does not generate revenues from mainland China, and does not provide services or conduct
sales or marketing activities in mainland China or to residents in mainland China. As of the date of this filing, Flexi has not
been contacted by any Chinese authorities in connection with consummation of the Business Combination.
On
February 17, 2023, the CSRC published the Overseas Listing Filing Rules, which became effective on March 31, 2023 and regulate
both direct and indirect overseas offering and listing of mainland China-based companies by adopting a filing-based regulatory
regime. According to the Overseas Listing Filing Rules, if the issuer meets the Criteria for CSRC Filing, the overseas securities
offering and listing conducted by such issuer shall be deemed as an indirect overseas offering and listing: (i) 50% or more of
the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial
statements for the most recent accounting year is accounted for by domestic companies; and (ii) the main parts of the issuer’s
business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior
managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China. As of
the date of this filing, none of the Company, the Sponsor or Flexi, whether prior to or after the consummation
of the Business Combination, meet the Criteria for CSRC Filing.
As
of the date of this filing, neither our operations nor our ability to consummate the Business Combination are affected by the
Sponsor being based in Hong Kong because our operations do not consist of prohibited activities under the applicable Hong Kong
laws and are generally not restricted.
On
December 28, 2021, CAC, together with certain other mainland China government authorities, jointly released the revised Measures
for Cybersecurity Review, which took effect on February 15, 2022. Pursuant to the revised Measures for Cybersecurity Review, (i)
operators of critical information infrastructure (“CIIO”), that intend to purchase network products
and services and online platform operators that conduct data processing activities, in each case that affect or may affect national
security, must be subject to the cybersecurity review, (ii) operators of network platforms seeking listing abroad that are in
possession of more than one million users’ personal data must apply for the cybersecurity review, and (iii) relevant mainland
China government authorities may initiate cybersecurity review if they determine an operator’s network products or services
or data processing activities affect or may affect national security. The revised Measures for Cybersecurity Review set out certain
general factors that would be the focus in assessing the national security risk during a cybersecurity review, including without
limitation, risks of influence, control or malicious use of critical information infrastructure, core data, important data or
large amounts of personal information by foreign governments in relation to listing abroad. As of the date of this filing, none
of the Company, the Sponsor, or Flexi conduct data processing activities in mainland China, possess personal data of more than
one million users, or have received any regulatory notice that identifies it as a CIIO from any mainland China governmental authority.
In
addition, neither we nor the Sponsor have triggered any of the following thresholds (“Thresholds”) or
intend to transfer any personal data outside of mainland China: (i) processing the personal data of more than one million data
subjects; (ii) transferring the personal data of more than 100,000 data subjects outside of mainland China since January 1 of
the preceding year; or (iii) transferring the sensitive personal data of more than 10,000 data subjects outside of mainland China
since January 1 of the preceding year. Thus, we are not subject to the security assessment of cross-border transfer of data under
the Measures for the Security assessment of Cross-border Transfer of Data issued by CAC on July 7, 2022, and do not face the attendant
potential impact on the ability to continue its operations or consummate a business combination.
If
the Sponsor in the future triggers any of the Thresholds that are under the scrutiny of CAC or any other governmental agency,
or if the Sponsor in the future intends to transfer any personal data or data that, if disclosed, leaked destroyed, illegally
obtained or used, may affect national security and public interests (“Important Data”), outside of mainland
China, then it must pass the security assessment organized by CAC and obtain the CAC’s approval. Currently, the Sponsor
does not believe that it possesses any personal data or Important Data; however, if the Sponsor suspects that it may possess any
Important Data or highly sensitive data, a further assessment is needed. In addition, if the Sponsor in the future operates a
network platform in mainland China with more than one million individual users, it must apply with the CAC and pass a cybersecurity
review if it plans an initial public offering or plans to list overseas.
Our
legal counsel in mainland China, Han Kun Law Offices, has advised that, as of the date of this filing, neither we nor the Sponsor
is required to obtain permissions or approvals from the CSRC, the CAC, or any other mainland China governmental agency to operate
TGVC’s business and to consummate the Business Combination. This conclusion is based on the fact that (i) we are a Delaware
corporation without subsidiaries, operations and revenues in mainland China, and have committed not to undertake our initial business
combination with any entity that is based in, located in or has its principal business operations in China (including Hong Kong
and Macau), and it has conducted a target search outside of China, (ii) the Sponsor is a Hong Kong company without subsidiaries,
operations and revenues in mainland China, (iii) Flexi is a British Virgin Islands company without subsidiaries, operations and
revenues in mainland China, and only some of Flexi’s business operations are conducted in Hong Kong through its Hong Kong
subsidiary, and (iv) pursuant to the Basic Law, national laws of mainland China shall not be applied in Hong Kong except for those
listed in Annex III of the Basic Law (which is confined to laws relating to defense and foreign affairs, as well as other matters
outside the autonomy of Hong Kong). However, since mainland China governmental agencies have certain discretion in administration,
interpretation and enforcement of the laws and regulations of mainland China, and in light of the recent statements and regulatory
actions by mainland China governmental agencies, such as those related to the administration over illegal securities activities
and the supervision on overseas listings by mainland China-based companies, we and the Sponsor may become subject to the risks
of the uncertainty of any future regulatory actions of mainland China governmental agencies. In addition, Flexi may also become
subject to the laws and regulations of mainland China to the extent that they commence business and customer facing operations
in mainland China as a result of any future partnership, acquisition, expansion, or organic growth. Furthermore, Our Hong Kong
legal counsel, DLA Piper Hong Kong, has advised that, as of the date of this filing, neither we nor the Sponsor is required to
obtain permissions or approvals from any Hong Kong governmental agency to operate our business or to consummate the Business Combination.
If
the Sponsor (i) fails to receive or maintain any required permissions or approvals, (ii) inadvertently concludes that such permissions
or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and the Sponsor is required to
obtain such permissions or approvals in the future, it may result in additional costs and expenses incurred by the Sponsor and/or
us to ensure compliance or to pay applicable fines or sanctions, or to comply with other orders or regulatory actions, and we
and/or the Sponsor may no longer be permitted to continue their current business operations, which could adversely affect their
financial condition and results of operations, or even our ability to consummate the Business Combination. In addition, if any
or all of the foregoing were to occur, this could significantly limit or completely hinder the post Business Combination’s
entity ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline
or become worthless
Industry Opportunity
While we may acquire a business in any industry,
our focus will be on the space technology, financial technology and TMT industries in the United States and other developed countries
(excluding mainland China, Hong Kong and Macau). There are a number of emerging technology sub-sections where we believe superior
acquisition opportunities may be identified and secured through management’s network and connections. These include, but
are not limited to:
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Artificial Intelligence (“AI”) and Machine Learning. Technologies that enable computers to autonomously learn, deduce and act, through utilization of large data sets. These technologies enable development of systems that collect and store massive amounts of data, and analyze that content to make decisions based on probability and statistical analysis. Applications for Artificial Intelligence & Machine Learning include speech recognition, computer vision, robotic control and accelerating processes in the empirical sciences where large data sets are essential. |
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Robotic Process Automation (“RPA”). Automated or remote-controlled mechanical devices and technology. This includes machinery programmed to perform repetitive tasks such as manufacturing and loading; precision tasks such as surgery or semiconductor production; and remote-operated movement or travel, such as that provided by unmanned aerial vehicles, subsea vehicles and land vehicles. |
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Edge Computing. Distributed IT architecture which moves computing resources from clouds and data centers as close as possible to the originating source. Edge computing reduces latency requirements while processing data and saving network costs. The edge can be the router, ISP, routing switches, integrated access devices (IADs), multiplexers, etc. Near-term applications include smart homes and the cloud gaming industry. |
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Quantum Computing. The exploitation of collective properties of quantum states, such as superposition and entanglement, to perform computation. Quantum computers are believed to be able to solve certain computational problems, such as integer factorization (which underlies RSA encryption), substantially faster than classical computers. Real-world use includes artificial intelligence, cryptography, financial modelling, molecular modelling, particle physics and weather forecasting. |
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Virtual Reality (“VR”). Hardware and software technologies providing an immersive, three-dimensional user experience in a virtual world. VR environments are provided through a computer screen augmented with wearable devices, such as head-mounted stereo-optical displays or sensor-embedded gloves. VR also includes remote communication environments, where users interact with each other through computer-generated avatars. |
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Augmented Reality. Technology which overlays superimposed computer-generated images over a view of the real-world, thus altering and/or enhancing the current perception of reality. Companies in this space are involved with hardware and software development, content creation, and distribution related to AR products. This includes headsets, eye tracking technology, smart glasses, video games, mobile applications, training programs, advertising, and commercial and retail applications that utilize AR technology. |
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Blockchain. The blockchain refers to a digital ledger that provides a secure way of making and recording transactions, agreements and contracts. Blockchains are unique in that their ledger is distributed across a network of computers such that it cannot be controlled by a single entity and has no single point of failure. This space includes companies involved in developing blockchain applications related to smart contracts, crowd funding, supply chain auditing, cryptocurrency, identity management, intellectual property, and file storage. |
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Space Exploration. The provision of services, scientific research, or technology related to spaceflight, satellites, or space exploration. This includes micro-satellites, nano-satellites, ground station networks, rocket technology, payload systems, spacecraft development, satellite imagery, satellite telecommunications, space-based data, space materials, space tourism, and asteroid mining. |
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Internet of Things. Products that are enabled with sensors and actuators embedded in physical objects and/or software that uses this sensor data to improve the user experience or allows for sharing this data with a network of other devices, often using the same Internet Protocol that connects the Internet. |
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5G Data and Telecommunications. In telecommunications, 5G is the fifth generation technology standard for broadband cellular networks, and is the planned successor to the 4G networks which provide connectivity to most current cellphones. Due to the increased bandwidth, it is expected the networks will increasingly be used as general internet service providers for laptops and desktop computers, competing with existing ISPs such as cable internet, and also will make possible new applications in internet of things (IoT) and machine-to-machine areas. 4G cellphones are not able to use the new networks, which require 5G enabled wireless devices. |
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Cybersecurity. Cybersecurity refers to the practice of ensuring the integrity, confidentiality, and availability (ICA) of information. Cybersecurity is comprised of an evolving set of tools, risk management approaches, technologies, training, and best practices designed to protect networks, devices, programs, and data from attacks or unauthorized access. Common types of cybersecurity include network security, data loss prevention, cloud security, intrusion detection/prevention systems, identity and access management and antivirus/anti-malware solutions. |
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AI Powered Drug Discovery. AI and other innovative technologies that use data from multiple sources can enable more precise, targeted treatments that will help shift the health ecosystem toward a future where medicine is personalized, predictive, preventative, and participatory. While these solutions focus mostly on transforming the process of small-molecule research, they are also showing potential in the identification of new biologics such as therapeutic antibodies against cancer, fibrosis, and other diseases. |
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Electrical Vehicle Charging Infrastructure. The number of charging outlets has expanded as awareness and adoption of electric vehicles has increased, and this trend is expected to continue and accelerate as large automakers continue to make investments into electric vehicle development. Includes companies building EV charging infrastructure to support the electrification of the mobility sector. |
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Hydrogen Energy. Hydrogen is potentially promising as an energy storage and delivery system, due to its zero emissions output (other than water) and high energy density per weight unit. Companies in this space are developing methods, machines, and materials to use hydrogen for multiple purposes. Key technologies represented here include the design and manufacture of hydrogen fuel cells, new methods of hydrogen production, hydrogen storage, hydrogen fuel infrastructure, and hydrogen-powered mobility solutions. |
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Financial Technology. FinTech is disruptive to our life every day. The power dynamics in the payments industry are changing as consumers shift from cash and checks to digital payment methods and the COVID-19 Pandemic accelerated digitization. The payments industry demonstrated its adaptability, springing quickly to serve as a crisis response co-partner for individuals and businesses, assist in distributing government stimulus payments, and help customers, merchants, and corporate clients transact in contactless ways. Favorable trends such as the shift to contactless payments, the growing adoption of digital wallets, and the more widespread use of B2B payments automation are lifting the industry’s prospects. |
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Technology, media and telecom. The TMT, sector is an industry grouping that includes the majority of companies focused on new technologies. The TMT sector is sometimes also referred to as technology, media, and communications (“TMC”). |
Business Strategy
We
believe the future success of the capital markets for space technology, financial technology and TMT, companies
is dependent on new company formation, the sustainability of robust private market funding and an increased willingness of private
technology companies to become publicly-traded and therefore become available to a broader universe of investors who can benefit
from their disruption and growth. Our mission is to create an alternative path to a traditional IPO for disruptive and agile technology
companies to achieve their long-term objectives and overcome key deterrents to becoming public. By leveraging our extensive operational
experience and network, we believe we can provide a number of benefits to potential targets and public market investors that can
potentially lead to attractive long-term risk-adjusted returns in the public markets. Though our sponsor is a Hong Kong
company, a majority of our management are located outside of China (including Hong Kong and Macau) and we will not undertake our
initial business combination with any entity that conducts a majority of its business or is headquartered in China (including Hong
Kong and Macau).
Our strategy revolves around seeking targets
in the following sectors:
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Technologies including but not limited to: |
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Artificial Intelligence (“AI”) and Machine Learning |
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Robotic Process Automation (“RPA”) |
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Edge Computing |
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Quantum Computing |
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Virtual Reality (“VR”) |
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Augmented Reality |
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Blockchain |
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Space Exploration |
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Internet of Things |
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5G Data and Telecommunications |
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Cybersecurity |
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AI Powered Drug Discovery |
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Hydrogen Energy |
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Electrical Vehicle Charging Infrastructure |
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Technology, media and telecom, or TMT |
We also intend to concentrate
our efforts on identifying businesses with enterprise values of less than $1.25 billion and may be located in the United States
and other developed countries. We believe this segment of the market has greater sourcing inefficiencies, as companies of this
scale and geographic “footprint” tend to be overlooked. Our core competencies and international rolodex will allow
us to identify opportunities earlier, move faster, and catalyze more accretive value creation strategies compared to our competition.
In addition to potential business combinations, we may identify on our own, we also anticipate that our focused mandate and pedigreed
team will generate inbound leads from various sources outside of our network, including investment market participants, private
equity and venture capital groups, investment banking firms, consultants, and large business enterprises seeking to divest non-core
assets or divisions.
Our management team possesses
the following characteristics necessary to execute on our business strategy:
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Extensive leadership experience: Our management team and board of directors have held leadership positions at and invested in some of the world’s most cutting edge and forward-thinking public and private companies in our core focus areas. |
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Access to proprietary deal flow: As both lead investors and operators with deep relationships across the globe, we have access to specific opportunities before they become more widely available to others. |
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Deep-pocketed network: Our network includes asset managers who collectively manage billions of dollars, allowing us to support fully the strategies we wish to implement and provide target companies with deal certainty. |
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Focus on aligning interests: We have a deep commitment to providing win-win scenarios for all stakeholders and intend to focus on generating attractive outcomes for our investors as well as the target company’s stockholders, employees and customers. |
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Extensive investing and M&A experience: Our team has completed numerous investments and transactions with companies through their lifecycle, including seed and growth equity rounds, IPOs and integrating acquisitions. |
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Track record of value creation: We have a long history of generating substantial risk-adjusted returns for our stockholders across public and private markets and through many business cycles over the last several decades. |
While we may pursue an acquisition
opportunity in the space technology, financial technology, and TMT industries in the United Stated and other developed countries,
we intend to identify and acquire a business that could benefit from a hands-on owner with extensive operational experience and
that presents potential for an attractive risk-adjusted return profile under our stewardship.
Acquisition Criteria
We
intend to leverage what we believe is a competitive advantage in sourcing potential targets that will materially benefit from our
unique expertise and where we are best situated to augment the value of the business following the completion of the initial business
combination.
We
believe our management team is well positioned to identify unique opportunities across the space technology, financial technology
and TMT industries, but we will not undertake our initial business combination with an entity
that conducts a majority of its business or is headquartered in China (including Hong Kong and Macau). Our selection process will
leverage our relationships with leading company founders, executives of private and public companies, venture capitalists and growth
equity funds, in addition to the extensive industry and geographical reach of TG Venture’s platforms, which we believe should
provide us with a key competitive advantage in sourcing potential business combination targets. Given our profile and thematic
approach, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources.
We
also believe that our founders’ reputation, experience and track record of making investments especially in the space technology,
financial technology and TMT industries
will make us a preferred partner for these potential targets.
We also anticipate offering
the following benefits to our business combination partner:
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Partnership with our management team and board of directors who have extensive and proven experiences in leading, operating and investing in world-class companies in our focus areas; |
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Access to our vast network of contacts and relationships across the globe to accelerate growth initiatives; |
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Access to deep-pocketed, fundamental investors who can provide confidence with respect to deal closure and long-term support of implementing management’s strategy; |
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A listed public currency for future acquisitions and quick access to the capital markets to support organic growth opportunities; |
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Ability for the existing management team to retain control and accelerate their long-term vision. |
Consistent
with our strategy, we have identified the following general criteria and guidelines to evaluate prospective target businesses.
We may, however, decide to enter into our initial business combination with a target business that does not meet these criteria
and guidelines. We intend to seek to acquire one or more businesses that we believe:
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can be leaders or pioneers in space technology, financial technology and TMT; |
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are technology first companies with strong portfolios of intellectual property, trade secrets and know-how; |
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can benefit from the extensive networks and insights we have built. |
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can use technology to drive meaningful operational improvements and efficiency gains; |
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are ready to operate in the scrutiny of public markets, with strong management, corporate governance and reporting policies in place; |
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will likely be well received by public investors and are expected to have good access to the public capital markets; |
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are at an inflection point, such as those requiring additional management expertise, innovation to develop new products or services, improvement of financial performance or growth through a business combination; |
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have significant embedded and/or underexploited expansion opportunities; |
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exhibit unrecognized value or other characteristics that we believe have been misevaluated by the market, based on our company-specific analysis and due diligence review; for a potential target company, this process will include, among other things, a review and analysis of the company’s capital structure, quality of earnings, potential for operational improvements, corporate governance, customers, material contracts, and industry background and trends; and |
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will offer attractive risk-adjusted equity returns for our stockholders. |
We
may use other criteria and guidelines as well. Any evaluation relating to the merits of a particular initial business combination
may be based on these general criteria and guidelines as well as other considerations, factors and criteria that our management
may deem relevant. In the event that we decide to enter into an initial business combination with a target business that does not
meet the above criteria and guidelines, we will disclose that fact in our stockholder communications related to the acquisition.
As discussed elsewhere in this Report, this would be in the form of proxy solicitation materials or tender offer documents that
we would file with the SEC.
Initial Business Combination
NASDAQ rules require
that we must complete one or more business combinations having an aggregate fair market value of at
least 80% of the value of the assets held in the trust account (excluding taxes payable on the interest earned on the trust account)
at the time of our signing a definitive agreement in connection with our initial business combination. We expect to be able to
comply with NASDAQ rules and by reason of our arrangements with ThinkEquity, there are no deferred underwriting commissions.
Our board of directors will make the determination as to the fair market value of our initial business combination. If our board
of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an
opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with
respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make
an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less
familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value
of a target’s assets or prospects. Additionally, pursuant to NASDAQ rules, any initial business combination must be approved
by a majority of our independent directors.
We anticipate structuring
our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such
a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in
order to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete
an initial business combination if the post-transaction 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, or the Investment Company Act. Even if the post-transaction
company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination
may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us
in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares
in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in
the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our
initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination.
If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of
NASDAQ’s 80% fair market value test. If the initial business combination involves more than one target business, the 80%
fair market value test will be based on the aggregate value of all of the transactions and we will treat the target businesses
together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Our Business Combination Process
In evaluating prospective
business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things, a
review of historical and projected financial and operating data, meetings with management and their advisors (if applicable), inspection
of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate. We will
also seek to utilize the expertise of our management team in the space technology, financial technology and TMT industries and
evaluating operating projections, financial projections and determining the appropriate return expectations given the risk profile
of the target business.
Members of our management
team and our independent directors directly or indirectly own founder shares and/or placement warrants and, accordingly, may have
a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating
a particular business combination if the retention or resignation of any such officers and directors was included by a target business
as a condition to any agreement with respect to our initial business combination.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event
we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors,
we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions that our initial business combination is fair to our company from a financial point
of view.
Certain of our officers
and directors presently have fiduciary or contractual obligations to other entities pursuant to which such officer or director
is or will be required to present a business combination opportunity, including Mr. Patrick Tsang, our CEO, who is also an independent
director of Model, another blank check company. Accordingly, if any of our officers or directors becomes aware of a business combination
opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations to present
the opportunity to such entity, he or she will honor his or her fiduciary or contractual obligations to present such opportunity
to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not
materially affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation
provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity
is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent
the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
In addition, members of
our team may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment
ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such
potential conflicts would materially affect our ability to complete our initial business combination.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we may encounter intense competition from other entities
having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout
funds, and operating businesses seeking strategic business combinations. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors
possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will
be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial business
combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise
their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants,
and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors
may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
Our executive offices are
located at 1390 Market Street, Suite 200, San Francisco, California 94102, and our telephone number is (628) 251-1369. Our executive
offices are provided to us by our sponsor. We consider our current office space adequate for our current operations.
Employees
We currently have two officers.
These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of
their time as they deem necessary, in the exercise of their respective business judgement, to our affairs until we have completed
our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business
has been selected for our initial business combination and the stage of the initial business combination process we are in. We
do not intend to have any full time employees prior to the completion of our initial business combination. We do not have an employment
agreement with any member of our management team.
ITEM 1A. RISK FACTORS.
As a smaller reporting company under Rule 12b-2 of
the Exchange Act, we are not required to include risk factors in this Report. However, below is a partial list of material risks, uncertainties
and other factors that could have a material effect on the Company and its operations.
For the complete list of risks relating
to our operations, see the section titled “Risk Factors” contained in our IPO Registration Statement and the Proxy
Statement on Schedule 14A as initially filed with the SEC on April 10, 2023 and as amended. Any of these factors could result
in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise
that may also affect our business or ability to consummate an Initial Business Combination. We may disclose changes to such risk
factors or disclose additional risk factors from time to time in our future filings with the SEC.
For a detailed discussion
of the risks related to Flexi and the Flexi business combination, please see the Registration Statement on Form F-4 that The Flexi
Group Holdings, Ltd./PubCo filed with the SEC on June 13, 2023 and as amended.
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we
are a blank check company with no revenue or basis to evaluate our ability to select a suitable business target; |
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we
may not be able to select an appropriate target business or businesses and complete our Initial Business Combination in the prescribed
time frame, including the Flexi business combination; |
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our
expectations around the performance of a prospective target business, such as Flexi, or businesses may not be realized; |
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If
our Sponsor makes untimely or is unable to make specified monthly payments in connection with the extension of time within which
we must complete an initial business combination, we will liquidate and dissolve as soon as practicable
after such date and in accordance with our Charter. |
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we
may not be successful in retaining or recruiting required officers, key employees or directors following our Initial Business
Combination; |
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our
officers and directors may have difficulties allocating their time between the Company and other businesses and may potentially
have conflicts of interest with our business or in approving our Initial Business Combination; |
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we
may not be able to obtain additional financing to complete our Initial Business Combination, including the Flexi business combination,
or reduce the number of shareholders requesting redemption; |
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we
may issue our shares to investors in connection with our Initial Business Combination at a price that is less than the prevailing
market price of our shares at that time; |
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you
may not be given the opportunity to choose the initial business target or to vote on the Initial Business Combination; |
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Trust
Account funds may not be protected against third party claims or bankruptcy; |
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an
active market for our public securities may not develop and you will have limited liquidity and trading; |
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our
financial performance following an Initial Business Combination with an entity may be negatively affected by their lack of an
established record of revenue, cash flows and experienced management; |
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there
may be more competition to find an attractive target for an Initial Business Combination, which could increase the costs associated
with completing our Initial Business Combination and may result in our inability to find a suitable target; |
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changes
in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate
and complete an Initial Business Combination; |
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in
the event that the Flexi business combination is not completed and we seek alternative targets, we may attempt to simultaneously
complete business combinations with multiple prospective targets, which may hinder our ability to complete our Initial Business
Combination and give rise to increased costs and risks that could negatively impact our operations and profitability; |
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we
may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us, which may include
acting as a financial advisor in connection with an Initial Business Combination or as placement agent in connection with a related financing
transaction. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services
to us, including, for example, in connection with the sourcing and consummation of an Initial Business Combination; |
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if
we cannot complete the initial business combination with Flexi, we may attempt to complete our Initial Business Combination with a private
company, about which little information is available, which may result in a business combination with a company that is not as profitable
as we suspected, if at all; |
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our
Warrants are accounted for as derivative liabilities and are recorded at fair value upon issuance with changes in fair value each period
reported in earnings, which may have an adverse effect on the market price of our Common Stock or may make it more difficult for us to
consummate an Initial Business Combination; |
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since
our Initial Shareholders will lose their entire investment in us if our Initial Business Combination is not completed (other than with
respect to any Public Shares they may acquire during or after the Initial Public Offering), and because our Sponsor, officers and directors
may profit substantially even under circumstances in which our Public Shareholders would experience losses in connection with their investment,
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our Initial Business
Combination; |
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changes
in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations,
may adversely affect our business, including our ability to negotiate and complete our Initial Business Combination, and results of operations; |
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the
value of the Founder Shares following completion of our Initial Business Combination is likely to be substantially higher than the nominal
price paid for them, even if the trading price of our common stock at such time is substantially less than $10.00 per share; |
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resources could be wasted in researching acquisitions that are not completed, which could materially adversely
affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our Initial Business
Combination within the Combination Period (as hereinafter defined), our Public Shareholders may receive only approximately $10.83
per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account and our Warrants will expire
worthless; |
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in
March 2022, the SEC issued proposed rules relating to certain activities of SPACs. Certain of the procedures that we, a potential business
combination target, or others may determine to undertake in connection with such proposals may increase our costs and the time needed
to complete our Initial Business Combination and may constrain the circumstances under which we could complete an Initial Business Combination.
The need for compliance with such proposals may cause us to liquidate the funds in the Trust Account or liquidate the Company at an earlier
time than we might otherwise choose; |
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if
we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance
requirements and our activities would be severely restricted. As a result, in such circumstances, unless we are able to modify our activities
so that we would not be deemed an investment company, we may abandon our efforts to complete an Initial Business Combination and instead
liquidate the Company; |
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to
mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we expect that we will,
on or prior to the 24-month anniversary of the effective date of our IPO Registration Statement, instruct the trustee to liquidate the
investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest bearing demand deposit account
until the earlier of the consummation of our Initial Business Combination or our liquidation. As a result, following the liquidation
of investments in the Trust Account, we would likely receive less interest on the funds held in the Trust Account, which would likely
reduce the dollar amount our Public Shareholders would receive upon any redemption or liquidation of the Company; |
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we
may not be able to complete an Initial Business Combination with certain potential target companies if a proposed transaction with the
target company may be subject to review or approval by regulatory authorities pursuant to certain U.S. or foreign laws or regulations,
including the Committee on Foreign Investment in the United States; |
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recent
increases in inflation and interest rates in the United States and elsewhere could make it more difficult for us to consummate an Initial
Business Combination; |
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military
conflict in Ukraine or elsewhere may lead to increased price volatility for publicly traded securities, which could make it more difficult
for us to consummate an Initial Business Combination; |
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there
is substantial doubt about our ability to continue as a “going concern”; and |
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we
may be subject to PRC political and economic regulations, which may delay our ability to consummate a business combination or prevent
it completely. |
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Our
sponsor is located in Hong Kong and therefore our business, financial condition, results of operations, and prospects may be materially
and adversely affected if certain additional PRC laws and regulations become applicable to us. We may be subject to the risks and
uncertainties associated with the evolving laws and regulations in the PRC, their interpretation and implementation, and the legal
and regulatory system in the PRC more generally, including with respect to the enforcement of laws and the possibility of changes
of rules and regulations with little or no advance notice. For a more complete discussion, see “Risk Factors—The
PRC government may intervene in or influence the operations of PRC-based issuers at any time and may exert control over offerings
conducted overseas and foreign investment in PRC-based issuers. If the PRC government determines that TGVC or the Sponsor is a PRC-based
issuer, the PRC government would be able to intervene in and influence TGVC’s and the Sponsor’s operations at any time
and such governmental or regulatory interference could result in a material change in TGVC’s operations and its ability to
consummate the Business Combination and/or the value of the Public Shares. Additionally, PRC governmental and regulatory interference
could significantly limit or completely hinder TGVC’s ability to offer or continue to offer securities to investors and cause
the value of such securities to significantly decline or become worthless”
on page 46 of this report; |
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The
M&A Rules and certain other regulations of mainland China establish certain procedures for some acquisitions of mainland
China-based companies by foreign investors that could make it more difficult for PubCo to pursue growth through future acquisitions
in mainland China. For a more complete discussion, see “Risk Factors—The M&A Rules and certain other regulations
of mainland China establish certain procedures for some acquisitions of mainland China-based companies by foreign investors
that could make it more difficult for us to pursue growth through future acquisitions in mainland China” on page
49 of this report; |
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Interpretation
of mainland China laws and their implementation in Hong Kong involve uncertainty. For a more complete discussion, see “Risk
Factors—Interpretation of mainland China laws and their implementation in Hong Kong involve uncertainty” on
page 50 of this report; |
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The
mainland China government may issue further restrictive measures in the future that
could adversely affect our business and prospects. For a more complete discussion, see “Risk Factors—The mainland
China government may issue further restrictive measures in the future that could adversely affect our business and prospects”
on page 51 of this report; |
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The Hong Kong legal system embodies uncertainties which could limit the legal
protections available to us. For a more complete discussion, see “Risk Factors——The
Hong Kong legal system embodies uncertainties which could limit the availability of legal protections”
on page 45 of this report; |
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We face legal and operational risks associated with the Sponsor being based
in Hong Kong, which could result in a material change in our operations and jeopardize our ability to consummate the Business Combination.
For a more complete discussion, see “Risk
Factors—We may, in the future, face legal and operational risks associated with the Sponsor being based in Hong Kong, which could
result in a material change in our operations and jeopardize our ability to consummate the Business Combination” on page 45
of this report; |
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Our business, financial
condition and results of operations, the value of our Common Stock, our ability to offer or continue to offer securities to
investors, and/or our ability to consummate a business combination may be materially and adversely affected to the extent
the laws and regulations of the PRC become applicable to a company like ours. For a
more complete discussion, see “Risk Factors—Our
business, financial condition and results of operations, and/or the value of our Common Stock or our ability to offer or continue
to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC
become applicable to a company such as us” on page 43 of
this report; |
Risks
related to the Global Economy
Market
conditions, economic uncertainty or downturns could adversely affect our business, financial condition, operating results and our ability
to consummate an Initial Business Combination.
In
recent years, the United States and other markets have experienced cyclical or episodic downturns, and worldwide economic conditions
remain uncertain, including as a result of the COVID-19 pandemic, supply chain disruptions, the Ukraine-Russia conflict, instability
in the U.S. and global banking systems, rising fuel prices, increasing interest rates or foreign exchange rates and high inflation and
the possibility of a recession. A significant downturn in economic conditions may make it more difficult for us to consummate an Initial
Business Combination.
We
cannot predict the timing, strength, or duration of any future economic slowdown or any subsequent recovery generally, or in any industry.
If the conditions in the general economy and the markets in which we operate worsen from present levels, our business, financial condition,
operating results and our ability to consummate an Initial Business Combination could be adversely affected. For example, although U.S.
lawmakers have passed legislation to raise the federal debt ceiling on multiple occasions, ratings agencies have lowered or threatened
to lower the long-term sovereign credit rating on the United States as a result of disputes over the debt ceiling. The impact of a potential
downgrade to the U.S. government’s sovereign credit rating or its perceived creditworthiness could adversely affect economic conditions,
as well as our business, financial condition, operating results and our ability to consummate an Initial Business Combination.
Adverse
developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance
by financial institutions, could adversely affect our business, financial condition or results of operations, or our prospects.
The
funds in our operating account and our Trust Account are held in banks or other financial institutions. Our cash held in non-interest
bearing and interest-bearing accounts would exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance
limits. Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the
banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally,
or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, on
March 10, 2023, the FDIC announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and
Innovation. Although we did not have any funds in Silicon Valley Bank or other institutions that have been closed, we cannot guarantee
that the banks or other financial institutions that hold our funds will not experience similar issues.
In
addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing
terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit
and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us in connection with a potential
Initial Business Combination, or at all, and could have material adverse impacts on our liquidity, our business, financial condition
or results of operations, and our prospects. Our business may be adversely impacted by these developments in ways that we cannot predict
at this time, there may be additional risks that we have not yet identified, and we cannot guarantee that we will be able to avoid negative
consequences directly or indirectly from any failure of one or more banks or other financial institutions.
If
our Initial Business Combination involves a company organized under the laws of a state of the United States, it is possible a 1% U.S.
federal excise tax will be imposed on us in connection with redemptions of our common stock after or in connection with such Initial
Business Combination.
On
August 16, 2022, the Inflation Reduction Act of 2022 became law in the United States, which, among other things, imposes a 1% excise
tax on the fair market value of certain repurchases (including certain redemptions) of stock by publicly traded domestic (i.e., United
States) corporations (and certain non-U.S. corporations treated as “surrogate foreign corporations”). The excise tax will
apply to stock repurchases occurring in 2023 and beyond. The amount of the excise tax is generally 1% of the fair market value of the
shares of stock repurchased at the time of the repurchase. In addition, certain exceptions apply to the Excise Tax. The Treasury Department
has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax;
however, only limited guidance has been issued to date. As of the time of this filing, the Treasury has issued Notice 2023-2, which provides
some guidance regarding the Excise Tax.
Since Flexi is
an entity incorporated as a Cayman Islands exempted company, the 1% excise tax is not expected to apply to Flexi or the redeeming
holders (absent any regulations and other additional guidance that may be issued in the future with retroactive effect). If any
Excise Tax is owed, it would be payable by TGVC and not by the redeeming holders.
In
all cases, the extent of the excise tax that may be incurred will depend on a number of factors, including the fair market value of our
stock redeemed, the extent such redemptions could be treated as dividends and not repurchases, and the content of any regulations and
other additional guidance from the Treasury Department that may be issued and applicable to the redemptions. Issuances of stock by a
repurchasing corporation in a year in which such corporation repurchases stock may reduce the amount of excise tax imposed with respect
to such repurchase. The excise tax is imposed on the repurchasing corporation itself, not the shareholders from which stock is repurchased.
The imposition of the excise tax as a result of redemptions in connection with a business combination could, however, reduce the amount
of cash available to pay redemptions or reduce the cash contribution to the target business in connection with a business combination,
which could cause the other shareholders of the combined company to economically bear the impact of such excise tax.
The
foregoing could cause a reduction in the cash held outside of the Trust Account, which the Company plans to use to complete a business
combination, including the Business Combination, and affect the Company’s ability to complete a business combination.
On
December 27, 2022, the Treasury published Notice 2023-2, which provides taxpayers with interim guidance on the Excise Tax that may be
relied upon by taxpayers until the IRS issues Treasury Regulations on such matter. Although such notice clarifies certain aspects of
the Excise Tax, the interpretation and operation of aspects of the Excise Tax (including its application and operation with respect to
SPACs) remain unclear and such interim operating rules are subject to change. The notice generally provides that if a covered corporation
completely liquidates under either Section 331 or Section 332(a) of the Code, distributions in such complete liquidation and other distributions
by such corporation in the same taxable year in which the final distribution in complete liquidation and dissolution is made are not
subject to the Excise Tax. Because we do not expect to undergo a complete liquidation under either Section 331 or Section 332(a) of the
Code with respect to the Business Combination, we do not expect this exception to the Excise Tax to apply for redemptions made prior
to the Business Combination.
If
the Excise Tax applies to redemptions of the Public Shares in connection with the Business Combination, the value of our securities may
decrease. If existing Public Stockholders elect to redeem their Public Shares such that their redemptions would subject us to the Excise
Tax, the Public Stockholders that do not elect to redeem their Public Shares may economically bear the impact of the Excise Tax. The
application of the Excise Tax in the event of a liquidation, except to the limited extent described above, is uncertain absent further
guidance. Except for franchise taxes and income taxes, the proceeds placed in the Trust Account and the interest earned thereon may not
be used to pay for possible excise taxes or any other fees or taxes that may be levied on us pursuant to any current, pending or future
rules or laws, including without limitation the Excise Tax.
The proceeds deposited in the Trust Account and the interest earned thereon
will not be used to pay for any Excise Tax due under the Inflation Reduction Act of 2022 in connection with any redemptions of the common
stock sold a part of the Units in the IPO (the “Public Shares”) prior to or in connection with the Business Combination. As
of May 31, 2023, there was approximately $13.9 million in the Trust Account. The redemption price per share at the Special Meeting or
TGVC’s subsequent liquidation (assuming no additional Public Shares were redeemed and no additional Extension Payments are made)
will be approximately $10.83 per TGVC Public Share. TGVC does intend to continue to use the accrued interest in the Trust Account to pay
its franchise and income taxes.
We
may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate.
We
must complete our initial business combination within 24 months from the closing of the IPO. We may not be able to close the business
transaction with Flexi or find another suitable target business and consummate our initial business combination within such time period.
Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital
and debt markets and the other risks described herein. If we are unable to consummate our initial business combination within the required
time period, we will,
as promptly as
reasonably possible but not more than five business days thereafter, distribute the aggregate amount then on deposit in the trust
account (net of taxes payable, and less up to $100,000 of interest to pay liquidation expenses), pro
rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs,
as further described herein. This redemption of public shareholders from the trust account shall be effected as required by function
of our amended and restated memorandum and articles of association and prior to any voluntary winding up.
If
we were considered to be a “foreign person,” we might not be able to complete an initial business combination with a U.S.
target company if such initial business combination is subject to U.S. foreign investment regulations or review by a U.S. government
entity, such as CFIUS.
The
Sponsor is a Hong Kong limited liability company, controlled by or that has substantial ties with non-U.S. persons. Acquisitions and
investments by non-U.S. persons in certain U.S. businesses may be subject to rules or regulations that limit foreign ownership. CFIUS
is an interagency committee authorized to review certain transactions involving investments by foreign persons in U.S. businesses that
have a nexus to critical technologies, critical infrastructure and/or sensitive personal data in order to determine the effect of such
transactions on the national security of the United States. If we were considered to be a “foreign person” under such rules
and regulations, any proposed business combination between us and a U.S. business engaged in a regulated industry or that may affect
national security could be subject to such foreign ownership restrictions, CFIUS review and/or mandatory filings.
If
TGVC’s potential initial business combination with a U.S. business falls within the scope of foreign ownership restrictions, it
may be unable to consummate an initial business combination with such business. In addition, if TGVC’s potential business combination
falls within CFIUS’ jurisdiction, it may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS,
or proceed with the initial business combination without notifying CFIUS and risk CFIUS intervention, before or after closing of the
initial business combination. CFIUS may decide to block or delay TGVC’s initial business combination, impose conditions to mitigate
national security concerns with respect to such initial business combination or order us to divest all or a portion of a U.S. business
of the combined company if we had proceeded without first obtaining CFIUS clearance. The potential limitations and risks may limit the
attractiveness of a transaction with us or prevent us from pursuing certain initial business combination opportunities that we believe
would otherwise be beneficial to it and the our stockholders. As a result, the pool of potential targets with which it could complete
an initial business combination may be limited and we may be adversely affected in terms of competing with other special purpose acquisition
companies that do not have similar foreign ownership issues. Moreover, the process of government review, whether by CFIUS or otherwise,
could be lengthy.
Because
we have only a limited time to complete our initial business combination, our failure to obtain any required approvals within the requisite
time-period may require it to liquidate. If we liquidate, our public stockholders may only receive their pro rata share of amounts held
in the Trust Account, and the their warrants will expire worthless. This will also cause the TGVC Stockholders to lose any potential
investment opportunity in a target company and the chance of realizing future gains on their investment through any price appreciation
in the combined company.
Our
Stockholders may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in mainland China
or Hong Kong against us, the Sponsor and certain of their directors and officers.
Although we
are a Delaware corporation, the Sponsor is a Hong Kong company and certain of our directors and officers are nationals or residents
of jurisdictions other than the United States and most of their assets are located outside of the United States. As a result, it may
be difficult or impossible for our stockholders to effect service of process upon the Sponsor, us or our management in Hong Kong or
mainland China, or to obtain swift and equitable enforcement of laws that do exist or to obtain enforcement of the judgment of one
court by a court of another jurisdiction. China’s legal system is based on the civil law regime, that is, it is based on
written statutes. A decision by one judge does not set a legal precedent that is required to be followed by judges in other cases.
In addition, the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. The courts in
mainland China may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law and
other applicable laws and regulations based either on treaties between mainland China and the country where the judgment is made or
on principles of reciprocity between jurisdictions. Neither mainland China nor Hong Kong has any treaties or other form of
reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. Due to
the lack of reciprocity and treaties between the U.S., on the one hand, and either mainland China or Hong Kong, on the other hand,
and the additional time and cost constraints in order to enforce judgments obtained in U.S. courts based upon the civil liability
provisions of U.S. federal securities laws in mainland China or Hong Kong, our stockholders may experience difficulties in effecting
service of legal process in the U.S. and enforcing civil liabilities in mainland China or Hong Kong against the Sponsor, us and
certain of our directors and officers. In addition, according to the PRC Civil Procedures Law,
courts in mainland China will not enforce a foreign judgment against the Sponsor, TGVC or their managements if they decide that the
judgment violates the basic principles of law or national sovereignty, security or public interest in mainland China. Therefore, it
is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States. Under the PRC Civil Procedures
Law, foreign investors may originate actions based on the law of mainland China against a company in mainland China for disputes if
they can establish sufficient nexus to mainland China for a court in mainland China to have jurisdiction, and meet other procedural
requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a
factual basis and a cause for the suit. As a result, our stockholders may have more difficulty in protecting their interests through
actions against the Sponsor or our management, directors or major stockholders than would investors of a corporation doing business
entirely or predominantly within the U.S.
Foreign
operations expose us to foreign currency, legal, tax, economic and management oversight risk.
Foreign
operations pose complex management, foreign currency, legal, tax and economic risks, which we may not be able to fully mitigate with
our actions. These risks differ from and potentially may be greater than those associated with our domestic businesses. Our international
businesses are sensitive to changes in the priorities and budgets of international customers and to geo-political uncertainties, which
may be driven by changes in threat environments and potentially volatile worldwide economic conditions, various regional and local economic
and political factors, risks and uncertainties, as well as U.S. foreign policy. Foreign currency exchange rates and fluctuations may
have an impact on our revenue, costs or cash flows from our international operations, which could materially adversely affect our financial
performance. Our primary objective in reducing foreign currency risk is to preserve the economic value of our foreign investments and
to reduce earnings volatility that would otherwise occur due to exchange rate fluctuations. We may attempt to offset material cross-currency
transactions and earnings exposure through various means, including financial instruments and short-term investments. Because we generally
do not hedge our net investments in foreign countries, we are susceptible to volatility in other comprehensive income caused by exchange
rate fluctuations.
Transfers
of Cash to and from Post Business Combination Subsidiaries
To
date, we have not completed our initial business combination and there have not been any capital contributions or shareholder loans by
us to any PRC entities, we do not yet have any subsidiaries, and we have not received, declared or made any dividends or distributions.
We intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As such, we
do not expect to pay any cash dividends in the foreseeable future.
A portion of our worldwide cash reserves may be generated by, and therefore held in, foreign jurisdictions.
Some jurisdictions restrict the amount of cash that can be transferred to the United States or impose taxes and penalties on such transfers
of cash, which reduces the cash available to us. To the extent we have excess cash in foreign locations that could be used in, or is
needed by, our United States operations, we may incur significant taxes and/or penalties to repatriate these funds.
We
have adopted written cash management policies and procedures that dictate how funds are transferred within our organization. According
to such policies and procedures, each subsidiary of the Company may initiate a cash transfer request by timely filling
out a fund application form, which shall be signed by the financial principal and the principal of the subsidiary and then submitted
to the financial department of the Company for approval. After a cash transfer request is approved by the financial department,
the relevant subsidiary may proceed to initiate such transfer. As of December 31, 2022, our Company has not provided any loans.
The Company is
incorporated in State of Delaware as a holding company with no actual operations. There has been no cash flows and transfers of
other assets between the Company and its Sponsor, other than that as of December 31, 2022,
the Sponsor paid approximately $100,000 for corporate expenses on behalf of the Company and not as a dividend payment or distribution.
The Sponsor
has not made any dividend payment or distribution to our Company or investors as of the date this report and they have no plans
to make any distribution or dividend payment to the Company in the near future. Neither the Company nor its Sponsor has made any
dividends or distributions to U.S. investors as of the date of this report.
Under
the existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related
foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural
requirements with the banks. Currently, we don’t have any intention to distribute earnings or settle amounts owed under our operating
structure.
Risks
Related to Acquiring or Operating Businesses in the PRC, including Hong Kong
Our
company currently does not have any operations in mainland China, we are a Delaware corporation, Flexi is a business company with
limited liability incorporated under the laws of the British Virgin Islands and if the business combination with Flexi does not
close, we do not plan to undertake our initial business combination with any entity that conducts a majority of its business or
is headquartered in China (including Hong Kong and Macau). However, our sponsor and certain members of our board of directors
and management have significant business ties to or are based in Hong Kong. If certain PRC laws and regulations become applicable
to a company such as us in the future, the application of such laws and regulations may have a material adverse impact on our
business, financial condition and results of operations and our ability to offer or continue to offer securities to investors,
any of which may cause the value of our Common Stock to significantly decline or become worthless.
Exchange
controls that exist in the PRC may limit our ability to utilize our cash flow effectively following our initial business combination.
SAFE
promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement
of Capital of Foreign-invested Enterprises, or Circular 19, effective on June 1, 2015, in replacement of the Circular on the Relevant
Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested
Enterprises, or SAFE Circular 142, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening
the Administration of Foreign Exchange Businesses, or Circular 59, and the Circular on Further Clarification and Regulation of the Issues
Concerning the Administration of Certain Capital Account Foreign Exchange Businesses, or Circular 45. According to Circular 19, the flow
and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated
such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment
of banks loans that have been transferred to a third party. Although Circular 19 allows RMB capital converted from foreign currency-denominated
registered capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle
that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used
for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such capital to be used for equity investments in
the PRC in actual practice. SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing
the Foreign Exchange Settlement Management Policy of Capital Account, or Circular 16, effective on June 9, 2016, which reiterates some
of the rules set forth in Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated
registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans
to non-associated enterprises. Violations of SAFE Circular 19 and Circular 16 could result in administrative penalties.
Following
an initial business combination with a PRC target company, we would be subject to the PRC’s rules and regulations on currency conversion.
In the PRC, the SAFE regulates the conversion of the Renminbi into foreign currencies. Currently, foreign invested enterprises (“FIE”)
are required to apply to the SAFE for “Foreign Exchange Registration Certificates for FIEs.” Following our initial business
combination, we will likely be an FIE as a result of our ownership structure. With such registration certificates, which need to be renewed
annually, FIEs are allowed to open foreign currency accounts including a “basic account” and “capital account.”
Currency conversion within the scope of the “basic account,” such as remittance of foreign currencies for payment of dividends,
can be effected without requiring the approval of the SAFE. However, conversion of currency in the “capital account,” including
capital items such as direct investment, loans and securities, still require approval of the SAFE.
We
cannot assure you the PRC regulatory authorities will not impose further restrictions on the convertibility of the Renminbi. Any future
restrictions on currency exchanges may limit the use our cash flow for the distribution of dividends to our shareholders or to fund operations
we may have outside of the PRC.
The
Cash-Flow Structure of a Post-Acquisition Company Based in China may prevent us from issuing dividends or other distributions to our
shareholders.
The
PRC government has significant authority to exert restrictions on foreign exchange and our ability to transfer cash between entities,
across borders, and to U.S. investors that may apply if we acquire a company that is based in China in an initial business combination.
If we consummate an initial business combination with a company based in China, we may rely on dividends and other distributions
from our future operating company in China to provide us with cash flow and to meet our other obligations. Such payments would
be subject to restrictions on dividends as current regulations in China would permit any potential future PRC operating
company to pay dividends to us only out of its accumulated distributable profits, if any, determined in accordance with Chinese
accounting standards and regulations. In addition, any potential future operating company in China will be required to set aside
at least 10% (up to an aggregate amount equal to half of its registered capital) of its accumulated profits each year. Such cash
reserve may not be distributed as cash dividends. Each such entity in China is also required to further set aside a portion of
its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion
of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and
eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as
cash dividends except in the event of liquidation. In addition, if any potential future operating company in China incurs debt
on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments
to us.
In
addition, we may be subject to restrictions on currency exchange as the PRC government may limit or eliminate our ability to utilize
cash generated in Renminbi, or RMB to fund our business activities outside of the PRC or pay dividends in foreign currencies to
our shareholders, including holders of our securities, and may limit our ability to obtain foreign currency through debt or equity
financing. Should we choose to acquire a company in China, exchange controls that exist in the PRC may limit our ability to utilize
our cash flow effectively following our initial business combination. If we were to acquire a PRC company, the PRC regulation
on loans to, and direct investment in, any potential future PRC subsidiary by offshore holding companies and governmental control
in currency conversion may restrict our ability to make loans to or capital contributions to any potential future PRC subsidiary,
which could materially and adversely affect our liquidity and our ability to fund and expand our business.
These
restrictions will restrict our ability to distribute earnings from our businesses, including subsidiaries, to the parent company and
U.S. investors as well as the ability to settle amounts owed under contractual agreements. In addition, fluctuations in exchange rates
could result in foreign currency exchange losses to us and may reduce the value of, and amount in U.S. Dollars of dividends payable on,
our shares in foreign currency terms.
To
date, we have not pursued an initial business combination with a Chinese entity and there have not been any capital contributions or
shareholder loans by us to any PRC entities, we do not yet have any subsidiaries, and we have not received, declared or made any dividends
or distributions.
Political
risks associated with the Sponsor being a Hong Kong entity
Since
our sponsor is a Hong Kong entity, our business operations and financial conditions may be affected by the political and legal
developments in Hong Kong. Any adverse economic, social and/or political conditions, material social unrest, strike, riot, civil
disturbance or disobedience, as well as significant natural disasters, may affect the market may adversely affect our business
operations. Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are
reflected in the Basic Law (the “Hong Kong Basic Law” or the “Basic Law”), namely, Hong Kong’s constitutional
document, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers,
including that of final adjudication under the principle of “one country, two systems”. However, there is no assurance
that there will not be any changes in the economic, political and legal environment in Hong Kong in the future. If we complete
a business combination with an entity that conducts operations in Hong Kong, any change of such political arrangements may pose
immediate threat to the stability of the economy in Hong Kong, thereby directly and adversely affecting our results of operations
and financial positions.
Under
the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, HongKong is exclusively
in charge of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs
and defense. As a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. Based
on certain recent development including the Law of the People’s Republic of China on Safeguarding National Security in the
Hong Kong Special Administrative Region issued by the Standing Committee of the PRC National People’s Congress in June 2020,
the U.S. State Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from
China and Former President Trump signed an executive order and Hong Kong Autonomy Act (“HKAA”) to remove Hong Kong’s
preferential trade status and to authorize the U.S. administration to impose blocking sanctions against individuals and entities
who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. The United States may impose the
same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from mainland China. These and other
recent actions may represent an escalation in political and trade tensions involving the U.S., China and Hong Kong, which could
potentially harm our business.
Given
the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on
our business operations, which could in turn adversely and materially affect our business, results of operations and financial
condition. It is difficult to predict the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong. Furthermore,
legislative or administrative actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers,
including us, and the market price of our Common Stock could be adversely affected.
If
the U.S. Public Company Accounting Oversight Board, or the PCAOB, is unable to inspect our auditors as required under the Holding Foreign
Companies Accountable Act, the SEC will prohibit the trading of our Class A Common Stock. A trading prohibition for our Class A Common
Stock, or the threat of a trading prohibition, may materially and adversely affect the value of your investment. Additionally, the inability
of the PCAOB to conduct inspections of our auditors would deprive our investors of the benefits of such inspections.
The
U.S. Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted into law on December 18, 2020. Under the HFCA Act, if the
SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection
by the PCAOB for three consecutive years, the SEC will prohibit our securities, including our Class A Common Stock, from being traded
on a U.S. national securities exchange, including NASDAQ, or in the over-the-counter trading market in the U.S. Furthermore, on June
22, 2021, the U.S. Senate passed the AHFCAA, which, if signed into law, would amend the HFCA Act and require the SEC to prohibit an issuer’s
securities from trading on any U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two consecutive years
instead of three consecutive years, thus reducing the time period for triggering the prohibition on trading. On September 22, 2021, the
PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated
under the HFCA Act, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a
foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On November 5, 2021, the SEC approved
the PCAOB’s Rule 6100,
Board
Determinations Under the Holding Foreign Companies Accountable Act. Rule 6100 provides a framework for the PCAOB to use when determining,
as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting firms located
in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued
amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants
that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located
in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in
foreign jurisdictions. The process for implementing trading prohibitions pursuant to the HFCA Acts will be based on a list of registered
public accounting firms that the PCAOB has been unable to inspect and investigate completely as a result of a position taken by a non-U.S.
government, or the Relevant Jurisdiction, and such identified auditors, the PCAOB Identified Firms. The first list of PCAOB
Identified Firms was included in a release by the PCAOB on December 16, 2021, or the PCAOB December 2021 Release. The SEC will review
annual reports filed with it for fiscal years beginning after December 18, 2020 to determine if the auditor used for such reports was
so identified by the PCAOB, and such issuers will be designated as “Commission Identified Issuers” on a list to be published
by the SEC. If an issuer is a Commission Identified Issuer for two consecutive years (which will be determined after the second
such annual report), the SEC will issue a trading order that will implement prohibitions described above. On August
26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the
People’s Republic of China – the first step toward opening access for the PCAOB to inspect and investigate registered public
accounting firms headquartered in mainland China and Hong Kong completely, consistent with U.S. law. The Statement of Protocol is intended
to grant to the PCAOB complete access to the audit work papers, audit personnel, and other information it needs to inspect and investigate
any firm it chooses, with no loopholes and no exceptions
On
December 29, 2022, the Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated Appropriations Act contained,
among other things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering
the prohibitions under the HFCA Act from three years to two.
Our
current independent accounting firm, Marcum LLP, whose audit report is included in this annual report on Form 10-K/A, is headquartered
in New York, NY and the lead audit partner is based in Hartford, CT. Marcum LLP was not included in the list of PCAOB Identified Firms
in the PCAOB December 2021 Release. Our ability to retain an auditor subject to PCAOB inspection and investigation, including but not
limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese regulators.
Marcum LLP’s audit working papers related to us are located in the United States.
If
our securities are subject to a trading prohibition under the HFCA Act, the price of our common stock may be adversely affected, and
the threat of such a trading prohibition would also adversely affect their price. If we are unable to be listed on another securities
exchange that provides sufficient liquidity, such a trading prohibition may substantially impair your ability to sell or purchase our
common stock when you wish to do so. Furthermore, if we are able to maintain a listing of our common stock on a non-U.S. exchange,
investors owning our common stock may have to take additional steps to engage in transactions on that exchange, including establishing
non-U.S. brokerage accounts.
The
HFCA Act also imposes additional certification and disclosure requirements for Commission Identified Issuers, and these requirements
apply to issuers in the year following their listing as Commission Identified Issuers. The additional requirements include a certification
that the issuer is not owned or controlled by a governmental entity in the Relevant Jurisdiction, and the additional requirements for
annual reports include disclosure that the issuer’s financials were audited by a firm not subject to PCAOB inspection, disclosure
on governmental entities in the Relevant Jurisdiction’s ownership in and controlling financial interest in the issuer, the names
of Chinese Communist Party, or CCP, members on the board of the issuer or its operating entities, and whether the issuer’s article’s
include a charter of the CCP, including the text of such charter.
In
addition to the issues under the HFCA discussed above, the PCAOB’s inability to conduct inspections in China and Hong Kong prevents
it from fully evaluating the audits and quality control procedures of the independent registered public accounting firm, consequently,
investors would be deprived of the benefits of such PCAOB inspections. Our current independent registered public accounting firm, Marcum
LLP, is headquartered in New York, NY and the lead audit partner is based in Hartford, CT. Marcum LLP is currently inspected on an annual
basis by the PCAOB, with the last public inspection report released on November 21, 2022 for inspection year 2021.
The
recent joint statement by the SEC, proposed rule changes submitted by Nasdaq, and an act passed by the U.S. Senate and the U.S. House
of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments
could add uncertainties to our offering, business operations, share price and reputation.
U.S.
public companies that have substantially all of their operations in China and Hong Kong have been the subject of intense scrutiny, criticism
and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism
and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over
financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.
On
December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their
oversight of financial statement audits of U.S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman
Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the
risks associated with investing in companies based in or have substantial operations in emerging markets including China, including Hong
Kong, reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit
work papers in China and Hong Kong and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department
of Justice and other U.S. regulatory actions, including in instances of fraud, in emerging markets generally.
On
May 20, 2020, the U.S. Senate passed the HFCA Act requiring a foreign company to certify it is not owned or controlled by a foreign government
if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the
PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to
trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the HFCA Act.
On
May 21, 2021, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in a “Restrictive Market”, (ii) prohibit Restrictive Market companies from directly listing on Nasdaq Capital Market, and
only permit them to list on Nasdaq Global Select or Nasdaq Global Market in connection with a direct listing and (iii) apply additional
and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.
As
a result of these scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese and Hong Kong companies
sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder
lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what
effect this sector-wide scrutiny, criticism and negative publicity will have on us, our offering, business and our share price. If we
become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant
resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our
management from developing our growth. If such allegations are not proven to be groundless, we and our business operations will be severely
affected and you could sustain a significant decline in the value of our share.
Our failure to meet the continued listing requirements
of the Nasdaq Global Market could result in a delisting of our Common Stock.
If we fail to satisfy the continued listing requirements
of the Nasdaq Global Market, such as the corporate governance requirements or the minimum closing bid price requirement, the Nasdaq Global
Market may take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock
and would impair your ability to sell or purchase our common stock when you wish to do so.
On June 22, 2023, the Company
received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based
upon the closing bid price of the Company’s Class A common stock for the last 30 consecutive business days and its number of publicly
held shares, the Company no longer meets Nasdaq Listing Rule 5450(b)(3)(C), which requires listed companies to maintain a minimum market
value of publicly held shares (“MVPHS”) of at least $15 million.
Nasdaq Listing Rule 5810(c)(3)(D)
provides a compliance period of 180 calendar days, or until December 19, 2023 (the “First Compliance Date”), in which to regain
compliance with this requirement. If the Company’s market value of publicly held shares is $15 million or more for a minimum of
10 consecutive business days during the 180-day compliance period, Nasdaq will provide written notice of compliance to the Company. If
the Company fails to regain compliance with the Nasdaq continued listing standards, Nasdaq will provide notice that the Company’s
class A common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings
panel.
On August 11, 2023, the Company received a written
notice from Nasdaq indicating that the Company is no longer in compliance with the minimum Market Value of Listed Securities (“MVLS”)
of $50,000,000 required for continued listing on The Nasdaq Global Market, as set forth in Nasdaq Listing Rule 5450(b)(2)(A) (the
“MVLS Requirement”). The Notice has no effect at this time on the listing of the Company’s securities on Nasdaq.
In accordance with Nasdaq Listing Rule 5810(c)(3)(C),
the Company has a period of 180 calendar days, or until February 7, 2024 (the “Second Compliance Date,” together with the
First Compliance Date, the “Compliance Dates”), to regain compliance with the MVLS Requirement. To regain compliance, the
Company’s MVLS must close at $50,000,000 or more for a minimum of 10 consecutive business days prior to the Compliance Date. In
the event the Company does not regain compliance with the MVLS Requirement prior to the Compliance Date, Nasdaq will notify the Company
that its securities are subject to delisting, at which point the Company may appeal the delisting determination to a Nasdaq hearings panel.
The notifications have
no immediate effect on the listing of the Company’s Class A common stock on Nasdaq Global Market. The Company intends to actively
monitor its MVPHS and MVLS between now and the respective Compliance Dates, and may, if appropriate, evaluate available options including
applying for a transfer to The Nasdaq Capital Market to resolve the deficiency and regain compliance with the requirements. While the
Company is exercising diligent efforts to maintain the listing of its securities on Nasdaq Global, there can be no assurance that the
Company will be able to regain or maintain compliance with Nasdaq Global listing standards or satisfy the requirements necessary to transfer
the listing of its securities to The Nasdaq Capital Market.
If our common stock were delisted from the Nasdaq,
trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as the
OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate
quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common
stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national
exchange or other reasons. In addition, as a delisted security, our common stock would be subject to SEC rules as a “penny stock,”
which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically
higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage
of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock.
In the event of a delisting, we anticipate that we
would take actions to restore our compliance with the Nasdaq Global Market or another national exchange’s listing requirements,
but we can provide no assurance that any such action taken by us would allow our Common Stock to remain listed on the Nasdaq Global Market,
stabilize our market price, improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq Global
Market’s minimum bid price requirement, or prevent future non-compliance with the Nasdaq Global Market or another national exchange’s
listing requirements.
Nasdaq
may apply additional and more stringent criteria for our continued listing because our insiders hold a large portion of our listed securities.
Nasdaq
Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and
Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing
of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs
that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though
the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to
deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to:
(i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or
an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s
audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s
listed securities; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S.
shareholders, operations, or members of the board of directors or management. The insiders of our Company hold a large portion of the
company’s listed securities. Therefore, we may be subject to the additional and more stringent criteria of Nasdaq for our continued
listing, which might result in deficiency letters or inquiries that will take management’s time away from focusing on our operations.
If we are deemed to be an unregistered company
under the Investment Company Act of 1940, as amended
(“Investment Company Act”),, we may have to liquidate all of our assets.
There is uncertainty whether special purpose acquisition
companies, such as the Company, could become subject to regulation under the Investment Company Act. The longer that the funds
in the Trust Account are held in U.S. government securities or in money market funds invested exclusively in such securities, the greater
the risk that we may be considered an unregistered investment company than if such assets were held as cash. If we are deemed to be an
investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete an initial business
combination and instead be required to liquidate. If we are required to liquidate, the Public Stockholders would not be able to realize
the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our ordinary shares
and warrants following such a transaction, and our warrants would expire worthless.
Our
business, financial condition and results of operations, and/or the value of our Common Stock or our ability to offer or continue to
offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable
to a company such as us.
We
currently do not have or intend to have any subsidiary or any contractual arrangement to establish a variable interest entity structure
with any entity in mainland China, and we have direct ownership of our operating entities, all of which are in jurisdictions outside
of China. However, as our principal place of business is in Hong Kong, a special administrative region of China, there is no guarantee
that if certain existing or future laws of the PRC become applicable to a company such as us, it will not have a material adverse impact
on our business, financial condition and results of operations and/or our ability to offer or continue to offer securities to investors,
any of which may cause the value of such securities to significantly decline or be worthless.
Except
for the Basic Law, the national laws of the PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied
locally by promulgation or local legislation. National laws that may be listed in Annex III are currently limited under the Basic Law
to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong
Kong. National laws and regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III and
so do not apply directly to Hong Kong.
The
laws and regulations in the PRC are evolving, and their enactment timetable, interpretation and implementation involve significant uncertainties.
To the extent any PRC laws and regulations become applicable to us, we may be subject to the risks and uncertainties associated with
the legal system in the PRC, including with respect to the enforcement of laws and the possibility of changes of rules and regulations
with little or no advance notice. We currently do not have plan to expand our operation or acquire any operation in the mainland China.
However, we may also become subject to the laws and regulations of the PRC to the extent we commence business and customer facing operations
in mainland China as a result of any future acquisition, expansion or organic growth.
The
PRC government exerts substantial influence and discretion over the manner in which companies incorporated under the laws of PRC must
conduct their business activities. If we were to become subject to such direct influence or discretion, it may result in a material change
in our operations and/or the value of our Common Stock, which would materially affect the interest of the investors.
The
PRC legal system is evolving rapidly and the PRC laws, regulations, and rules may change quickly with little advance notice. In particular,
because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-precedential
nature of these decisions, the interpretation of these laws, rules and regulations may contain inconsistences, the enforcement of which
involves uncertainties. The PRC government has exercised and continues to exercise substantial control over many sectors of the PRC economy
through regulation and/or state ownership. Government actions have had, and may continue to have, a significant effect on economic conditions
in the PRC and businesses which are subject to such government actions.
Although
we do not have business operations in the PRC, our sponsor is a Hong Kong entity. The PRC government currently does not exert
direct influence and discretion over the manner in which we conduct our business activities outside of mainland China, however,
there is no guarantee that we will not be subject to such direct influence or discretion in the future due to changes in laws
or other unforeseeable reasons or as a result of our future expansion or acquisition of operations in mainland China. See “- Our
business, financial condition and results of operations, and/or the value of our Common Stock or our ability to offer or continue
to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become
applicable to a company such as us.”
We
currently do not have plans to expand our operation or acquire any operation in the mainland China. However, if we were to become subject
to the direct intervention or influence of the PRC government at any time due to changes in laws or other unforeseeable reasons or as
a result of our future development, expansion or acquisition of operations in the PRC, it may require a material change in our operations
and/or result in increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure
to comply. In addition, the market prices of our Common Stock could be adversely affected as a result of anticipated negative impacts
of any such government actions, as well as negative investor sentiment towards Hong Kong-based companies subject to direct PRC government
oversight and regulation, regardless of our actual operating performance. There can be no assurance that the Chinese government would
not intervene in or influence our operations at any time.
We
were not required to obtain permission from the PRC government to list on a U.S. securities exchange, however there is no guarantee that
this will continue to be the case in the future in relation to the continued listing of our securities on a securities exchange outside
of the PRC, or even when such permission is obtained, it will not be subsequently denied or rescinded. Any actions by the PRC government
to exert more oversight and control over offerings (including of businesses whose primary operations are in Hong Kong) that are conducted
overseas and/or foreign investments in Hong Kong-based issuers could significantly limit or completely hinder our ability to offer or
continue to offer securities to investors and cause the value of our securities, including our Common Stock, to significantly decline
or be worthless.
The
enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National
Security Law”) could impact our Sponsor.
On
June 30, 2020, the Standing Committee of the PRC National People’s Congress adopted the Hong Kong National Security Law. This law
defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories
of offences - secession, subversion, terrorist activities, and collusion with a foreign country or external elements to
endanger national security - and their corresponding penalties. On July 14, 2020, the former U.S. President Donald Trump
signed the Hong Kong Autonomy Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals
and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. On August 7, 2020 the U.S.
government imposed HKAA-authorized sanctions on eleven individuals, including former HKSAR chief executive Carrie Lam. On October 14,
2020, the U.S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying persons materially
contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law.”
The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions
that knowingly conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions may
directly affect the foreign financial institutions as well as any third parties or customers dealing with any foreign financial institution
that is targeted. It is difficult to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies
located in Hong Kong. If our Sponsor is determined to be in violation of the Hong Kong National Security Law or the HKAA by competent
authorities, our business operations, financial position and results of operations could be materially and adversely affected.
The
Hong Kong legal system embodies uncertainties which could limit the availability of legal protections.
As
one of the conditions for the handover of the sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong’s
Basic Law. The Basic Law ensured Hong Kong will retain its own currency (Hong Kong Dollar), legal system, parliamentary system and people’s
rights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom to function with a high degree of autonomy.
The Special Administrative Region of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary
and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English
common law system.
However,
if the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s
common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could,
in turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality
protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect
of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation
or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections
available to us, including our ability to enforce our agreements with our customers.
We may, in the future, face legal or
operational risks associated with our Sponsor being based in Hong Kong, which could result in a material change in our operations
and jeopardize our ability to consummate a business combination.
Hong Kong is a Special Administrative Region of the PRC and enjoys its own limited autonomy as defined by
the Basic Law, which is a national law of the PRC and the constitutional document for Hong Kong. Hong Kong’s legal system,
which is different from that of the PRC, is based on common law and has its own laws and regulations. Though some of the national
laws of the PRC are made applicable in Hong Kong under the Basic Law, as of the date hereof, such laws are not applicable to TGVC.
Changes
in the policies, regulations, rules and the enforcement of laws of the PRC government may be made quickly with little or no advance
notice. Additionally, the PRC government may intervene in or influence the operations of PRC-based issuers at any time, and may
exert more control over offerings conducted overseas and/or foreign investment in PRC-based issuers. If the PRC government determines
that TGVC or the Sponsor is a PRC-based issuer, the PRC government would be able to intervene in and influence TGVC’s and
the Sponsor’s operations at any time, and such governmental or regulatory interference could result in a material change
in TGVC’s operations, its ability to consummate a business combination, including the Business Combination, and/or the value
of our common stock.
Pursuant
to the Basic Law, national laws of the PRC shall not be applied in Hong Kong except for those relating to defense, foreign affairs and
other matters outside the autonomy of Hong Kong, which may be listed in Annex III of the Basic Law and applied locally by promulgation
or local legislation. While the National People’s Congress of the PRC has the power to amend the Basic Law, the Basic Law expressly
provides that no amendment to the Basic Law shall contravene the established basic policies of the PRC regarding Hong Kong. As a result,
national laws of the PRC not listed in Annex III of the Basic Law (and any regulatory notices issued pursuant to those national laws)
do not apply in Hong Kong.
The laws and regulations in the PRC continue
to evolve, and their enactment timetable, interpretation and implementation involve significant uncertainties. Accordingly, the
Sponsor may be subject to the risks and uncertainties associated with the legal system in the PRC, including with respect to het
enforcement of laws and the possibility of changes of rules and regulations with little or no advance notice. If, prior to the
expiration of the Combination Period, certain PRC laws and regulations were to become applicable in Hong Kong, the application
of such laws and regulations may have a material impact on the Sponsor’s business, financial condition and results of operations,
as well as the Sponsor’s ability to provide interim funding for TGVC expenses, fulfill its contractual commitments to TGVC
or vote its shares of TGVC Class B Common Stock, any of which could jeopardize TGVC’s ability to consummate a Business Combination.
The
PRC government may intervene in or influence the operations of PRC-based issuers at any time and may exert control over offerings conducted
overseas and foreign investment in PRC-based issuers. If the PRC government determines that TGVC or the Sponsor is a PRC-based issuer,
the PRC government would be able to intervene in and influence TGVC’s and the Sponsor’s operations at any time and such governmental
or regulatory interference could result in a material change in TGVC’s operations and its ability to consummate the Business Combination
and/or the value of the Public Shares. Additionally, PRC governmental and regulatory interference could significantly limit or completely
hinder TGVC’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly
decline or become worthless.
Although none of TGVC’s or the Sponsor’s revenues are derived in Hong
Kong or mainland China, and although none of TGVC’s or the Sponsor’s operations are conducted in Hong Kong or mainland China,
the Sponsor is a Hong Kong company. Accordingly, the Sponsor’s and TGVC’s financial condition and prospects are influenced
by economic, political and legal developments in China, especially the policies of the PRC government. The PRC government has significant
oversight and authority to exert influence on the ability of a PRC-based company to conduct its business. If the PRC government determines
that TGVC or the Sponsor is a PRC-based issuer or that the PRC laws and regulations apply in Hong Kong, it could regulate and may intervene
in or influence the Sponsor’s and TGVC’s operations at any time, which could result in a material adverse change in TGVC’s
or the Sponsor’s operations and TGVC’s ability to consummate the Business Combination and/or the value of the Company’s
securities. Implementation of any regulations directly targeting SPACs or any interference by the PRC government into TGVC’s ability
to consummate the Business Combination could cause TGVC’s securities to significantly decline in value or become worthless. Also,
the PRC government has recently indicated an intent to exert more oversight over offerings that are conducted overseas and/or foreign
investment in PRC-based issuers. Any such action could significantly limit or completely hinder TGVC’s ability to offer or continue
to offer securities to investors, and any uncertainties or negative publicity regarding such actions could also materially and adversely
affect TGVC’s business, prospects, financial condition, reputation, and the trading price of the Company’s shares, which may
cause TGVC’s securities to significantly decline in value or become worthless. Therefore, investors in TGVC face potential uncertainty
from the actions taken by the PRC government.
Moreover,
the significant oversight of the PRC government could also be reflected from the uncertainties arising from the legal system in China.
The laws and regulations of the PRC can change quickly without sufficient notice in advance, which makes it difficult to predict which
kind of laws and regulations will come into force in the future and how they will influence TGVC. Any actions by the PRC government to
exert more oversight and control over offerings that are conducted overseas and/or foreign investment in PRC-based issuers could significantly
limit or completely hinder TGVC’s ability to consummate the Business Combination and/or offer or continue to offer securities to
investors and cause the value of such securities to significantly decline or become worthless.
As
a Hong Kong company, the Sponsor is subject to certain Hong Kong laws and regulations, such as the PDPO, the Competition Ordinance and
the Inland Revenue Ordinance. As of the date of this filing, the Sponsor believes that it is in compliance with each of the Hong Kong
laws and regulations to which it is subject. The PDPO imposes the Data Protection Principles contained in Schedule 1 to the PDPO. The
PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the
act or practice,
as
the case may be, is required or permitted under the PDPO. The six Data Protection Principles are: (i) purpose and manner of collection
of personal data; (ii) accuracy and duration of retention of personal data; (iii) use of personal data; (iv) security of personal data;
(v) information to be generally available; and (vi) access to personal data. Non-compliance with a Data Protection Principle may
lead to a complaint to the Privacy Commissioner. The Privacy Commissioner may serve an enforcement notice to direct the data user to
remedy the contravention and/or instigate prosecution actions. A data user who contravenes an enforcement notice commits an offense that
may lead to a fine and imprisonment. The PDPO criminalizes, including, but not limited to, the misuse or inappropriate use of personal
data in direct marketing activities, non-compliance with a data access request, and the unauthorized disclosure of personal data
obtained without the relevant data user’s consent. An individual who suffers damage, including injured feelings, by reason of a
contravention of the PDPO in relation to his or her personal data may seek compensation from the data user concerned.
The Competition Ordinance prohibits and deters
undertakings in all sectors from adopting anticompetitive conduct which has the objective or effect of preventing, restricting
or distorting competition in Hong Kong. The Competition Ordinance prohibits three forms of behavior to prevent and discourage anti-competitive conduct:
(i) agreements between undertakings that have the objective or effect of preventing, restricting or distorting competition in Hong
Kong; (ii) engaging in conduct that has the objective or effect of preventing, restricting or distorting competition in Hong Kong
by undertakings with a substantial degree of market power in a market; and (iii) mergers that have or are likely to have the effect
of substantially lessening competition in Hong Kong. Currently, the merger rule only applies to the telecommunications sector.
Each of the aforesaid rules is however subject to a number of exclusions and exemptions.
Pursuant
to section 82 of the Competition Ordinance, if the Competition Commission has reasonable cause to believe that (a) a contravention
of the first conduct rule has occurred; and (b) the contravention does not involve serious anti-competitive conduct, it must,
before bringing proceedings in the Competition Tribunal against the undertaking whose conduct is alleged to constitute the contravention,
issue a notice to the undertaking. However, under section 67 of the Competition Ordinance, where a contravention of the first conduct
rule has occurred and the contravention involves serious anti-competitive conduct or a contravention of the second conduct rule
has occurred, the Competition Commission may, instead of bringing proceedings in the Competition Tribunal in the first instance, issue
an Infringement Notice to the person against whom it proposes to bring proceedings, offering not to bring those proceedings on condition
that the person makes a commitment to comply with requirements of the Infringement Notice. Serious anti-competitive conduct means
any conduct that consists of any of the following or any combination of the following — (a) fixing, maintaining,
increasing or controlling the price for the supply of goods or services; (b) allocating sales, territories, customers or markets
for the production or supply of goods or services; (c) fixing, maintaining, controlling, preventing, limiting or eliminating the
production or supply of goods or services; (d) bid-rigging.
In
the event of breaches of the Competition Ordinance, the Competition Tribunal may make orders including: imposing a pecuniary penalty
if satisfied that an entity has contravened a competition rule; disqualifying a person from acting as a director of a company or taking
part in the management of a company; prohibiting an entity from making or giving effect to an agreement; modifying or terminating an
agreement; and requiring the payment of damages to a person who has suffered loss or damage.
Under
the Inland Revenue Ordinance, where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable
to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months
after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual
who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland
Revenue not later than one month before such individual ceases to be employed in Hong Kong.
Under
the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect to dividends
paid by Hong Kong companies.
We
may not be able to obtain certain benefits under the relevant tax treaty on dividends paid by future PRC subsidiaries (if any)
to us through our future Hong Kong subsidiaries (if any).
The EIT Law and its implementing rules provide
that dividends paid by a PRC entity to a nonresident enterprise for income tax purposes is subject to PRC withholding tax at a
rate of 10%, subject to reduction by an applicable tax treaty with China. Pursuant to the Arrangement between Mainland China and
the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax
rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard
rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise. Pursuant to SAT Circular 81, a Hong
Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate:
(1) it must be a company; (2) it must directly own the required percentage of the total owner’s equity and the proportion
of the voting shares in the PRC resident enterprise; and (3) it must have directly owned such required percentage in the PRC resident
enterprise throughout the consecutive 12 months prior to receiving the dividends. In October 2019, the State Administration of
Taxation promulgated SAT Circular 35, which became effective on January 1, 2020. SAT Circular 35 provides that nonresident enterprises
are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead,
nonresident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to
enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting
documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. However,
according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or arrangements between
a PRC enterprise and a non-PRC enterprise are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities
may adjust the favorable withholding tax in the future.
Since
TGVC is a Delaware corporation with no subsidiaries in the PRC and Hong Kong, we do not believe that the above tax arrangements
will have any effect on us at present. If we establish Hong Kong subsidiaries in the future and through such Hong Kong subsidiaries
to hold future PRC subsidiaries, and rely on dividends and other distributions on equity from future PRC subsidiaries to satisfy
part of our liquidity requirements, we cannot assure you that such Hong Kong subsidiaries will be able to complete the necessary
filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement
with respect to dividends to be paid by future PRC subsidiaries to future Hong Kong subsidiaries.
The
M&A Rules and certain other regulations of mainland China establish certain procedures for some acquisitions of mainland China-based
companies by foreign investors that could make it more difficult for PubCo to pursue growth through future acquisitions in mainland
China.
On
August 8, 2006, six mainland China governmental agencies, including the
Ministry of Commerce (“MOFCOM ”) jointly issued the Rules on Mergers and Acquisitions of Domestic Enterprise
by Foreign Investors (the “M&A Rules”), which took effect on September 8, 2006, and were amended on June 22, 2009.
The M&A Rules and other recently adopted regulations and rules concerning mergers and acquisitions established certain procedures
and requirements for merger and acquisition activities by foreign investors in mainland China. For example, the M&A Rules
require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a
domestic enterprise in mainland China, if any important industry is concerned, such transaction involves factors that impact or
may impact national economic security, or such transaction will lead to a change in control of a domestic enterprise which holds
a famous trademark or a mainland China time-honored brand. In addition, the M&A Rules require an overseas special purpose
vehicle formed for listing purposes through acquisitions of domestic companies and controlled by mainland China persons or entities
to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas
stock exchange. TGVC’s legal counsel in mainland China, Han Kun Law Offices,
has advised that based on its understanding of the current laws and regulations of mainland China, approval of the CSRC under
the M&A Rules may not be required for TGVC and the Sponsor to consummate the Business Combination, given that: ( i) the
CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like TGVC’s under this
prospectus are subject to the M&A Rules, (ii) we are a Delaware corporation without subsidiaries, operations and revenues
in mainland China, and have committed not to undertake its initial business combination with any entity that is based in, located
in or has its principal business operations in China (including Hong Kong and Macau), and we have conducted a target search outside
of China, (iii) the Sponsor is a Hong Kong company without subsidiaries, operations and revenues in mainland China, and (iv) Flexi
is a British Virgin Islands company without subsidiaries, operations and revenues in mainland China, and only some of Flexi’s
business operations are conducted in Hong Kong through its Hong Kong subsidiary. However, our counsel in mainland
China has further advised that there remains some uncertainty as to how the M&A Rules will be interpreted or implemented
in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or
detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant mainland
China government agencies, including the CSRC, would reach the same conclusion as our counsel in mainland China.
In
addition, in 2011, the General Office of the State Council of the People’s Republic of China promulgated a Notice on Establishing
the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (“Circular 6”),
which officially established a security review system for mergers and acquisitions of domestic enterprises by foreign investors.
Further, MOFCOM promulgated the Regulations on Implementation of Security Review System for the Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors, effective in September 2011, to implement Circular 6. Under Circular 6, a security review is
required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers
and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises with “national
security” concerns. Under the foregoing MOFCOM regulations,
MOFCOM will focus on the substance and actual impact of the
transaction when deciding whether a specific merger or acquisition is subject to security review. If MOFCOM decides that a specific
merger or acquisition is subject to a security review, it will submit such transaction to the Inter-Ministerial Panel, an authority
established under Circular 6 led by the National Development and Reform Commission, or NDRC, and MOFCOM under the leadership of
the State Council of the People’s Republic of China, to carry out security review. The regulations prohibit foreign investors
from bypassing the security review by structuring transactions through holding shares on behalf of others, trusts, reinvestment
at multiple levels, leases, loans, control through contractual arrangements or offshore transactions.
On
December 19, 2020, the NDRC and MOFCOM jointly promulgated the Measures on the Security Review of Foreign Investment, effective
on January 18, 2021, setting forth provisions concerning the security review mechanism on foreign investment, including the types
of investments subject to review, and the scope and procedures for review, among others. The Office of the Working Mechanism of
the Security Review of Foreign Investment (the “Office of the Working Mechanism”) will be established
under the NDRC, which will lead the task together with MOFCOM. Foreign investors or relevant parties in mainland China must declare
the security review to the Office of the Working Mechanism prior to the investments in or obtaining control over enterprises in
certain industries, including among others, important cultural products and services, important information technology and internet
products and services, important financial services, key technologies and other important fields relating to national security.
In
the future, after consummation of the Business Combination, the surviving entity may grow its business by acquiring complementary
businesses in mainland China, although it has no current plans or intensions to do so. Complying with the requirements of the
above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming and costly, and any
required approval processes, including obtaining approval from mainland China governmental
agencies may delay or inhibit the entity’s ability to complete such transactions; if they fail to comply with such requirements,
it may be subject to penalty, including but not limited to, a fine.
Interpretation
of mainland China laws and their implementation in Hong Kong involve uncertainty.
Mainland
China’s legal system is based on written statutes, and prior court decisions can only be used as a reference. Since 1979,
the mainland China government has promulgated laws and regulations in relation to economic matters such as foreign investment,
corporate organization and governance, commerce, taxation and trade, with a view to developing a comprehensive system of commercial
law, including laws relating to property ownership and development. However, because these laws and regulations have not been
fully developed, and because of the limited volume of published cases and the non-binding nature of prior court decisions, interpretation
of mainland China’s laws and regulations involves a degree of uncertainty. Some of these laws may be changed with little
advance notice, without immediate publication or may be amended with retroactive effect.
On
June 30, 2020, mainland China’s top legislature unanimously passed a new National Security Law for Hong Kong (the “Hong
Kong National Security Law”) that was enacted on the same day. Similar to mainland China’s laws and regulations,
the interpretation of the Hong Kong National Security Law involves a degree of uncertainty.
Depending
on the government agency or how an application or case is presented to such agency, we may receive less favorable interpretations
of laws and regulations than its competitors, particularly if a competitor has long been established in the locality and has developed
a relationship with such agency. In addition, any litigation may be protracted and result in substantial costs and a diversion
of resources and management attention. All of these uncertainties may cause difficulties in the enforcement of Flexi’s land
use rights, entitlements under its permits and other statutory and contractual rights and interests.
The
mainland China government may issue further restrictive measures in the future that could adversely affect our business and prospects.
We
cannot assure you that the mainland China government
will not issue further restrictive measures in the future. To the extent that we commence business and operations in mainland
China as a result of any future partnership, acquisition, expansion, or organic growth,
or to the extent that the mainland China government determines that additional mainland
China rules and regulations should apply in Hong Kong, the mainland China government’s
restrictive regulations and measures could increase our existing and future operating costs in adapting to these regulations and
measures, limit its access to capital resources or even restrict its existing and future business operations, which could adversely
affect its business and prospects.
ENFORCEABILITY
OF CIVIL LIABILITIES
The
Sponsor is a Hong Kong company and certain of our directors and officers are nationals
or residents of jurisdictions other than the United States and most of their assets are located outside the United States. As
a result, it may be difficult, or in some cases impossible, for our shareholders to effect service of process within the United
States upon these individuals, to bring an action against the Sponsor or these individuals in the United States, or to enforce
against the Sponsor or these individuals judgments obtained in United States courts, including judgments predicated upon the civil
liability provisions of the securities laws of the United States or any state in the United States.
The
following table provides the country of citizenship and current residence for each of TGVC’s officers and directors.
| Officer/Director |
Country of Citizenship |
Country of Current Residence |
| Pui Lan Patrick Tsang |
Ireland |
United Arab Emirates |
| Philip Rettger |
United States |
United States |
| Jason Cheng Yuen Ma |
United States |
United States |
| Komal Ahmad |
United States |
United States |
| Michael Alexander |
Australia |
Australia |
The
PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States
and many other countries and regions. Therefore, recognition and enforcement in the PRC of judgments of U.S. courts in relation
to any matter not subject to a binding arbitration provision may be difficult or impossible.
The
recognition and enforcement of foreign judgments are provided for under the Civil Procedures Law. Mainland China courts may
recognize and enforce foreign judgments in accordance with the requirements of the Civil Procedures Law based either
on treaties between mainland China and the country where the judgment is made or on principles of reciprocity between jurisdictions.
The PRC does not have any treaties or other forms of written arrangements with the U.S. that provide for the reciprocal recognition
and enforcement of foreign judgments. In addition, according to the Civil Procedures Law, mainland China courts will not
enforce a foreign judgment against our or the Sponsor’s directors and officers if they decide that the judgment violates
the basic principles of mainland China laws or national sovereignty, security, or public interest. As a result, it is uncertain
whether and on what basis a mainland China court would enforce a judgment rendered by a court in the U.S. Recognition and enforcement
in mainland China of judgments of U.S. courts in relation to any matter not subject to a binding arbitration provision may be
difficult or impossible.
There
is also uncertainty as to whether the courts of Hong Kong would enforce in Hong Kong, in original actions or in actions for enforcement,
judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States
or the securities laws of any state or territory within the United States. There are currently no treaties or other arrangements
providing for reciprocal enforcement of foreign judgments between Hong Kong and the United States. A
judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at
common law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary
judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is (i) for a debt or
a definite sum of money (not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty)
and (ii) final and conclusive on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced
in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice;
(c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was
not jurisdictionally competent; or € the judgment was in conflict with a prior Hong Kong judgment.
Due
to the lack of reciprocity and treaties between the U.S., on the one hand, and the PRC, on the other hand, and the additional
time and cost constraints in order to enforce judgments obtained in U.S. courts based upon the civil liability provisions of U.S.
federal securities laws in the PRC, our shareholders and, after the consummation of the Business Combination, the public entity’s
shareholders, may experience difficulties in effecting service of legal process in the U.S. and enforcing civil liabilities in
the PRC against the Sponsor and certain of our directors and officers.
We have
appointed Pui Lan Patrick Tsang, with an office located at 1390 Market Street, Suite 200, San Francisco, CA 94102, as our agent upon
whom process may be served in any action brought against it under the securities laws of the United States.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
As the Company is a smaller reporting company,
this item is not applicable.
ITEM 2. DESCRIPTION OF PROPERTY.
Our principal executive office is located at
1390 Market Street, Suite 200, San Francisco, California 94102 and we pay a monthly rent of $445.
ITEM 3. LEGAL PROCEEDINGS.
There is no material litigation, arbitration
or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
ITEM 4. MINE SAFETY DISCLOSURES.
As the Company is a smaller reporting company,
this item is not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
The units, Class A common stock and warrants
were approved for listing on the NASDAQ Global Market (“NASDAQ”), under the symbol “TGVCU,” “TGVC”
and “TGVCW,” respectively on November 2, 2021. Commencing on November 22, 2021, holders of the Units can elect to separately
trade the shares of Class A common stock and warrants included in the Units. Any Units not separated will continue to trade on
the NASDAQ under the symbol “TGVCU”. Any underlying Class A common stock and warrants that are separated will trade
on the NASDAQ under the symbols “TGVC” and “TGVCW,” respectively. Our CUSIP numbers are 87251T 109 for
our common stock, 87251T 117 for the warrant and 87251T 208 for the Unit.
Holders
As of March 29, 2023 in accordance
with our transfer agent records, there was one holder of record of TGVC Class A Common Stock, seven holders of record of TGVC
Class B Common Stock, 13 holders of record of TGVC Units and two holders of record of TGVC Warrants.
This number excludes any estimate by us of the number of beneficial
owners of shares held in street name, the accuracy of which cannot be guaranteed.
Dividends
We have never paid cash dividends on any of
our capital stock and we currently intend to retain our future earnings, if any, to fund the development and growth of our business.
We do not intend to pay cash dividends to holders of our common stock in the foreseeable future.
Securities Authorized for Issuance under
Equity Compensation Plans
We do
not currently have any equity compensation plans.
Sale of Unregistered Securities
Information regarding any equity securities
we have sold since inception that were not registered under the Securities Act of 1933, as amended is set forth below. Each such
transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities
Act or Rule 506 of Regulation D promulgated by the SEC, unless otherwise noted. Unless stated otherwise: (i) the securities were
offered and sold only to accredited investors; (ii) there was no general solicitation or general advertising related to the offerings;
(iii) each of the persons who received these unregistered securities had knowledge and experience in financial and business matters
which allowed them to evaluate the merits and risk of the receipt of these securities, and that they were knowledgeable about our
operations and financial condition; (iv) no underwriter participated in, nor did we pay any commissions or fees to any underwriter
in connection with the transactions; and, (v) each certificate issued for these unregistered securities contained a legend stating
that the securities have not been registered under the Securities Act and setting forth the restrictions on the transferability
and the sale of the securities.
Between February and March 2021, we issued
an aggregate of 2,589,149 founder shares for an aggregate purchase price of $23,282, in cash, or approximately $0.009 per share.
We also issued 150,000 founder shares to each of TriPoint and HFI for a purchase price of $1,350 each. The number of founder shares
issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common
stock after the IPO. Such securities were issued in connection with our organization pursuant to the exemption from registration
contained in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501
of Regulation D.
On November 2, 2021,
the Sponsor entered into an Agreement with the Company’s three independent directors under which they were each assigned
30,000 of the Founder Shares the Sponsor owned, as an inducement to serve as directors of the Company, for which they paid $0.009
per share, or an aggregate of $810. The shares vested upon the consummation of the IPO. The fair value of the 90,000 shares at
November 2, 2021, was estimated using a Monte Carlo simulation model to be approximately $706,000 in the aggregate, which the Company
recorded as director compensation expense.
On November 5, 2021,
the Company consummated the IPO of 11,500,000 units (the “Units” and, with respect to the Common stock included
in the Units being offered, the “Public Shares” and the warrants included in the Units being offered, the “Public
Warrants”) at $10.00 per Unit, including the full exercise of the underwriters’ over-allotment of 1,500,000 Units,
generating gross proceeds to the Company of $115,000,000. Simultaneously with the consummation of the IPO, the Company consummated
the private placement of 5,500,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per
Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $5,500,000.
Use of Proceeds
The IPO generated
gross proceeds to the Company of $115,000,000. The Private Placement generated gross proceeds to the Company of $5,500,000.
A total of $117,300,000
of the proceeds from the IPO and the Private Placement was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A.,
maintained by Continental Stock Transfer & Trust Company, acting as trustee.
Transaction costs
of the IPO amounted to $3,040,822 consisting of $1,150,000 of underwriting commissions, $575,000 of fair value of
the Units issued to ThinkEquity LLC (the representative of the underwriters), $579,110 of fair value of the Founder Shares
sold to advisors in excess of proceeds, and $736,712 of other offering costs. The remaining proceeds will be used for paying
existing accounts payable, identifying and evaluating prospective initial 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 the Business Combination.
Repurchases of Equity Securities
None.
ITEM 6. SELECTED FINANCIAL DATA
As the Company is a smaller reporting company,
this item is not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Caution Regarding Forward-Looking Information
The following discussion and analysis of
our financial condition and result of operations should be read in conjunction with our audited financial statements and the related
notes to those financial statements included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking
statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect
our future operating results or financial position. Actual results and the timing of events may differ materially from those contained
in these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk
Factors” and “Forward-Looking Statements” appearing elsewhere in this Annual Report on Form 10-K.
This Annual Report on Form 10-K includes
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on
our current expectations and projections about future events. These forward-looking statements are subject to known and unknown
risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward- looking statements by terminology such as “may,”
“should,” “could,” “would,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions.
Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters,
as well as all other statements other than statements of historical fact included in this Form 10-K. Factors that might cause or
contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission
(“SEC”) filings.
The following section reflects management’s
views on the financial condition as of December 31, 2022, and the results of operations and cash flows for the period ended December
31, 2022. This section is provided as a supplement to, and should be read in conjunction with, the Company’s audited financial
statements and related notes to the financial statements contained elsewhere in this Report.
Overview
We are a newly organized
blank check company incorporated on February 8, 2021, as a Delaware corporation and formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses
(the “Business Combination”).
While our efforts to identify
a target business may span many industries and regions worldwide, we intend to focus our search for prospects within the space
technology, financial technology, technology, media and telecom (“TMT”)
industries and related sectors. We have not selected any specific business combination target and we have not, nor has anyone
on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Though our
sponsor is a Hong Kong company, a majority of our management are located outside of China (including Hong Kong and Macau) and we
will not undertake our initial business combination with any entity that conducts a majority of its business or is headquartered
in China (including Hong Kong and Macau). We intend to effectuate our initial business combination using cash from the proceeds
of the IPO and the private placement of the placement warrants, the proceeds of the sale of our shares in connection with our initial
business combination (pursuant to backstop agreements we may enter into following the consummation of the IPO or otherwise), shares
issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
The issuance of additional
shares in connection with an initial business combination to the owners of the target or other investors:
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may significantly dilute the equity interest of current shareholders, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock; |
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may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock; |
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could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and |
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may adversely affect prevailing market prices for our Class A common stock and/or warrants. |
Similarly, if we issue debt
securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
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our inability to pay dividends on our common stock; |
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes; |
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; |
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and |
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other purposes and other disadvantages compared to our competitors who have less debt. |
Our
sponsor is Tsangs Group Holdings Limited (the “Sponsor”). The registration statement for our initial public offering
was declared effective on November 2, 2021 (File No. 333-258773) (the “Registration Statement”). On November 5, 2021,
we consummated the IPO of 11,500,000 units (the “Units” and, with respect to the Common stock included in the Units
being offered, the “Public Shares” and the warrants included in the Units being offered, the “Public Warrants”)
at $10.00 per Unit, including the full exercise of the underwriters’ over-allotment of 1,500,000 Units. Transaction costs
amounted to $3,040,822 consisting of $1,150,000 of underwriting commissions, $575,000 of fair value of the Units issued to ThinkEquity
LLC (“ThinkEquity”), the representative of the underwriters, $579,110 of fair value of the Founder Shares sold to advisors
in excess of proceeds, and $736,712 of other offering costs, and were charged to stockholders’ equity upon the completion
of the Initial Public Offering.
Simultaneously
with the consummation of the IPO, the Company consummated the private placement of 5,500,000 Warrants (the “Private Placement
Warrants”) at a price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of
$5,500,000.
Upon
the closing of the Initial Public Offering and the Private Placement, an amount of $117,300,000 ($10.20 per Unit) from the net proceeds
of the sale of Units in the IPO and a portion of the proceeds of the sale of the Private Placement Warrants was deposited into a trust
account (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as
trustee, and will be invested only in U.S. government securities with a maturity of 180 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.
Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay franchise and income
tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds from the IPO and the sale of the Private
Placement Warrants will not be released from the Trust Account until the earliest of: (a) the completion of the initial Business Combination;
(b) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate
of incorporation: (i) to modify the substance or timing of our obligation to allow redemption in connection with the initial Business
Combination or certain amendments to our charter prior thereto or to redeem 100% of the Public Shares if we are unable to complete the
initial Business Combination within 24 months from the closing of the IPO, May 5, 2023; or (ii) with respect to any other provision relating
to stockholders’ rights or pre-Business Combination activity; and (c) the redemption of 100% of the Public Shares if we are unable
to complete the initial Business Combination within the required time frame (subject to the requirements of applicable law).
We
have 24 months from the closing of the IPO, until May 5, 2023 (the “Combination
Period”) to complete the initial Business Combination. If we are unable to complete the initial Business Combination within the
Combination Period, we 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 subject to lawfully available funds therefor, 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 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), subject to applicable law; and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining stockholders and the board of directors, dissolve and liquidate,
subject in the case of clauses (ii) and (iii) above to our 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 we fail to complete the initial Business Combination within the Combination Period.
On
December 5, 2022, the Company entered into a Business Combination Agreement (the “Business Combination
Agreement”) by and among (i) The Flexi Group Limited, a business company with limited liability incorporated under the
laws of the British Virgin Islands (the “Flexi”), (ii) The Flexi Group Holdings, Ltd., a business company
with limited liability incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of Flexi
(“PubCo” and, together with Flexi, the “Flexi Group”), (iii) The Flexi Merger
Co. Ltd., a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct wholly
owned subsidiary of PubCo (“Merger Sub 1”), and (iv) Flexi Merger Co. LLC, a Delaware limited liability
company and a direct wholly owned subsidiary of PubCo (“Merger Sub 2” and, Merger Sub 2, PubCo and Merger
Sub 1, each, individually, an “Acquisition Entity”). On August 10, 2023, we entered into an amendment (the
“First Amendment”) to the Business Combination Agreement. Capitalized terms used in this Annual Report on
Form 10-K but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.
Pursuant
to the Business Combination Agreement, subject to the terms and conditions set forth therein, (i) Merger Sub 1 will merge
with and into Flexi (the “Initial Merger”), whereby the separate existence of Merger Sub 1 will cease
and Flexi will be the surviving entity of the Initial Merger and become a wholly owned subsidiary of PubCo, and (ii) following
confirmation of the effective filing of the documents required to implement the Initial Merger, Merger Sub 2 will merge with and
into TGVC (the “SPAC Merger” and together with the Initial Merger, the “Mergers”),
the separate existence of Merger Sub 2 will cease and TGVC will be the surviving entity of the SPAC Merger and a direct wholly
owned subsidiary of PubCo.
As
a result of the Mergers, among other things, (i) each outstanding Flexi Ordinary Share will be cancelled in exchange for the right
to receive such number of PubCo Ordinary Shares that is equal to the Company Exchange Ratio, (ii) each outstanding SPAC Unit will
be automatically detached and the holder thereof will be deemed to hold one share of SPAC Class A Common Stock and one SPAC Warrant,
(iii) each outstanding share of SPAC Class B Common Stock will automatically convert into SPAC Class A Common Stock, (iv) each
outstanding share of SPAC Class A Common Stock will be cancelled in exchange for the right to receive such number of PubCo Ordinary
Shares that is equal to the SPAC Exchange Ratio, and (v) each outstanding SPAC Warrant will be assumed by PubCo and converted into
a warrant to purchase PubCo Ordinary Shares (each, an “Assumed SPAC Warrant”).
Under
the Business Combination Agreement, the parties’ obligations to consummate the Transactions are subject to a number of customary
conditions for special purpose acquisition companies, including, among others, the following: (i) the approval of the Mergers and
the other shareholder proposals required to approve the Transactions by the Company’s and Flexi’s shareholders, (ii)
all specified approvals or consents (including governmental and regulatory approvals) have been obtained and all waiting, notice,
or review periods have expired or been terminated, as applicable, (iii) the effectiveness of the F-4 Registration Statement, (iv)
PubCo’s initial listing application with Nasdaq shall have been conditionally approved and, immediately following the Closing,
PubCo shall satisfy any applicable initial and continuing listing requirements of Nasdaq and PubCo shall not have received any
notice of non-compliance therewith, and (v) the PubCo Ordinary Shares and Assumed SPAC Warrants having been approved for listing
on Nasdaq, subject to round lot holder requirements.
In
addition to these customary closing conditions, the Company must also hold net tangible assets of at least $5,000,001 immediately
prior to Closing, net of Redemptions and liabilities (including the Company’s transaction expenses).
The
transaction is expected to be completed in the second quarter of 2023, subject to regulatory approvals and other customary closing
conditions. After closing, The Flexi Group’s ordinary shares are expected to trade on the Nasdaq Stock Market LLC under ticker
symbol FLXG.
On
May 4, 2023, the Company held a special meeting of stockholders (the “Extension
Meeting”), where our stockholders approved amending (i) our then existing amended and restated certificate of incorporation and
(ii) the Investment Management Trust Agreement, dated November 2, 2021, by and between Continental Stock Transfer & Trust Company
and the Company, to extend the date by which the Company must complete a business combination for an additional six months, from May 5,
2023 to November 5, 2023 (the “Extension”). In connection with the Extension, 10,164,304 shares were tendered for redemption,
which represented 88.4% of the total shares outstanding at the time of redemption, and approximately $105.6 million was released from
the Trust Account to pay such redeeming stockholders. As a result of this redemption, and after $696,575 was withdrawn from the Trust
Account in May 2023 for tax obligations, approximately $13.9 million remained in the trust account as of May 31, 2023 and there
are 1,335,696 shares issued and outstanding.
In connection with the Extension,
in order to induce stockholders not to redeem their shares, on April 30, 2023, we and our Sponsor entered into an agreement (the ”Non-Redemption Agreement”)
with Bulldog Investors, LLP (“Bulldog”) and Phillip Goldstein (“Goldstein”
and, together with Bulldog, the “Investors”) in exchange for the Investors agreeing not to redeem shares
of the Company’s Class A common stock sold in the Company’s IPO (the “Public Shares”) at
the Extension Meeting. The Non-Redemption Agreement provides for, among other things, the Sponsor to pay approximately
$105,000 to the Investors in exchange for the Investors agreeing to hold and not redeem certain Public Shares at the Extension Meeting.
In addition, in order to induce stockholders to not redeem their shares and in connection with the Extension, our sponsor will
deposit an additional cash contribution of $0.04 per share per month to the Trust Account (each, a “Monthly Extension
Payment”). Assuming that we will complete our initial business combination by November 5, 2023, a total of up
to $320,567 from six Monthly Extension Payments will be deposited in the Trust Account by October 5, 2023. As of the date hereof,
four Monthly Extension Payments, in the aggregate principal amount of $213,711.36, have been deposited into the Trust Account.
Each Monthly Extension Payment will be evidenced by an unsecured promissory note (an “Extension Note”)
issued by our sponsor to the Company, each in the principal amount equal to the Monthly Extension Payment. Each Extension Note
will bear no interest and be payable in full upon consummation of a business combination. If we do not consummate a business combination
by November 5, 2023, the Extension Notes will be repaid only from funds held outside of the Trust Account or will be forfeited,
eliminated or otherwise forgiven.
If the Sponsor fails to
make a Monthly Extension Payment when due, (subject to a three (3) business day grace period), then we will liquidate and dissolve
as soon as practicable after such date and in accordance with our Charter.
Additionally,
pursuant to the Non-Redemption Agreement, the Company has agreed
that until the earlier of (a) the consummation of the Company’s initial business combination; (b) the liquidation of the trust account;
and (c) 24 months from consummation of the Company’s IPO, the Company will maintain the investment of funds held in the trust account
in interest-bearing United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940,
as amended (the “Investment Company Act”), having a maturity of 185 days or less, or in money market funds meeting
the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the Investment Company Act,
which invest only in direct U.S. government treasury obligations. The Company has also agreed that it will not use any amounts in the
trust account, or the interest earned thereon, to pay any excise tax that may be imposed on the Company pursuant to the Inflation Reduction
Act (IRA) of 2022 (H.R. 5376) (the “Inflation Reduction Act”) due to any redemptions of public shares at the
Extension Meeting, including in connection with a liquidation of the Company if it does not effect a business combination prior to its
termination date by the Company.
In
connection with the Non-Redemption Agreement, the Company amended its advisory agreement with ThinkEquity LLC and agreed to pay
ThinkEquity LLC an advisory fee of $50,000.
Also
in connection with the Non-Redemption Agreement, a director of the Company agreed to provide a loan to the Sponsor in the principal
amount of approximately $105,000.
Liquidity,
Capital Resources, and Going Concern
On
November 5, 2021, the Company consummated the IPO of 11,500,000 units (the “Units” and, with respect to the Common
stock included in the Units that were offered, the “Public Shares” and the warrants included in the Units, the “Public
Warrants”) at $10.00 per Unit, including the full exercise of the underwriters’ over-allotment of 1,500,000 Units,
generating gross proceeds to the Company of $115,000,000, which is discussed in Note 3.
Simultaneously
with the consummation of the IPO, the Company consummated the private placement of 5,500,000 Warrants (the “Private Placement
Warrants”) at a price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of
$5,500,000, which is described in Note 4.
As
of December 31, 2022, we had investments held in the Trust Account of $118,956,557 (including approximately $1,656,557 of dividend
income and interest income) consisting of money market fund invested in treasury trust fund and matured U.S. Treasury Bills with
a maturity of 185 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through December
31, 2022, we have not withdrawn any interest earned from the Trust Account, however, we may in future periods as permitted under
the Trust Agreement.
We
intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the
Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is
used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account
will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue
our growth strategies.
As of
December 31, 2022, we had cash of $147,020 and working capital deficit of $894,841. We intend to use the funds held outside the Trust
Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel
to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate
documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination transaction.
Our
sponsor has committed that they are willing and able to provide the Company with any additional funds it needs to carry out its
operations. In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor, an
affiliate of the Sponsor or certain of the Company’s officers and directors have committed to loan the Company funds as may
be required (the “Working Capital Loans”). If the Company completes an initial Business Combination, the Company would
repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid
only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company
may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from the
Trust Account would be used to repay such loaned amounts. Up to $3,000,000 of such loans may be convertible into Private Placement
Warrants of the post Business Combination entity, at a price of $1.00 per warrant at the option of the lender. The warrants would
be identical to the Private Placement Warrants issued to the Sponsor. As of December 31, 2022 and 2021, the Company had no borrowings
under the Working Capital Loans.
The
Company expects to incur significant costs in pursuit of its acquisition plans. Based on the foregoing, management believes that we will
not have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination
or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and
evaluating prospective initial 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 the business
combination.
In connection with the Company’s assessment of going concern considerations
in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company’s
business plan is dependent on the completion of the Business Combination, the Company’s existing cash and working capital as of
December 31, 2022 are not sufficient to complete its planned activities for a reasonable period of time, and the date for mandatory liquidation
and dissolution raises substantial doubt about the Company’s ability to continue as a going concern through May 5, 2023, the scheduled
liquidation date of the Company if it does not complete a Business Combination prior to such date. These conditions also raise substantial
doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial
statements are issued. Management plans to address this uncertainty through the Business Combination as discussed above. There is no assurance
that the Company’s plans to consummate a Business Combination will be successful within the Combination Period. Our financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
Risks and Uncertainties
In
February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this
action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus.
Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial
statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable
as of the date of these financial statements.
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus
could have a negative effect on our financial position, results of our operations, and/or search for a target company, the specific
impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Inflation Reduction
Act of 2022
On
August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides
for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations
and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise
tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the
excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes
of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances
against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise
tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other
guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any
redemption or other repurchase that occurs after December 31, 2022, in connection with a
Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether
and to what extent the Company would be subject to the excise tax in connection with a Business
Combination, extension vote or otherwise would depend on a number of factors, including (i)
the fair market value of the redemptions and repurchases in connection with the Business
Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii)
the nature and amount of any “PIPE” or other equity issuances in connection with
a Business Combination (or otherwise issued not in connection with a Business Combination
but issued within the same taxable year of a Business Combination) and (iv) the content of
regulations and other guidance from the Treasury. The foregoing could cause a reduction
in the cash available on hand to complete a Business Combination and in the Company’s
ability to complete a Business Combination. See, Risk Factor – “If our
Initial Business Combination involves a company organized under the laws of a state of the
United States, it is possible a 1% U.S. federal excise tax will be imposed on us in connection
with redemptions of our common stock after or in connection with such Initial Business Combination.”
Results of Operations
As
of December 31, 2022, we had not commenced any operations. All activity for the year ended December 31, 2022 relates to our formation
and the Initial Public Offering. We have neither engaged in any operations nor generated any revenues to date. We will not generate
any operating revenues until after the completion of our initial Business Combination, at the earliest. We will generate non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering.
We expect to incur increased 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 year ended
December 31, 2022, we had a net loss of $857,534, which consists of formation and operating costs of $2,238,122 and provision
for income tax of $268,239, offset by interest earned on marketable securities held in Trust Account of $1,648,827.
For the period from February
8, 2021 (inception) to December 31, 2021, we had a net loss of $1,073,167, which consisted of formation and operating costs amounting
to $375,267 and director’s stock-based compensation of $705,630, offset by interest income amounting to $7,730.
Contractual Obligations
We
do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term
liabilities.
Administrative Services Agreement
We
entered into an administrative services agreement on November 2, 2021, pursuant to which we will pay an affiliate of the Sponsor,
$445 per month for office space, utilities and secretarial and administrative support. Upon completion of the initial Business
Combination or the Company’s liquidation, we will cease paying these monthly fees.
Registration Rights
The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans
(and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued
upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant
to a registration rights agreement that was signed prior to the effective date of the Registration
Statement, requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion
to the Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands,
that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to our completion of the initial Business Combination.
Underwriting Agreement
On
November 5, 2021, we paid a cash underwriting discount of 1.0% per Unit, or $1,150,000.
Advisory Services Agreement
On
December 23, 2022, we entered into an agreement with ThinkEquity to
provide financial advisory services in connection with the proposed Business Combination with The Flexi Group Ltd. We shall pay ThinkEquity
an advisory fee in an amount equal to the greater of (i) 4.0% of the net funds from our Trust Account after investor redemptions, or (ii)
$300,000, which fee shall be due and payable in immediately available funds on the day of closing of the proposed Business Combination.
In addition to any fees which may be payable to ThinkEquity under the agreement, we shall reimburse ThinkEquity, upon reasonable request
made from time to time, for its reasonable and documented out-of-pocket expenses incurred in connection with the Advisory Services up
to a maximum of $15,000, including, but not limited to, the reasonable and documented fees and disbursements of ThinkEquity’s legal
counsel.
Critical Accounting Policies and Significant
Estimates
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.
Deferred Offering Costs
We
comply with the requirements of ASC 340-10-S99-1. Deferred offering costs consist of legal, accounting, underwriting fees and other
costs incurred through the balance sheet date that are directly related to the Public Offering. Offering costs are allocated to
the separable financial instruments to be issued in the IPO based on a relative fair value basis, compared to total proceeds received.
Upon closing of the IPO on November 5, 2021, offering costs associated with the Class A common stock and the warrants were charged
to stockholders’ equity. Transaction costs amounted to $3,040,822, all of which was allocated to stockholders’ equity.
Share Based Compensation
The Company complies with ASC 718 Compensation-
Stock Compensation, regarding interests in founder shares acquired by directors and advisors of the Company as compensation. The
interests in the founder shares vested upon the Company completing the initial public offering and compensation expense has been
recorded accordingly at that date based upon the initial grant date fair value. The determination of the fair value of the share-based
compensation awards represents a significant estimate within the financial statements. The fair value is based upon a Monte Carlo
valuation that considers the probability of an initial public offering, business combination and other risk factors.
The interest in the founder
shares was issued on November 2, 2021. Since the approach in ASC 718 is to determine the fair value without regard to the
vesting date, the Company determined the valuation of the Class B shares as of November 2, 2021. Consideration of $810 was paid
for the interest in the founder shares.
Common Stock Subject to Possible Redemption
We
account for our common stock subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing
Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and
measured at fair value. Conditionally redeemable common stock (including shares of common stock 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) is classified as temporary equity. At all other times, common stock is classified as stockholders’
equity. Our Common stock features certain redemption rights that are considered to be outside of the Company’s control and
is subject to the occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented
at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
We
recognize changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal
the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock
are affected by charges against additional paid in capital and accumulated deficit. There was no change to redemption
value at December 31, 2022 since the incurred taxes exceed the interest earned inception to date. The dissolution expense of $100,000
is not included in the redemption value of the shares subject to redemption since it is only taken into account in the event of
the Company’s liquidation.
Net Loss Per Common Share
The
Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company
has two classes of shares, which are referred to as Class A common stock and Class B common stock. Net loss per common share is
computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding
common stock subject to forfeiture. Earnings and losses are shared pro rata between the two classes of shares. The Company has
not considered the effect of the Private Placement to purchase an aggregate of 5,500,000 of our Class A common stock in the calculation
of diluted loss per share, since their exercise is contingent upon future events. As a result, diluted net loss per common stock
is the same as basic net loss per common stock.
Warrants
We
account 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 FASB ASC 480, “Distinguishing Liabilities from Equity” (“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 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 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 additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the
criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance,
and each balance sheet date thereafter. We account for our outstanding warrants as equity-classified instruments.
Off-Balance Sheet Arrangements
As
of December 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Inflation
We
do not believe that inflation had a material impact on our business or operating results during the period presented.
Emerging Growth Company Status
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, 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 approval of any golden parachute payments not previously approved.
Further,
Section102 (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. We have
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, we, 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 our 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
We are a smaller reporting company as defined
by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.
CONTENTS
| PAGE |
F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 688) |
| |
|
|
| PAGE |
F-2 |
BALANCE SHEETS AS OF DECEMBER 31, 2022 AND
2021 |
| |
|
|
| PAGE |
F-3 |
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD FROM FEBRUARY 8, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021 |
| |
|
|
| PAGE |
F-4 |
STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD FROM FEBRUARY 8, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021 |
| |
|
|
| PAGES |
F-5 |
STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD FROM FEBRUARY 8, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021 |
| |
|
|
| PAGES |
F-6 |
NOTES TO FINANCIAL STATEMENTS |
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Stockholders and Board of Directors
of
TG Venture Acquisition Corp.
Opinion on the Financial Statements
We have audited the
accompanying balance sheets of TG Venture Acquisition Corp. (the “Company”) as of December 31, 2022 and 2021, the related
statements of operations, changes in stockholders’ (deficit) equity and cash flows for the year ended December 31, 2022 and for
the period from February 8, 2021 (inception) through December 31, 2021, and the related notes (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 and for the
period from February 8, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted in the
United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial
statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial
statements, the Company’s business plan is dependent on the completion of a business combination and the Company’s cash and
working capital as of December 31, 2022 are not sufficient to complete its planned activities for a reasonable period of time, which
is considered to be one year from the issuance date of the financial statements. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits
in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included
performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
| /s/ Marcum LLP |
|
| |
|
| Marcum LLP |
|
| |
|
| We have served as the Company’s auditor since 2021. |
|
| |
|
| Hartford, CT |
|
| March 29, 2023 |
|
| |
|
| PCAOB ID Number 688 |
|
TG VENTURE
ACQUISITION CORP.
BALANCE
SHEETS
| | |
| | | |
| | |
| | |
December 31, |
| | |
2022 | |
2021 |
| ASSETS | |
| | | |
| | |
| Current
assets: | |
| | | |
| | |
| Cash | |
$ | 147,020 | | |
$ | 664,626 | |
| Prepaid expenses | |
| 140,692 | | |
| 436,676 | |
| Total
Current Assets | |
| 287,712 | | |
| 1,101,302 | |
| | |
| | | |
| | |
| Prepaid expense –
noncurrent | |
| — | | |
| 138,423 | |
| Cash and investments held
in Trust Account | |
| 118,956,557 | | |
| 117,307,730 | |
| TOTAL
ASSETS | |
$ | 119,244,269 | | |
$ | 118,547,455 | |
| | |
| | | |
| | |
| LIABILITIES
AND STOCKHOLDERS’ (DEFICIT) EQUITY | |
| | | |
| | |
| Current
liabilities: | |
| | | |
| | |
| Accounts payable and accrued
expenses | |
$ | 1,455,616 | | |
$ | 274,847 | |
| Due to related parties | |
| 106,215 | | |
| 875 | |
| Income tax payable | |
| 268,239 | | |
| — | |
| Total Current Liabilities | |
| 1,830,070 | | |
| 275,722 | |
| TOTAL
LIABILITIES | |
| 1,830,070 | | |
| 275,722 | |
| | |
| | | |
| | |
| Commitments
and Contingencies (Note 6) | |
| | | |
| | |
| | |
| | | |
| | |
| Class A common stock subject
to possible redemption, $0.0001 par value; 11,500,000 shares at a redemption value of $10.29 and $10.20 per share at December 31,
2022 and 2021, respectively | |
| 118,309,040 | | |
| 117,300,000 | |
| | |
| | | |
| | |
| STOCKHOLDERS’
(DEFICIT) EQUITY: | |
| | | |
| | |
| Preferred stock, $0.0001
par value; 1,000,000 shares authorized; no shares issued and outstanding | |
| — | | |
| — | |
| Class A common stock, $0.0001
par value, 100,000,000 shares authorized, 57,500 shares issued and outstanding (excluding 11,500,000 shares subject to possible redemption)
at December 31, 2022 and 2021 | |
| 6 | | |
| 6 | |
| Class B common stock, $0.0001
par value, 10,000,000 shares authorized, 2,889,149 shares issued and outstanding at December 31, 2022 and 2021 | |
| 289 | | |
| 289 | |
| Additional paid-in capital | |
| 1,035,565 | | |
| 2,044,605 | |
| Accumulated deficit | |
| (1,930,701 | ) | |
| (1,073,167 | ) |
| TOTAL
STOCKHOLDERS’ (DEFICIT) EQUITY | |
| (894,841 | ) | |
| 971,733 | |
| TOTAL
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |
$ | 119,244,269 | | |
$ | 118,547,455 | |
The
accompanying notes are an integral part of these financial statements.
TG VENTURE
ACQUISITION CORP.
STATEMENTS
OF OPERATIONS
| | |
| | | |
| | |
| | |
| |
For the Period |
| | |
| |
from February 8, |
| | |
For the Year | |
2021 (Inception) |
| | |
Ended | |
through |
| | |
December 31, | |
December 31, |
| | |
2022 | |
2021 |
| | |
| |
|
| | |
| |
|
| Formation and
operating costs | |
$ | 2,238,122 | | |
$ | 375,267 | |
| Loss
from operations | |
| (2,238,122 | ) | |
| (375,267 | ) |
| | |
| | | |
| | |
| Other income (expenses): | |
| | | |
| | |
| Share based compensation
expense | |
| — | | |
| (705,630 | ) |
| Interest income on cash
and investments held in Trust Account | |
| 1,648,827 | | |
| 7,730 | |
| Total
other income (expenses) | |
| 1,648,827 | | |
| (697,900 | ) |
| | |
| | | |
| | |
| Loss
before provision for income taxes | |
| (589,295 | ) | |
| (1,073,167 | ) |
| Provision for income taxes | |
| 268,239 | | |
| — | |
| Net
loss | |
$ | (857,534 | ) | |
$ | (1,073,167 | ) |
| | |
| | | |
| | |
| Basic and diluted weighted
average shares outstanding, Class A common stock subject to possible redemption | |
| 11,557,500 | | |
| 2,014,610 | |
| Basic
and diluted net loss per common share, Class A common stock subject to possible redemption | |
$ | (0.06 | ) | |
$ | (0.26 | ) |
| | |
| | | |
| | |
| Basic and diluted weighted
average shares outstanding, Class B common stock | |
| 2,889,149 | | |
| 2,095,139 | |
| Basic
and diluted net loss per common share, Class B common stock | |
$ | (0.06 | ) | |
$ | (0.26 | ) |
The
accompanying notes are an integral part of these financial statements.
TG
VENTURE ACQUISITION CORP.
STATEMENTS
OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
FOR
THE YEAR ENDED DECEMBER 31, 2022 AND FOR THE PERIOD FROM FEBRUARY 8, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Class A |
|
Class B |
|
Additional |
|
|
|
Total |
| |
|
Common Stock |
|
Common Stock |
|
Paid-in |
|
Accumulated |
|
Stockholders’ |
| |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
(Deficit)
Equity |
| Balance — February
8, 2021 (inception) |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Issuance of founder shares |
|
|
— |
|
|
|
— |
|
|
|
2,889,149 |
|
|
|
289 |
|
|
|
25,693 |
|
|
|
— |
|
|
|
25,982 |
|
| Issuance of representative
units |
|
|
57,500 |
|
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
— |
|
| Value of representative units issued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
575,000 |
|
|
|
— |
|
|
|
575,000 |
|
| Excess fair value of Class
B stock sold to advisors |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
579,110 |
|
|
|
— |
|
|
|
579,110 |
|
| Director share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
705,630 |
|
|
|
— |
|
|
|
705,630 |
|
| Issuance of private placement
warrants |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,500,000 |
|
|
|
— |
|
|
|
5,500,000 |
|
| Allocated proceeds to public
warrants |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,908,120 |
|
|
|
— |
|
|
|
6,908,120 |
|
| Underwriters’ discount
allocated to warrants |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(69,081 |
) |
|
|
— |
|
|
|
(69,081 |
) |
| Other offering expenses allocated
to warrants |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(113,583 |
) |
|
|
— |
|
|
|
(113,583 |
) |
| Accretion of common stock subject
to possible redemption |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,066,278 |
) |
|
|
— |
|
|
|
(12,066,278 |
) |
| Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,073,167 |
) |
|
|
(1,073,167 |
) |
| Balance – December 31,
2021 |
|
|
57,500 |
|
|
|
6 |
|
|
|
2,889,149 |
|
|
|
289 |
|
|
|
2,044,605 |
|
|
|
(1,073,167 |
) |
|
|
971,733 |
|
| Accretion of common stock subject
to possible redemption |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,009,040 |
) |
|
|
— |
|
|
|
(1,009,040 |
) |
| Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(857,534 |
) |
|
|
(857,534 |
) |
| Balance – December 31,
2022 |
|
|
57,500 |
|
|
$ |
6 |
|
|
|
2,889,149 |
|
|
$ |
289 |
|
|
$ |
1,035,565 |
|
|
$ |
(1,930,701 |
) |
|
$ |
(894,841 |
) |
The
accompanying notes are an integral part of these financial statements.
TG
VENTURE ACQUISITION CORP.
STATEMENTS
OF CASH FLOWS
| | |
| | | |
| | |
| | |
| |
For the Period |
| | |
| |
from February 8, |
| | |
For the Year | |
2021 (Inception) |
| | |
Ended | |
Through |
| | |
December 31, | |
December 31, |
| | |
2022 | |
2021 |
| Cash
Flows from Operating Activities: | |
| | | |
| | |
| Net loss | |
$ | (857,534 | ) | |
$ | (1,073,167 | ) |
| Adjustments to reconcile
net loss to net cash used in operating activities: | |
| | | |
| | |
| Interest earned on investment
held in Trust Account | |
| (1,648,827 | ) | |
| (7,730 | ) |
| Formation and operating
costs paid by Promissory note – related party | |
| — | | |
| 5,728 | |
| Director compensation expense | |
| — | | |
| 705,630 | |
| Changes in operating assets
and liabilities: | |
| | | |
| | |
| Prepaid assets | |
| 434,407 | | |
| (575,099 | ) |
| Accounts payable and accrued
expense | |
| 1,180,769 | | |
| 163,451 | |
| Due to related parties | |
| 105,340 | | |
| — | |
| Income tax payable | |
| 268,239 | | |
| — | |
| Net
cash used in operating activities | |
| (517,606 | ) | |
| (781,187 | ) |
| | |
| | | |
| | |
| Cash
Flows from Investing Activities: | |
| | | |
| | |
| Investment of cash in Trust
Account | |
| — | | |
| (117,300,000 | ) |
| Net
cash used in investing activities | |
| — | | |
| (117,300,000 | ) |
| | |
| | | |
| | |
| Cash
Flows from Financing Activities: | |
| | | |
| | |
| Proceeds from issuance
of shares to initial stockholders | |
| — | | |
| 113,850,000 | |
| Proceeds from sale of Founder
Shares | |
| — | | |
| 25,982 | |
| Proceeds from sale of Private
Placement units | |
| — | | |
| 5,500,000 | |
| Proceeds from issuance
of promissory note to related party | |
| — | | |
| 100,000 | |
| Payment of promissory note
to related party | |
| — | | |
| (227,689 | ) |
| Payment of deferred offering
costs | |
| — | | |
| (502,480 | ) |
| Net
cash provided by financing activities | |
| — | | |
| 118,745,813 | |
| | |
| | | |
| | |
| Net
Change in Cash | |
| (517,606 | ) | |
| 664,626 | |
| Cash – Beginning of period | |
| 664,626 | | |
| — | |
| Cash – End of period | |
$ | 147,020 | | |
$ | 664,626 | |
| | |
| | | |
| | |
| Supplemental
disclosure of non-cash financing activities: | |
| | | |
| | |
| Issuance of representative shares | |
$ | — | | |
$ | 6 | |
| Deferred offering costs
paid by Sponsor under the promissory note | |
$ | — | | |
$ | 122,836 | |
| Deferred offering costs
included in accrued offering costs and expenses | |
$ | — | | |
$ | 111,396 | |
| Remeasurement adjustment
charged to additional paid in capital | |
$ | — | | |
$ | 12,066,278 | |
| Accretion to Common Stock
Subject to Redemption | |
$ | 1,009,040 | | |
$ | — | |
The accompanying
notes are an integral part of these financial statements
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note 1 — Organization
and Business Operations
TG
Venture Acquisition Corp. (the “Company”) is a blank check company incorporated as a Delaware corporation on February 8,
2021, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”).
As
of December 31, 2022, the Company had not commenced any operations. All activity for the period from February 8, 2021 (inception) through
December 31, 2022 relates to the Company’s formation and the initial public offering described below. The Company will not generate
any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering (the “IPO”).
The
Company’s sponsor is Tsangs Group Holdings Limited (the “Sponsor”). The registration statement for the Company’s
IPO was declared effective on November 2, 2021 (the “Effective Date”). On November 5, 2021, the Company consummated the IPO
of 11,500,000 units (the “Units” and, with respect to the Common stock included in the Units being offered, the
“Public Shares” and the warrants included in the Units being offered, the “Public Warrants”) at $10.00 per
Unit, including the full exercise of the underwriters’ over-allotment of 1,500,000 Units, generating gross proceeds to
the Company of $115,000,000, which is discussed in Note 3.
Simultaneously
with the consummation of the IPO, the Company consummated the private placement of 5,500,000 Warrants (the “Private Placement
Warrants”) at a price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $5,500,000,
which is described in Note 4.
Transaction
costs amounted to $3,040,822 consisting of $1,150,000 of underwriting commissions, $575,000 of fair value of the Units
issued to ThinkEquity LLC (“ThinkEquity”), the representative of the underwriters (see Note 6), $579,110 of fair value
of the Founder Shares (as defined in Note 5) sold to advisors in excess of proceeds (see Note 5), and $736,712 of other offering
costs, and was all charged to stockholders’ equity.
While
the Company’s management has broad discretion with respect to the specific application of the cash held outside of the Trust Account
(as hereinafter defined), substantially all of the net proceeds from the Initial Public Offering and the sale of the Private Placement
Warrants, which are placed in the Trust Account, are intended to be applied generally toward completing a Business Combination. The Company’s
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 (excluding the taxes payable on the interest earned on the Trust Account) at the time of the
signing a definitive agreement in connection with the initial Business Combination. However, 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 of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company
will be able to successfully effect a Business Combination.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Following
the closing of the IPO on November 5, 2021, $117,300,000 ($10.20 per Unit) from the net proceeds of
the sale of Units in the IPO and a portion of the proceeds of the sale of the Private Placement Warrants were deposited into a trust
account (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as
trustee, and are invested only in U.S. government securities with a maturity of 180 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. Except
with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its franchise and income
tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds from the IPO and the sale of the Private
Placement Warrants will not be released from the Trust Account until the earliest of: (a) the completion of the initial Business Combination;
(b) 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: (i) to modify the substance or timing of the Company’s obligation to allow redemption
in connection with the initial Business Combination or certain amendments to the Company’s charter prior thereto or to redeem 100%
of the Public Shares if the Company does not complete the initial Business Combination within 18 months
from the closing of this offering May 5, 2023; or (ii) with respect to any other
provision relating to stockholders’ rights or pre-Business Combination activity; and (c) the redemption of 100% of the Public Shares
if the Company is unable to complete the initial Business Combination within the required time frame (subject to the requirements of
applicable law).
Public
stockholders have the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination
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 voting on 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
described herein. The amount in the Trust Account is initially anticipated to be $10.20 per public share.
The
Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately
prior to or upon the consummation of such Business Combination, and, if the Company seeks public stockholder approval, a majority of
the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange
listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant
to its amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities
and Exchange Commission (the “SEC”) and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company
decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy
solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection
with a Business Combination, the Sponsor has agreed to vote its Founder Shares and any Public Shares purchased during or after the Initial
Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public
Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
The
Company has 18 months from the closing of the IPO until May 5, 2023 to complete the initial Business Combination (the “Combination
Period”). If the Company is unable to complete the initial 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 subject to lawfully available funds therefor, redeem the Public Shares, at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not
previously released to the Company to pay its 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), subject to applicable law; and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the Company’s remaining stockholders and the board of directors, dissolve
and liquidate, subject in the case of clauses (ii) and (iii) above 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 the initial Business Combination within the Combination
Period.
The
initial stockholders, Sponsor, executive officers and directors have entered into a letter agreement with the Company, pursuant to which
they have agreed to (i) to waive their redemption rights with respect to their Founder Shares if we are forced to liquidate; (ii) to
waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve
an amendment to the Company’s amended and restated certificate of incorporation: (A) to modify the substance or timing of the Company’s
obligation to allow redemption in connection with the Company’s initial Business Combination or certain amendments to the charter
prior thereto or to redeem 100% of the Company’s Public Shares if the Company does not complete the initial Business Combination
within the Combined Period or (B) with respect to any other provision relating to stockholders’ 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 if the Company fails to complete the initial Business Combination within the Combination Period, 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 Combination Period; (iv) the Founder Shares are shares of the Company’s Class B common
stock that will automatically convert into shares of the Company’s Class A common stock at the time of the initial Business Combination,
on a one-for-one basis, subject to adjustment as described herein, and (v) are entitled to registration rights. If the Company submits
the initial Business Combination to the public stockholders for a vote, the initial stockholders, officers and directors have agreed
pursuant to the letter agreement to vote any shares held by them and any Public Shares purchased during or after this offering (including
in open market and privately negotiated transactions) in favor of the initial Business Combination.
The
Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products
sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality
or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20
per Public Share; and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust
Account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability
will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies
held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity
of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company has
not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor
has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company.
Therefore, the Company cannot assent that the Sponsor would be able to satisfy those obligations. None of the Company’s officers
or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Proposed
Business Combination
On
December 5, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”)
by and among (i) The Flexi Group Limited, a business company with limited liability incorporated under the laws of the British Virgin
Islands (the “Flexi”), (ii) The Flexi Group Holdings, Ltd., a business company with limited liability incorporated
under the laws of the British Virgin Islands and a direct wholly owned subsidiary of Flexi (“PubCo” and, together
with Flexi, the “Flexi Group”), (iii) The Flexi Merger Co. Ltd., a business company with limited liability
incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of PubCo (“Merger Sub 1”),
and (iv) Flexi Merger Co. LLC, a Delaware limited liability company and a direct wholly owned subsidiary of PubCo (“Merger
Sub 2” and, Merger Sub 2, PubCo and Merger Sub 1, each, individually, an “Acquisition Entity”).
Capitalized
terms used in this section, but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.
Pursuant
to the Business Combination Agreement, subject to the terms and conditions set forth therein, (i) Merger Sub 1 will merge with and
into Flexi (the “Initial Merger”), whereby the separate existence of Merger Sub 1 will cease and Flexi will
be the surviving entity of the Initial Merger and become a wholly owned subsidiary of PubCo, and (ii) following confirmation of the effective
filing of the documents required to implement the Initial Merger, Merger Sub 2 will merge with and into TGVC (the “SPAC Merger”
and together with the Initial Merger, the “Mergers”), the separate existence of Merger Sub 2 will cease and
the Company will be the surviving entity of the SPAC Merger and a direct wholly owned subsidiary of PubCo.
As
a result of the Mergers, among other things, (i) each outstanding Flexi Ordinary Share will be cancelled in exchange for the right to
receive such number of PubCo Ordinary Shares that is equal to the Company Exchange Ratio, (ii) each outstanding SPAC Unit will be automatically
detached and the holder thereof will be deemed to hold one share of SPAC Class A Common Stock and one SPAC Warrant, (iii) each outstanding
share of SPAC Class B Common Stock will automatically convert into SPAC Class A Common Stock, (iv) each outstanding share of SPAC Class
A Common Stock will be cancelled in exchange for the right to receive such number of PubCo Ordinary Shares that is equal to the SPAC
Exchange Ratio, and (v) each outstanding SPAC Warrant will be assumed by PubCo and converted into a warrant to purchase PubCo Ordinary
Shares (each, an “Assumed SPAC Warrant”).
Earnout
The
Business Combination Agreement, subject to the terms and conditions set forth therein, provides that Flexi shareholders as of the Initial
Merger will have the right to receive up to an aggregate of 2,900,000 additional PubCo Ordinary Shares based on the total annual revenues
of PubCo in each of the two fiscal years following the Closing Date.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Representations,
Warranties and Covenants
The
Business Combination Agreement contains customary representations and warranties of the parties, which will not survive the Closing.
Many of the representations and warranties are qualified by materiality or Company Material Adverse Effect (with respect to Flexi) or
SPAC Material Adverse Effect (with respect to the Company). “Material Adverse Effect” as used in the Business Combination
Agreement means with respect to Flexi or the Company, as applicable, any event, state of facts, development, change, circumstance, occurrence
or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (i) the
business, assets and liabilities, results of operations or financial condition of the applicable party and its subsidiaries, taken as
a whole or (ii) the ability of such party or any of its subsidiaries to consummate the Transactions, in each case subject to certain
customary exceptions. Certain of the representations are subject to specified exceptions and qualifications contained in the Business
Combination Agreement or in information provided pursuant to certain disclosure schedules to the Business Combination Agreement.
The
Business Combination Agreement also contains pre-closing covenants of the parties, including obligations of the parties to operate their
respective businesses in the ordinary course consistent with past practice, and to refrain from taking certain specified actions without
the prior written consent of the other applicable parties, in each case, subject to certain exceptions and qualifications. Additionally,
the parties have agreed not to solicit, negotiate or enter into competing transactions, as further provided in the Business Combination
Agreement. The covenants do not survive the Closing (other than those that are to be performed after the Closing).
As
promptly as practicable after the execution of the Business Combination Agreement, the Company and PubCo have agreed to prepare and file
with the SEC, a Registration Statement on Form F-4 (as amended, the “F-4 Registration Statement”) in connection with the
registration under the Securities Act of 1933, as amended (the “Securities Act”), of the offer and issuance of the PubCo
Ordinary Shares and Assumed SPAC Warrants to be issued pursuant to the Business Combination Agreement The F-4 Registration Statement
will contain a proxy statement/prospectus for the purpose of (i) the Company soliciting proxies from its shareholders to approve the
Business Combination Agreement, the Transactions and related matters (the “the Company Shareholder Approval”) at a special
meeting of the Company shareholders (the “Shareholder Meeting”), (ii) providing the Company’s shareholders an opportunity,
in accordance with its organizational documents and initial public offering prospectus, to redeem their shares of SPAC Class A Common
Stock (collectively, the “Redemptions”), and (iii) PubCo’s offering and issuance of the PubCo Ordinary Shares and Assumed
Warrants in connection with the Transactions.
PubCo
agreed to take all action within its power so that effective at the Closing, the board of directors of PubCo will consist of no less
than five individuals, two of whom may be designated by the Sponsor, and a majority of whom shall be independent directors in accordance
with Nasdaq requirements, and which shall comply with all diversity requirements under applicable Law.
In
addition, prior to Closing, PubCo agreed to amend and restate its Memorandum of Association and Articles of Association (the “PubCo
Governing Documents”). The PubCo Governing Documents will include customary provisions for a memorandum of association and
articles of association of a British Virgin Islands publicly traded company that is traded on Nasdaq.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Conditions
to the Parties’ Obligations to Consummate the Mergers
Under
the Business Combination Agreement, the parties’ obligations to consummate the Transactions are subject to a number of customary
conditions for special purpose acquisition companies, including, among others, the following: (i) the approval of the Mergers and the
other shareholder proposals required to approve the Transactions by the Company’s and Flexi’s shareholders, (ii) all specified
approvals or consents (including governmental and regulatory approvals) have been obtained and all waiting, notice, or review periods
have expired or been terminated, as applicable, (iii) the effectiveness of the F-4 Registration Statement, (iv) PubCo’s initial
listing application with Nasdaq shall have been conditionally approved and, immediately following the Closing, PubCo shall satisfy any
applicable initial and continuing listing requirements of Nasdaq and PubCo shall not have received any notice of non-compliance therewith,
and (v) the PubCo Ordinary Shares and Assumed SPAC Warrants having been approved for listing on Nasdaq, subject to round lot holder requirements.
In
addition to these customary closing conditions, the Company must also hold net tangible assets of at least $5,000,001 immediately prior
to Closing, net of Redemptions and liabilities (including the Company’s transaction expenses).
The
obligations of the Company to consummate the Transactions are also subject to, among other things (i) the representations and warranties
of Flexi and of each Acquisition Entity being true and correct, subject to the materiality standards contained in the Business Combination
Agreement, (ii) material compliance by Flexi and each Acquisition Entity with its pre-closing covenants, and (iii) the absence of a Company
Material Adverse Effect.
In
addition, the obligations of Flexi to consummate the Transactions are also subject to, among other things (i) the representations and
warranties of the Company being true and correct, subject to the materiality standards contained in the Business Combination Agreement,
(ii) material compliance by the Company with its pre-closing covenants, and (iii) the absence of a SPAC Material Adverse Effect.
Termination
Rights
The
Business Combination Agreement contains certain termination rights, including, among others, the following: (i) upon the mutual written
consent of the Company and Flexi, (ii) if the consummation of the Transactions is prohibited by governmental order, (iii) if the Closing
has not occurred on or before May 5, 2023, (iv) in connection with a breach of a representation, warranty, covenant or other agreement
by Flexi or the Company which is not capable of being cured or is not cured within 30 days after receipt of notice of such breach, (v)
by either the Company or Flexi if the board of directors of the other party publicly changes its recommendation with respect to the Business
Combination Agreement and Transactions and related shareholder approvals under certain circumstances detailed in the Business Combination
Agreement, (vi) by either the Company or Flexi if the Shareholder Meeting is held and the Company Shareholder Approval is not received,
(vii) by the Company if the requisite Company Audited Financial Statements and PCAOB-compliant unaudited financials of Flexi for the
first, second and third quarters of 2022 (to the extent required in accordance with the Business Combination Agreement) have not been
delivered by January 4, 2023, with respect to the first and second quarters, and January 16, 2023, with respect to the third quarter,
or (viii) by the Company if Flexi does not receive the written consent of its shareholders to the Business Combination Agreement and
related approvals within five business days after the F-4 Registration Statement has become effective.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
None
of the parties to the Business Combination Agreement are required to pay a termination fee or reimburse any other party for its expenses
as a result of a termination of the Business Combination Agreement. However, each party will remain liable for willful and material breaches
of the Business Combination Agreement prior to termination.
Trust
Account Waiver
Flexi
and each Acquisition Entity agreed that it and its affiliates will not have any right, title, interest or claim of any kind in or to
any monies in the Company’s trust account held for its public shareholders, and agreed not to, and waived any right to, make any
claim against the trust account (including any distributions therefrom).
The
Business Combination Agreement is filed as Exhibit 2.1 to this Annual Report on Form 10-K and the foregoing description thereof is qualified
in its entirety by reference to the full text of the Business Combination Agreement. The Business Combination Agreement provides investors
with information regarding its terms and is not intended to provide any other factual information about the parties. In particular, the
assertions embodied in the representations and warranties contained in the Business Combination Agreement were made as of the execution
date of the Business Combination Agreement only and are qualified by information in confidential disclosure schedules provided by the
parties to each other in connection with the signing of the Business Combination Agreement. These disclosure schedules contain information
that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the Business Combination Agreement.
Moreover, certain representations and warranties in the Business Combination Agreement may have been used for the purpose of allocating
risk between the parties rather than establishing matters of fact. Accordingly, you should not rely on the representations and warranties
in the Business Combination Agreement as characterizations of the actual statements of fact about the parties.
Shareholder
Support Agreement
Contemporaneously
with the execution of the Business Combination Agreement, PubCo, Flexi and certain Flexi shareholders entered into a Shareholder Support
Agreement, pursuant to which, among other things, certain Flexi shareholders agreed (i) to vote their Flexi shares in favor of the Business
Combination Agreement (including by execution of a written consent), the Mergers and the other Transactions, (ii) to waive any rights
to seek appraisal or rights of dissent in connection with the Business Combination Agreement, the Mergers and the transactions contemplated
thereby; and (iii) to consent to the termination of all shareholder agreements with Flexi (with certain exceptions), effective at Closing,
subject to the terms and conditions contemplated by the Shareholder Support Agreement. Flexi shareholders party to the Shareholder Support
Agreement collectively have a sufficient number of votes to approve the Business Combination Agreement, the Mergers and the other Transactions.
The
Shareholder Support Agreement and all of its provisions will terminate and be of no further force or effect upon the earlier of the Closing
and termination of the Business Combination Agreement pursuant to its terms. Upon such termination of the Shareholder Support Agreement,
all obligations of the parties under the Shareholder Support Agreement will terminate; provided, however, that
such termination will not relieve any party thereto from liability arising in respect of any breach of the Shareholder Support Agreement
prior to such termination.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Sponsor
Support Agreement
Contemporaneously
with the execution of the Business Combination Agreement, the Company entered into a Sponsor Support Agreement with the Sponsor, PubCo,
Flexi, and certain members of the Company’s board of directors and management team (the “Holders”), pursuant
to which, among other things, the Sponsor and the Holders agreed to vote their the Company shares in favor of the Business Combination
Agreement (including by execution of a written consent), the Mergers and the other Transactions, subject to the terms and conditions
contemplated by the Sponsor Support Agreement.
The
Sponsor Support Agreement and all of its provisions will terminate and be of no further force or effect upon the earlier to occur of
Closing and termination of the Business Combination Agreement pursuant to its terms.
Lock-Up
Agreement
Concurrently
with the execution of the Business Combination Agreement, the Company and PubCo entered into separate Lock-Up Agreements (each a “Lock-Up
Agreement”) with Sponsor, certain members of the Company’s board of directors and management team, and certain Flexi
shareholders, pursuant to which 95% of the PubCo Ordinary Shares to be received by such shareholders will be locked-up and subject to
transfer restrictions for a period of time following the Closing, as described below, subject to certain exceptions. That portion of
the securities held by such shareholders will be locked-up until the earliest of: (i) the six month anniversary of the date of the Closing,
(ii) subsequent to the Business Combination, if the last sale price of PubCo Ordinary Shares equals or exceeds $12.00 per share (adjusted
for stock splits, stock dividends, reorganizations, recapitalizations and the like), for any 20 trading days within any 30-trading day
period commencing at least 150 days after the date of the Business Combination, and (iii) the date after the Closing on which PubCo completes
a liquidation, merger, capital stock exchange, reorganization or other similar transaction which results in all of PubCo’s shareholders
having the right to exchange their equity holdings in PubCo for cash, securities or other property.
Registration
Rights Agreement
Concurrently
with the execution of the Business Combination Agreement, PubCo entered into a Registration Rights Agreement (the “Registration
Rights Agreement”) with Sponsor and certain Flexi shareholders pursuant to which, among other things, PubCo agreed to provide Sponsor
and such shareholders with certain rights relating to the registration for resale under the Securities Act of the PubCo Ordinary Shares
and Assumed Warrants that they received in the Mergers.
Forms
of the foregoing agreements related to the Business Combination Transaction are filed as exhibits to this Annual Report, and the foregoing
description thereof is qualified in its entirety by reference to the full text of the respective agreement.
The
transaction is expected to be completed in the second quarter of 2023, subject to regulatory approvals and other customary closing conditions.
After closing, The Flexi Group’s ordinary shares are expected to trade on the Nasdaq Stock Market LLC under ticker symbol FLXG.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Liquidity,
Capital Resources, and Going Concern
The
Company’s liquidity needs prior to the consummation of the Initial Public Offering had been satisfied through a payment from the
Sponsor of $25,000 (see Note 5) for the Founder Shares and the loan under an unsecured promissory note from the Sponsor of up to
$400,000 (see Note 5) which was fully repaid on December 31, 2021. Subsequent to the consummation of the Initial Public Offering,
the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the
Private Placement held outside of the Trust Account. As of December 31, 2022, the Company had $147,020 in its operating bank account
and working capital deficit of $894,841.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate
of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital
Loans, as defined below (see Note 5). As of December 31, 2022 and 2021, there were no amounts outstanding under any Working Capital Loans.
The
Company expects to incur significant costs in pursuit of its acquisition plans. 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 a Business
Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable,
identifying and evaluating prospective initial 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
the Business Combination.
On March
16, 2023, the Sponsor issued a promissory note allowing the Company to borrow up to $3,000,000 under an unsecured promissory note to be
used to defray expenses in connection with the proposed Business Combination. The promissory note is payable on the date on which the
Company consummates its initial Business Combination. $350,000 in previously advanced fund from the Sponsor is included as part of the
principal of the promissory note and is therefore not available for further use by the Company (see Notes 5 and 10).
In
connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s
Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue
as a Going Concern,” management has determined that the Company’s business plan is dependent on the completion of the Business
Combination, the Company’s existing cash and working capital as of December 31, 2022 are not sufficient to complete its planned
activities for a reasonable period of time, and the date for mandatory liquidation and dissolution raises substantial doubt about the
Company’s ability to continue as a going concern through May 5, 2023, the scheduled liquidation date of the Company if it does not
complete a Business Combination prior to such date. These
conditions also raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one
year after the date that these financial statements are issued. Management plans to address this
uncertainty through a Business Combination as discussed above. There is no assurance that the Company’s plans to consummate a Business
Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Risks
and Uncertainties
In
February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further,
the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements.
The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of
the date of these financial statements.
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus and war
could have a negative effect on the Company’s financial position, results of its operations and search for a target company, the
specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Inflation
Reduction Act of 2022
On
August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for,
among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and
certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed
on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally
1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise
tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value
of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the
Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the
abuse or avoidance of the excise tax.
Any
redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise,
may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business
Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions
and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii)
the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued
not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content
of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the
redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction
in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note 2 — Significant
Accounting Policies
Basis of Presentation
The
accompanying financial statement is presented in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder 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 statement with another public company which
is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
Use of Estimates
The
preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in
formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results
could differ significantly from those estimates. The significant accounting estimate reflected in the Company’s financial statements
includes, but is not limited to, valuation of Founder Shares.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Cash and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had cash of $147,020 and $664,626 as of December 31, 2022 and 2021, respectively. The Company did not have any cash equivalents
as of December 31, 2022 and 2021.
Investments
Held in Trust Account
As
of December 31, 2022, substantially all of assets held in the Trust Account were held in money market funds which are invested primarily
in U.S. Treasury securities.
As
of December 31, 2021, the assets held in the Trust Account consist of United States Treasury Bills. The Company classifies its United
States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments—Debt and Equity Securities.”
Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity
treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.
During
the year ended December 31, 2022 and the period from February 8, 2021 (inception) through December 31, 2021, the Company did not withdraw
any of the interest income from the Trust Account to pay its tax obligations, however, may in the future periods as permitted under the
Trust Agreement.
A
decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment
that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for
the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability
and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment
is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the
severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the
general market condition in the geographic area or industry in which the investee operates.
Premiums
and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest
method. Such amortization and accretion are included in the “interest income” line item in the statements of operations.
Interest income is recognized when earned.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Deferred
Offering Costs
The
Company complies with the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 340-10-S99-1, “Other Assets and Deferred Costs”. Deferred offering costs consists of legal, accounting,
underwriting fees and other costs incurred through the balance sheet date that are directly related to the Public Offering. Offering
costs are allocated to the separable financial instruments to be issued in the IPO based on a relative fair value basis, compared to
total proceeds received. Upon closing of the IPO on November 5, 2021, offering costs associated with the Class A common stock and the
warrants were charged to stockholders’ equity. Upon the IPO on November 5, 2021 offering costs amounted to $3,040,822, all of which
was allocated to stockholders’ equity.
Share
Based Compensation
The
Company complies with ASC 718 Compensation- Stock Compensation, regarding interests in founder shares acquired by directors and advisors
of the Company as compensation. The interests in the founder shares vested upon the Company completing the initial public offering and
compensation expense has been recorded accordingly at that date based upon the initial grant date fair value. The determination of the
fair value of the share-based compensation awards represents a significant estimate within the financial statements. The fair value is
based upon a Monte Carlo valuation that considers the probability of an initial public offering, business combination and other risk
factors.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its 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. 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. |
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Class A Common Stock Subject
to Possible Redemption
The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified
as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features
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 Class A 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, Class A common stock subject to possible redemption is presented
at redemption value as temporary equity, outside of the stockholders’(deficit) equity section of the Company’s balance sheets.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject
to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting
period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, the Company
recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to
the extent available) and accumulated deficit. There was $1,009,040 increase in the redemption value at December 31, 2022 since the interest
earned to date from marketable securities held in Trust Account exceed the franchise taxes incurred and provision for income taxes to
date. The dissolution expense of $100,000 is not included in the redemption value of the shares subject to redemption since it is only
taken into account in the event of the Company’s liquidation.
At
December 31, 2022 and 2021, the Class A common stock subject to possible redemption reflected in the balance sheets is reconciled in
the following table:
| Schedule of reconciliation | |
| | |
| Gross proceeds | |
$ | 115,000,000 | |
| Less: | |
| | |
| Proceeds allocated to Public
Warrants | |
| (6,275,456 | ) |
| Issuance cost of redeemable
Class A common stock | |
| (3,040,822 | ) |
| Plus: | |
| | |
| Remeasurement adjustment
on redeemable common stock | |
| 12,066,278 | |
| Class
A common stock subject to possible redemption, December 31, 2021 | |
| 117,300,000 | |
| Plus: | |
| | |
| Remeasurement adjustment
on redeemable common stock | |
| 1,009,040 | |
| Class
A common stock subject to possible redemption, December 31, 2022 | |
$ | 118,309,040 | |
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
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 FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Derivative instruments
are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported
in the statements of operations. Derivative assets and 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.
Warrants
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 FASB ASC 480, “Distinguishing Liabilities from Equity” (“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 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 is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while
the warrants are outstanding.
If
the stock subject to mandatory redemptions provisions represents the only shares in the reporting entity, it must report instruments
in the liabilities section of its statements of financial position. The stock subject must then describe them as shares subject to mandatory
redemption, so as to distinguish the instruments from other financial statement liabilities. The Company concludes that the Company’s
warrants defined in Note 7 do not exhibit any of the above characteristics and, therefore, are outside the scope of ASC 480.
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 additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity
classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet
date thereafter. The Company accounts for the 11,500,000 Public Warrants (Note 3) and 5,500,000 Private Placement
Warrants (Note 4) as equity-classified instruments.
Net Loss per Common Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss share
is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The Company
has two classes of shares, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro
rata between the two classes of shares. The Company had not considered the effect of the Private Placement to purchase an aggregate of
5,500,000 of Class A common stock in the calculation of diluted loss per share, since their exercise is contingent upon future events.
As a result, diluted net loss per common stock is the same as basic net loss per common stock. The table below presents a reconciliation
of the numerator and denominator used to compute basic and diluted net loss per share for each class of common stock.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Reconciliation
of Net Loss per Common Stock
Basic
and diluted net loss per share for Class A
common stock and for Class B common stock is calculated as follows:
| Schedule of Earnings Per Share, Basic and Diluted | |
| | | |
| | |
| | |
For the
Year Ended December 31, 2022 | |
For the
Period from February 8, 2021 (Inception) to December 31, 2021 |
| Net
loss per share for Class A common stock: | |
| | | |
| | |
| Allocation
of net loss to Class A common stock | |
$ | (686,038 | ) | |
$ | (526,069 | ) |
| | |
| | | |
| | |
| Basic and diluted weighted
average shares, Class A common stock | |
| 11,557,500 | | |
| 2,014,610 | |
| Basic and diluted net loss
per share | |
$ | (0.06 | ) | |
$ | (0.26 | ) |
| | |
| | | |
| | |
| Net
loss per share for Class B common stock: | |
| | | |
| | |
| Allocation of net loss
to Class B common stock | |
$ | (171,496 | ) | |
$ | (547,098 | ) |
| | |
| | | |
| | |
| Basic and diluted weighted
average shares, Class B common stock | |
| 2,889,149 | | |
| 2,095,139 | |
| Basic and diluted net loss
per share | |
$ | (0.06 | ) | |
$ | (0.26 | ) |
Income
Taxes
The
Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax
assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities
and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition.
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 December 31, 2022 and 2021. The Company is currently not aware of
any issues under review that could result in significant payments, accruals or material deviation from its position.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
The
Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income tax examinations
by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus
of income among various tax jurisdictions and compliance with federal and state 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
provision for income taxes for the year ended December 31, 2022 and for the period from February 8,2021 (inception) through December
31, 2021 were $268,239 and $0, respectively.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal Deposit Insurance Corporation coverage of $250,000. At December 31, 2022 and 2021, the Company
had not experienced losses on this account.
Recent Accounting Standards
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements.
Note 3 — Initial Public
Offering
On
November 5, 2021, the Company sold 11,500,000 Units, including the full exercise of the underwriters’ over-allotment option to
purchase 1,500,000 Units, at a purchase price of $10.00 per Unit. Each unit consists of one Public Share, an aggregate of 11,500,000
Public Shares, and one redeemable Public Warrant, an aggregate of 11,500,000 Public Warrants. Each Public Warrant entitles the holder
to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 7).
Note 4 — Private Placement
Simultaneously
with the closing of the IPO, the Sponsor purchased an aggregate of 5,500,000 Private Placement Warrants at a price of $1.00 per warrant
in a private placement, for an aggregate purchase price of $5,500,000. Each Private Placement Warrant entitles the holder thereof to
purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustments (see Note 7), and
will expire worthless if the Company does not complete the initial Business Combination.
The
Private Placement Warrants are identical to the Public Warrants except that they will not be transferable, assignable or saleable until
30 days after the Business Combination except to certain permitted transferees.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note 5 — Related Party
Transactions
Founder
Shares
In
2021, the Sponsor and other founders (the “Initial Stockholder”) paid $25,982 in exchange for 2,889,149 shares
of Common stock (the “Founder Shares”). The number of Founder Shares outstanding was determined based on the expectation
that the total size of the IPO would be a maximum of 11,500,000 Units if the underwriter’s over-allotment option was
exercised in full, and therefore that such Founder Shares represent 20% of the outstanding shares after the IPO.
Two
of the initial stockholders, TriPoint Capital Management, LLC (“TriPoint”), a Delaware limited liability company, and HFI
Limited (“HFI”), a Cayman Islands company, serve in an advisory capacity to the Sponsor with the Company being a primary
beneficiary, and their participation in the purchase of Founder Shares is considered as part of their compensation as advisors. Accordingly,
upon consummation of the IPO on November 5, 2021, the Company recorded the excess fair value above the purchase price of the 300,000 Founder
Shares purchased by TriPoint and HFI as an offering cost of $579,110, which were charged to stockholders’ equity.
On
November 2, 2021, the Sponsor entered into an Agreement with the Company’s three independent directors under which they were
each assigned 30,000 of the Founder Shares the Sponsor owned, as an inducement to serve as directors of the Company, for which they paid
$0.009 per share, or an aggregate of $810. The shares are vested upon the consummation of the IPO. The fair value of the 90,000 shares
at November 2, 2021, was estimated using a Monte Carlo simulation model to be approximately $706,000 in the aggregate, which the Company
recorded as director compensation expense.
The
Initial Stockholders have agreed not to transfer, assign, or sell any of their Founder Shares until the earlier to occur of: (A) nine
months after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last
sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial
Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or
other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common
stock for cash, securities or other property, except with respect to permitted transferees.
Promissory
Note — Related Party
The
Sponsor issued a promissory note allowing the Company to borrow up to $400,000 under an unsecured promissory note to be used for
a portion of the expenses of the IPO. The Company had borrowed $227,690 under the promissory note. At December 31, 2021, the Company
fully repaid the outstanding promissory note. At December 31, 2022, the Company did not have any outstanding promissory notes.
On March
16, 2023, the Sponsor issued a promissory note allowing the Company to borrow up to $3,000,000 under an unsecured promissory note to be
used to defray expenses in connection with the proposed Business Combination. The promissory note is payable on the date on which the
Company consummates its initial Business Combination. $350,000 in previously advanced fund from the Sponsor is included as part of the
principal of the promissory note and is therefore not available for further use by the Company (see Note 10).
Due
to Related Parties
As
of December 31, 2022 and 2021, there were $106,215 and $875, respectively, outstanding under due to related parties including the monthly
administrative service fee.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Working
Capital Loans
The
Sponsor has committed that they are willing and able to provide the Company with any additional funds it needs to carry out its operations.
In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor, an affiliate of the Sponsor
or certain of the Company’s officers and directors have committed to loan the Company funds as may be required (the “Working
Capital Loans”). If the Company completes an initial Business Combination, the Company would repay such loaned amounts out of the
proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid only out of funds held outside the Trust
Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held
outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts.
Up to $3,000,000 of such loans may be convertible into Private Placement Warrants of the post Business Combination entity, at a price
of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor.
As of December 31, 2022 and 2021, the Company had no borrowings under the Working Capital Loans.
Administrative
Service Fee
The
Company entered into an administrative services agreement on November 2, 2021, pursuant to which the Company will pay an affiliate of
the Sponsor, $445 per month for office space, utilities and secretarial and administrative support. Upon completion of the initial Business
Combination or the Company’s liquidation, the Company will cease paying these monthly fees. Total expense under the administrative
services agreement during the year ended December 31, 2022 and for the period from February 8, 2021 (inception) through December 31,
2021, were $5,340 and $875, respectively.
Note 6 — Commitments
and Contingencies
Registration
Rights
The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and
any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon
conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a
registration rights agreement to be signed prior to or on the Effective Date of the registration statement of which this prospectus forms
a part, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the
Class A common stock). The holders of these securities will be 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 the initial Business Combination.
Underwriting
Agreement
On
November 5, 2021, the Company paid a cash underwriting discount of 1.0% per Unit, or $1,150,000. In addition, the underwriting agreement
provides the option to purchase up to 1,500,000 additional Units to cover any over-allotments, if any, at the Proposed Public
Offering price of $10.00 less the underwriting discount of 1%. The over-allotment was exercised in full upon the IPO on November
5, 2021.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Representative
Units
Simultaneous
with the closing of the IPO, the Company issued to ThinkEquity, as part of representative compensation upon the consummation of the IPO,
57,500 Representative Units (the “Representative Units”). The Representative Units consist of one share of Class A common
stock and one redeemable warrant to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment.
The Representative Units are identical to the Units except, and so long as the Representative Units are held by ThinkEquity (and/or its
designees) or its permitted transferees, they (i) may not (including the Class A common s tock
issuable upon exercise of the warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until
30 days after the completion of the initial Business Combination, (ii) may be exercised by the holders on a cashless basis, (iii) will
be entitled to registration rights and (iv) will not be exercisable more than five years from the Effective Date of the registration statement
of which this prospectus forms a part in accordance with FINRA Rule 5110(f)(2)(G)(i). ThinkEquity has agreed (i) to waive its redemption
rights with respect to the warrants underlying the Representative Units in connection with the completion of the initial Business Combination
and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such warrants if the Company fails to
complete the initial Business Combination within 18 months from the closing of the IPO.
Advisory Services Agreement
On December
23, 2022, the Company entered into an agreement with ThinkEquity to provide financial advisory services in connection with the proposed
Business Combination with The Flexi Group Ltd. The Company shall pay ThinkEquity an advisory fee for the Advisory Services in an amount
equal to greater of either (i) 4.0% of the net funds from the Company’s Trust Account after investor redemptions, or (ii) $300,000,
which fee shall be due and payable in immediately available funds on the day of closing of the proposed Business Combination. In addition
to any fees which may be payable to ThinkEquity under the agreement, the Company shall reimburse ThinkEquity, upon reasonable request
made from time to time, for its reasonable and documented out-of-pocket expenses incurred in connection with the Advisory Services up
to a maximum of $15,000, including, but not limited to, the reasonable and documented fees and disbursements of ThinkEquity’s legal
counsel.
Note 7 — Stockholders’
(Deficit) Equity
Preferred
Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per
share. As of December 31, 2022 and 2021, there were no shares of preferred stock issued or outstanding.
Class
A Common Stock — The Company is authorized to issue 100,000,000 shares of Class A common stock with a par
value of $0.0001 per share. At December 31, 2022 and 2021, there were 57,500 shares of Class A common stock issued and
outstanding (excluding 11,500,000 shares of Class A common stock subject to possible redemption).
Class
B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par
value of $0.0001 per share. At December 31, 2022 and 2021, there were 2,889,149 shares of Class B common stock issued
and outstanding.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
The
shares of Class B common stock will automatically convert into shares of the Class A common stock at the time of the initial Business
Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations, and
the like, and subject to further adjustment as provided herein.
Warrants
– At December 31, 2022 and 2021, 11,500,000 Public Warrants and 5,500,000 Private Placement Warrants
are currently outstanding. Each warrant entitles the holder to purchase one share of the Company’s Class A common stock at a price
of $11.50 per share, subject to adjustment as described herein. In addition, if (x) the Company issues additional shares of Class A common
stock or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at
a Newly Issued Price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined
in good faith by the board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account
any Founder Shares held by the Sponsor or its affiliates, prior to such issuance), (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 the initial Business Combination
on the date of the consummation of the initial Business Combination (net of redemptions), and (z) The Market Value (defined as the volume
weighted average reported trading price of Class A Common Stock for twenty trading days starting on the trading day prior to the date
of the consummation of the initial Business Combination) is below $9.20 per share, the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption
trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly
Issued Price.
Each
warrant is exercisable at any time commencing on the later of 30 days after the completion of an initial business combination and 12
months from the closing of the IPO and terminating at 5:00 p.m., New York City time on the earlier to occur of (i) the date that is five
(5) years after the date on which the Company consummates a Business Combination, (ii) at 5:00 p.m., New York City time on the Redemption
Date as provided in the Warrant Agreement and (iii) the liquidation of the Trust Account (the “Expiration Date”). The Company
in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will
provide at least twenty (20) days’ prior written notice of any such extension to registered holders and, provided further that
any such extension shall be applied consistently to all of the Warrants. Notwithstanding anything to the contrary contained herein, for
so long as any Private Warrant is held by the Sponsor and/or their designees, such Private Warrant may not be exercised after five years
from the Effective Date of the Registration Statement. The warrants will expire at 5:00 p.m., New York City time on the warrant expiration
date, which is five years after the completion of the initial Business Combination or earlier upon redemption or liquidation. On the
exercise of any warrant, the warrant exercise price will be paid directly to the Company and not placed in the Trust Account.
The
Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common
stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying
its obligations described below with respect to registration. No warrant will be exercisable, and the Company will not be obligated to
issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been
registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of
such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will
the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised
warrants, the purchaser of a Unit containing such warrant will have paid the full purchase price for the Unit solely for the share of
Class A common stock underlying such Unit.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
The
Company is not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, the Company
has agreed that as soon as practicable after the closing of the initial Business Combination, the Company will use its best efforts to
file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants, to cause
such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock
until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of
Class A common stock issuable upon exercise of the warrants is not effective within 60 business days after the closing of the initial
Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when
the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in
accordance with Section 3(a)(9) of the Securities Act or another exemption.
Redemption
of warrants:
Once
the warrants become exercisable, the Company may redeem the outstanding warrants:
| |
● |
In
whole and not in part; |
| |
|
|
| |
● |
at
a price of $0.01 per warrant; |
| |
|
|
| |
● |
upon
not less than 30 days’ prior written notice of redemption given after the warrants become exercisable to each warrant holder;
and |
| |
|
|
| |
● |
if,
and only if, the last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the
third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
If
the Company calls the warrants for redemption as described above, the management will have the option to require all holders that wish
to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants
on a “cashless basis,” the management will consider, among other factors, its cash position, the number of warrants that
are outstanding and the dilutive effect on the stockholders of issuing the maximum number of shares of Class A common stock issuable
upon the exercise of the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number
of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A 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 Class A 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. If the Company’s management takes advantage of this option, the notice of redemption will contain
the information necessary to calculate the number of shares of Class A common stock to be received upon exercise of the warrants, including
the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be
issued and thereby lessen the dilutive effect of a warrant redemption.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
8. Income Tax
The Company’s
net deferred tax assets at December 31, 2022 and 2021 are
as follows:
| Schedule of deferred tax asset | |
| | | |
| | |
| | |
December 31, | |
December 31, |
| | |
2022 | |
2021 |
| Deferred tax assets | |
| | | |
| | |
| Net operating
loss carryforward | |
$ | — | | |
$ | 37,512 | |
| Organizational costs/Start-up
costs | |
| 200,597 | | |
| 41,294 | |
| Unrealized gain on interest
income in Trust Account | |
| — | | |
| (1,623 | ) |
| Total deferred tax assets
| |
| 200,597 | | |
| 77,183 | |
| Valuation Allowance | |
| (200,597 | ) | |
| (77,183 | ) |
| Deferred tax assets | |
$ | — | | |
$ | — | |
The provision for
income taxes for the year ended December 31, 2022 and for the period from February 8, 2021 (inception) through December 31, 2021 consist
of the following:
| Schedule of income tax provision | |
| | | |
| | |
| | |
For the year ended
December 31, | |
For the period from February 8, 2021 (inception) through December 31, |
| | |
2022 | |
2021 |
| Federal | |
| | | |
| | |
| Current | |
$ | 268,239 | | |
$ | — | |
| Deferred | |
| (123,414 | ) | |
| (77,183 | ) |
| Change in valuation allowance | |
| 123,414 | | |
| 77,183 | |
| | |
| | | |
| | |
| Provision for income taxes | |
$ | 268,239 | | |
$ | — | |
As
of December 31, 2022 and 2021, the Company had $0 and $178,630 of U.S. federal net operating loss carryovers, respectively, available
to offset future taxable income, which do not expire.
In
assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of 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 temporary differences representing net future deductible amounts become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies
in making this assessment. After consideration of all of the information available, management believes that significant uncertainty
exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the
period from February 8, 2021 (inception) through December 31, 2021, the change in the valuation allowance was $77,183. For the year ended
December 31, 2022, the change in the valuation allowance was $123,414.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
A reconciliation
of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows:
| Schedule of reconciliation of federal income tax rate | |
| | | |
| | |
| | |
December 31, | |
December 31, |
| | |
2022 | |
2021 |
| Statutory federal
income tax rate | |
| 21.0 | % | |
| 21.0 | % |
| Permanent book/tax differences | |
| (45.6 | )% | |
| 0.0 | % |
| Stock Based Compensation | |
| (0.0 | )% | |
| (13.8 | )% |
| Change in valuation allowance | |
| (20.9 | )% | |
| (7.2 | )% |
| Provision for income taxes | |
| (45.5 | )% | |
| 0.0 | % |
The
Company files income tax returns in the U.S. federal jurisdiction. The Company’s tax returns for the year ended December 31, 2022
and 2021 remain open and subject to examination.
Note
9 — Fair Value Measurements
The
fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, approximates
the carrying amounts represented in the balance sheets as of December 31, 2022 and 2021. The fair values of cash and cash equivalents,
prepaid assets, accounts payable and accrued expenses are estimated to approximate the carrying values as of December 31, 2022 and 2021
due to the short maturities of such instruments.
The
following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis at December 31, 2022 and 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine
such fair value:
| Schedule of fair value on a recurring basis | |
| | | |
| | | |
| | | |
| | |
| Description: | |
Level | |
December
31,
2022 | |
Level | |
December 31,
2021 |
Assets:
| |
| | | |
| | | |
| | | |
| | |
| U.S. Money
Market Funds Held in Trust Account | |
| 1 | | |
| 118,956,557 | | |
| 1 | | |
$ | — | |
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
The
carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities on December 31, 2021 are as follows:
| Debt securities, available-for-sale | |
| |
| |
| |
|
| | |
Carrying
Value as of December 31, 2021 | |
Gross
Unrealized Gains | |
Gross
Unrealized Losses | |
Fair Value
as of December 31, 2021 |
| U.S. Treasury
Securities (maturity 05/20/2021) | |
$ | 117,307,072 | | |
$ | — | | |
$ | (21,399 | ) | |
$ | 117,285,673 | |
There
were no transfers between Levels 1, 2 or 3 during the year ended December 31, 2022 and 2021.
Note
10 — Subsequent Events
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the financial
statements were issued. Except as disclosed in the footnotes elsewhere and below, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the financial statements.
On March
16, 2023, the Sponsor issued a promissory note allowing the Company to borrow up to $3,000,000 under an unsecured promissory note to be
used to defray expenses in connection with the proposed Business Combination. The promissory note is payable on the date on which the
Company consummates its initial Business Combination. $350,000 in previously advanced fund from the Sponsor is included as part of the
principal of the promissory note and is therefore not available for further use by the Company.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of
Disclosure Controls and Procedures
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.
Under
the supervision and with the participation of 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 year ended December 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 concluded that during the period covered by this report, our disclosure controls and procedures
were effective.
Management’s Report on Internal Control
over Financial Reporting
As required by SEC rules and
regulations implementing Section 404 of the Sarbanes-Oxley Act, our management – including our Chief Executive Officer and Chief
Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control
over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of our financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes
those policies and procedures that:
| (1) |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, |
| (2) |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and |
| (3) |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management, including our Chief Executive
Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting at December 31, 2022.
In making these assessments, management, including our Chief Executive Officer and Chief Financial Officer used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).
Based on our assessments and those criteria, management determined that we maintain effective internal control over financial reporting
as of December 31, 2022.
This Annual Report on Form 10-K
does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company
under the JOBS Act.
Changes in Internal Control over Financial Reporting
There was no change in our internal
control over financial reporting that occurred during the fiscal year ended December 31, 2022 covered by this Annual Report on Form 10-K
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION
THAT PREVENT INSPECTIONS.
Not Applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Our executive officers and sole director as
of the date of this report are as set forth below. There are no family relationships by between or among the members of the Board
or other executive officers of the Company.
| Name |
|
Age |
|
Position |
| Pui Lan Patrick Tsang |
|
47 |
|
Chief Executive Officer, Director and Chairman |
| Philip Rettger |
|
65 |
|
Chief Financial Officer and Director |
| Jason Cheng Yuen Ma |
|
42 |
|
Director |
| Komal Ahmad |
|
33 |
|
Director |
| Michael Alexander |
|
57 |
|
Director |
Pui Lan Patrick Tsang, since
2016, Mr. Tsang has served as the Chairman of Tsangs Group Holdings Limited, or our sponsor, a fourth-generation innovation focused
Single-Family Office bridging east to west. Born and raised in the United Kingdom, Mr. Tsang has a robust global network as a seasoned
investor. He has worked on multiple IPOs and M&A transactions globally and has successfully made investments in Asia, North
America, and Europe. Mr. Tsang is the Trade Commissioner of Grenada in Macau, to promote international business and investment.
A graduate from the College of Law in England, Mr. Tsang is a qualified solicitor in England, and Wales and Hong Kong. As a philanthropic
advocate, he is a Fellow of The Duke of Edinburgh’s International Award World Fellowship and past President of the Rotary
E-Club of Hong Kong. He is also an international keynote speaker on finance, technology, fintech, blockchain, AI, and leadership.
We believe he is well-qualified to serve as a director, as well as our CEO and Chairman, due to his extensive investment and management
experience.
Philip Rettger, our Chief Financial
Officer, is also one of our directors. Mr. Rettger has been an entrepreneur and corporate executive in energy and finance activities
for more than 40 years. In recent years, Mr. Rettger has set up cryptocurrency mining operations at multiple locations and he has
been an operating manager of PUF Mining, LLC since 2019. In 2005, he co-founded OptiSolar, Inc., an international developer of
utility-scale solar photovoltaic projects, the bulk of whose assets were acquired by First Solar, Inc. in 2010. From 1985 through
2005, Mr. Rettger was active in the invention and development of new technologies and projects in waste energy recovery and heavy
oil processing with Oxford Energy, Inc., Ormat Process Technologies, Inc. and OPTI Canada, Inc., resulting in the finance (including
initial public offerings and private placements) and construction of several billion dollars of energy projects. Mr. Rettger has
also been responsible for the development and finance of multiple hydroelectric projects with Essex Hydro Associates (1979-1982)
and Sheep Creek Hydro, Inc. (1983-present), for which he has served as an executive since 2015. Several of the companies in which
Mr. Rettger was a co-founder are no longer operating, as a result of technology or market issues. Mr. Rettger received a Bachelor
of Science in Economics from the Massachusetts Institute of Technology and an MBA from the Harvard Business School. He is the inventor
or co-inventor of over 15 US Patents in his fields of experience, including energy production and space-based data farming. We
believe he is well-qualified to serve on our board due to his extensive financial and management experience.
Jason Cheng Yuen Ma, is a serial
entrepreneur, venture capitalist & artist who oversees all creative endeavors as Co-Founder and CEO at OP3N, the global Web3
chat superapp that serves as a one-stop-shop for all communication, connection and commerce with on-chain interactions in a simple
unified interface. With a mission to create a more frictionless, decentralized and democratized creator economy on a global scale,
Jaeson drives the vision of OP3N. He is the founder/partner of multiple companies such as 88rising, Stampede Ventures, East West
Ventures, and EST Media focusing on the Asian market through entertainment, media, and technology. He is also a strategic advisor
& financier to social music video app Triller and a co-founder of ZASH and General Partner of Caravan Digital Studios. As well,
a Milken Institute Young Leaders Circle member. During his career, he has raised capital and advised on transactions totaling over
$1 billion. He is also a Senior Advisor to Tencent Music Entertainment & KKBox fund KKFarm, Sparklabs Foundry and a Venture
Partner for consumer tech fund GoodWater Capital. His investments include Musical.ly (TikTok), Grab, Coinbase, Dark Horse Comics,
Slock.it, Brain.ai, Oursong, Triller, Lomotif, XiaoPeng, Kind Heaven, OneOf & MAUM restaurant (Michelin Star).
Michael Alexander, a director,
has held a 34-year career in investment banking based in Brisbane, Sydney, New York and Hong Kong. His working career
started at Wilsons in Brisbane and Ord Minnett Securities in Sydney and New York. Upon moving to Hong Kong, Mr. Alexander
joined JP Morgan before moving to Deutsche Bank, CLSA and Jefferies. From August 2010 through June 2018, he served as the CEO of
Jefferies in Asia. Post retiring from investment banking, he spent 12 months as an advisor to the Jefferies group. He was
also a seed investor in Block.one which had revenue of US $4 billion in its first year of operation as a blockchain based software
company; from January 2018 to April 2020, he served as the CEO of the $1 billion EOS VC Fund of Block.one and until April 2021
had been serving as a senior advisor to Block.one. Mr. Alexander is also a property developer in Japan having built two chalets
in the Annupuri ski fields of Niseko. He is in the process of developing a 20-luxury apartment complex on a two-acre
block near the Niseko village ski field. He received a Bachelor of Economics and Bachelor of Commerce from Queensland University.
We selected Mr. Alexander to serve on our board of directors based upon his significant experience both as an investment banker
and advisor, as well as his experience with listed companies.
Komal Ahmad, is recognized globally
as an award-winning changemaker, humanitarian, and entrepreneur. She’s innovatively Solving the World’s Dumbest Problem.
Komal realized as a young UC Berkeley student that “Hunger isn’t a scarcity problem; it’s a logistics problem.”
This led to her founding Copia, a for-profit surplus food waste management company. Copia dramatically reduces food waste and hunger
across North America. Copia has successfully diverted over 6M pounds of food from landfills to feed over 5M people. Komal’s
leadership and vision have led Copia to become distinguished as 1 of the top 3 startups run by women in the U.S. and 1 of the top
8 startups graduating out of Y Combinator. Komal has been named to the coveted Forbes 30 Under 30 twice, has been featured as one
of the Most Powerful Women in the World by Entrepreneur Magazine, has been recognized as one of the Most Powerful & Impactful
People in Business by Marie Claire, highlighted as one of the Most Creative People in Business by Fast Company, listed among the
Top 50 Most Badass Women in the World by InStyle, and selected as a Toyota Mother of Invention. Komal was also honored with the
prestigious Nelson Mandela Humanitarian Award.
Involvement in Certain Legal Proceedings
To the best of the Company’s knowledge,
none of the following events occurred during the past ten years that are material to an evaluation of the ability or integrity
of any of our executive officers, directors or promoters:
(1) A petition under the
Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was
appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within
two years before the time of such filing, or any corporation or business association of which he was an executive officer at or
within two years before the time of such filing;
(2) Convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Subject of any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining him from, or otherwise limiting, the following activities:
(i) Acting as a futures
commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing,
or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice
in connection with such activity;
(ii) Engaging in any type
of business practice; or
(iii) Engaging in any activity
in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities
laws or Federal commodities laws;
(4) Subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise
limiting for more than 60 days the right of such person to engage in any activity described by such activity;
(5) Found by a court of
competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment
in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
(6) Found by a court of
competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities
law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated;
(7) Subject of, or a party
to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or
vacated, relating to an alleged violation of:
(i) Any Federal or State
securities or commodities law or regulation; or
(ii) Any law or regulation
respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order
of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
order; or
(iii) Any law or regulation
prohibiting mail or wire fraud or fraud in connection with any business entity; or
(8) Subject of, or a party
to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in
Section 3(a)(26) of the Exchange Act (15 U.S. C 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity
Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority
over its members or persons associated with a member.
Number and Terms of Office of Officers and
Directors
We have five directors.
The term of office of our directors will expire at our first annual meeting of stockholders.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our
board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws
provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President,
Vice Presidents, Secretary, Treasurer, Assistant Secretaries and such other offices as may be determined by the board of directors.
Director Independence
NASDAQ listing standards
require that a majority of our board of directors be independent. An “independent director” is defined generally as
a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which
in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment
in carrying out the responsibilities of a director. Our board of directors has determined that Mr. Ma, Mr. Alexander and Ms. Ahmad
are “independent directors” as defined in NASDAQ listing standards and applicable SEC rules. Our independent directors
will have regularly scheduled meetings at which only independent directors are present.
Committees of the Board of Directors
Our board of directors has
two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception,
NASDAQ rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely
of independent directors, and NASDAQ rules require that the compensation committee of a listed company be comprised solely
of independent directors.
Audit Committee
We established an audit
committee of the board of directors. Ms. Ahmad, Mr. Alexander and Mr. Ma serve as members of our audit committee, and Mr. Alexander
chairs the audit committee. Under NASDAQ listing standards and applicable SEC rules, we are required to have at least three members
of the audit committee, all of whom must be independent, subject to certain phase-in provisions. Each of our directors meet the
independent director standard under NASDAQ listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.
Each member of the audit
committee is financially literate and our board of directors has determined that Mr. Donaldson qualifies as an “audit committee
financial expert” as defined in applicable SEC rules.
We adopted an audit committee
charter, which details the principal functions of the audit committee, including:
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the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us; |
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pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
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setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations; |
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setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
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obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence; |
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reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
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reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
Compensation Committee
We established a compensation
committee of the board of directors. The members of our compensation committee include Ms. Ahmad, Mr. Alexander and Mr. Ma, and
Ms. Ahmad chairs our compensation committee. Under NASDAQ listing standards and applicable SEC rules, we are required to have at
least two members of the compensation committee, all of whom must be independent.
We adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Office’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
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reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers; |
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reviewing on an annual basis our executive compensation policies and plans; |
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implementing and administering our incentive compensation equity-based remuneration plans; |
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assisting management in complying with our proxy statement and annual report disclosure requirements; |
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approving all special perquisites, special
cash payments and other special compensation and benefit arrangements for our officers and employees;
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if required, producing a report on executive compensation to be included in our annual proxy statement; and |
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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Notwithstanding the foregoing,
as indicated above, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our
existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in
order to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation
of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any
compensation arrangements to be entered into in connection with such initial business combination.
The charter also provides
that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel
or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser.
However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation
committee will consider the independence of each such adviser, including the factors required by NASDAQ and the SEC.
Director Nominations
We do not have a standing
nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by
law or NASDAQ rules. In accordance with Rule 5605(e)(2) of the NASDAQ Rules, a majority of the independent directors
may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent
directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation
of a standing nominating committee. As there is no standing nominating committee, we do not have a nominating committee charter
in place.
The board of directors will
also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed
nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders).
Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth
in our bylaws.
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience,
knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests
of our stockholders.
Code of Ethics
We have a Code of Ethics
applicable to our directors, officers and employees. You can review the Code of Ethics by accessing our public filings at the SEC’s
web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us.
We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
See the section of this Report entitled “Where You Can Find Additional Information.”
Limitation on Liability and Indemnification
of Officers and Directors
Our amended and restated
certificate of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized
by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation
provides that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their
fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly
or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions,
or derived an improper personal benefit from their actions as directors.
We have entered into agreements
with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended
and restated certificate of incorporation. Our bylaws also permit us to secure insurance on behalf of any officer, director or
employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification.
We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against
the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify
our officers and directors.
These provisions may discourage
stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the
effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful,
might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the
extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions,
the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented
and experienced officers and directors.
Meetings of the Board of Directors
During the year ended December 31, 2022, the
Board of Directors did not meet on any occasion, but rather transacted business by unanimous written consent.
Section 16(a) of the Securities Exchange
Act of 1934
Based on a review of Forms 3, 4 and 5 furnished
to us, we believe that during the year ended December 31, 2022 the directors, officers and owners of more than 10% of our common
stock filed, on a timely basis, all reports required by Section 16(a) of the Exchange Act.
ITEM 11. EXECUTIVE COMPENSATION
Officer and Director Compensation
None of our officers has
received any cash compensation for services rendered to us. On November 2, 2021, the Sponsor
entered into an Agreement with the Company’s three independent directors under which they were each assigned 30,000
of the Founder Shares the Sponsor owned, as an inducement to serve as directors of the Company, for which they paid $0.009 per
share, or an aggregate of $810. The shares are vested upon the consummation of the IPO. The fair value of the 90,000 shares at
November 2, 2021, was estimated using a Monte Carlo simulation model considering the probability of an initial public offering,
business combination and other risk factors, to be approximately $706,000 in the aggregate, which the Company has recorded
as director compensation expense. Other than as set forth elsewhere in this Report, no other compensation of any kind, including
any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our
sponsor, officers, directors or any affiliate of our sponsor, officers or directors, prior to, or in connection with any services
rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that
it is). However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on
our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our
audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors or our or their
affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account.
Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing
our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with
identifying and consummating an initial business combination.
After the completion of
our initial business combination, directors or members of our management team who remain with us may be paid consulting or management
fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender
offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed initial business combination.
We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members
of management. It is unlikely the amount of such compensation will be known at the time of the proposed initial business combination,
because the directors of the post-combination business will be responsible for determining officer and director compensation. Any
compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either
by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board
of directors.
We do not intend to take
any action to ensure that members of our management team maintain their positions with us after the consummation of our initial
business combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting
arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting
arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target
business but we do not believe that the ability of our management to remain with us after the consummation of our initial business
combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to
any agreements with our officers and directors that provide for benefits upon termination of employment.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table provides the names and
addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of the date of this report
and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
The following table sets
forth information regarding the beneficial ownership of our common stock as of the date of this Report by:
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each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
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each of our executive officers and directors that beneficially owns shares of our common stock; and |
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all our executive officers and directors as a group. |
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock
beneficially owned by them.
The percent of class is based
on 11,557,500 shares of Class A common stock (11,500,000 of which are subject to possible redemption) and 2,889,149 shares of Class B
common stock issued and outstanding as of the date of this Report.
| Name and Address of Beneficial Owner |
|
Number of
Shares
Beneficially
Owned(1) |
|
Approximate
Percentage of
Outstanding
Common Stock |
| Pui Lan Patrick Tsang(2) |
|
|
1,710,816 |
|
|
|
11.84 |
% |
| Philip Rettger(3) |
|
|
0 |
|
|
|
* |
|
| Jason Cheng Yuen Ma |
|
|
30,000 |
|
|
|
0.21 |
% |
| Komal Ahmad |
|
|
30,000 |
|
|
|
0.21 |
% |
| Michael Alexander |
|
|
30,000 |
|
|
|
0.21 |
% |
| All executive officers and directors as a group (5 individuals) |
|
|
1,800,816 |
|
|
|
12.47 |
% |
| TriPoint Capital Management(4) |
|
|
150,000 |
|
|
|
1.04 |
% |
| HFI Limited(5) |
|
|
150,000 |
|
|
|
1.04 |
% |
| Dragon Active Limited(6) |
|
|
788,333 |
|
|
|
5.46 |
% |
| Tsangs Group Holdings Limited(2) |
|
|
1,710,816 |
|
|
|
11.84 |
% |
| (1) |
Interests shown consists solely of founder shares, classified as shares of Class B common stock. Founder shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment. See Exhibit 4.2, “Description of Securities.” |
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| (2) |
Mr. Patrick Tsang, our CEO, is the sole owner, sole director and managing member of Tsangs Group Holdings Limited and therefore holds voting and dispositive control over the securities held by Tsangs Group. The business address of Tsangs Group Holdings Limited is Room 6801, 68th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong, Hong Kong. |
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| (3) |
Mr. Rettger owns 80,000 shares, which are held in trust by Dragon Active Limited. Dragon Active Limited holds voting and dispositive control of these shares.. Mr. Rettger purchased these shares for $8.00. |
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| (4) |
TriPoint Capital Management, LLC is managed by its managers, Michael Boswell and Mark Elenowitz, who are deemed to have voting and dispositive control over the shares held by TriPoint, the principal office address of which is 725 Still Creek Lane, Suite 101, Gaithersburg, MD 20878. |
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| (5) |
Simon Powell is sole owner of HFI Limited, a company incorporated in the British Virgin Islands, and therefore holds voting and dispositive control over the securities held by HFI Limited. The business address of HFI Limited is PO Box 957 Offshore Incorporations Center, Road Town, Tortola, British Virgin Islands. |
| (6) |
Chak Kwan Kelvin Liu has voting and dispositive control over the securities held by Dragon Active Limited. The business address of Dragon Active Limited is Flat 11B, Blk 1, Robinson Heights, 8 Robinson Road, Mid-Levels, Central, Hong Kong. |
Because of their ownership
block, our founders have significant influence over the outcome of all matters requiring approval by our stockholders, including
the election of directors, amendments to our amended and restated certificate of incorporation and approval of significant corporate
transactions other than approval of our initial business combination. The holders of the founder shares have agreed (A) to
vote any shares owned by them in favor of any proposed initial business combination and (B) not to redeem any shares in connection
with a stockholder vote to approve a proposed initial business combination.
Our sponsor, executive officers
and directors are deemed to be our “promoters” as such term is defined under the federal securities laws.
Change in Control
As of the date of this Report, there were no
arrangements which may result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTION, AND DIRECTOR INDEPENDENCE
Except as disclosed herein, no director, executive
officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct
or indirect, in any transaction, or proposed transaction since the beginning of the year ended December 31, 2021, in which the amount
involved in the transaction exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last
two completed fiscal years.
On
November 2, 2021, the Sponsor entered into an Agreement with the Company’s three independent directors under which they
were each assigned 30,000 of the Founder Shares the Sponsor owned, as an inducement to serve as directors of the Company, for which
they paid $0.009 per share, or an aggregate of $810. The shares are vested upon the consummation of the IPO. The fair value of
the 90,000 shares at November 2, 2021, was estimated using a Monte Carlo simulation model to be approximately $706,000 in the aggregate,
which the Company recorded as director compensation expense.
Our sponsor, officers and
directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with
activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or
their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling
on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Our sponsor purchased an aggregate
of 5,050,000 placement warrants at a price of $1.00 per warrant, for an aggregate purchase price of $5,050,000. Each warrant is exercisable
to purchase one share of common stock at $11.50 per share. There will be no redemption rights or liquidating distributions from the trust
account with respect to the founder shares or placement warrants, which will expire worthless if we do not consummate a business combination
within 24 months from the closing of the IPO. Our initial stockholders have agreed to waive their redemption rights with respect to their
founder shares (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 or to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the completion of the IPO and (iii) if we fail
to consummate a business combination within 24 months from the completion of the IPO or if we liquidate prior to the expiration of the
18 month period, However, our initial stockholders will be entitled to redemption rights with respect to any public shares held by them
if we fail to consummate a business combination or liquidate within the 18 month period.
Pursuant to a registration
rights agreement we entered into with our initial stockholders prior to the IPO, we may be required to register certain securities
for sale under the Securities Act. These holders, and holders of warrants issued upon conversion of working capital loans, if any,
are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held
by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415
under the Securities Act; provided that the holders of the underwriter shares and underwriter warrants may only make a demand on
one occasion. In addition, these holders have the right to include their securities in other registration statements filed by us.
We will bear the costs and expenses of filing any such registration statements.
Our
CEO, Mr. Tsang, has served as Chairman of the sponsor, who is also our largest stockholder, since October 2017. Additionally, Dragon,
who owns more than 5% of our stock, is controlled by the Managing Director of our sponsor.
In March 2021, we issued
an aggregate of 2,589,149 founder shares for an aggregate purchase price of $23,282 in cash, or approximately $0.009 per share.
We also issued 150,000 founder shares to each of TriPoint and HFI for a purchase price of $1,350 each. The number of founder shares
issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares after the
IPO. The founder shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the holder.
We have an advisory agreement
with TriPoint and HFI (collectively, the “Advisors”), pursuant to which we paid the Advisors an aggregate of $50,000
upon signing the agreement with them in January 2021 and paid the Advisors a cash bonus of $60,000 upon the closing of the IPO.
We also issued the Advisors an aggregate of 300,000 shares of common stock. In addition, the Company has an advisory agreement
with Tripoint for post listing services of $5,000 per month (of which $2,500 will be deferred until the completion of a business
combination) and a cash bonus of $50,000 on completion of a business combination.
Our sponsor loaned us $227,690,
which we used for a portion of the expenses of the IPO. We fully repaid the loan on November 5, 2021.
On March 16, 2023, the Sponsor
issued a promissory note allowing the Company to borrow up to $3,000,000 under an unsecured promissory note to be used for general
working capital purposes, including completing the business combination transaction contemplated by the Business Commination Agreement
with Flexi described elsewhere in this Report (the “Business Combination”). These loans are non-interest bearing, unsecured
and are due when we commence the Business Combination. $350,000 in previously advanced fund from the Sponsor are included as part of the
principal of this note and is therefore not available for further use by the Company.
Our sponsor has confirmed
that they are willing and able to provide the Company with any additional funds it needs to carry out its operations. In addition,
in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate
of our sponsor or certain of our officers and directors have committed to loan us funds on a non-interest bearing basis as may
be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial
business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned
amounts but no proceeds from our trust account would be used for such repayment. Up to $3,000,000 of such loans may be convertible
into warrants, at a price of $1.00 per warrant at the option of the lender, upon consummation of our initial business combination.
The warrants would be identical to the placement warrants. Other than as described above, the terms of such loans by our officers
and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to
seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing
to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business
combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined
company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy
solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known
at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial
business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive
and director compensation.
The holders of the founder
shares, placement warrants, and warrants that may be issued upon conversion of working capital loans (and in each case holders
of their underlying securities, as applicable) will have registration rights to require us to register a sale of any of our securities
held by them pursuant to a registration rights agreement. These holders will be entitled to make up to three demands, excluding
short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders
will have “piggy-back” registration rights to include their securities in other registration statements filed by us.
We have entered into agreements
with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended
and restated certificate of incorporation. Our bylaws also permit us to secure insurance on behalf of any officer, director or
employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification.
We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against
the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify
our officers and directors.
Related Party Policy
We have not yet adopted
a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed
above were not reviewed, approved or ratified in accordance with any such policy.
We adopted adopt a code
of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved
by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under
our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including
any indebtedness or guarantee of indebtedness) involving the company. A form of the code of ethics is filed as an exhibit hereto.
In addition, our audit committee,
pursuant to a written charter is responsible for reviewing and approving related party transactions to the extent that we enter
into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a
quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit
committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee
will be required to approve a related party transaction. A form of the audit committee charter is filed as an exhibit hereto. We
also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that
elicits information about related party transactions.
These procedures are intended
to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest
on the part of a director, employee or officer.
To further minimize conflicts
of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our
sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions that our initial business combination
is fair to our company from a financial point of view. Furthermore, no finder’s fees, reimbursements, consulting fee, monies
in respect of any payment of a loan or other compensation will be paid by us to our sponsor, officers, directors or any affiliate
of our sponsor, officers or directors prior to, for services rendered to us prior to, or in connection with any services rendered
in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is).
However, the following payments have or will be made to our sponsor, officers, directors or our or their affiliates, none of which
will be made from the proceeds of the IPO held in the trust account prior to the completion of our initial business combination:
| |
● |
Repayment of $227,690, in loans made to us by our sponsor to cover a portion of the expenses of the IPO. We fully repaid the loan on November 5, 2021; |
| |
|
|
| |
● |
Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and |
| |
|
|
| |
● |
Repayment of non-interest bearing loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, as per the commitment letter our sponsor provided to us on March 25, 2022, to cover any additional funds needed to carry out our business. Up to $3,000,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender, upon consummation of our initial business combination. The warrants would be identical to the placement warrants. |
Our audit committee will
review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.
Conflicts of Interest
Subject to pre-existing
fiduciary or contractual duties, our officers and directors have agreed to present any business opportunities presented to them
in their capacity as a director or officer of our company to us. Certain of our officers and directors presently have fiduciary
or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business
combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which
is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or
her fiduciary or contractual obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties
or contractual obligations of our officers or directors will not materially affect our ability to complete our initial business
combination. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as
a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would
otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us
without violating another legal obligation.
Our sponsor, officers and
directors may become an officer or director of other special purpose acquisition companies with a class of securities registered
under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Notwithstanding that, such officers and directors will
continue to have a pre-existing fiduciary obligation to us and we will, therefore, have priority over any special purpose acquisition
companies they subsequently join. However, in the case of Mr. Tsang, who is currently an independent director of Model Performance
Acquisition Corp. (“Model”), another blank check company, he may need to advise Model of any potential transactions
first, which could prevent us from completing a deal otherwise beneficial to us.
Other potential conflicts
of interest issues include:
| |
● |
None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. |
| |
|
|
| |
● |
In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
| |
● |
Our officers or directors may become an officer or director of another
SPAC even before we enter into a definitive agreement regarding our initial business combination or we have failed to complete our
initial business combination within 24 months after the closing of the IPO. In fact, our CEO Patrick Tsang is an independent
director of another blank check company named Model that is listed on NASDAQ. As a result, our officers or directors may present
a potential target to our competitor that would had been presented to us or devote time to our affairs which may have a negative
impact on our ability to complete our initial business combination. |
| |
|
|
| |
● |
Our initial stockholders have agreed to waive their redemption rights
with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business
combination. Additionally, our initial stockholders have agreed to waive their redemption rights with respect to any founder shares
held by them if we fail to consummate our initial business combination within 24 months after the closing of the IPO. If we
do not complete our initial business combination within such applicable time period, the proceeds of the sale of the placement warrants
held in the trust account will be used to fund the redemption of our public shares, and the placement securities will expire worthless.
With certain limited exceptions, the founder shares will not be transferable, assignable by our sponsor until the earlier of: (A) six
months after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if
the last sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150
days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange,
reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of
common stock for cash, securities or other property. With certain limited exceptions, the placement warrants and the Class A
common stock underlying such warrants, will not be transferable, assignable or saleable by our sponsor or its permitted transferees
until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors own common stock
and warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an
appropriate business with which to effectuate our initial business combination. |
| |
|
|
| |
● |
Our officers and directors may have a conflict of interest with respect
to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by
a target business as a condition to any agreement with respect to our initial business combination. |
| |
|
|
| |
● |
Our sponsor, officers or directors may have a conflict of interest
with respect to evaluating a business combination and financing arrangements as we may obtain loans from our sponsor or an affiliate
of our sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination.
Up to $3,000,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender, upon
consummation of our initial business combination. The warrants would be identical to the placement warrants. |
The conflicts
described above may not be resolved in our favor.
In general, officers and
directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities
to a corporation if:
| |
● |
the corporation could financially undertake the opportunity; |
| |
|
|
| |
● |
the opportunity is within the corporation’s line of business; and |
| |
|
|
| |
● |
it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Accordingly, as a result
of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business
opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation
provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity
is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent
the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
If any of our officers or
directors becomes aware of a business combination opportunity which is suitable for any of the other entities for which he or she
has current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity.
We have not selected any
potential business combination target and have not, nor has anyone on our behalf, initiated any substantive discussions, directly
or indirectly, with any potential business combination target. Potential target companies with whom we may engage in discussions
may have had prior discussions with other blank check companies, bankers in the industry and/or other professional advisors. We
may pursue transactions with such potential targets (i) if such other blank check companies are no longer pursuing transactions
with such potential targets, (ii) if we become aware that such potential targets are interested in a potential initial business
combination with us and (iii) if we believe such transactions would be attractive to our stockholders.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors (excluding
any entity or business that conducts a majority of its business or is headquartered in China, including Hong Kong and Macau).
In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors,
would obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions, that such an initial business combination is fair to our company from a financial point of view.
In the event that we submit
our initial business combination to our public stockholders for a vote, pursuant to the letter agreement, our initial stockholders,
officers and directors have agreed to vote any shares held by them and any public shares purchased during or after the IPO (including
in open market and privately negotiated transactions) in favor of our initial business combination.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
| | |
Year ended December 31, 2022 | |
Period from February 8, 2021 (Inception) through December 31, 2021 |
| Audit Fees | |
$ | 91,190 | | |
$ | 77,540 | |
| Audit-Related Fees | |
$ | — | | |
$ | — | |
| Tax Fees | |
$ | — | | |
$ | — | |
| All Other Fees | |
$ | — | | |
$ | — | |
| Total | |
$ | 91,190 | | |
$ | 77,540 | |
Audit Fees
For the Company’s fiscal year ended December
31, 2022 and the period from February 8, 2021 (inception) through December 31, 2021, we were billed approximately $91,190 and $77,540
for professional services rendered for the audit and review of our financial statements.
Audit Related Fees
There were no fees for audit related services
for the Company’s fiscal year ended December 31, 2022 and the period from February 8, 2021 (inception) through December 31,
2021.
Tax Fees
For the Company’s fiscal year ended December
31, 2022 and the period from February 8, 2021 (inception) through December 31, 2021, we were not billed any fees for professional
services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
The aggregate fees billed for the Company’s
fiscal year ended December 31, 2022 and during the period from February 8, 2021 (inception) through December 31, 2021 for products
and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1)
through 9(e)(3) of Schedule 14A) was $NIL.
Effective May 6, 2003, the Securities and Exchange
Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related
service, the engagement be:
| ● |
approved by our audit committee; or |
| |
|
| ● |
entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee’s responsibilities to management. |
Our audit committee pre-approves all services
provided by our independent auditors. As per the audit committee’s charter, the audit committee is exclusively authorized
and directed to consider and, in its discretion, approve in advance any services (including the fees and material terms thereof)
proposed to be carried out for the Company by the independent auditor or by any other firm proposed to be engaged by the Company
as its independent auditor. In connection with approval of any permissible tax services and services related to internal control
over financial reporting, the Committee shall discuss with the independent auditor the potential effects of such services on the
independence of the auditor.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a)
| 1. |
The financial statements listed in the “Index to Financial Statements” at page F-1 are filed as part of this report. The financial statements listed in the “Index to Financial Statements” at page F-1 are filed as part of this report. |
| 2. |
Financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. |
| 3. |
Exhibits included or incorporated herein: see index to Exhibits. |
(b) Exhibits
| Exhibit |
|
Description |
| 1.1 |
|
Underwriting Agreement**** |
| 2.1 |
|
Business Combination Agreement dated December 5, 2022, by and among TGVC, PubCo, Merger Sub 1, Merger Sub 2 and Flexi(1) |
| 3.1 |
|
Certificate of Incorporation*** |
| 3.2 |
|
Amended and Restated Certificate of Incorporation**** |
| 3.3 |
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation dated May 4, 2023(2) |
| 3.4 |
|
By Laws** |
| 4.1 |
|
Specimen Unit Certificate+++ |
| 4.2 |
|
Specimen Class A Common Stock Certificate** |
| 4.3 |
|
Specimen Warrant Certificate** |
| 4.4 |
|
Warrant Agreement between Continental Stock Transfer & Trust Company, LLC and the Registrant**** |
| 4.5 |
|
Description of Securities* |
| 10.1 |
|
Letter Agreement among the Registrant and our officers, directors, Tsangs Group Holdings Limited, and ThinkEquity LLC**** |
| 10.2 |
|
Promissory Note, dated April 7, 2021, issued to Tsangs Group Holdings Limited** |
| 10.3 |
|
Letter Agreement regarding Promissory Note** |
| 10.4 |
|
Investment Management Trust Agreement between Continental Stock Transfer & Trust Company, LLC and the Registrant**** |
| 10.5 |
|
Registration Rights Agreement between the Registrant and certain security holders**** |
| 10.6 |
|
Securities Subscription Agreement, dated March 22, 2021, between the Registrant and Tsangs Group Holdings Limited** |
| 10.7 |
|
Securities Subscription Agreement, dated March 22, 2021, between the Registrant and Dragon Active Limited** |
| 10.8 |
|
Securities Subscription Agreement, dated February 8, 2021, between the Registrant and Tripoint Capital Management, LLC** |
| 10.9 |
|
Securities Subscription Agreement, dated February 8, 2021, between the Registrant and HFI Limited** |
| 10.10 |
|
Placement Warrants Purchase Agreement between the Registrant and Tsangs Group Holdings Limited**** |
| 10.11 |
|
Indemnity Agreement** |
| 10.12 |
|
Amendment to Promissory Note, dated April 7, 2021, issued to Tsangs Group Holdings Limited++ |
| 10.13 |
|
Promissory Note, dated March 16, 2023, issued to Tsangs Group Holdings Limited* |
| 10.14 |
|
Form of Shareholder Agreement(1) |
| 10.15 |
|
Form of Sponsor Support Agreement(1) |
| 10.16 |
|
Form of Lock-Up Agreement(1) |
| 10.17 |
|
Form of Registration Rights Agreement(1) |
| 10.18 |
|
Amendment No. 2 to Investment Management Trust Agreement, dated as of May 4, 2023, by and between the Company and Continental Stock Transfer & Trust Company(2) |
| 10.19 |
|
Non-Redemption Agreement, dated as of April 30, 2023, by and among TG Venture Acquisition Corp., Tsangs Group Holdings Limited, Bulldog Investors, LLP and Phillip Goldstein(3) |
| 10.20 |
|
First Amendment to Business Combination Agreement, dated as of August 10, 2023, by and among the Company, Flexi, PubCo, Merger Sub 1 and Merger Sub 2(4) |
| 14.1 |
|
Form of Code of Ethics** |
| 23.1 |
|
Consent of Han Kun Law Offices, regarding certain PRC legal matters(5) |
| 23.2 |
|
Consent of DLA Piper Hong Kong, regarding certain Hong Kong legal matters(5) |
| 99.1 |
|
Form of Audit Committee Charter** |
| 99.2 |
|
Form of Compensation Committee Charter** |
| 31.1 |
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.(Filed herewith) |
| 31.2 |
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.(Filed herewith) |
| 32.1 |
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(Furnished herewith) |
| 32.2 |
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(Furnished herewith) |
| 101.INS* |
|
XBRL Instance Document |
| 101.CAL* |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.SCH* |
|
XBRL Taxonomy Extension Schema Document |
| 101.DEF* |
|
XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB* |
|
XBRL Taxonomy Extension Labels Linkbase Document |
| 101.PRE* |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Incorporated by reference to the Annual Report on
Form 10-K filed on March 29, 2023
** Incorporated by reference to the Registration Statement on Form
S-1 filed on August 13, 2021
*** Incorporated by reference to the Registration Statement on Form
S-1 filed on September 24, 2021
**** Incorporated by reference to the Current Report on Form 8-K
filed on November 2, 2021
++ Incorporated by reference to the Registration Statement on Form
S-1 filed on November 2, 2021
+++Incorporated by reference to the Registration Statement on Form
S-1 filed on October 15, 2021
(1) Incorporated by reference to the Current Report on Form 8-K
filed on December 6, 2022
(2) Incorporated by reference to the Current Report on Form 8-K filed on
May 10, 2023
(3) Incorporated by reference to the Current Report on Form 8-K
filed on May 1, 2023
(4) Incorporated by reference to the Current Report on Form 8-K filed on
August 11, 2023
(5) Incorporated by reference to the Annual Report on Form 10-K/A
filed on August 14, 2023
Item 16. Form 10-K Summary
We do not think a summary of the information
required by this form would be useful at this stage of our business and therefore are electing not to include an optional summary.
SIGNATURES
Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
| |
TG Venture Acquisition Corp. |
| |
|
|
| Dated: September 29, 2023 |
By: |
/s/ Pui Lan Patrick Tsang |
| |
|
Pui Lan Patrick Tsang |
| |
|
President and Chief Executive Officer |
| |
|
(Principal Executive Officer) |
| |
TG Venture Acquisition Corp. |
| |
|
|
| Dated: September 29, 2023 |
By: |
/s/ Philip Rettger |
| |
|
Philip Rettger |
| |
|
Chief Financial Officer |
| |
|
(Principal Financial and
Accounting Officer) |
Pursuant to the requirements of the Securities
Exchange Act of 1934, this annual report has been signed below by the following persons on behalf of the registrant and in
the capacities indicated and on September 29, 2023:
| Name |
|
Position |
| /s/ Pui Lan Patrick Tsang |
|
Chief Executive Officer, Chairman and Director |
| Pui Lan Patrick Tsang |
|
(Principal Executive Officer) |
| |
|
|
| /s/ Philip Rettger |
|
Chief Financial Officer and Director |
| Philip Rettger |
|
(Principal Financial and Accounting Officer) |
| |
|
|
| /s/ Jason Cheng Yuen Ma |
|
Director |
| Jason Cheng Yuen Ma |
|
|
| |
|
|
| /s/ Komal Ahmad |
|
Director |
| Komal Ahmad |
|
|
| |
|
|
| /s/ Michael Alexander |
|
Director |
| Michael Alexander |
|
|
83
Exhibit 31.1
CERTIFICATION
I, Patrick Tsang,
certify that:
1. I have reviewed
this report on Form 10-K/A for the year ended December 31, 2022, of TG Venture Acquisition Corp.;
2. Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s
other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such
evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the
equivalent function):
a)
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
| Date: September 29, 2023 |
|
| |
|
| /s/ Patrick Tsang |
|
| Patrick Tsang |
|
| Chief Executive Officer and Director (Principal Executive Officer) |
|
Exhibit 31.2
CERTIFICATION
I, Philip Rettger,
certify that:
1. I have reviewed
this report on Form 10-K/A for the year ended December 31, 2022, of TG Venture Acquisition Corp.
2. Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s
other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such
evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the
equivalent function):
a)
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
| Date: September 29, 2023 |
|
| |
|
| /s/ Philip Rettger |
|
| Philip Rettger |
|
| Chief Financial Officer & Director (Principal Financial Officer and Principal Accounting
Officer) |
|
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION
1350,
AS ADOPTED PURSUANT
TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
The
undersigned hereby certifies, in his capacity as an officer of TG Venture Acquisition Corp. (the “Company”), for the
purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his
knowledge:
(1) The Annual Report
of the Company on Form 10-K/A for the year ended December 31, 2022, (the “Report”) fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: September
29, 2023
| /s/ Patrick Tsang |
|
| Patrick Tsang |
|
| Chief Executive Officer and Director (Principal Executive Officer) |
|
The foregoing certification
is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION
1350,
AS ADOPTED PURSUANT
TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
The
undersigned hereby certifies, in his capacity as an officer of TG Venture Acquisition Corp. (the “Company”), for the
purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his
knowledge:
(1) The Annual Report
of the Company on Form 10-K/A for the year ended December 31, 2022, (the “Report”) fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: September
29, 2023
| /s/ Philip Rettger |
|
| Philip Rettger |
|
| Chief Financial Officer & Director (Principal Financial Officer and Principal Accounting Officer) |
|
The foregoing certification
is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.
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