Amended Annual Report (10-k/a)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

(Amendment No. 1)

 

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2021

 

or

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____________ to ________________

 

Commission file number: 001-40820

 

HHG CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

 

British Virgin Islands		N/A
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

1 Commonwealth Lane #03-20, Singapore		149544
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Units, each consisting of one Ordinary Share, par value $0.0001 per share, one Redeemable Warrant entitling the holder to purchase three-fourths (3/4) of an Ordinary Share, and one Right to acquire one-tenth of an Ordinary Share		HHGCU		NASDAQ Capital Market
Ordinary Shares		HHGC		NASDAQ Capital Market
Warrants		HHGCW		NASDAQ Capital Market
Rights		HHGCR		NASDAQ Capital Market

 

Securities registered pursuant to Section 12(g) of the 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 Exchange Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required 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. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

 

At June 30, 2021, the aggregate market value of the Registrant’s ordinary shares held by non-affiliates of the Registrant was $0.

 

As of March 3, 2022, the Registrant had 7,477,000 ordinary shares outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

 

 

 

EXPLANATORY NOTE

 

This Amendment No. 1 to the Annual Report on Form 10-K (this “Amendment”) is being filed solely to correct the date of the Report of Independent Registered Public Accounting Firm. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our principal executive officer and principal financial officer are being filed as exhibits to this Amendment. Except as expressly set forth in this Amendment, the Annual Report on Form 10-K for the year ended December 31, 2021 has not been amended, updated or otherwise modified.

 

 

part II

 

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Our financial statements and the notes thereto begin on page F-1 of this Annual Report.

 

part IV

 

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

(a)	Financial Statements:

 

(1)

Financial Statements:

 

	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Comprehensive Loss	F-4
Statements of Changes in Shareholders’ Equity	F-5
Statements of Cash Flows	F-6
Notes to Financial Statements	F-7

 

	(2)	All supplemental schedules have been omitted since the information is either included in the financial statements or the notes thereto or they are not required or are not applicable
	(3)	See attached Exhibit Index of this Annual Report on Form 10-K

 

(b)

Exhibits

 

EXHIBIT INDEX

 

Exhibit No.		Description
1.1		Underwriting Agreement, dated September 20, 2021, by and between the Registrant, EF Hutton, division of Benchmark Investments, LLC  (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
3.1		Second Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
4.1		Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on August 23, 2021)
4.2		Specimen Ordinary Share Certificate (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on March 16, 2021)
4.3		Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on August 23, 2021)
4.4		Specimen Right Certificate (incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on August 23, 2021)
4.5		Warrant Agreement, dated September 20, 2021, by and between American Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
4.6		Rights Agreement, dated September 20, 2021, by and between American Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
4.7		Description of Securities*
10.1		Letter Agreement, dated September 20, 2021, by and between the Company and each of the officers and directors of the Company (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
10.2		Letter Agreement, dated September 20, 2021, by and between the Company and the Sponsor (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
10.3		Investment Management Trust Account Agreement, dated September 20, 2021, by and between American Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)

 

1

 

10.4		Stock Escrow Agreement, dated September 20, 2021, among the Registrant, American Stock Transfer & Trust Company, LLC, and the initial shareholders (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
10.5		Registration Rights Agreement, dated September 20, 2021, among the Registrant, American Stock Transfer & Trust Company, LLC and the initial shareholders (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
10.6		Subscription Agreement, dated September 20, 2021, by and between the Company and the Sponsor (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
10.7		Administrative Service Agreement, dated September 20, 2021, by and between the Company and Ms. Leung Po Yi. (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
10.8		Form of Indemnification Agreement, dated September 20, 2021, by and between the Company and each of the officers and directors of the Company (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 23, 2021)
14		Form of Code of Ethics (incorporated by reference to Exhibit 14 to the Registration Statement on Form S-1 filed with the Securities & Exchange Commission on March 16, 2021)
21.1		List of subsidiaries*
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Previously filed.

 

2

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	HHG CAPITAL CORPORATION
Dated: June 28, 2022	By:	/s/ Chee Shiong (Keith) Kok
	Name:	Chee Shiong (Keith) Kok
	Title:	Chief Executive Officer

3

 

HHG CAPITAL CORPORATION

 

INDEX TO FINANCIAL STATEMENTS

 

	Page
Report of Independent Registered Public Accounting Firm — Friedman LLP (PCAOB ID: 711)	F-2
Balance Sheets	F-3
Statements of Comprehensive Loss	F-4
Statements of Changes in Shareholders’ Equity	F-5
Statements of Cash Flows	F-6
Notes to Financial Statements	F-7

 

F-1

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Stockholders of HHG Capital Corporation

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of HHG Capital Corporation (the Company) as of December 31, 2021 and 2020, and the related statements of comprehensive loss, changes in shareholders’ equity, and cash flows for year ended December 31, 2021 and the period from July 15, 2020 (inception) through December 31, 2020, 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, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 and the period from July 15, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

 

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 audit 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/ Friedman LLP
We have served as the Company’s auditor since 2020.
New York, New York
March 3, 2022

 

F-2

 

 

HHG CAPITAL CORPORATION

BALANCE SHEET

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

		December 31, 2021				December 31, 2020
ASSETS
Current assets
Cash		$	779,868			$	25,048
Prepayment			4,084
Deferred offering costs			-				30,000
Total Current Assets			783,952				55,048
Non-current assets:
Cash held in Trust Account			58,076,283				-
TOTAL ASSETS		$	58,860,235			$	55,048
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accrual and other payable		$	15,258			$	-
Amount due to related parties			30,450				48,302
Total Current Liabilities			45,708				48,302
Deferred underwriting compensation			1,615,000				-
TOTAL LIABILITIES		$	1,660,708			$	48,302
Commitments and contingencies
Ordinary shares subject to possible redemption, 5,750,000 and 0 shares issued and outstanding at redemption value at December 31, 2021 and 2020, respectively		$	49,193,098			$	-
Shareholders’ equity:
Ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 1,727,000 and 1,250,000 shares issued and outstanding (excluding 5,750,000 and 0 shares subject to redemption) at December 31, 2021 and 2020, respectively		$	172			$	125
Additional paid-in capital			8,164,707				24,875
Accumulated deficit			(158,774	)			(18,254	)
Other comprehensive income			324				-
Total Shareholders’ Equity		$	8,006,429			$	6,746
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	58,860,235			$	55,048

 

See accompanying notes to financial statements.

 

F-3

 

 

HHG CAPITAL CORPORATION

STATEMENT OF COMPREHENSIVE LOSS

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

		Year ended December 31, 2021				Period from July 15, 2020 (inception) through December 31, 2020
General and administrative expenses		$	(141,727	)		$	(18,254	)
Other income:
Dividend income			960				-
Interest income			79				-
Sundry income			168				-
Total other income			1,207				-
NET LOSS		$	(140,520	)		$	(18,254	)
Other comprehensive income:
Unrealized gain on available-for-sale securities			324				-
COMPREHENSIVE LOSS			(140,196	)			(18,254	)
Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption			1,559,589				-
Basic and diluted net income per ordinary shares subject to redemption		$	0.88			$	-
Basic and diluted weighted average shares outstanding, non-redeemable ordinary share			1,499,070				372,485
Basic and diluted net loss per non-redeemable ordinary share		$	(1.01	)		$	(0.05	)

 

See accompanying notes to financial statements.

 

F-4

 

 

HHG CAPITAL CORPORATION

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

		Year ended December 31, 2021
		Ordinary shares								Additional paid-in				Accumulated other comprehensive				Accumulated				Total shareholders’
		No. of shares				Amount				capital				income				deficit				equity
Balance as of December 31, 2020			1,250,000			$	125			$	24,875			$	-			$	(18,254	)		$	6,746
Insider shares issued			187,500				18				(18	)			-				-				-
Sale of units in initial public offering			5,750,000				575				54,782,402				-				-				54,782,977
Sale of units to the founder in private placement			255,000				26				2,549,974				-				-				2,550,000
Representative share			34,500				3				(3	)			-				-				-
Initial classification of ordinary shares subject to possible redemption			(5,750,000	)			(575	)			(46,245,189	)			-				-				(46,245,764	)
Accretion of carrying value to redemption value			-				-				(2,947,334	)			-				-				(2,947,334	)
Unrealized holding gain on available-for-sales securities			-				-				-				324				-				324
Issuance of ordinary shares to founders
Issuance of ordinary shares to founders, shares
Net loss for the year			-				-				-				-				(140,520	)			(140,520	)
Balance as of December 31, 2021			1,727,000			$	172			$	8,164,707			$	324			$	(158,774	)		$	8,006,429

 

		No. of shares				Amount				capital				deficit				equity
		Period from July 15, 2020 (inception) through December 31, 2020
		Ordinary shares								Additional paid-in				Accumulated				Total shareholders’
		No. of shares				Amount				capital				deficit				equity
Balance as of July 15, 2020 (inception)			10,000			$	1			$	-			$	-			$	1
Balance			10,000			$	1			$	-			$	-			$	1
Issuance of ordinary shares to founders			1,240,000				124				24,875				-				24,999
Net loss for the period			-				-				-				(18,254	)			(18,254	)
Balance as of December 31, 2020			1,250,000			$	125			$	24,875			$	(18,254	)		$	6,746
Ending balance			1,250,000			$	125			$	24,875			$	(18,254	)		$	6,746

 

See accompanying notes to financial statements.

 

F-5

 

 

HHG CAPITAL CORPORATION

STATEMENT OF CASH FLOWS

(Currency expressed in United States Dollars (“US$”))

 

		Year ended December 31, 2021				Period from July 15, 2020 (inception) through December 31, 2020
Cash flows from operating activities:
Net loss		$	(140,520	)		$	(18,254	)
Adjustments to reconcile net loss to net cash used in operating activities
Dividend income earned in cash and investments income held in trust account			(959	)
Change in operating assets and liabilities
Increase in prepayment			(4,084	)			-
Increase in accrual and other payable			15,258				-
Net cash used in operating activities			(130,305	)			(18,254	)
Cash flows from investing activities:
Proceeds deposited in Trust Account			(58,075,000	)			-
Net cash used in investing activities			(58,075,000	)			-
Cash flows from financing activities:
Proceed from issuance of ordinary shares			-				25,000
Proceed from public offering			57,500,000				-
Proceeds from private placements to a related party			2,550,000				-
Proceed from (payments to) a related party			(17,852	)			48,302
Proceed from promissory note			500,000				-
Repayment of promissory note			(500,000	)			-
Payment of offering costs			(1,072,023	)			-
Payment of deferred offering costs			-				(30,000	)
Net cash provided by financing activities			58,960,125				43,302
NET CHANGE IN CASH			754,820				25,048
CASH, BEGINNING OF YEAR			25,048				-
CASH, END OF YEAR		$	779,868			$	25,048

 

See accompanying notes to financial statements.

 

F-6

 

 

NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

 

HHG Capital Corporation (the “Company” or “we”, “us” and “our”) is a newly organized blank check company incorporated on July 15, 2020, under the laws of the British Virgin Islands for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combination with one or more businesses or entities (“Business Combination”). Currently, the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, except for any entity with its principal business operations in China (including Hong Kong).

 

From inception through December 31, 2021, the Company had not yet commenced any operations. All activity through December 31, 2021 relates to the Company’s formation and the Initial Public Offering as described below. The Company has selected December 31 as its fiscal year end.

 

Financing

 

The registration statement for the Company’s Initial Public Offering (the “Initial Public Offering” or “IPO” as described in Note 4) became effective on September 20, 2021. On September 23, 2021, the Company consummated the Initial Public Offering of 5,000,000 ordinary units (the “Public Units”), generating gross proceeds of $50,000,000 which is described in Note 4.

 

Simultaneously, the underwriters exercised the over-allotment option in full. The underwriters purchased an additional 750,000 Units (the “Over-Allotment Units”) at an offering price of $10.00 per Unit, generating gross proceeds to the Company of $7,500,000.

 

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 237,000 units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement, generating gross proceeds of $2,370,000, which is described in Note 5. On September 23, 2021, simultaneously with the sale of the over-allotment units, the Company consummated the private sale of an additional 18,000 Private Units, generating gross proceeds of $180,000.

 

Transaction costs paid upon the consummation of the Initial Public Offering amounted to $1,031,411, consisting of $805,000 of underwriter’s fees and $226,411 of other offering costs.

 

Trust Account

 

Upon the closing of the Initial Public Offering, the exercise of the over-allotment option and the closing of the private placement, $58,075,000 was placed in a trust account (the “Trust Account”) with American Stock & Trust Company, LLC acting as trustee. The funds held in the Trust Account can be invested in United States government treasury bills, bonds or notes, having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act until the earlier of (i) the consummation of the Company’s initial Business Combination and (ii) the Company’s failure to consummate a Business Combination within the Combination Period as described below. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Additionally, the interest earned on the Trust Account balance may be released to the Company to pay the Company’s tax obligations.

 

Business Combination

 

Pursuant to Nasdaq listing rules, the Company’s initial Business Combination must occur with one or more target businesses having an aggregate fair market value equal to at least 80% of the value of the funds in the Trust Account (excluding any deferred underwriter’s fees and taxes payable on the income earned on the Trust Account), which the Company refers to as the 80% test, at the time of the execution of a definitive agreement for our initial Business Combination, although the Company may structure a Business Combination with one or more target businesses whose fair market value significantly exceeds 80% of the Trust Account balance. If the Company is no longer listed on Nasdaq, it will not be required to satisfy the 80% test. The Company currently anticipates structuring a Business Combination to acquire 100% of the equity interests or assets of the target business or businesses.

 

F-7

 

 

The Company will provide its shareholders with the opportunity to redeem all or a portion of their ordinary shares obtained in the Initial Public Offering (“Public Shares”) upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $10.10 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants and rights. The ordinary shares subject to redemption was initially recorded at its fair value at the date of issuance and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”

 

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Second Amended and Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.

 

The Company’s initial shareholders (the “initial shareholders”) have agreed (a) to vote their insider shares, the ordinary shares included in the Private Units (the “Private Shares”) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose, or vote in favor of, an amendment to the Company’s Second Amended and Restated Memorandum and Articles of Association that would stop the public shareholders from converting or selling their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) unless the Company provides dissenting public shareholders with the opportunity to convert their Public Shares into the right to receive cash from the Trust Account in connection with any such vote; (c) not to convert any insider shares and Private Units (including underlying securities) (as well as any Public Shares purchased during or after the Initial Public Offering) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a Business Combination (or sell any shares in a tender offer in connection with a Business Combination) or a vote to amend the provisions of the Second Amended and Restated Memorandum and Articles of Association relating to shareholders’ rights of pre-Business Combination activity and (d) that the insider shares and Private Units (including underlying securities) shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the initial shareholders will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination. The Company will have until 12 months (or 15 months if the Company has filed a proxy statement, registration statement or similar filing for an initial business combination within 12 months from the consummation of the Initial Public Offering but have not completed the initial business combination within such 12-month period, or up to 21 months if the Company extends the period of time to consummate a business combination, as described in more detail in this prospectus) from the closing of the Initial Public Offering to complete its Business Combination (the “Combination Period”).

 

F-8

 

 

Liquidation

 

If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of taxes payable), which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriters have agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.10.

 

The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below $10.10 per share (whether or not the underwriters’ over-allotment option is exercised in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

 

Liquidity

 

For the year ended December 31, 2021, the Company incurred net loss of $140,520 and had negative cash generated from operating activities of $130,305. As of December 31, 2021, the Company had cash of $779,868 and working capital of $738,244. Management believes its cash is sufficient to support the Company’s operation for the next 12-month period from the date the accompanying financial statements are issued.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

●	Basis of presentation

 

These accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

 

●	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 shareholder approval of any golden parachute payments not previously approved.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is 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.

 

F-9

 

 

●	Use of estimates

 

In preparing these financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported expenses during the reporting period.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results may differ from these estimates.

 

●	Cash and cash equivalents

 

The Company’s cash consists of deposit with financial institution. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2021 and 2020.

 

●	Concentration of credit risk

 

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

 

●	Cash held in Trust Account

 

At December 31, 2021, the assets held in the Trust Account are held in cash and US Treasury securities. Investment securities in the Company’s Trust Account consisted of $58,076,283 in United States Treasury Bills.

 

The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities are recorded at their estimated fair value. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive income. The Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered other than temporary if they are related to deterioration in credit risk or if it is likely the Company will sell the securities before the recovery of the cost basis. Realized gains and losses and declines in value determined to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the statements of operations.

 

●	Deferred Offering Costs

 

Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial public Offering and that were charged to shareholders’ equity upon the completion of the Initial Public Offering.

 

●	Warrant accounting

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

F-10

 

 

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

 

As the warrants issued upon the IPO and private placements meet the criteria for equity classification under ASC 480, therefore, the warrants are classified as equity.

 

●	Ordinary shares subject to possible redemption

 

The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares issued upon the consummation of the IPO and the exercise of the over-allotment option feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2021, ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.

 

The Company has made a policy election in accordance with ASC 480-10-S99-3A and recognizes changes in redemption value in accumulated deficit over an expected 12-month period leading up to a Business Combination. On December 31, 2021, the Company had recorded $2,947,334 accretion of carrying value to redemption value.

 

●	Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. The Company’s management determined that the British Virgin Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 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.

 

The Company may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws.

 

The Company’s tax provision is zero for the period from July 15, 2020 (date of inception) through December 31, 2020 and for the year ended December 31, 2021.

 

F-11

 

 

The Company is considered to be an exempted British Virgin Islands Company, and is presently not subject to income taxes or income tax filing requirements in the British Virgin Islands or the United States.

 

●	Net loss per share

 

The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable common stock and non-redeemable common stock and the undistributed income (loss) is calculated using the total net loss less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary share. Any remeasurement of the accretion to redemption value of the ordinary share subject to possible redemption was considered to be dividends paid to the public shareholders. As of December 31, 2021, the Company has not considered the effect of the warrants sold in the Initial Public Offering in the calculation of diluted net income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive and the Company did not have any other dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic (income) loss per share for the period presented.

 

The net income (loss) per share presented in the statement of operations is based on the following:

 

		December 31, 2021				through December 31, 2020
		For the Year				For the period from
		Ended				July 15, 2020 (Inception)
		December 31, 2021				through December 31, 2020
Net loss		$	(140,520	)		$	(18,254	)
Accretion of carrying value to redemption value			(2,947,334	)			-
Net loss including accretion of carrying value to redemption value		$	(3,087,854	)		$	(18,254	)

 

										For the Period from
		For the Year Ended								July 15, 2020 (Inception)
		December 31, 2021								to December 31, 2020
		Redeemable				Non-Redeemable				Redeemable				Non-Redeemable
		Ordinary Share				Ordinary Share				Ordinary Share				Ordinary Share
Basic and diluted net income (loss) per share:
Numerators:
Allocation of net loss including carrying value to redemption value		$	(1,574,475	)		$	(1,513,379	)		$	-			$	(18,254	)
Accretion of carrying value to redemption value			2,947,334				-				-				-
Allocation of net income (loss)		$	1,372,859			$	(1,513,379	)		$	-			$	(18,254	)
Denominators:
Weighted-average shares outstanding			1,559,589				1,499,070				-				372,485
Basic and diluted net income (loss) per share		$	0.88			$	(1.01	)		$	-			$	(0.05	)

 

● Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

F-12

 

 

●	Fair value of financial instrument

 

FASB ASC Topic 820 “Fair Value Measurements” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. FASB ASC Topic 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.

 

The fair value hierarchy is categorized into three levels based on the inputs as follows:

 

Level 1 —	Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.
Level 2 —	Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.
Level 3 —	Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

 

The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the balance sheets. The fair values of cash and cash equivalents, and other current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of December 31, 2021 due to the short maturities of such instruments. The Company measured its cash and investments held in trust account at fair value on a recurring basis as of December 31, 2021 and the fair value is based on Level 1 inputs.

 

●	Recent accounting pronouncements

 

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on the results of operations, financial condition, or cash flows, based on the current information.

 

NOTE 3 — CASH AND INVESTMENT HELD IN TRUST ACCOUNT

 

As of December 31, 2021, investment securities in the Company’s Trust Account consisted of $58,076,283 in United States Treasury Bills. The Company classifies its United States Treasury securities as available-for-sale. Available-for-sale marketable securities are recorded at their estimated fair value on the accompanying December 31, 2021 balance sheet. The carrying value, including gross unrealized holding gain as other comprehensive income and fair value of held to marketable securities on December 31, 2021 is as follows:

 

		Cost as of December 31, 2021				Gross Unrealized Holding Gain				Fair Value as of December 31, 2021
Available-for-sale marketable securities:
U.S. Treasury Securities		$	58,075,959			$	324			$	58,076,283

 

F-13

 

 

NOTE 4 – PUBLIC OFFERING

 

On September 23, 2021, the Company sold 5,000,000 Public Units at a price of $10.00 per Unit. Simultaneously, the Company sold an additional 750,000 units to cover over-allotments. Each Public Unit consists of one ordinary share, one right (“Public Right”) and one redeemable warrant (“Public Warrant”). Each Public Right will convert into one-tenth (1/10) of one ordinary share upon the completion of the initial Business Combination. Each Public Warrant will entitle the holder to purchase three-fourth (3/4) of one ordinary share at an exercise price of $11.50 per whole share. The Company will not issue fractional shares upon the exercise of the Public Warrant or the conversion of the Public Right.

 

The Company paid an upfront underwriting discount of $805,000, equal to 1.4% of the gross offering proceeds to the underwriter at the closing of the Initial Public Offering, with an additional fee of $1,615,000 (the “Deferred Underwriting Discount”). The Deferred Underwriting Discount will become payable to the underwriter from the amounts held in the Trust Account solely in the event the Company completes its Business Combination. In the event that the Company does not close the Business Combination, the underwriter has waived its right to receive the Deferred Underwriting Discount. The underwriter is not entitled to any interest accrued on the Deferred Underwriting Discount.

 

Besides the upfront underwriting discount of $805,000 and the Deferred Underwriting Discount of $1,615,000, the Company also incurred other offering expenses of $297,023. The Company allocates offering costs totaled $2,717,023 between Public Shares, Public Warrants and Public Rights based on the estimated fair value of each at the date of issuance. Accordingly, $2,284,236 offering cost was allocated to Public Shares, $432,787 offering cost was allocated to Public Warrants and Public Rights.

 

As a result of the aforementioned allocation, upon the completion of the IPO, $46,245,764 is allocated to the ordinary shares included in the Public Units and recorded as temporary equity and $8,537,213 is allocated to the Public Warrants and Public Rights and is recorded as part of the additional paid-in capital.

 

NOTE 5 – PRIVATE PLACEMENT

 

Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) with its sponsor of 255,000 units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,550,000. Each Private Unit consists of one Private Share, one Private Right (“Private Right”) and one redeemable warrant (each, a “Private Warrant”). Each Private Right will convert into one-tenth (1/10) of one ordinary share upon the completion of the Business Combination. Each Private Warrant is exercisable to purchase three-fourth (3/4) of one ordinary share at a price of $11.50 per share. The Company will not issue fractional shares upon the exercise of the Public Warrant or the conversion of the Public Right.

 

The Private Units are identical to the units sold in the Initial Public Offering except with certain registration rights and transfer restrictions.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

Insider Shares

 

In July 2020, the Company issued an aggregate of 10,000 insider shares to the initial shareholders for an aggregate purchase price of $1.

 

In November 2020, the Company issued an aggregate of 1,240,000 additional insider shares to the initial shareholders for an aggregate purchase price of $24,999.

 

In February 2021, the Company issued an aggregate of 187,500 additional insider shares to the initial shareholders for an aggregate purchase price of $18. These shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part. As the over-allotment option was exercised in full in the IPO, none of these shares were forfeited.

 

F-14

 

 

Advances from a Related Party

 

As of December 31, 2021 and 2020, the Company had a temporary advance of $30,450 and $48,302 from a related party for the payment of costs related to the Initial Public Offering and administrative expense. The balance is unsecured, interest-free and has no fixed terms of repayment.

 

Promissory Note from a Related Party

 

In February 2021, the Company issued an unsecured promissory note of $500,000 (the “Promissory Note) to a related party, HHG Investment Fund SPC – HHG Capital Fund SP (“HHG Fund”), which was a majority owner of the Company. The promissory note is unsecured, interest-free and repayable on February 16, 2022. The Company has repaid $400,000 and $100,000 to HHG Fund on April 20, 2021 and September 30, 2021, respectively. As of December 31, 2021 and 2020, the principal amount due and owing under the Promissory Note was $0 and $0, respectively.

 

Administrative Services Agreement

 

The Company is obligated, commencing from the date of the consummation of the offering, to pay the Sponsor a monthly fee of $10,000 for general and administrative services. This agreement will terminate upon completion of the Company’s Business Combination or the liquidation of the trust account to public shareholders.

 

NOTE 7 – SHAREHOLDERS’ EQUITY

 

On September 23, 2021, the Company completed the Initial Public Offering and issued an aggregate of 5,750,000 Public Units and raised gross proceeds of $57,500,000. Refer to Note 4 for details. Simultaneously, the Company completed a private placement and issued an aggregate of 255,000 Private Units and raised gross proceeds of $2,550,000. Refer to Note 5 for details.

 

Ordinary shares

 

The Company is authorized to issue 500,000,000 ordinary shares at par $0.0001. Holders of the Company’s ordinary shares are entitled to one vote for each share.

 

Rights

 

Each holder of a right (including Public Rights and Private Rights) will automatically receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, even if the holder of such right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued upon exchange of the rights. In the event the Company will not be the surviving company upon completion of a Business Combination, each holder of a right will be required to affirmatively convert the rights in order to receive the one-tenth (1/10) of an ordinary share underlying each right upon consummation of a Business Combination.

 

If the Company is unable to complete a Business Combination within the required time period and the Company redeems the Public Shares for the funds held in the trust account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless.

 

Warrants

 

The Public Warrants will become exercisable on the later of (a) the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 90 days from the consummation of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities Act provided that such exemption is available. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years after the completion of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

 

F-15

 

 

The Company may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant:

 

●	at any time while the Public Warrants are exercisable,
●	upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder,
●	if, and only if, the reported last sale price of the ordinary shares equals or exceeds $16.5 per share, for any 20 trading days within a 30 trading day period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and
●	if, and only if, there is a current registration statement in effect with respect to the issuance of the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

 

The Private Warrants are identical to the Public Warrants underlying the Units being sold in the Initial Public Offering. The Private Warrants (including the ordinary shares issuable upon exercise of the private warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination.

 

If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.

 

The Company assessed the key terms applicable to the Public Warrants as well as the Private Warrants and classified the Public Warrants and Private Warrants as equity in accordance with ASC 480, and ASC 815.

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

Risks and Uncertainties

 

Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the pandemic could have a negative effect on the Company’s future financial position, results of its operations and/or search for a target company. There has not been a significant impact as of the date of these financial statements. The financial statements do not include any adjustments that might result from the future outcome of this uncertainty. Additionally, If the Company is unable to complete a Business Combination within the Combination Period, the Company will cease all operations except for the purpose of winding up and redeem 100% of the outstanding Public Shares for amount then on deposit in the Trust Account. Furthermore, the ordinary shares included in the units offered in the IPO provide the holder redemption upon the consummation of the initial Business Combination or the liquidation. These risks and uncertainties also impact the Company’s future financial positions, results of its operations. Please refer to Note 1 for detail discussion of these risks and uncertainties.

 

Registration Rights

 

The holders of the insider shares, the Private Units (and their underlying securities) and the warrants that may be issued upon conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights pursuant to a registration rights agreement signed on September 20, 2021. The holders of a majority of these securities will be entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these ordinary shares are to be released from escrow. The holders of a majority of the Private Units and warrants issued in payment of Working Capital Loans made to the Company (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

NOTE 9 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before this unaudited financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2021, up through the date the Company issued the audited financial statements.

 

F-16