Annual Report (10-k)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(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

 

or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______, 20 ______, to ______, 20 ______.

 

Commission File Number: 001-39383

 

Malacca Straits Acquisition Company Limited

(Exact name of registrant as specified in its charter)

 

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

 

Unit 601-2 St. George’s Building 2 Ice House Street Central, Hong Kong		N/A
(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 Class A Ordinary Share and one-half of one Redeemable Warrant		MLACU		The Nasdaq Stock Market LLC
Class A Ordinary Shares, par value $0.0001 per share		MLAC		The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one Class A Ordinary Share for $11.50 per share		MLACW		The Nasdaq Stock Market LLC

 

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 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. ☐

 

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

 

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 officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

 

The aggregate market value of the registrant’s outstanding shares of Class A ordinary shares, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing price for the Class A ordinary shares on June 30, 2022, as reported on The Nasdaq Stock Market LLC, was approximately $47,855,000.

 

As of March 30, 2023, there were 517,354 Class A ordinary shares, par value $0.0001 per share, and 3,593,750 Class B ordinary shares, par value $0.0001 per share, of the registrant issued and outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

			PAGE
PART I			1
Item 1.	Business.		1
Item 1A.	Risk Factors.		24
Item 1B.	Unresolved Staff Comments.		26
Item 2.	Properties.		26
Item 3.	Legal Proceedings.		26
Item 4.	Mine Safety Disclosures.		26
PART II			27
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.		27
Item 6.	[Reserved]		28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.		34
Item 8.	Financial Statements and Supplementary Data.		34
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.		34
Item 9A.	Controls and Procedures.		34
Item 9B.	Other Information.		35
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.		35
PART III			36
Item 10.	Directors, Executive Officers and Corporate Governance.		36
Item 11.	Executive Compensation.		41
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.		42
Item 13.	Certain Relationships and Related Transactions, and Director Independence.		44
Item 14.	Principal Accountant Fees and Services.		46
PART IV			47
Item 15.	Exhibit and Financial Statement Schedules.		47
Item 16.	Form 10-K Summary.		47

 

i

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Report (as defined below), including, without limitation, statements under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act (as defined below) and Section 21E of the Exchange Act (as defined below). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

 

●

our ability to complete our initial business combination (as defined below), including the Indiev Business Combination (as defined below);

 

●

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

 

●

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements;

 

●

our potential ability to obtain additional financing to complete our initial business combination;

 

●

the ability of our officers and directors to generate a number of potential acquisition opportunities;

 

●

our pool of prospective target businesses;

 

●

our public securities’ potential liquidity and trading;

 

●

the lack of a market for our securities;

 

●

the use of proceeds not held in the trust account (as defined below) or available to us from interest income on the trust account balance; or

 

●

our financial performance.

 

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. 

 

ii

 

 

Unless otherwise stated in this Report, or the context otherwise requires, references to:

 

●

“amended and restated memorandum and articles of association” are to our amended and restated memorandum and articles of association currently in effect, as amended by the First Extension Amendment (as defined below) and the Second Extension Amendment (as defined below);

 

●

“ASC” are to the FASB (as defined below) Accounting Standards Codification;

 

●

“ASU” are to the FASB Accounting Standards Update;

 

●

“ASM” are to Argyle Street Management Limited, an SEC-registered investment adviser and indirect member of our sponsor (as defined below);

 

●

“AVN” are to PT Asia Vision Network, an Indonesian limited liability company;

 

●

“AVN Business Combination Agreement” are to the Business Combination Agreement, dated March 21, 2021, we entered into with AVN and the other parties thereto;

 

●

“AVN Termination Agreement” are to the Termination Agreement, dated September 3, 2021, we entered into with AVN;

 

●

“board of directors,” “board” or “directors” are to the board of directors of the Company (as defined below);

 

●

“business combination” are to a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses;

 

●

“Class A ordinary shares” are to the shares of Class A ordinary shares of the Company, par value $0.0001 per share;

 

●

“Class B ordinary shares” are to the shares of Class B ordinary shares of the Company, par value $0.0001 per share;

 

●

“Closing” are to the closing of the Indiev Business Combination;

 

●

“Combination Period” are to the period from the closing of the initial public offering (as defined below) to July 17, 2023 (or such earlier date as determined by the board), that the Company has to consummate an initial business combination;

 

●

“Companies Law” are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time;

 

●

“Company,” “our Company,” “we,” or “us” are to Malacca Straits Acquisition Company Limited, a Cayman Islands exempted company;

 

●

“Companies Law” are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time;

 

●

“Continental” are to Continental Stock Transfer & Trust Company, trustee of our trust account and warrant agent of our public warrants (as defined below);

 

●

“Conversion” are to the conversion of Indiev (as defined below) from a corporation incorporated under the laws of the State of California into a Delaware corporation;

 

●

“Domestication” are to the redomiciliation of the Company from a Cayman Islands limited company to a Delaware corporation;

 

●

“DWAC System” are to the Depository Trust Company’s Deposit/Withdrawal At Custodian System;

 

●

“Earnout Participants” are to the Indiev stockholders immediately prior to the Indiev Business Combination);

 

iii

 

 

●

“Earnout Shares” are to the 20,000,000 additional shares of New INDI (as defined below) common stock to which the Indiev stockholders have a contingent right in connection with the Indiev Business Combination;

 

●

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

 

●

“equity-linked securities” are to any securities of our Company which are convertible into or exchangeable or exercisable for, ordinary shares of our Company;

 

●

“First Contribution” are to our sponsor’s monthly contribution, as a loan of $0.03 for each public share not redeemed in connection with the First Extension Amendment;

 

●

“First Extension Amendment” are to the first amendment to our amended and restated memorandum and articles of association, to extend the date by which we must consummate a business combination from January 17, 2022 (which was 18 months from the closing of the initial public offering) to October 17, 2022 (or such earlier date as determined by the board);

 

●

“First Extension Note” are to the unsecured promissory note, dated March 29, 2022, in the amount of up to $1,297,500 we issued to our sponsor in connection with the First Extension Amendment;

 

●

“First Extension Redemption” are to the redemption of 9,669,449 public shares for an aggregate amount of $96,761,060, or approximately $10.00 per share, in connection with the First Extension Amendment;

 

●

“First Sales Earnout Year” are to 12-month period beginning with the start of the first calendar quarter starting after the Closing;

 

●

“FASB” are to the Financial Accounting Standards Board;

 

●

“founder shares” are to our Class B ordinary shares initially purchased by our sponsor in the private placement (as defined below) and, unless the context otherwise requires, our Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our business combination as described herein (for the avoidance of doubt, such Class A ordinary shares will not be “public shares” (as defined below);

 

●

“GAAP” are to the accounting principles generally accepted in the United States of America;

 

●

“IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board;

 

●

“Indiev” are to Indiev, Inc, a California corporation;

 

●

“Indiev Business Combination” are to the transactions contemplated by the Indiev Merger Agreement (as defined below);

 

●

“Indiev Merger Agreement” are to that certain Agreement and Plan of Merger with Indiev, Merger Sub (as defined below), the Sponsor and the other parties thereto, dated September 26, 2022 (as may be amended and/or restated from time to time);

 

●

“Indiev Registration Statement” are to the registration statement on Form S-4 filed with the SEC (as defined below) on February 3, 2023 (File No. 333-269544);

 

●

“initial business combination” are to a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

 

●

“initial public offering” are to the initial public offering that was consummated by the Company on July 17, 2020;

 

●

“IPO Registration Statement” are to the Registration Statement on Form S-1 initially filed with the SEC on June 26, 2020, as amended and declared effective on July 14, 2020 (File No. 333-239462);

 

iv

 

 

●

“initial shareholders” are to the holders of our founder shares prior to our initial public offering;

 

●

“Investment Company Act” are to the Investment Company Act of 1940, as amended;

 

●

“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

 

●

“letter agreement” are to the letter agreement, the form of which was filed as an exhibit to our IPO Registration Statement;

 

●

“management” or our “management team” are to our officers and directors;

 

●

“Merger Sub” are to MLAC Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company;

 

●

“Nasdaq” are to the Nasdaq Capital Market;

 

●

“New INDI” are to the entity continuing as the surviving and wholly-owned subsidiary of the Company at the closing of the Indiev Business Combination;

 

●

“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;

 

●

“PCAOB” are to the Public Company Accounting Oversight Board (United States);

 

●

“PIPE” are to the purchase of a total of 1.5 million shares of the Company’s Class A common stock (after giving effect to the Domestication) in a private investment in public equity in the Company at $10,000 per share with aggregate gross proceeds of $15,000,000, to be consummated immediately prior to the Closing, but after the Domestication;

 

●

“PIPE Investor” are to Mr. Hai Shi, an individual;

 

●

“private placement” are to the private placement of warrants that occurred simultaneously with the closing of our initial public offering;

 

●

“private placement warrants” are to the warrants issued to our sponsor in the private placement;

 

●

“Promissory Notes” are to the unsecured promissory notes to the sponsor in the amount of up to $300,000, each, that were issued on August 2, 2021, October 20, 2021,respectively, the Frist Extension Note and the Second Extension Note;

 

●

“public shares” are to our Class A ordinary shares offered as part of the units in our initial public offering (whether they were subscribed for in our initial public offering or thereafter in the open market);

 

●

“public shareholders” are to the holders of our public shares;

 

●

“public warrants” are to the redeemable warrants sold as part of the units in our initial public offering (whether they are subscribed for in our initial public offering or in the open market);

  

●

“Report” are to this Annual Report on Form 10-K for the fiscal year ended December 31, 2022;

 

●

“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

 

●

“SEC” are to the U.S. Securities and Exchange Commission;

 

●

“Second Contribution” are to our sponsor’s monthly contribution, as a loan of, $0.033 for each public share not redeemed in connection with the Second Extension Amendment;

 

v

 

 

●

“Second Extension Amendment” are to the second amendment to our amended and restated memorandum and articles of association, to extend the date by which we must consummate a business combination from October 17, 2022 to July 17, 2023 (or such earlier date as determined by our sponsor).

 

●

“Second Extension Note” are to the unsecured promissory note, dated October 17, 2022, in the amount of up to $153 655, we issued to our sponsor in connection with the Second Extension Amendment;

 

●

“Second Extension Redemption” are to the redemption of 4,188,197, for a total of $43,282,728, or approximately $10.33 per public share, in connection with the Second Extension Amendment.

 

●

“Securities Act” are to the Securities Act of 1933, as amended;

 

●

“sponsor” are to Malacca Straits Management Company Limited, a BVI business company with limited liability;

 

●

“trust account” are to the U.S.-based trust account in which an amount of $143,750,000 from the net proceeds of the sales of the units (as defined below) in the initial public offering and private placement warrants was placed following the closing of the initial public offering;

 

●

“TIH” are to TIH Limited, a Singapore-listed closed-end fund formed in 1994;

 

●

“units” are to the units sold in our initial public offering, which consist of one public share and one-half of one public warrant;

 

●

“warrants” are to our redeemable warrants, which include the public warrants as well as the private placement warrants;

 

●

“Withum” are to WithumSmith+Brown, PC, our independent registered public accounting firm;

 

●

“Working Capital Loans” are to funds that, in order to provide working capital or finance transaction costs in connection with a business combination, the initial shareholders or an affiliate of the initial shareholders or certain of our directors and officers may, but are not obligated to, loan the Company; and

 

●

“Working Capital Notes” are to the unsecured promissory notes, dated March 29, 2022 and March 31, 2023, each in the amount of up to $1,000,000 we issued to our sponsor.

  

vi

 

 

PART I

 

ITEM 1. BUSINESS.

 

General

 

We are a blank check company incorporated on July 17, 2019 as a Cayman Islands exempted company and formed for the purpose of effecting an initial business combination. We have generated no revenues to date and we will not generate operating revenues until we consummate our initial business combination. Since our initial public offering (as described below), we have focused our search for an initial business combination on businesses that may provide significant opportunities for attractive investor returns. Our efforts to identify a prospective target business are not limited to a particular industry or geographic region, although we expect to focus on a target in an industry where we believe our management team and founders’ expertise will provide us with a competitive advantage, including businesses which are currently part of Southeast Asian business conglomerates in the media, food processing, renewable energy and healthcare industries, which we believe can be positioned for success in Southeast Asian markets, as well as other Asian markets and beyond.

 

Initial Public Offering

 

On July 17, 2020, we consummated our initial public offering of 12,500,000 units. Each unit consists of one Class A ordinary share, par value $0.0001 per share, and one-half of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one Class A ordinary share for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds to us of $125,000,000.

 

Simultaneously with the closing of our initial public offering, we completed the private sale of an aggregate of 4,000,000 warrants to our sponsor at a purchase price of $1.00 per private placement warrant, generating gross proceeds to us of $4,000,000.

 

On July 21, 2020, we consummated the sale of an additional 1,875,000 units that were subject to the underwriters’ over-allotment option at $10.00 per unit, generating gross proceeds of $18,750,000. Simultaneously with the closing of the sale of additional units, we consummated the sale of an additional 375,000 private placement warrants at a price of $1.00 per private placement warrant, generating total proceeds of $375,000. Following the closing of the over-allotment option and sale of additional private placement warrants, an aggregate amount of $143,750,000 was placed in the trust account with Continental acting as trustee.

 

A total of $125,000,000, comprised of $122,500,000 of the proceeds from the initial public offering and $2,500,000 of the proceeds of the sale of the private placement warrants units was placed in the trust account maintained by Continental, acting as trustee.

 

It is the job of our sponsor and management team to complete our initial business combination. Our management team is led by Gordon Lo, our Chief Executive Officer and President, and Stanley Wang, our Chief Financial Officer. We must complete our initial business combination by July 17, 2023 (if we fully extend, as described further below). If our initial business combination is not consummated by the end of the Combination Period, then our existence will terminate, and we will distribute all amounts in the trust account.

  

Extension Amendments and Redemptions

 

On December 27, 2021, we held our 2021 annual general meeting of shareholders and approved, among other things, an amendment to the amended and restated memorandum and articles of association to extend the date by which we must consummate a business combination. The First Extension Amendment extended the date by which the Company must consummate a business combination from January 17, 2022 (which was 18 months from the closing of the initial public offering) to October 17, 2022 (or such earlier date as determined by the board). In connection with the First Extension Amendment, shareholders holding 9,669,449 public shares exercised their right to redeem such public shares for a pro rata portion of the trust account. On January 7, 2022, we paid from the trust account an aggregate amount of $96,761,060, or approximately $10.00 per share to redeeming shareholders in the First Extension Redemption. For each one-month extension, our sponsor agreed to contribute to the Company, as a loan, $0.03 for each public share not redeemed in connection with the First Extension Amendment. First Contributions in the amount of $141,167 were paid monthly through our extension date in October 2022.

 

1

 

 

On October 12, 2022, we held our 2022 annual general meeting of shareholders and approved, among other things, an amendment to the amended and restated memorandum and articles of association to extend the date by which the Company must consummate an initial business combination. The Second Extension Amendment extended the date by which we must consummate an initial business combination from October 17, 2022 to July 17, 2023 (or such earlier date as determined by the board). In connection with the Second Extension Amendment, shareholders holding 4,188,197 public shares exercised their right to redeem such public shares for a pro rata portion of the trust account. In October 2022, we paid from the trust account an aggregate amount of $43,282,728, or approximately $10.33 per share, to redeeming shareholders in the Second Extension Redemption. For each one-month extension, our sponsor agreed to contribute to us, as a loan, $0.033 for each public share not redeemed in connection with the Second Extension Amendment. Second Contributions in the amount of $153,655 are payable monthly through end of our current Combination Period. Our sponsor has the sole discretion whether to continue extending for additional calendar months until July 17, 2023.

 

The Company must consummate an initial business combination by July 17, 2023 (if the Company fully extends the term the Company has to complete an initial business combination). If the Company has not completed an 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 not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands 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 Company’s warrants, which will expire worthless if the Company fails to complete an initial business combination within the Combination Period.

 

Our sponsor has agreed to waive its liquidation rights with respect to the founder shares if the Company fails to complete an initial business combination within the Combination Period. However, if our sponsor acquires public shares in or after the initial public offering, such public shares will be entitled to liquidating distributions from the trust account if the Company fails to complete an initial business combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event the Company does not complete an initial business combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the trust account that will be available to fund the redemption of the public shares. In the event of such distribution, it is possible that the per-share value of the assets remaining available for distribution will be less than the initial public offering price per unit ($10.00). 

 

Our Business

 

We believe that, with a population of 656 million and a nominal GDP of approximately $3.2 trillion in 2019, as reported in the ASEAN Statistical Yearbook 2020 compiled by the ASEAN Secretariat, ASEAN, made up of Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam, is fast becoming a major economic force in Asia and a driver of global growth. We are focusing on companies that have the potential for success in this region as we believe that such companies will benefit from a young and growing population, robust economic growth and expansionary volume of trade in goods. According to the ASEAN Statistical Yearbook 2020, ASEAN remains one of the fastest growing regions in the world with economic growth continuing to average 5.2%, and is predicted to become the fourth-largest economy in the world by 2030 after the United States, China, and the European Union.

 

2

 

 

We believe that we are uniquely positioned to tap into what we believe is a de-conglomeration phase that business groups in Southeast Asia are currently undergoing, by leveraging our sponsor’s, affiliates’ and management team’s long investment track record and deep network of relationships in Southeast Asia.

 

ASM, an SEC-registered investment adviser and indirect member of our sponsor, was founded in Hong Kong, China in 2002 as a pan-Asia special situations investor. ASM manages approximately $1.9 billion and has over 50 employees in offices in Hong Kong, Thailand, Indonesia, the Philippines, Singapore and the United States. ASM has long-standing strategic relationships in Southeast Asia, including with family-owned business conglomerates, sovereign wealth funds and other Asian corporate groups. Such business relationships form the backbone of ASM’s long investment track record and deal-sourcing capability. ASM won the Eurekahedge Best Asia ex-Japan Hedge Fund Award in 2011, AsiaHedge Fund of the Year in 2010 and Eurekahedge Best Asian Distressed Debt Fund Award in 2007. We believe ASM’s extensive investment experience, broad and deep relationships with Asian business groups, strong reputation, and support of its stakeholders helps to give us a deep understanding of applicable regulations and policies, demographics and the political landscape in our target sectors and regions.

 

We are also close investment partners with TIH, a Singapore-listed closed-end fund formed in 1994, with strong historical ties to Singapore government-linked companies and focused on investment opportunities in Southeast Asia. Throughout its operating history and investment experience, TIH has invested in a broad variety of sectors including Consumer & Industrial Products, Healthcare, Technology, Media & Telecommunications, Food, Manufacturing and Chemicals, with a strong focus in Asia. TIH has extensive experience in cross-border private equity investments and divestments including but not limited to restructuring, mergers & acquisitions and joint venture opportunities. TIH’s largest shareholder is Lippo Group, one of Asia’s largest and most diversified conglomerates, who are also among the largest property developers and the largest healthcare groups in Indonesia. TIH Investment Management is an investment adviser to two ASM funds, and the TIH and ASM investment teams have worked closely on deals together. We draw upon ASM and TIH’s respective platforms, infrastructure, personnel, network and relationships to provide access to deal prospects, along with any necessary resources to aid in the identification, diligence, and operational support of a target for the initial business combination. We believe that we benefit from ASM and TIH’s investment experience across the sectors on which we focus. Both maintain extensive networks of relationships, and we currently anticipate that ASM and TIH may, from time to time, assist us in the identification of assets or companies that may be appropriate acquisition targets and in unlocking their long-term value. Neither ASM nor TIH are obligated to identify any such target assets or companies or to perform due diligence on any acquisition targets. Any such activities are the responsibility of our management team.

 

We seek to capitalize on the strength of our management team and advisors. Our management team and advisors consist of professionals and senior operating executives of various companies with decades of experience and industry exposure in media, food processing, energy and healthcare. Based on our management team’s and advisors’ extensive experience and industry exposure, we believe we will be able to identify, evaluate the risk and reward of and execute on attractive acquisition opportunities. Our management team and advisors are supported by ASM’s and TIH’s teams of investment professionals who each have meaningful investing experience and possess extensive experience in corporate finance, mergers and acquisitions, equity and debt capital markets, strategic consulting, and operations. 

 

AVN Business Combination

 

On March 21, 2021, we entered into the AVN Business Combination Agreement with AVN, an indirect 99.99% owned subsidiary of PT MNC Vision Networks TBK, an Indonesian public limited liability company, and new holding company for Vision+, Indonesia’s fastest growing OTT business and MNC Play, the 3^rd largest broadband and IPTV operator in Indonesia. Pursuant to the AVN Business Combination Agreement, subject to the terms and conditions set forth therein, a newly-formed Cayman Islands subsidiary of AVN would merge with and into our Company, with our Company surviving the merger as a wholly-owned subsidiary of AVN, and with AVN becoming the successor US-listed company to our Company.

 

On September 3, 2021, AVN and the Company entered into the AVN Termination Agreement in which AVN and the Company mutually agreed to terminate the AVN Business Combination Agreement, pursuant to Section 9.1(a) thereof.

 

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Indiev Business Combination

 

On September 26, 2022, the Company entered into the Indiev Merger Agreement with Indiev, Merger Sub, our sponsor, in the capacity as the representative thereunder of the stockholders of the Company (other than the stockholders of Indiev immediately prior to the Closing ) and their respective successors and assignees) from and after the Closing of the transactions contemplated by the Indiev Merger Agreement (in such capacity, the “Purchaser Representative”), and Mr. Hai Shi, in the capacity as the representative thereunder for the Earnout Participants and their respective successors and assignees from and after the Closing (in such capacity, the “Seller Representative”). Capitalized terms not defined but otherwise used in the following description have the meaning ascribed to them in the Indiev Merger Agreement.

 

Pursuant to the Indiev Merger Agreement, subject to the terms and conditions set forth therein, (i) prior to the Closing, Indiev shall convert from a corporation incorporated under the laws of the State of California into a Delaware corporation, and the Company will continue out of the Cayman Islands and into the State of Delaware to re-domicile and become a Delaware corporation, and (ii) at the Closing, Merger Sub will merge with and into Indiev, with Indiev continuing as the surviving entity and wholly-owned subsidiary of the Company, and with each Indiev stockholder receiving shares of Company common stock at the Closing, as further described below.

 

The Indiev Merger Agreement provides that the total consideration received by Indiev security holders from the Company at the Closing will be a number of shares of Company common stock that have an aggregate value equal to $600,000,000 subject to adjustments at the Closing to be decreased for the amount of the consolidated Indebtedness of Indiev and its Subsidiaries, net of their consolidated cash and cash equivalents, as of the Closing and the amount of unpaid transaction expenses and transaction bonuses of Indiev and its subsidiaries as of the Closing, and to the extent applicable and elected by our sponsor in accordance with the Sponsor Letter Agreement (as defined below), increased by the amount by which the Company’s transaction expenses exceed $5 million, with each share of the Company in the Merger Consideration being valued at an amount equal to the price at which the Company will pay to redeem its common stock from its public stockholders in the redemption for its initial business combination as required by its organizational documents, and with each Earnout Participant receiving its pro rata share of the Merger Consideration. Additionally, after the Closing, the Earnout Participants shall have the contingent right to receive up to an additional 20,000,000 shares of Company common stock (subject to equitable adjustment for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing) (from the Company based on the post-merger entity achieving certain sales milestones or stock trading price milestones after the Closing. The Earnout Participants will receive 5,000,000 of the Earnout Shares if the Company’s consolidated net sales of electronic automobile vehicles for the 12 month period beginning with the start of the first calendar quarter starting after the Closing is at least 400, at an average effective pre-tax sales price of $55,000 per vehicle, and will receive another 10,000,000 of the Earnout Shares if the Company’s consolidated net sales of electronic automobile vehicles for next 12 month period after the First Sales Earnout Year is at least 2,000, at an average effective pre-tax sales price of $55,000 per vehicle. The Earnout Participants will receive another 5,000,000 of the Earnout Shares if the volume weighted average stock price of our common stock is at least $12.50 per share for any 20 trading day period within any 30 trading day period beginning 150 days after the Closing until December 31, 2024. The determinations with respect to whether the Earnout Shares will be managed by the Purchaser Representative and the Seller Representative.

 

A copy of the Indiev Merger Agreement is filed as Exhibit 2.1 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the Indiev Merger Agreement is qualified in its entirety by reference thereto.

 

The Indiev Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The Indiev Merger Agreement has been filed with this Report in order to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Indiev, Merger Sub or any other party to the Indiev Merger Agreement. In particular, the representations, warranties, covenants and agreements contained in the Indiev Merger Agreement, which were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Indiev Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Indiev Merger Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Indiev Merger Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Indiev Merger Agreement may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties and other terms may change after the date of the Indiev Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

 

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Voting Agreements

 

Simultaneously with the execution and delivery of the Indiev Merger Agreement, the Company and Indiev have entered into Voting Agreements (collectively, the “Voting Agreements”) with certain stockholders of Indiev required to approve the Transaction. Under the Voting Agreements, each Indiev stockholder party thereto agreed to vote all of such shareholder’s shares of Indiev in favor of the Indiev Merger Agreement and the Transaction and to otherwise take (or not take, as applicable) certain other actions in support of the Indiev Merger Agreement and the Transaction and the other matters to be submitted to the Indiev stockholders for approval in connection with the Transaction, in the manner and subject to the conditions set forth in the Voting Agreements, and provide a proxy to the Company to vote such Indiev shares accordingly (subject to the condition that the Indiev Registration Statement have been declared effective by the SEC, provided that the covenants not to take certain actions to delay, impair or impede the Transaction as set forth in the Voting Agreements shall take effect from the date such agreements are executed). The Voting Agreements prevent transfers of the Indiev shares held by the Indiev stockholders thereto between the date of the Voting Agreement and the date of Closing, except for certain permitted transfers where the recipient also agrees to comply with the Voting Agreement.

 

A copy of the form of Voting Agreement is filed as Exhibit 10.13 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the form of Voting Agreement is qualified in its entirety by reference thereto.

 

Lock-Up Agreements

 

At or prior to the Closing, certain stockholders of Indiev will enter into a Lock-Up Agreement with the Company (collectively, the “Lock-Up Agreements”). Pursuant to the Lock-Up Agreements, each Indiev stockholder party thereto agreed not to, during the period commencing from the Closing and ending one year after the Closing (subject to early release if the closing price of shares of the Company common stock equals or exceeds $12.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, stock splits, stock dividends, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading period commencing at least 150 days after the Closing or the Company consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party after the Closing): (i) sell, offer to sell, contact or agree to sell, hypothecate, pledge, lend, encumber, donate, assign, grant any option, right or warrant to purchase, purchase any option or contract to sell, or otherwise dispose of or enter into any agreement to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules of regulation of the SEC promulgated thereunder, with respect to any Restricted Securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such the Company restricted securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i) or (ii) above is to be settled by delivery of the Company restricted securities or other securities, in cash or otherwise (in each case, subject to certain limited permitted transfers where the recipient takes the shares subject to the restrictions in the Lock-Up Agreement).

 

A copy of the form of Lock-Up Agreement is filed as Exhibit 10.14 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the form of Lock-Up Agreement is qualified in its entirety by reference thereto.

 

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Non-Competition Agreement

 

Simultaneously with the execution and delivery of the Indiev Merger Agreement, Mr. Hai Shi, CEO of Indiev, entered into a non-competition and non-solicitation agreement (the “Non-Competition Agreement”) in favor Indiev and the Company and their respective present and future successors and direct and indirect subsidiaries (collectively, the “Covered Parties”). Under the Non-Competition Agreement, pursuant to which Mr. Hai Shi agrees not to compete with the Company, Indiev and their respective affiliates during the two-year period following the Closing and, during such two-year restricted period, not to solicit employees or customers of such entities. The Non-Competition Agreement also contains customary confidentiality and non-disparagement provisions.

 

A copy of the Non-Competition Agreement is filed as Exhibit 10.15 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the Non-Competition Agreement is qualified in its entirety by reference thereto.

 

Form of Registration Rights Agreement

 

In connection with the Closing, the Company and certain of the Indiev Stockholders who are expected to be Affiliates of Malacca immediately after the Closing will enter into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which such Indiev Stockholders will be granted certain registration rights with respect to their shares of the Company Common Stock received as Merger Consideration as such terms are defined thereunder (including Earnout Shares), on the terms and subject to the conditions set forth in the Registration Rights Agreement.

 

A copy of the Form of Registration Rights Agreement is filed as Exhibit 10.16 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the Form of Registration Rights Agreement is qualified in its entirety by reference thereto.

 

Sponsor Letter Agreement

 

Simultaneously with the execution and delivery of the Indiev Merger Agreement, the Company and our sponsor entered into a letter agreement (the “Sponsor Letter Agreement”), pursuant to which our sponsor agreed to, (a) consistent with that certain Letter Agreement, dated July 14, 2022, by and among the Company, our officers and directors and our sponsor, (i) appear at our shareholder special meeting for purposes of constituting a quorum, (ii) vote in favor of the Indiev Merger Agreement and the transactions contemplated hereby, including the Merger and the Domestication, (iii) vote against any proposals that would materially impede the transactions contemplated thereby, including the Merger and the Domestication, and (iv) not redeem any Company common stock held by such person, (b) waive any adjustment to the conversion ratio or any other anti-dilution or similar protections with respect to shares of Company Class B ordinary shares in connection with the Transactions , and (c) provide for the election by our sponsor of certain options with respect to the satisfaction of Excess Purchaser Expenses, including by increasing the Merger Consideration in accordance with the terms of the Indiev Merger Agreement.

 

A copy of the Sponsor Letter Agreement is filed as Exhibit 10.17 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the Sponsor Letter Agreement is qualified in its entirety by reference thereto.

 

PIPE Investment

 

Simultaneously with the execution of the Indiev Merger Agreement, the Company and Indiev entered into subscription agreements (collectively, the “Subscription Agreements”) with certain PIPE Investor for an aggregate for 1,500,000 shares of the Company’s common stock, par value $0.0001 per share (the “PIPE Shares”), at a price of $10.00 per share, for an aggregate of $15,000,000, in a private placement to be consummated immediately prior to the Closing of the Transaction (the “PIPE Investment”).

 

The consummation of the transactions contemplated by the Subscription Agreements is conditioned on the substantially concurrent Closing and other customary closing conditions. Among other things, each PIPE Investor agreed in the Subscription Agreement that it and its affiliates will not have any right, title, interest or claim of any kind in or to any monies in our trust account held for its public stockholders, and agreed not to, and waived any right to, make any claim against the trust account (including any distributions therefrom). In addition, we granted certain customary resale registration rights to the PIPE Investors in the Subscription Agreements.

 

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A copy of the form of Subscription Agreement is filed as Exhibit 10.18 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the form of Subscription Agreement is qualified in its entirety by reference thereto.

 

Amendment to the Underwriting Agreement

 

Simultaneously with the execution of the Indiev Merger Agreement, the Company and BTIG, LLC, as representative for the underwriters thereunder (“BTIG”) entered into an amendment (the “Amendment to Underwriting Agreement”) to the underwriting agreement, dated as of July 14, 2020, between the Company and BTIG (the “Underwriting Agreement”), pursuant to which amendment, the Company decreased the deferred underwriting fee payable to the underwriters of our initial public offering with respect to the Closing from $5,031,250 in cash to a total of $1,500,000 in cash and 200,000 shares of our common stock (the “Representative Shares”), both deliverable at the Closing, and in exchange therefore, we agreed to (i) eliminate our right to pay a portion of deferred underwriting fee to third parties that did not participate in the initial public offering that assist us with our initial business combination, (ii) add BTIG and the other initial public offering underwriters as a “Holder” party to the Registration Rights Agreement, dated as of July 14, 2020, by and among the Company and our sponsor, with respect to the Representative Shares, which will become “Registrable Securities” thereunder, and (iii) in connection with the initial business combination with Indiev, provide access to, and cooperate with, BTIG and its Representatives for its diligence review, use efforts to provide the initial public offering underwriters with comfort letters, negative assurance letters and other documents from auditors and lawyers, and provide certain customary representations and warranties, covenants and indemnification to the initial public offering underwriters.

 

A copy of the Amendment to the Underwriting Agreement is filed as Exhibit 10.19 to this Report on Form 10-K and is incorporated herein by reference, and the foregoing description of the Amendment to the Underwriting Agreement is qualified in its entirety by reference thereto.

 

Other than as specifically discussed, this Report does not assume the Closing of the Indiev Business Combination.

 

Business Strategy

 

Our business strategy is to identify and complete our initial business combination with a company which is currently part of a Southeast Asian business conglomerate in the media, food processing, renewable energy and healthcare industries, though we also look for opportunities outside these sectors, which we believe can be positioned for success in Southeast Asian markets as well as other markets in Asia and beyond, which is complementary to the experience of our management team.

 

We are focusing our target search on Southeast Asian business groups which we believe are undergoing a phase of de-conglomeration. We believe that a number of business groups in Southeast Asia would be receptive to potential divestitures and de-conglomeration due to the following reasons: (i) we observe that a high number of family-owned business groups in Southeast Asia are transitioning to a next generation of leadership, resulting in increasing sophistication with regard to modern portfolio management and capital allocation theories, and a better understanding of how divestments and spin-offs can help conglomerate performance; (ii) a stronger preference to form dedicated professional management teams for specific businesses within the group; and (iii) estate planning for some family groups which influences how business groups are split.

 

Our selection process also leverages our management team’s, affiliates’ and investment partners’ broad and deep network of relationships with other Asian corporates, business groups, and sovereign wealth funds. We utilize our unique industry expertise as well as that of the ASM and TIH platforms, and their respective proven deal-sourcing capabilities to provide us with a strong pipeline of potential targets.

 

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Business Combination Criteria

 

Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We have used and intend to continue to use these criteria and guidelines in evaluating initial business combination opportunities, including the Indiev Business Combination, but we may decide to enter into our initial business combination with a target business that meets some, but not all of these criteria and guidelines.

 

●

Middle-Market Growth Business. We primarily seek to acquire one or more growth businesses with a history of good operating and financial results and with a total enterprise value of between $300 million and $500 million. We believe that there are a substantial number of potential target businesses within this valuation range that can benefit from new capital to scale operations and in turn yield significant revenue and earnings growth. We currently do not intend to acquire either a start-up company (a company that has not yet established commercial operations) or a company with negative cash flow.

 

●

De-conglomeration. We believe that a number of business groups in Southeast Asia would be receptive to potential divestitures and de-conglomeration as a result of transitioning to a next generation of leadership and a better understanding of how divestments and spin-offs can help conglomerate performance as well as a stronger preference to form dedicated professional management teams for specific businesses within the group and estate planning for some family groups.

 

●

Companies in Business Segments that are Strategically Significant to Southeast Asia. We seek to acquire those businesses that are strategically significant in Southeast Asia. Although we are focused on the media, food processing, renewable energy and healthcare industries, we may also look at businesses outside of these industries.

 

●

Business with Revenue and Earnings Growth Potential. We seek to acquire one or more businesses that have the potential for organic growth in revenue and earnings through a combination of both existing and new product development, increased production capacity, incremental marketing, expense reduction and synergistic follow-on acquisitions resulting in increased operating leverage.

 

●

Strong Competitive Industry Position. We seek to acquire one or more businesses that have a leading market position or that we believe have an opportunity to develop such a position in their respective sector. We seek to acquire businesses that demonstrate advantages when compared to their competitors, which may help to protect their market position and profitability and deliver strong free cash flow.

 

●

Strong target management teams. We seek candidates who have strong management teams with a proven track record of driving growth, enhancing profitability, making sound strategic decisions, and generating strong free cash flow. We diligence a target company’s leadership team to evaluate if there are areas that need to be improved or require additional personnel.

 

●

Appropriate valuations. We intend to be a disciplined and valuation-centric investor that will invest on terms that we believe provide significant upside potential with limited downside risk.

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into a business combination with a target business that only meets some but not all of the above criteria and guidelines, we will disclose that the target business does not meet all of the above criteria in our shareholder communications related to our initial business combination, which would be in the form of proxy solicitation or tender offer materials, as applicable, that we would file with the SEC.

 

Our Business Combination Process

 

In evaluating a prospective target business, including the Indiev Business Combination, we conduct a thorough due diligence review that encompasses, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as reviewing financial and other information which will be made available to us. We also utilize our operational and capital allocation experience.

 

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Our acquisition criteria, due diligence processes and value creation methods are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant.

 

Sourcing of Potential Business Combination Targets

 

We believe that the operational and transactional experience of our management team and advisor and the relationships they have developed as a result of such experience, will provide us with a substantial number of potential business combination targets. These individuals and entities have developed a broad network of contacts and corporate relationships around the world. This network has grown through sourcing, acquiring and financing businesses and maintaining relationships with sellers, financing sources and target management teams. Our management team members and advisor have significant experience in executing transactions under varying economic and financial market conditions. We believe that these networks of contacts and relationships and this experience provide us with important sources of investment opportunities. In addition, target business candidates are brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest noncore assets or divisions.

 

We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. While Indiev is not affiliated with our sponsor, officers, or directors, in the event we do not consummate the Indiev Business Combination and 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 firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting firm that our initial business combination is fair to our Company from a financial point of view. We are not required to obtain such an opinion in any other context. If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties under Cayman Islands law. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

 

At the closing of our initial business combination, such as the Indiev Business Combination, we may pay a customary financial consulting fee to ASM or TIH, or another affiliate of our sponsor. We may pay such financial consulting fee in the event such party or parties provide us with specific target company, industry, financial or market expertise, as well as insights, relationships, services or resources that we believe are necessary in order to assess, negotiate and consummate an initial business combination. The amount of any such financial consulting fee we pay will be based upon the prevailing market for similar services for comparable transactions at such time, and will be subject to the review of our audit committee pursuant to the audit committee’s policies and procedures relating to transactions that may present conflicts of interest.

 

Other Acquisition Considerations

 

Members of our management team directly and indirectly own our ordinary shares and/or private 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.

 

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Each of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provide that, subject to his or her fiduciary duties under Cayman Islands law, no director or officer shall be disqualified or prevented from contracting with the company nor shall any contract or transaction entered into by or on behalf of the company in which any director shall have an interest be liable to be avoided. A director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of such interest shall be disclosed at or prior to its consideration or any vote thereon by the board of directors. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially undermine our ability to complete our business combination.

 

Our officers have agreed not to become an officer of any other special purpose acquisition company with a class of securities registered under the Exchange Act, until we have entered into a definitive agreement regarding our initial business combination, such as the Indiev Business Combination, or we have failed to complete our initial business combination by the end of the Combination Period.

 

Initial Business Combination

 

Nasdaq rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable) at the time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting firm with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors. Based on the valuation analysis of our management and board of directors, we have determined that the fair market value of Indiev was in excess of 80% of the funds in the trust account and that the 80% test was therefore satisfied.

 

Unless we complete our initial business combination with an affiliated entity, or our board of directors cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that the price we are paying for a target is fair to our Company from a financial point of view. If no opinion is obtained, our shareholders will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

 

We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such 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 shareholders or for other reasons. However, we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and 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. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares and/or other equity interests 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 shareholders immediately prior to our initial business combination could own less than a majority of our issued and 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 valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. If our securities are not listed on the Nasdaq after our initial public offering, we would not be required to satisfy the 80% requirement. However, we intend to satisfy the 80% requirement even if our securities are not listed on the Nasdaq at the time of our initial business combination.

 

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Status as a Public Company

 

We believe our structure makes us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange their equity interests, shares and/or shares of stock in the target business for our shares or for a combination of our shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.

 

Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with shareholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.

 

While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may have a negative view of us since we are a blank check company, without an operating history, and there is uncertainty relating to our ability to obtain shareholder approval of our proposed initial business combination and retain sufficient funds in our trust account in connection therewith.

 

We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following July 17, 2025, the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30^th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

 

Financial Position

 

With funds available for a business combination in the amount of approximately $5,397,789, as of December 31, 2022, and $5,363,644 following the Second Extension Redemption, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us. 

 

Effecting our Initial Business Combination

 

We are not presently engaged in, and we will not engage in, any operations other than finding a business combination until we consummate our initial business combination. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the sale of the private placement warrants, our shares, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

 

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If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

 

Our sponsor from time to time may be made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination.

 

We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account.

 

In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by applicable law or we decide to do so for business or other reasons, we would seek shareholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination.

 

Selection of a Target Business and Structuring of our Initial Business Combination

 

Nasdaq rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. Our shareholders will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

 

If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting firm, with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to these requirements, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.

 

In any case, we will only complete an initial business combination in which we own or acquire 50% or more of the issued and outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be valued for purposes of the 80% of net assets test. There is no basis for investors in our initial public offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.

 

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To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

 

In evaluating a prospective target business, we conduct a thorough due diligence review which encompasses, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us.

 

Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.

 

Lack of Business Diversification

 

For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:

 

●

subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and

 

●

cause us to depend on the marketing and sale of a single product or limited number of products or services.

 

Limited Ability to Evaluate the Target’s Management Team

 

Although we closely scrutinize the management of a prospective target business, including the management team of Indiev, when evaluating the desirability of effecting our initial business combination with that business, and will continue to do so if the Indiev Business Combination is not consummated and we seek other business combination opportunities, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, including the Indiev Business Combination in which Mr. Hai Shi will serve as Chief Executive Officer of Indiev post-Closing, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.

 

We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

 

Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that such additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

 

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Shareholders May Not Have The Ability to Approve Our Initial Business Combination

 

We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by law or applicable stock exchange rule (as is the case in the Indiev Business Combination), or we may decide to seek shareholder approval for business or other legal reasons.

 

Under the Nasdaq’s listing rules, shareholder approval would be required for our initial business combination if, for example:

 

●

we issue Class A ordinary shares that will be equal to or in excess of 20% of the number of Class A ordinary shares then issued and outstanding;

 

●

any of our directors, officers or substantial shareholders (as defined by NASDAQ rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 5% or more; or

 

●

the issuance or potential issuance of ordinary shares will result in our undergoing a change of control.

 

Permitted Purchases of our Securities

 

In the event we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, or their respective affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares such persons may purchase. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our sponsor, directors, officers, or their respective affiliates determine to make any such purchases at the time of a shareholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase shares in such transactions. They will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We have adopted an insider trading policy which requires insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material non-public information and (ii) to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.

 

In the event that our sponsor, directors, officers, or their respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

 

The purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been possible.

 

In addition, if such purchases are made, the public “float” of our ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

 

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Our sponsor, directors, officers, or their respective affiliates anticipate that they may identify the shareholders with whom our sponsor, directors, officers, or their respective affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, directors, officers, or their respective affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the business combination. Such persons would select the shareholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsor, directors, officers, or their respective affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

 

Any purchases by our sponsor, directors, officers, or their respective affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, directors, officers, or their respective affiliates will not make purchases of ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

 

Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination

 

We will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon the completion of our 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 the consummation of the initial business combination, including interest (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares, subject to the limitations described herein. As of December 31, 2022, the amount in the trust account was approximately $10.43 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the completion of our initial business combination.

 

Manner of Conducting Redemptions

 

We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination, such as the Indiev Business Combination with Indiev, or (ii) by means of a tender offer if the Indiev Business Combination is not consummated. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under the law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our Company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. If we structure a business combination transaction with a target company in a manner that requires shareholder approval, we will not have discretion as to whether to seek a shareholder vote to approve the proposed business combination. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq rules.

 

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If shareholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain shareholder approval for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles of association:

 

●

conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and

 

●

file proxy materials with the SEC.

 

We expect that a final proxy statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any shareholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.

 

In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.

 

If we seek shareholder approval, we will complete our initial business combination only if we obtain an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting in favor of the business combination. In such case, pursuant to the terms of a letter agreement entered into with us, our sponsor, officers and directors have agreed (and their permitted transferees will agree) to vote any founder shares held by them and any public shares purchased during or after our initial public offering in favor of our initial business combination. We expect that at the time of any shareholder vote relating to our initial business combination, our sponsor and its permitted transferees will own at least 20% of our issued and outstanding ordinary shares entitled to vote thereon. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of a business combination.

 

If a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles of association:

 

●

conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and

 

●

file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

 

Upon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.

 

In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on the requirement that we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.

 

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Our amended and restated memorandum and articles of association provide that we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.

 

Limitation on Redemption upon Completion of Our Initial Business Combination if We Seek Shareholder Approval

 

Notwithstanding the foregoing, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in our initial public offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our sponsor, officers and directors have, pursuant to a letter agreement entered into with us, waived their right to have any founder shares or public shares held by them redeemed in connection with our initial business combination. Unless any of our other affiliates acquires founder shares through a permitted transfer from an initial shareholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver.eliever, to the extent any such affiliate acquires public shares in our initial public offering or thereafter through open market purchases, it would be a public shareholder and restricted from seeking redemption rights with respect to any Excess Shares.

 

Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights

 

We may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates (if any) to our transfer agent prior to the date set forth in the tender offer documents, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using the DWAC System, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public shareholders to satisfy such delivery requirements. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a shareholder vote, a final proxy statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for shareholders to use electronic delivery of their public shares.

 

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There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $100.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

 

Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the general meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.

 

If our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.

 

If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until the end of the Combination Period.

 

Redemption of Public Shares and Liquidation if no Initial Business Combination

 

Our sponsor, officers and directors have agreed that we have until the end of the Combination Period to complete our initial business combination. If we are unable to complete our initial business combination by the end of the Combination Period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands 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 our warrants, which will expire worthless if we fail to complete our initial business combination by the end of the Combination Period.

 

Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination by the end of the Combination Period. However, if our sponsor, officers or directors acquire public shares after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination by the end of the Combination Period.

 

Our sponsor, officers and directors have agreed, pursuant to a written letter agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association that would (i) modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by the end of the Combination Period or (ii) with respect to the other provisions relating to shareholders’ rights or pre-business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment or the related redemption of our public shares.

 

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If we do not consummate the Indiev Business Combination or any other initial business combination by the deadlines set forth in our amended and restated memorandum and articles of association, we expect to use the amounts held outside the trust account ($34,262 as of December 31, 2022) to pay for all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, if we do not complete an initial business combination prior to the end of the Combination Period although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

 

If we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be approximately $10.43. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially less than $10.43. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

 

Although we seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect 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 our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only third parties we currently expect to engage would be vendors such as lawyers, investment bankers, computer or information and technical services providers or prospective target businesses. In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our Company. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

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In the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share.

 

We seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. We may have access to use the amounts held outside the trust account ($34,262 as of December 31, 2022) to pay any such potential claims, but these amounts may be spent on expenses incurred as a result of being a public company or due diligence expenses on prospective business combination candidates. In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $650,000, we may fund such excess with funds from the funds not to be held in the trust account.

 

If we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency laws, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.430 per share to our public shareholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover all amounts received by our shareholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our Company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

Our public shareholders will be entitled to receive funds from the trust account only upon the earlier of (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination prior to the end of the Combination Period or (B) with respect to any other provision relating to shareholders’ rights or pre-business combination activity and (iii) the redemption of all of our public shares if we are unable to complete our initial business combination within the Combination Period, subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above.

 

20

 

 

Amended and Restated Memorandum and Articles of Association

 

Our amended and restated memorandum and articles of association contain certain requirements and restrictions relating to our initial public offering that will apply to us until the consummation of our initial business combination. If we seek to amend any provisions of our amended and restated memorandum and articles of association relating to shareholders’ rights or pre-business combination activity, we will provide dissenting public shareholders with the opportunity to redeem their public shares in connection with any such vote. Our sponsor, officers and directors have agreed to waive any redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. Specifically, our amended and restated memorandum and articles of association provide, among other things, that:

 

●

prior to the consummation of our initial business combination, we shall either (1) seek shareholder approval of our initial business combination at a general meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) or (2) provide our public shareholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) in each case subject to the limitations described herein;

 

●

we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation and, solely if we seek shareholder approval, obtain an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting in favor of the business combination;

 

●

if our initial business combination is not consummated prior to July 17, 2023 (if we fully extend the term we have to complete our initial business combination), then our existence will terminate and we will distribute all amounts in the trust account; and

 

●

prior to our initial business combination, we may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination.

 

These provisions cannot be amended without the approval of holders of at least two-thirds of our ordinary shares. In the event we seek shareholder approval in connection with our initial business combination, our amended and restated memorandum and articles of association provide that we may consummate our initial business combination only if approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting in favor of the business combination.

 

An Amendment to the Amended and Restated Memorandum and Articles of Association

 

On November 16, 2022, the Company filed an amendment to the amended and restated memorandum and articles of association with the Cayman Islands Registrar of Companies, where it extended the date by which the Company has to consummate an initial business combination from October 17, 2022 to July 17, 2023.

 

21

 

Competition

 

In identifying, evaluating and selecting a target business for our initial business combination, we are encountering 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 acquisitions. 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 us. Our ability to acquire larger target businesses is limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our issued and 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.

 

Indemnity

 

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect 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 our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only third parties we currently expect to engage would be vendors such as lawyers, investment bankers, computer or information and technical services providers or prospective target businesses. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our Company. We have not asked our sponsor to reserve for such obligations.

 

Employees

 

We have two officers. Members of our management team are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that our officers or any other members of our management team devote in any time period varies based on the stage of the business combination process we are in.

 

Periodic Reporting and Financial Information

 

We have registered our units, Class A ordinary shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports, including this Report, contain financial statements audited and reported on by our independent registered public auditors.

 

We will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to shareholders to assist them in assessing the target business, such as the Indiev Registration Statement. These financial statements may be required to be prepared in accordance with, or be reconciled to, GAAP, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.

 

22

 

 

We are required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

 

We have filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.

 

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to 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 our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

 

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following July 17, 2025, the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30^th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

 

Exempted companies are Cayman Islands companies wishing to conduct business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Law. As an exempted company, we have applied for and have received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Law (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (1) on or in respect of our shares, debentures or other obligations or (2) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. 

 

23

 

 

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:

 

●

we are a blank check company with no revenue or basis to evaluate our ability to select a suitable business target;

 

●

we may not be able to select an appropriate target business or businesses and complete our initial business combination in the prescribed time frame, such as the Indiev Business Combination;

 

●

our expectations around the performance of a prospective target business or businesses, such as Indiev, may not be realized;

 

●

we may not be successful in retaining or recruiting required officers, key employees or directors following our initial business combination;

 

●

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;

 

●

we may not be able to obtain additional financing to complete our initial business combination, including the Indiev Business Combination, or reduce the number of shareholders requesting redemption;

 

●

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;

 

●

you may not be given the opportunity to choose the initial business target or to vote on the initial business combination;

 

●

trust account funds may not be protected against third party claims or bankruptcy;

 

●

an active market for our public securities may not develop and you will have limited liquidity and trading;

 

●

the availability to us of funds from interest income on the trust account balance may be insufficient to operate our business prior to the business combination;

 

	●	our financial performance following a business combination with an entity may be negatively affected by their lack an established record of revenue, cash flows and experienced management;
	●	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;
	●	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;
	●	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;
	●	we may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after the initial public offering, 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. Our underwriters are entitled to receive deferred underwriting commissions that will be released from the trust account only upon a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after the initial public offering, including, for example, in connection with the sourcing and consummation of an initial business combination;

 

24

 

 

	●	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;
	●	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;
	●	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;
	●	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;
	●	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 $10.43 per share;
	●	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, our public shareholders may receive only approximately $10.43 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless;
	●	in March 2022, the SEC issued proposed rules relating to certain activities of special purpose acquisition companies. 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;
	●	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;
	●	to mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we have instructed 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 than the interest we would have received pursuant to our original trust account investment, which would likely reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company;
	●	our ability to identify a target and to consummate an initial business combination may be adversely affected by economic uncertainty and volatility in the financial markets, including as a result of the military conflict in Ukraine;

 

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	●	our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern, since we will cease all operations except for the purpose of liquidating if we are unable to complete an initial business combination by July 17, 2023 (if we fully extend the term we have to complete our initial business combination);
	●	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;
	●	if the funds held outside of our trust account are insufficient to allow us to operate until at least July 17, 2023, our ability to fund our search for a target business or businesses or complete an initial business combination may be adversely affected;
	●	If third parties bring claims against us, the proceeds held in the trust could be reduced and the per share redemption price received by stockholders may be less than $10.43; and
	●	our search for an initial business combination, and any target business with which we ultimately consummate an initial business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and other events, and the status of debt and equity markets.

  

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 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.

 

For the complete list of risks relating to our operations, see the section titled “Risk Factors” contained in (i) our IPO Registration Statement, (ii) our Quarterly Reports on Forms 10-Q and 10-Q/A for the quarters ended September 30, 2020, March 31, 2022, June 30, 2022 and September 30, 2022, as filed with the SEC on filed November 16, 2020 and as amended January 11, 2022, May 24, 2022, August 18, 2022 and November 15, 2022, respectively (iii) Amendment No. 2 to our Annual Report on Form 10-K/A for the year ended December 31, 2020, as filed with the SEC on January 11, 2022, (iv) our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 31, 2022, (v) our definitive proxy statement on Schedule 14A, dated September 28, 2022, as filed with the SEC on September 29, 2022 and (viii) the Indiev Registration Statement. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC. 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.

 

For risks relating to Indiev and the Indiev Business Combination, see the Indiev Registration Statement.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS.

 

Not applicable.

 

ITEM 2. PROPERTIES.

 

Our executive offices are located at Unit 601-2, St. George’s Building, 2 Ice House Street, Central, Hong Kong, and our telephone number is [phone]. Our executive offices are provided to us by our sponsor at no charge. We consider our current office space adequate for our current operations.

 

ITEM 3. LEGAL PROCEEDINGS.

 

To the knowledge of our management team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

26

 

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

(a)

Market Information

 

Our units, Class A ordinary shares and public warrants are each traded on Nasdaq under the symbols “MLACU,” “MLAC” and “MLACW,” respectively. Our units commenced public trading on July 15, 2020, and our Class A ordinary shares and public warrants commenced separate public trading on August 6, 2020.

 

(b)

Holders

 

On March 30, 2023, there was one holder of record of our units, one holder of record of our Class A ordinary shares, and two holders of record of our warrants.

 

(c)

Dividends

 

We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

(d)

Securities Authorized for Issuance Under Equity Compensation Plans

 

None.

 

(e)

Recent Sales of Unregistered Securities

 

None.

 

(f)

Use of Proceeds from the Initial Public Offering

 

For a description of the use of proceeds generated in our initial public offering and private placement, see Part II, Item 2 of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, as filed with the SEC on November 16, 2020. There has been no material change in the planned use of proceeds from the initial public offering and the private placement as described in the IPO Registration Statement. Our specific investments in our trust account may change from time to time.

 

On September 16, 2022, we instructed Continental to liquidate the investments held in the trust account and instead to hold the funds in the trust account in a non-interest-bearing demand deposit account at JPMorgan Chase Bank, with Continental continuing to act as trustee, 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, the remaining proceeds from the initial public offering and private placement are no longer invested in U.S. government securities or money market funds.

 

27

 

 

(g)

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 

On October 12, 2022, we held our 2022 annual general meeting of shareholders and approved, among other things, an amendment to the amended and restated memorandum and articles of association to extend the date by which the Company must consummate an initial business combination. In connection with the Second Extension Amendment, shareholders holding 4,188,197 public shares exercised their right to redeem such public shares for a pro rata portion of the trust account. In October 2022, we paid from the trust account an aggregate amount of $43,282,728, or approximately $10.33 per share, to redeeming shareholders in the Second Extension Redemption.

 

The following table contains monthly information about the repurchases of our equity securities for the three months ended December 31, 2022:

 

Period		(a) Total number of shares (or units) purchased				(b) Average price paid per share (or unit)				(c) Total number of shares (or units) purchased as part of publicly announced plans or programs				(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
October 1 – October 31, 2022			4,188,197			$	10.33				—				—
November 1 – November 30, 2022			—				—				—				—
December 1 – December 31, 2022			—				—				—				—

 

ITEM 6. [RESERVED]

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Cautionary Note Regarding Forward-Looking Statements

 

All statements other than statements of historical fact included in this Report including, without limitation, statements in this section regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward- looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this Report.

 

Overview

 

We are a blank check company incorporated on July 17, 2019 as a Cayman Islands exempted company for the purpose of effecting an initial business combination. We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering and the sale of the private placement warrants, our shares, debt or a combination of cash, equity and debt.

 

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.

 

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AVN Business Combination

 

On March 21, 2021, we entered into the AVN Business Combination Agreement with AVN, an indirect 99.99% owned subsidiary of PT MNC Vision Networks TBK, an Indonesian public limited liability company, and new holding company for Vision+, Indonesia’s fastest growing OTT business and MNC Play, the 3rd largest broadband and IPTV operator in Indonesia. Pursuant to the AVN Business Combination Agreement, subject to the terms and conditions set forth therein, a newly-formed Cayman Islands subsidiary of AVN would merge with and into our Company, with our Company surviving the merger as a wholly-owned subsidiary of AVN, and with AVN becoming the successor US-listed company to our Company.

 

On September 3, 2021, AVN and the Company entered into the AVN Termination Agreement to mutually terminate the AVN Business Combination Agreement, pursuant to Section 9.1(a) thereof.

 

Indiev Business Combination

 

On September 26, 2022, the Company entered into the Indiev Merger Agreement with Indiev, Merger Sub, our sponsor, in the capacity as the representative thereunder of the stockholders of the Company (other than the stockholders of Indiev immediately prior to the Closing and their respective successors and assignees) from and after the Closing of the transactions contemplated by the Indiev Merger Agreement, and Mr. Hai Shi, in the capacity as the representative thereunder for the Earnout Participants and their respective successors and assignees from and after the Closing.

 

Pursuant to the Indiev Merger Agreement, subject to the terms and conditions set forth therein, (i) prior to the Closing, Indiev shall convert from a corporation incorporated under the laws of the State of California into a Delaware corporation, and the Company will continue out of the Cayman Islands and into the State of Delaware to re-domicile and become a Delaware corporation, and (ii) at the Closing, Merger Sub will merge with and into Indiev, with Indiev continuing as the surviving entity and wholly-owned subsidiary of the Company, and with each Indiev stockholder receiving shares of Company common stock at the Closing, as further described below. Simultaneously with entering into the Indiev Merger Agreement, the Company entered into a Subscription Agreement with Mr. Hai Shi to purchase a total of 1.5 million shares of our Class A common stock (after giving effect to the Domestication) in a PIPE in the Company at $10.00 per share with aggregate gross proceeds to of $15,000,000, to be consummated immediately prior the Closing, but after the Domestication.

 

For a full description of the Indiev Merger Agreement and the proposed Indiev Business Combination, please see “Item 1. Business.”

 

Extension Amendments and Redemptions

 

On December 27, 2021, we held our 2021 annual general meeting of shareholders and approved, among other things, the First Extension Amendment, which extended the date by which we must consummate a business combination from January 17, 2022 (which was 18 months from the closing of the initial public offering) to October 17, 2022 (or such earlier date as determined by the board). Our sponsor had the sole discretion whether to continue extending for additional calendar months until October 17, 2022. In connection with the First Extension Amendment, shareholders holding 9,669,449 public shares exercised their right to redeem such public shares for a pro rata portion of the trust account.

 

In January 2022, in connection with the First Extension Amendment, we paid cash in the aggregate amount of $96,761,060, or approximately $10.00 per share to redeeming shareholders in the First Extension Redemption. For each one-month extension our sponsor deposited the First Contribution of $0.03 per public share not redeemed in connection with the First Extension Amendment. The first such First Contribution was due on January 17, 2022 in the amount of $141,167 and subsequent Contributions were payable monthly through the extension date in October 2022 . Immediately after the First Extension Redemption, the amount in the trust account was approximately $47,087,905.

 

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In connection with the First Extension Amendment, we also issued the Extension Note, an unsecured promissory note, dated March 29, 2022, in the amount of up to $1,297,500, to our sponsor. The proceeds of the Extension Note were used solely for extensions of the time period we have to complete an initial business combination.

 

On October 12, 2022, we held our 2022 annual general meeting of shareholders and approved, among other things, the Second Extension Amendment, which extended the date by which we must consummate a business combination from October 17, 2022 to July 17, 2023 (or such earlier date as determined by the board). Our sponsor has sole discretion whether to continue extending for additional calendar months until July 17, 2023. In connection with the Second Extension Redemption, shareholders holding 4,188,197 public shares exercised their right to redeem such public shares for a pro rata portion of the trust account. 

 

In connection with the Second Extension Amendment, we also issued the Second Extension Note, an unsecured promissory note, dated October 17, 2022, in the amount of up to $153 655, to our sponsor. The proceeds of the Second Extension Note have been and will continue to be used solely for extensions of the time period we have to complete an initial business combination.

 

Results of Operations

 

We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through December 31, 2022 were organizational activities and those necessary to prepare for the initial public offering. We do not expect to generate any operating revenues until after the completion of our initial business combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the initial public offering. We expect that we will 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 in connection with searching for, and completing, a business combination.

 

For the year ended December 31, 2022, we had net income of $3,008,083, which consists of a gain due to changes in fair value of warrant liabilities of $4,497,031, operating expenses of $1,759,463, offset by interest and dividends earned on marketable securities held in the trust account of $270,514. 

 

For the year ended December 31, 2021, we had net income of $6,050,466, which consists of a gain due to changes in fair value of warrant liabilities of $7,457,876, operating expenses of $1,440,989, offset by interest earned from bank of $3 and interest earned on marketable securities held in the trust account of $33,576. 

 

Liquidity and Capital Resources

 

On July 17, 2020, we consummated the initial public offering of 12,500,000 units, and on July 21, 2020, we consummated the sale of an additional 1,875,000 units, which included the full exercise by the underwriters of their over-allotment option, at $10.00 per unit, generating aggregate gross proceeds of $143,750,000. Each unit consists of one Class A ordinary share, par value $0.0001 per share, and one-half of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A ordinary share for $11.50 per share. Simultaneously with the closing of the initial public offering and the full exercise of the over-allotment option, we consummated the sale of an aggregate of 4,375,000 private placement warrants to our sponsor in the private placement at a price of $1.00 per warrant, generating aggregate gross proceeds of $4,375,000.

 

Following the initial public offering, the exercise of the over-allotment option and the private placement, a total of $143,750,000 was placed in the trust account. We incurred $8,394,954 in transaction costs, including $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $488,704 of other offering costs in connection with the initial public offering and the private placement. Of these amounts, transactions costs of $186,456 attributable to the issuance of the warrants were expensed during 2020.

 

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For the year ended December 31, 2022, net cash used in operating activities was $1,388,732. Net income of $3,008,083 primarily related to the income from change in fair market value of derivative warrant liabilities of $4,497,031 interest and dividends earned on marketable securities of $270,514 and changes in operating assets and liabilities, which used $370,730 of cash from operating activities. 

 

At December 31, 2022 and 2021, we had cash and marketable securities held in the trust account of $5,397,789 and $143,849,320, respectively. 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 taxes payable (if applicable) and deferred underwriting commissions) to complete our business combination. To the extent that our shares 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 post-business combination entity, make other acquisitions and pursue our growth strategies.

 

At December 31, 2022 and 2021, we had cash of $34,262 and $112,687, respectively, held outside of the trust account. 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, structure, negotiate and complete a business combination.

 

In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us Working Capital Loans, as may be required. If we complete a business combination, we may repay any such Working Capital Loans out of the proceeds of the trust account released to us. In the event that a business combination does not close, we may use a portion of the working capital held outside the trust account to repay any such Working Capital Loans, but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the private placement warrants.

 

Other than as disclosed in this Report, we do not presently believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon completion of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

 

We issued the Promissory Notes to the sponsor, which consist of (i) two unsecured promissory notes in the amount of up to $300,000, each, which were issued on August 2, 2021 and October 20, 2021, respectively, (ii) the First Extension Note, an unsecured promissory note, in the amount of up to $1,297,500, and (iii) the Second Extension Note, an unsecured promissory note in the aggregate principal amount of up to $153,655. The Promissory Notes are non-interest bearing and payable at the earlier of (a) the date on which the initial business combination is completed and (b) the date of liquidation of the Company. The Promissory Notes are not convertible into equity or warrants. As of December 31, 2022 and 2021, we had $3,232,050 and $600,000, respectively, outstanding borrowings under the Promissory Notes.

 

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On March 29, 2022, we issued a Working Capital Note, an unsecured promissory note in the amount of up to $1,000,000, to our sponsor. On March 31, 2023, we issued another Working Capital Note, an unsecured promissory note in the amount of up to $1,000,000, to our sponsor. The proceeds of both Working Capital Notes will be used for costs in connection with our initial business combination or as general working capital.

 

On September 16, 2022, we instructed Continental to liquidate the investments held in the trust account and instead to hold the funds in the trust account in a non-interest-bearing demand deposit account at JPMorgan Chase Bank, with Continental continuing to act as trustee, 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, the remaining proceeds from the initial public offering and private placement are no longer invested in U.S. government securities or money market funds.

 

Going Concern

 

In connection with our assessment of going concern considerations in accordance with ASU Topic 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have determined that we do not currently have adequate liquidity to sustain operations, which consist solely of pursuing an initial business combination. While we expect to have sufficient access to additional sources of capital if necessary, there is no current commitment on the part of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately be available. Additionally, we have determined that if we are unable to complete a business combination by the end of the Combination Period, then the Company will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent redemption of shares raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate the end of the Combination Period. We intend to complete a business combination before the mandatory liquidation date. Our independent registered public accounting firm, Withum, in its report on the consolidated financial statements contained elsewhere in this Report have expressed substantial doubt about ability to continue as a going concern.

 

Off-Balance Sheet Financing Arrangements

 

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

 

Contractual Obligations

 

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below.

 

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The underwriters are entitled to a deferred fee of $0.35 per unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete a business combination, subject to the terms of the underwriting agreement. A portion of such amount, not to exceed 25% of the total amount of the deferred fee held in the trust account, may be re-allocated or paid to unaffiliated thirds parties that assist us in consummating a business combination. The election to re-allocate or make any such payments to unaffiliated third parties will be solely at the discretion our management team, and such unaffiliated third parties will be selected by the management team in their sole and absolute discretion.

 

Pursuant to the Amendment to Underwriting Agreement entered on September 26, 2022, the underwriters are entitled to a deferred fee of a total of $1,500,000 in cash and 200,000 shares of our common stock. The deferred fee will become deliverable at this specific Closing, subject to the terms of the Underwriting Agreement and the Amendment to the Underwriting Agreement.

 

Pursuant to a registration rights agreement entered into on July 14, 2020, the holders of the founder shares, private placement warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the private placement warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the founder shares) are entitled to registration rights requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). 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 the completion of a business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering our securities. We will bear the expenses incurred in connection with the filing of any such registration statements.

 

Critical Accounting Estimates

 

The preparation of financial statements and related disclosures in conformity with GAAP 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 not identified any critical accounting estimates.

 

Factors That May Adversely Affect Our Results of Operations

 

Our results of operations and our ability to complete an initial business combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial business combination.    

 

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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.

 

Reference is made to pages F-1 through F-21, comprising a portion of this Report, which are incorporated herein by reference.

 

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 controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15I and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of December 31, 2022.

 

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. 

 

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Management’s Annual Report on Internal Controls over Financial Reporting

  

As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, (as defined in Rules 13a-15(e) and 15- d-15(e) under the Exchange Act) our management 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 consolidated 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 consolidated 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 consolidated financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated 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 assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making these assessments, management 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 maintained effective internal control over financial reporting as of December 31, 2022.

 

Management has concluded that our audited consolidated financial statements included in this Report are fairly stated in all material respects in accordance with GAAP for each of the periods presented therein.

 

This Report does not include an attestation report of internal controls from 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 have been no changes to our internal control over financial reporting during the fiscal year ended December 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

 

ITEM 9B. OTHER INFORMATION.

 

None.

 

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 

Not applicable.

 

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PART III

 

ITEM 10. DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE.

 

Directors and Executive Officers

 

As of the date of this Report, our directors and officers are as follows:

 

Name		Age		Position
Gordon Lo		45		Chief Executive Officer, President and Director
Stanley Wang		57		Chief Financial Officer and Director
Vince Ming Shu Leung		46		Director
Ping He		38		Director
Eugene Ty Tan		59		Director

 

The experience of our directors and executive officers is as follows:

 

Mr. Gordon Lo, our Chief Executive Officer, President and a director since February 2022, has been the Chief Financial Officer and Chief Operating Officer of Donaco International Limited (ASX: DNA), a company engaged in leisure and entertainment businesses in the Asia-Pacific region, since January 2020. Prior to that, he was the Chief Financial Officer and Secretary of China Ruifeng Renewable Energy Holdings Limited (0527.HK), a company principally engaged in the operation of wind farms in China, from December 2018 to December 2019. From August 2018 to November 2018, Mr. Lo served as the Financial Controller of VHQ Hong Kong Holdings Ltd. (VHQ-KY 4803), a media company with operations in China, Malaysia and Singapore. Mr. Lo was the Regional Tax Director (Asia-Pacific) of W.L. Gore & Associates (Hong Kong) Limited, a wholesale distributor of piece goods or yard goods of natural or manmade fibers, from September 2014 to February 2018. Mr. Lo is a fellow member of Hong Kong Institute of Certified Public Accountants and a certified public accountant in Hong Kong, and a fellow member of The Association of Chartered Certified Accountants and a Certified Chartered Accountant in the U.K. Mr. Lo received his Bachelor of Business Administration degree in Accountancy from the City University of Hong Kong and his Master of Science degree in Investment Management from Hong Kong University of Science and Technology. Mr. Lo is well-qualified to serve on the Board due to his extensive corporate finance and publicly-listed company experience.

 

Stanley Wang, our Chief Financial Officer and a director since July 14, 2020, has been the founder and managing director of K2 Venture Capital Company Limited, a venture capital investment company focused on investments in financial technologies and artificial intelligence opportunities in Southeast Asia. Since 2017, Mr. Wang has also been serving as a consultant and management investment committee member of TIH, where he provides consultation and approves investments. Prior to that, Mr. Wang served as a director of several technology startups and media companies, serving as a managing director at Emerging Asia Capital Partners, a Thailand-based project financing advisory firm, from 2015 to 2016, a senior financial advisor to Italian-Thai Development, a civil infrastructure and construction group, and to the group’s founding family from 2004 to 2013, and the managing director to PK Development Pty Ltd, a property development company in South Africa, from 1996 to 2003, respectively. Prior to that, Mr. Wang was an executive director at Goldman Sachs (Asia) Limited, Hong Kong and Singapore from 1992 to 1995, a senior associate at Morgan Stanley (Asia) Limited, Hong Kong from 1990 to 1992, and an associate at Morgan Stanley Real Estate International, New York from 1988 to 1990, where he was involved in both real estate investment banking and project finance. Mr. Wang earned a Bachelor’s degree in Economics and Finance from The Wharton School of the University of Pennsylvania and an MBA degree from The University of Chicago. Mr. Wang is well qualified to serve on our board due to his extensive finance and investment experience, as well as his experience with conglomerates.

 

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Vince Ming Shu Leung, one of our directors since July 2022, has been the group Chief Financial Officer, a member of strategy committee of 58 Group, a leading classified information internet platform in China and managing partner of 58 Industry Fund, an investment fund under 58.com Inc., where he is mainly responsible for overseeing overall financial and legal functions and strategic investment and management of the 58 Industry Fund, since April 2021. He has been serving as a founding and managing partner at Harmony Capital, a family office PE fund with a focus on internet and consumer sectors in China, since February 2017. From January 2013 to January 2017, Mr. Leung served as Chief Financial Officer of Visual China Group, a company mainly engaged in the image licensing businesses and a public company listed on the Main Board of the Shenzhen Stock Exchange. From January 2008 to December 2012, Mr. Leung served as the Chief Financial Officer of China ITS (Holdings) Co., Ltd., a Hong Kong listed company mainly engaged in the provision of intelligent transportation solutions covering expressway, railway and urban traffic sectors. From February 2003 to March 2006, he served as a senior manager in the mergers and acquisitions department and subsequently as Chief Financial Officer at CDC Corporation, a Nasdaq and Hong Kong listed group. From October 1999 to December 2000, Mr. Leung served as a senior consultant at Arthur Andersen & Co, where he was mainly responsible for providing business consultancy services. From September 1998 to August 1999, he was an auditor at PricewaterhouseCoopers. Since May 2022, Mr. Leung has been serving as an independent non-executive director at Infinities Technology international (Cayman) Holding Limited (formerly known as “Jiu Zun Digital Interactive Entertainment Group Holdings Limited”), a company mainly engaged in the provision of mobile gaming solutions and a public company listed on the Main Board of the Hong Kong Stock Exchange. Since August 2021, Mr. Leung has been serving as non-executive director of Gogox Holdings Limited, a company mainly engaged in the provision of logistic and delivery solutions and offering platform services to connect transacting user and logistic and delivery service provider in the mainland China, Hong Kong, Singapore, the Republic of Korea, and other Eastern and Southern Asian countries, whose shares are listed on the Main Board of the Hong Kong Stock Exchange. Since December 2019, Mr. Leung has been serving as an independent non-executive director at Renrui Human Resources Technology Holdings Limited, a company mainly engaged in the provision of human resources services and a company listed on the Main Board of the Hong Kong Stock Exchange. Since March 2017, he has been serving as an independent non-executive director at Sun.King Technology Group Limited, a company mainly engaged in the provision of power electron capacitor and a public company listed on the Main Board of the Hong Kong Stock Exchange. Since February 2013, Mr. Leung has been serving as an independent non-executive director at Cabbeen Fashion Limited, a menswear outfit brand in China and a public company listed on the Main Board of the Hong Kong Stock Exchange. Mr. Leung has been a Fellow Member of Association of Chartered Certified Accountants and the Fellow Member of the Hong Kong Institute of Certified Public Accountants since February 2007 and June 2010, respectively. Mr. Leung obtained a First Class Honor bachelor’s degree in accounting from the City University of Hong Kong and a master’s degree in accounting from The Chinese University of Hong Kong. Mr. Leung is well-qualified to serve on our Board due to his expertise in corporate finance and management and his extensive experience with public companies.

 

Ping He has been a director since inception and brings over a decade of professional experience in international finance and venture capital. Since 2020, he has been serving as the head of finance at Osix Corporation, a growth capital financing company based in Silicon Valley. Concurrently, he is an active startup investor and advisor in several international companies spanning e-commerce, gaming, fintech, consumers and logistics, as well as a director of Labforinvention Corp., a novel materials research and development company, since 2019, and a director at Alkymia SAS, an internet technology company, since 2017. Mr. He was a director at Quintus Partners LLC, a cross-border merchant bank responsible for sourcing, due diligence and execution of M&A and growth capital mandates, from 2017 to 2019. Prior to that, from 2014 to 2015, he worked as a manager at Refinitiv, a global provider of financial market data and infrastructure, responsible for identifying and developing technology-enabled business opportunities. Mr. He was an investment associate at ASM from 2012 to 2013, an investment banking analyst at Barclays from 2010 to 2012 and an analyst at NERA Economic Consulting from 2006 to 2010. Since July 2022, Mr. He has been a director of Titans Labs Inc., a Delaware corporation for a tournament game that is under beta development. Mr. He received his Bachelor’s degree in Economics from The University of Chicago. He is also a CFA charterholder. Mr. He is well qualified to serve on our Board due to his extensive advisory, board and finance experience.

 

Eugene Ty Tan, one of our directors since July 2022, has been the Co-Chief Executive Officer of Oriental Patron Asia Limited, a financial services company, since April 2019. From January 2017 to March 2019, Mr. Tan was the Co-Chief Executive of the Institutional and Client Group at Shanxi Securities International, a company engaging in the provision of securities brokerage and investment advisory services. He was the Managing Director and Head of Investment Banking and Equity Capital Markets — Asia Department at Oppenheimer Investments Asia Limited, an investment advisory firm, from 2013 to 2016. From 2010 to 2012, Mr. Tan served as the Managing Director, Greater China of Rothschild (Hong Kong) Limited, a financial advisory firm. From 2007 to 2010, he was the Managing Director of Argyle Street Management, an asset management firm. Prior to that, Mr. Tan has also worked at various financial services firms, including Goldman Sachs, Salomon Smith Barney, ING Barings, HSBC Investment Bank and Citibank, N.A. Mr. Tan served as independent board member of KGI Holdings and KGI Thailand. Mr. Tan served as a member of the Hong Kong Trade Development Council (HKTDC) Belt and Road & Greater Bay Area Committee’s Industrial Parks: SMEs’ Manufacturing Partnership and Investment Task Force from November 2019 to December 2021. Mr. Tan holds an MBA with Distinction from Stanford Graduate School of Business where he was an Arjay Miller Scholar and Deloitte and Touche Accounting Awardee. He also holds dual degrees in Accounting and Finance, summa cum laude, from the University of the Philippines. Mr. Tan is a Certified Public Accountant. Mr. Tan is well-qualified to serve on the Board due to his extensive corporate finance and publicly-listed company experience.

 

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Advisors

 

Kenneth Ng has over 20 years of experience in hedge funds, private equity, equity derivatives, and buy-side investment banking. He is the founder and managing partner of Ark Pacific Capital Management Limited, an asset management company licensed with the Securities and Futures Commission in Hong Kong since 2014, with overall leadership responsibility in managing investments in growth, special situations private equity and real estate investments across Asia. He has also been serving as the executive director of Sprint Power Technology Limited, a consulting and engineering services company with a focus on low-carbon automotive technology, since 2018. From 2005 to 2014, Mr. Ng served as an executive director and a founding team member at Elliott Advisors (HK) Limited, the Asian arm of the global multi-strategy hedge fund Elliott Associates, where he oversaw investments in public equities, public debt, private credit and private equity in Asia. Prior to that, Mr. Ng worked as an associate director in the equity derivatives department at UBS AG from 2004 to 2005 and an associate at TPG Capital Asia, a private equity firm, from 2001 to 2004. Mr. Ng started his career in New York with Merrill Lynch & Co. from 1999 to 2001, where he worked on corporate finance transactions and mergers and acquisitions in the technology sector. Mr. Ng graduated from Massachusetts Institute of Technology with a Bachelor’s degree in Computer Science and Engineering, a Bachelor’s degree in Management Science and a Master’s degree in Electrical Engineering and Computer Science.

 

Kin Chan is the founding shareholder of Argyle Street Management Limited, and has been the Chief Investment Officer since inception in 2002. He is the Chairman of TIH Limited and a Non-Independent Non-Executive Director of OUE Limited, both listed on the Singapore Exchange. He is also a Non-Independent Non-Executive Director of CITIC Resources Holdings Limited, a Hong Kong-listed natural resources company, and a Commissioner of PT Lippo Karawaci Tbk, an Indonesia-listed real estate company. Mr. Chan was Chief Executive and Managing Director of Lazard Asia Limited from 2000 to 2001, and managed the firm’s advisory business outside of Japan. Prior to joining Lazard, Mr. Chan was an Executive Director at Goldman, Sachs & Co, where he worked in Hong Kong, New York, and Singapore from 1992 to 1999. Mr. Chan earned an A.B degree from Princeton University and an MBA degree from the Wharton School of the University of Pennsylvania.

 

Our advisors assisted us in the completion of our initial public offering. We expect our advisors to (i) assist us in sourcing and negotiating with potential business combination targets, (ii) provide business insights when we assess potential business combination targets and (iii) upon our request, provide business insights as we work to create additional value in the businesses that we acquire. In this regard, they fulfill some of the same functions as our board members. However, they have no written advisory agreement with us, nor do they have any other employment or compensation arrangements with us. Moreover, our advisors are not under any fiduciary obligation to us nor do they perform board or committee functions, nor do they have any voting or decision making capacity on our behalf. They are not required to devote any specific amount of time to our efforts or be subject to the fiduciary requirements to which our board members are subject. Accordingly, if our advisors become aware of a business combination opportunity which is suitable for any of the entities to which they have fiduciary or contractual obligations, they will honor these 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 may modify or expand our roster of advisors as we source potential business combination targets or create value in businesses that we may acquire.

 

Number and Terms of Office of Officers and Directors

 

Our board of directors consists of five members. Holders of our founder shares have the right to elect all of our directors prior to the consummation of our initial business combination and holders of our public shares do not have the right to vote on the election of directors during such time. Holders of our founder shares have the right to appoint all of our directors prior to consummation of our initial business combination and holders of our public shares do not have the right to vote on the appointment of directors during such time. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by at least 90% of our ordinary shares voting in a general meeting. Each of our directors will hold office for a two-year term. Subject to any other special rights applicable to the shareholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board or by a majority of the holders of our founder shares.

 

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Our officers are elected 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 amended and restated memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association provides that our officers may consist of a Chairman, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other offices as may be determined by the board of directors.

 

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 have established an audit committee of the board of directors. Messrs. Leung, He and Tan serve as members of our audit committee and Mr. Leung serves as the Chairman of the audit committee. Under the 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 such person meets 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. Leung qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.

 

We have adopted an audit committee charter that details the principal functions of the audit committee, including:

 

●

the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;

 

●

pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

 

●

reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;

 

●

setting clear hiring policies for employees or former employees of the independent auditors;

 

●

setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

 

●

obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (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;

 

●

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

 

●

reviewing with management, the independent auditors, 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.

 

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Compensation Committee

 

We have established a compensation committee of the board of directors. Messrs. Tan and He serve as members of our compensation committee and Mr. Tan serves as the chairman of the compensation committee. Under the 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, subject to certain phase-in provisions. Each such person meets the independent director standard under Nasdaq listing standards applicable to members of the compensation committee.

 

We have adopted a compensation committee charter that details the purpose and responsibilities of the compensation committee, including:

 

●

reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’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’s based on such evaluation;

 

●

reviewing and approving the compensation of all of our other officers;

 

●

reviewing our executive compensation policies and plans;

 

●

implementing and administering our incentive compensation equity-based remuneration plans;

 

●

assisting management in complying with our proxy statement and annual report disclosure requirements;

 

●

approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

 

●

producing a report on executive compensation to be included in our annual proxy statement; and

 

●

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

 

Notwithstanding the foregoing, as indicated above, other than reimbursement of expenses and as set forth below, no compensation of any kind, including finders, consulting or other similar fees, has been or will be paid to any of our existing shareholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to complete the consummation of a business combination although we may consider cash or other compensation to officers or advisors we may hire subsequent to our initial public offering to be paid either prior to or in connection with our initial business combination. At the closing of our initial business combination, we may also pay a customary financial consulting fee to ASM, TIH or another affiliate of our sponsor, which will not be made from the proceeds of our initial public offering held in the trust account prior to the completion of our initial business combination. We may pay such financial consulting fee in the event such party or parties provide us with specific target company, industry, financial or market expertise, as well as insights, relationships, services or resources that we believe are necessary in order to assess, negotiate and consummate an initial business combination. The amount of any such financial consulting fee we pay will be based upon the prevailing market for similar services for comparable transactions at such time, and will be subject to the review of our audit committee pursuant to the audit committee’s policies and procedures relating to transactions that may present conflicts of interest. 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.

 

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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 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. The directors who participate in the consideration and recommendation of director nominees are Messrs. Leung, He and Tan. In accordance with Rule 5605 of the Nasdaq rules, all such directors are independent. 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 holders of our founder shares during such times as they are seeking proposed nominees to stand for election at an annual general meeting (or, if applicable, an extraordinary general meeting). Holders of our public shares will not have the right to recommend director candidates for nomination to our board.

 

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 shareholders.

 

Code of Ethics

 

We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics and our audit and compensation committee charters as exhibits to the IPO Registration Statement. You will be able to review these documents accessing our public filings at the SEC’s web site at www.sec.gov and on our website at www.malaccastraits.net. Any amendments to or waivers of certain provisions of our Code of Ethics will be disclosed in a current report on Form 8-K.

 

ITEM 11. EXECUTIVE COMPENSATION.

 

None of our officers or directors have received any cash compensation for services rendered to us. Our sponsor, officers and directors, or any of their respective affiliates, has been or will be reimbursed for any bona-fide, documented 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. In addition, we may pay a customary financial consulting fee to ASM, TIH or another affiliate of our sponsor prior to the completion of our initial business combination. We may pay such financial consulting fee in the event such party or parties provide us with specific target company, industry, financial or market expertise, as well as insights, relationships, services or resources that we believe are necessary in order to assess, negotiate and consummate an initial business combination. The amount of any such financial consulting fee we pay will be based upon the prevailing market for similar services for comparable transactions at such time, and will be subject to the review of our audit committee pursuant to the audit committee’s policies and procedures relating to transactions that may present conflicts of interest. Our audit committee also reviews on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.

 

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time such materials are distributed, 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 by a compensation committee constituted solely by independent 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 the 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.

 

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 30, 2023 based on information obtained from the persons named below, with respect to the beneficial ownership of ordinary shares, by:

 

●

each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;

 

●

each of our executive officers and directors that beneficially owns our ordinary shares; and

 

●

all our executive officers and directors as a group.

 

In the table below, percentage ownership is based on 4,111,064 ordinary shares, consisting of (i) 517,314 Class A ordinary shares and (ii) 3,593,750 Class B ordinary shares, issued and outstanding as of March 30, 2023. On all matters to be voted upon, except for the election of directors of the board, holders of Class A ordinary shares and Class B ordinary shares vote together as a single class, unless otherwise required under applicable law. Currently, all of the Class B ordinary shares are convertible into Class A ordinary shares on a one-for-one basis.

 

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this Report.

 

		Class A Ordinary Shares								Class B Ordinary Shares								Approximate
Name and Address of Beneficial Owner (1)		Number of Shares Beneficially Owned				Approximate Percentage of Class				Number of Shares Beneficially Owned(2)				Approximate Percentage of Class				Percentage of Outstanding Ordinary Shares
Malacca Straits Management Company Limited(3)		--				--				3,593,750		(2)		100.0		%		87.4		%
Gordon Lo			--				--				3,593,750	(2)			100.0	%			87.4	%
Stanley Wang			--				--				--				--				--
Christian Jason Chan			--				--				--				--				--
Ping He			--				--				--				--				--
Eugene TY Tan			--				--				--				--
All officers and directors as a group (5 individuals)			--				--				3,593,750				100.0	%			87.4	%
Fir Tree Capital Management LP (4)			909,508				(4	)%			--				--				(4	)%
Periscope Capital Inc. (5)			45,000				8.7	%			--				--				1.1	%
Glazer Parties			97,816				18.9	%											2.4	%
Polar Asset Management Partners Inc. (7)			100,000				19.3	%			--				--				2.4	%
JPMorgan Chase & Co.(8)			45,432				8.8	%			--				--				1.1	%
Nomura Holdings, Inc. (9)			135,854				26.3	%			--				--				3.3	%
AQR Parties(10)			57,927				11.2	%			--				--				1.4	%

 

*	less than 1%

 

(1)	Unless otherwise noted, the business address of each of the following entities or individuals is Unit 601-2, St. George’s Building, 2 Ice House Street, Central, Hong Kong.

 

(2)	Interests shown consist solely of founders shares, classified as Class B ordinary shares. Such ordinary shares will convert into Class A ordinary shares on a one-for-one basis, subject to adjustment.
(3)	Mr. Ng, our Senior Advisor, is one of three directors of our sponsor and has the right to appoint a majority of the directors of our sponsor through an entity controlled by him. As such he may be deemed to beneficially own the securities held by our sponsor by virtue of such control. Mr. Ng disclaims beneficial ownership of the securities held by our sponsor other than to the extent of his direct or indirect pecuniary interest in such securities. ASM, as well as each of our officers and directors and our advisor are direct and indirect members of our sponsor, or have direct or indirect economic interests in our sponsor.

 

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(4)

According to a Schedule 13G filed with the SEC on February 14, 2022, Fir Tree Capital Management LP, a Delaware limited partnership (“Fir Tree”), holds 909,508 Class A ordinary shares. The number of public shares held by the Fir Tree is reported as of December 31, 2022, which does not reflect any redemption of shares by the Fir Tree in connection with the Second Extension Amendment or any other transactions after December 31, 2022. Accordingly, since the number of publics shares held by Fir Tree on December 31, 2022 is in excess of the total number of public shares outstanding as of March 30, 2023, the ownership percentages have been omitted from the table as they would not accurately reflect Fir Tree’s current percentage ownership. The principal business address of Fir Tree is 55 West 46th Street, 29th Floor New York, NY 10036.

 

(5)	According to a Schedule 13G/A filed with the SEC on February 13, 2023, 29,200 Class A ordinary shares are held by Periscope Capital Inc. (“Periscope”) and 15,800 Class A ordinary shares are held collectively by certain private investment funds (each, a “Periscope Fund”). Periscope may be deemed a beneficial owner of the shares held by the Periscope Funds. James Wise, as Chief Executive Officer of the Periscope, may be deemed to be a beneficial owner of the shares held by Periscope. The principal address of Periscope, the Periscope Funds, and James Wise is 333 Bay Street, Suite 1240, Toronto, Ontario, Canada M5H 2R2.
(6)	According to a Schedule 13G/A filed with the SEC on February 14, 2022 by (i) Glazer Capital, LLC, a Delaware limited liability company (“Glazer Capital”), with respect to the shares of Class A ordinary shares held by certain funds and managed accounts to which Glazer Capital serves as investment manager (collectively, the “Glazer Funds”) and (ii) Mr. Paul J. Glazer (“Mr. Glazer”, together with Glazer Capital, the Glazer Parties”),  who serves as the Managing Member of Glazer Capital, with respect to the Class A ordinary shares held by the Glazer Funds. The number of public shares held by the Glazer Parties is reported as of December 31, 2022, which does not reflect any redemption of shares by the Glazer Parties in connection with the Second Extension Amendment or any other transactions after December 31, 2022. Accordingly, the number of public shares and the percentages set forth in the table may not reflect the Glazer Parties’ current beneficial ownership. The principal business address of each of the Glazer Parties is Unit 601-2, St. George’s Building, 2 Ice House Street, Central, Hong Kong.
(7)	According to a Schedule 13G filed with the SEC on February 13, 2023 by Polar Asset Management Partners Inc., which serves as the investment advisor to Polar Multi-Strategy Master Fund, a Cayman Islands exempted company (“PMSMF”) with respect to the shares directly held by PMSMF. The principal address of Polar Asset Management Partners Inc. is 16 York Street, Suite 2900, Toronto, ON, Canada M5J 0E6.
(8)	According to a Schedule 13G filed with the SEC on January 11, 2023, 45,432 Class A ordinary shares are held by JPMorgan Chase & Co., a Delaware corporation., through its subsidiaries J.P. Morgan Investment Management Inc. and J.P. Morgan Alternative Asset Management Inc. The principal business address of JPMorgan Chase & Co. is 383 Madison Avenue, New York, NY, 10179.
(9)	According to a Schedule 13G filed with the SEC on February 14, 2023, 135,854 shares were beneficially owned by Nomura Global Financial Products, Inc. (“NGFP”). NGFP is a wholly owned subsidiary of Nomura Holdings, Inc., which accordingly may be deemed to beneficially own the shares beneficially owned by NGFP. The principal address of Nomura Holdings, Inc. is 13-1, Nihonbashi 1-chome, Chuo-ku, Tokyo 103-8645, Japan. The principal address of Nomura Global Financial Products, Inc. is Worldwide Plaza, 309 West 49th Street, New York, NY 10019.
(10)	According to a Schedule 13G filed with the SEC on February 14, 2023 by AQR Capital Management, LLC, AQR Capital Management Holdings, LLC, AQR Arbitrage, LLC, AQR Global Alternative Investment Offshore Fund, L.P. and AQR Capital Management GP Ltd (together, the “AQR Parties”). AQR Capital Management, LLC is a wholly owned subsidiary of AQR Capital Management Holdings, LLC. AQR Arbitrage, LLC is deemed to be controlled by AQR Capital Management, LLC. AQR Capital Management, LLC, and AQR Arbitrage, LLC act as investment managers to AQR Global Alternative Investment Offshore Fund, L.P. AQR Capital Management Gp Ltd. is the general partner of AQR Global Alternative Investment Offshore Fund, L.P. The principal business address of each of the AQR Parties is One Greenwich Plaza, Greenwich, CT 06830.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

None.

 

Changes in Control

 

For more information on the Indiev Business Combination, please see “Item 1. Business”.

 

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

In March 2020, the sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 2,875,000 Class B ordinary shares, or founder shares. In June 2020, we declared a share dividend of 0.25 of a share for each Class B ordinary share in issue, resulting in the sponsor holding an aggregate of 3,593,750 founder shares. All shares have been retroactively stated to reflect the share dividend.

 

The sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any founder shares until the earlier to occur of (i) one year after the completion of an initial business combination or (ii) subsequent to an initial business combination, (x) if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after an initial business combination or (y) the date following the completion of an initial business combination on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

 

On March 31, 2020, we issued an unsecured promissory note (the “IPO Note”) to the sponsor, pursuant to which we could borrow up to an aggregate principal amount of $300,000. The IPO Note was non-interest bearing and payable on the earlier of (i) December 31, 2020 or (ii) the completion of the initial public offering. The outstanding balance under the IPO Note of $246,330 was repaid upon the closing of the initial public offering on July 17, 2020.

 

On July 17, 2020, the sponsor purchased 4,000,000 private placement warrants at a price of $1.00 per private placement warrant, for an aggregate purchase price of $4,000,000. On July 21, 2020, in connection with the underwriters’ exercise of the over-allotment option in full, the sponsor purchased an additional 375,000 private placement warrants at a price of $1.00 per private placement warrant. Each private placement warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the private placement warrants was added to the proceeds from the initial public offering to be held in the trust account. If we do not complete an initial business combination by the end of the the Combination Period, the proceeds from the sale of the private placement warrants will be used to fund the redemption of the public shares (subject to the requirements of applicable law), and the private placement warrants will expire worthless.

 

If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties under Cayman Islands law. Our officers and directors currently have and will in the future have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any bona-fide, documented 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 reviews on a quarterly basis all payments that are made to our sponsor, officers and directors, or any of their respective affiliates and determines which expenses and the amount of expenses that are 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.

 

At the closing of our initial business combination, we may pay a customary financial consulting fee to ASM, TIH or another affiliate of our sponsor, which will not be made from the proceeds of our initial public offering held in the trust account prior to the completion of our initial business combination. We may pay such financial consulting fee in the event such party or parties provide us with specific target company, industry, financial or market expertise, as well as insights, relationships, services or resources that we believe are necessary in order to assess, negotiate and consummate an initial business combination. The amount of any such financial consulting fee we pay will be based upon the prevailing market for similar services for comparable transactions at such time, and will be subject to the review of our audit committee pursuant to the audit committee’s policies and procedures relating to transactions that may present conflicts of interest.

 

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 may, but are not obligated to, loan us Working Capital Loans, as may be required. If we complete an initial business combination, we would repay any such Working Capital Loans. 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 any such Working Capital Loans but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the placement warrants issued to the initial holder. The terms of such Working Capital 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.

 

44

 

 

We issued the Promissory Notes to the sponsor, which consist of (i) two unsecured promissory notes in the amount of up to $300,000, each, which were issued on August 2, 2021 and October 20, 2021, respectively, (ii) the First Extension Note, an unsecured promissory note, in the amount of up to $1,297,500, and (iii) the Second Extension Note, an unsecured promissory note in the aggregate principal amount of up to $153,655. The Promissory Notes are non-interest bearing and payable at the earlier of (a) the date on which the initial business combination is completed and (b) the date of liquidation of the Company. The Promissory Notes are not convertible into equity or warrants. As of December 31, 2022 and 2021, we had $3,232,050 and $600,000, respectively, outstanding borrowings under the Promissory Notes.

 

On March 29, 2022, we issued a Working Capital Note, an unsecured promissory note in the amount of up to $1,000,000, to our sponsor. On March 31, 2023, we issued another Working Capital Note, an unsecured promissory note in the amount of up to $1,000,000, to our sponsor. The proceeds of both Working Capital Notes will be used for costs in connection with our initial business combination or as general working capital.

 

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 shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. 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 general 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.

 

We have entered into a registration rights agreement with respect to the founder shares, private placement warrants and warrants issued upon conversion of working capital loans (if any).

 

We have entered into indemnity agreements with each of our officers and directors, a form of which is included as an exhibit to this Report. These agreements require us to indemnify these individuals and entity to the fullest extent permitted under applicable Cayman Islands law and to hold harmless, exonerate and advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

 

In connection with the First Extension Amendment, our sponsor agreed to loan us the First Contribution, $0.03 for each public share that was not redeemed, for each calendar month (commencing on January 17, 2022 and on the 17th day of each subsequent month), or a portion thereof, that we needed to complete an initial business combination from January 17, 2022 until October 17, 2022. The sponsor made aggregate First Contributions of approximately $1,411,665.30 ($0.03 per month for each of the 4,705,551 Class A ordinary shares that were not redeemed).

 

In connection with the First Extension Amendment, we also issued the Extension Note, an unsecured promissory note, dated March 29, 2022, in the amount of up to $1,297,500, to our sponsor. The proceeds of the Extension Note were used solely for extensions of the time period we have to complete an initial business combination.

 

In connection with the Second Extension Amendment, our sponsor agreed to loan us the Second Contribution, $0.033 for each public share that was not redeemed, for each calendar month (commencing on October 17, 2022 and on the 17th day of each subsequent month), or a portion thereof, that we need to complete an initial business combination from October 17, 2022 (the date by which we were previously required to complete our initial business combination) until July 17, 2023 (if we fully extend the term we have to complete our initial business combination). For example, if we take until April 17, 2023 to complete our business combination, which would represent six calendar months, the sponsor would make aggregate Second Contributions of $0.033 per month for each of the Class A ordinary shares that was not redeemed. Each Second Contribution has been and will be deposited in the trust account within seven calendar days from the beginning of such calendar month (or portion thereof). The sponsor has made the deposits for November, December, January, February, and March 2023.

 

In connection with the Second Extension Amendment, we also issued the Second Extension Note, an unsecured promissory note, dated October 17, 2022, in the amount of up to $153,655, to our sponsor. The proceeds of the Second Extension Note have been and will continue to be used solely for extensions of the time period we have to complete an initial business combination.

 

For more information on the additional agreements entered into in connection with the Indiev Business Combination, please see “Item 1. Business.”

 

45

 

 

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 Messrs. Leung, He and Tan are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our audit committee is entirely composed of independent directors meeting Nasdaq’s additional requirements applicable to members of the audit committee. Our independent directors have regularly scheduled meetings at which only independent directors are present.

 

Any affiliated transactions will be on terms no less favorable to us than could be obtained from independent parties. Our board of directors will review and approve all affiliated transactions with any interested director abstaining from such review and approval.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

The following is a summary of fees paid or to be paid to Withum for services rendered.

 

Audit Fees

 

Audit fees consist of fees for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Withum in connection with regulatory filings. The aggregate fees of Withum for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC for the years ended December 31, 2022 and December 31, 2021 were approximately $121,000 and $126,000, respectively. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.

 

Audit-Related Fees

 

Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. For the years ended December 31, 2022 and December 31, 2021, we did not pay Withum any audit-related fees.

 

Tax Fees

 

For the years ended December 31, 2022 and December 31, 2021, fees for Withum were approximately $4,000 and $3,500, respectively, for tax compliance, tax advice and tax planning.

 

All Other Fees

 

For the years ended December 31, 2022 and December 31, 2021, there were no fees billed for products and services provided by Withum other than those set forth above.

 

Pre-Approval Policy

 

Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

  

46

 

 

PART IV

 

ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

 

(a)	The following documents are filed as part of this Report:

 

(1)

Financial Statements

 

Report of Independent Registered Public Accounting Firm (PCAOB ID# 100)	F-2
Consolidated Balance Sheets as of December 31, 2022 and 2021	F-3
Consolidated Statements of Operations for the years ended December 31, 2022 and 2021	F-4
Consolidated Statements of Changes in Shareholders’ Deficit for the years ended December 31, 2022 and 2021	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021	F-6
Notes to Consolidated Financial Statements	F-7 to F-21

  

(2)

Financial Statement Schedules

 

All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto beginning on page F-1 of this Report.

 

(3)

Exhibits

 

We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits that are incorporated herein by reference can be inspected on the SEC website at www.sec.gov.  

 

ITEM 16. FORM 10-K SUMMARY.

 

Not applicable.

 

47

 

  

EXHIBIT INDEX

 

Exhibit		Description
1.1		Underwriting Agreement, dated July 14, 2020, by and between the Company and BTIG, LLC. (4)
1.2		Amendment to the Underwriting Agreement, dated as of September 26, 2022, by and between the Company and BTIG, LLC. (10)
2.1		Agreement and Plan of Merger, dated as of September 26, 2022, by and among the Company, Indiev,  Merger Sub, the Sponsor, in the capacity as the Purchaser Representative thereunder, and Mr. Hai Shi, in the capacity as the Seller Representative thereunder.+ (10)
3.1		Amended and Restated Memorandum and Articles of Association, filed on November 16, 2022 (12).
4.1		Specimen Unit Certificate. (2)
4.2		Specimen Class A ordinary shares Certificate. (2)
4.3		Specimen Warrant Certificate (included in Exhibit 4.4). (2)
4.4		Warrant Agreement dated July 14, 2020 by and between Continental and the Company. (4)
4.5		Description of Securities. (5)
10.1		Letter Agreement dated July 14, 2020 by and among the Company and its officers, directors and the Sponsor. (4)
10.2		Promissory Note, dated March 31, 2020, issued to the Sponsor. (1)
10.3		Investment Management Trust Agreement dated July 14, 2020 by and between Continental and the Company. (4)
10.4		Registration Rights Agreement dated July 14, 2020 by and between the Company and the Sponsor. (4)
10.5		Securities Subscription Agreement, dated March 31, 2020, between the Company and the Sponsor. (1)
10.6		Private Placement Warrant Purchase Agreement dated July 14, 2020 between the Company and the Sponsor. (4)
10.7		Form of Indemnity Agreement. (2)
10.8		Promissory Note, dated August 2, 2021, issued to the Sponsor. (6)
10.9		Termination Agreement, dated September 3, 2021. (7)
10.10		Promissory Note, dated October 20, 2021, issued to the Sponsor. (8)
10.11		Promissory Note, dated March 29, 2022, issued to the Sponsor. (9)
10.12		Promissory Note, dated March 29, 2022, issued to the Sponsor.(9)
10.13		Voting Agreement, dated as of September 26, 2022, by and among the Company , Indiev, and the stockholder of Indiev party thereto. (10)
10.14		Form of Lock-Up Agreement, by and between the Company and the stockholder of Indiev party thereto. (10)
10.15		Non-Competition Agreement, dated as of September 26, 2022, by and among the Company, Indiev and Mr. Hai Shi. (10)
10.16		Form of Registration Rights Agreement, by and among the Company, the Sponsor and Investors party thereto. (10)
10.17		Sponsor Letter Agreement, dated as of September 26, 2022 by and between the Company and the Sponsor. (10)
10.18		Form of Subscription Agreement, by and among the Company and the subscriber party thereto. (10)

 

48

 

 

10.20		Promissory Note, dated October 17, 2022, issued to the Sponsor. (11)
10.21		Promissory Note, dated March 31, 2023, issued to the Sponsor. (13)
21		List of Subsidiaries.*
31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2		Certification of the Principal Financial Officer pursuant to 18 U.S.C. 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 as Inline XBRL document and contained in Exhibit 101).*

 

*	Filed herewith.

**	Furnished herewith.

+	The exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally to the SEC a copy of all omitted exhibits and schedules upon its request.

(1)	Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No: 333-239462), filed with the SEC on June 26, 2020.
(2)	Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No: 333-239462), filed with the SEC on July 6, 2020.
(3)	Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No: 333-239462), filed with the SEC on July 9, 2020.
(4)	Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on July 17, 2020.
(5)	Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2021, as amended.
(6)	Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on August 3, 2021.
(7)	Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on September 7, 2021.
(8)	Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 20, 2021.
(9)	Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2022.
(10)	Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the SEC on September 30, 2022.
(11)	Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 17, 2022.
(12)	Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the SEC on November 22, 2022.
(13)	Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the SEC on March 31, 2023.

  

49

 

 

 MALACCA STRAITS ACQUISITION COMPANY LIMITED

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

Report of Independent Registered Public Accounting Firm (PCAOB ID# 100)		F-2
Consolidated Financial Statements:
Balance Sheets as of December 31, 2022 and 2021		F-3
Statements of Operations  for the years ended December 31, 2022 and 2021		F-4
Statements of Changes in Shareholders’ Deficit		F-5
Statements of Cash Flows for the years ended December 31, 2022 and 2021		F-6
Notes to Consolidated Financial Statements		F-7 to F-21

 

F-1

 

 

Report of Independent Registered Public Accounting Firm

 

To the Shareholders and the Board of Directors of

Malacca Straits Acquisition Company Limited

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Malacca Straits Acquisition Company Limited (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, changes in shareholders’ deficit and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated 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 years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by July 17, 2023, then the Company will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution 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 consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ WithumSmith+Brown, PC

 

We have served as the Company's auditor since 2020.

 

New York, New York

March 31, 2023

PCAOB Number 100

 

F-2

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONSOLIDATED BALANCE SHEETS

 

		December 31, 2022				December 31, 2021
ASSETS
Current Assets
Cash		$	34,262			$	112,687
Prepaid expenses and other current assets			80,000				—
Total Current Assets			114,262				112,687
Cash and marketable securities held in Trust Account			5,397,789				143,849,320
TOTAL ASSETS		$	5,512,051			$	143,962,007
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO REDEMPTION AND SHAREHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	679,207			$	228,477
Promissory notes – related party			2,051,155				600,000
Promissory note - working capital			1,000,000				—
Due to affiliate			180,895				—
Class A ordinary shares tendered for redemption (Note 6)			—				96,694,490
Total Current Liabilities			3,911,257				97,522,967
Derivative warrant liabilities			231,353				4,728,384
Deferred underwriting fee payable			5,031,250				5,031,250
Total Liabilities			9,173,860				107,282,601
Commitments and Contingencies
Class A ordinary shares subject to possible redemption, 517,354 at $10.43 per share as of December 31, 2022 and 4,705,551 at $10.00 per share as of December 31, 2021			5,397,789				47,055,510
Shareholders’ Deficit
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding			—				—
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized at December 31, 2022 and December 31, 2021			—				—
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 3,593,750 shares issued and outstanding at December 31, 2022 and December 31, 2021			359				359
Additional paid-in capital			—				—
Accumulated deficit			(9,059,957	)			(10,376,463	)
Total Shareholders’ Deficit			(9,059,598	)			(10,376,104	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT		$	5,512,051			$	143,962,007

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-3

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		Years Ended December 31,
		2022				2021
Operating costs		$	1,759,463			$	1,440,989
Loss from operations			(1,759,463	)			(1,440,989	)
Other income:
Interest earned – bank			4,129				3
Interest and dividend earned on marketable securities held in Trust Account			266,386				33,576
Change in fair market value of derivative warrant liabilities			4,497,031				7,457,876
Net Income		$	3,008,083			$	6,050,466
Weighted-average shares outstanding of Class A ordinary shares			3,995,981				14,375,000
Basic and diluted net income per share, Class A ordinary shares		$	0.40			$	0.34
Weighted-average shares outstanding of Class B ordinary shares			3,593,750				3,593,750
Basic and diluted net income per share, Class B ordinary shares		$	0.40			$	0.34

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-4

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021

 

		Class A Ordinary Shares								Class B Ordinary Shares								Additional Paid in				Accumulated				Total Shareholders’
		Shares				Amount				Shares				Amount				Capital				Deficit				Deficit
Balance — January 1, 2021			—			$	—				3,593,750			$	359			$	—			$	(16,426,929	)		$	(16,426,570	)
Net income			—				—				—				—				—				6,050,466				6,050,466
Balance — December 31, 2021			—				—				3,593,750				359				—				(10,376,463	)			(10,376,104	)
Accretion of shares subject to redemption																							(1,691,577	)			(1,691,577	)
Net income			—				—				—				—				—				3,008,083				3,008,083
Balance — December 31, 2022			—			$	—				3,593,750			$	359			$	—			$	(9,059,957	)		$	(9,059,598	)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-5

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Years Ended December 31,
		2022				2021
Cash Flows from Operating Activities:
Net income		$	3,008,083			$	6,050,466
Adjustments to reconcile net income to net cash used in operating activities:
Interest and dividends earned on marketable securities held in Trust Account			(270,514	)			(33,576	)
Change in fair value of derivative warrant liability			(4,497,031	)			(7,457,876	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			(80,000	)			75,844
Accrued expenses			450,730				146,992
Net cash used in operating activities			(1,388,732	)			(1,218,150	)
Cash Flows from Investing Activities:
Extension payments made into Trust Account			(1,321,743	)			-
Withdrawal from Trust Account upon redemption of 13,857,646 Class A ordinary shares			140,043,788				-
Net cash provided by investing activities			138,722,045				-
Cash Flows from Financing Activities:
Proceeds from promissory notes – related party			2,451,155				600,000
Proceeds from affiliate			180,895				-
Redemption of 13,857,646 Class A ordinary shares			(140,043,788	)			-
Net cash provided (used in) by financing activities			(137,411,738	)			600,000
Net Change in Cash			(78,425	)			(618,150	)
Cash – Beginning of year			112,687				730,837
Cash – Ending of year		$	34,262			$	112,687

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-6

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 and 2021

 

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

 

Malacca Straits Acquisition Company Limited (formerly known as Bilbao Street Limited; the “Company”) was incorporated in the Cayman Islands on July 17, 2019. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company changed its name to Malacca Straits Acquisition Company Limited on February 26, 2020.

 

The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.

 

All activity through December 31, 2022 relates to the Company’s formation, the initial public offering (the “Initial Public Offering”), which is described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

 

The registration statement for the Company’s Initial Public Offering was declared effective on July 14, 2020. On July 17, 2020, the Company consummated the Initial Public Offering of 12,500,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), generating gross proceeds of $125,000,000 which is described in Note 3.

 

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 4,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per warrant in a private placement to Malacca Straits Management Company Limited (the “Sponsor”), generating gross proceeds of $4,000,000, which is described in Note 4.

 

Following the closing of the Initial Public Offering on July 17, 2020, an amount of $125,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the United States, which had been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination and (ii) the redemption of any Public Shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association then in effect (the “Amended and Restated Memorandum and Articles of Association”) to (A) modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete its initial Business Combination within the Combination Period (as defined below) or (B) with respect to any other provision relating to shareholders’ rights or pre-Business Combination activity and (iii) the redemption of all of the Public Shares if the Company is unable to complete its initial Business Combination within the Combination Period, subject to applicable law. To mitigate the risk that the Company may be deemed to be an investment company for purposes of the Investment Company Act, in September 2022, the Company instructed the trustee of its Trust Account to liquidate the assets held in the Trust Account and instead hold all funds in a demand deposit account at a bank.

 

On July 21, 2020, the underwriters exercised their over-allotment option in full, resulting in an additional 1,875,000 Units issued for an aggregate amount of $18,750,000. In connection with the underwriters’ exercise of their over-allotment option, the Company also consummated the sale of an additional 375,000 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $375,000. A total of $18,750,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $143,750,000.

 

F-7

 

 

Transaction costs amounted to $8,394,954, consisting of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $488,704 of other offering costs. Transaction costs of $186,456 attributable to the warrants were expensed during the year ended December 31, 2020.

 

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The rules of the Nasdaq Stock Market LLC, the stock exchange on which the Company lists its securities, require that the Company’s initial Business Combination must be with one or more target businesses that have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the Company signing a definitive agreement in connection with the initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.

 

The Company will provide the holders of its issued and outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination (initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and net of taxes payable), divided by the number of then issued and outstanding Public Shares. The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (see Note 5). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

 

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and after payment of underwriters’ fees and commissions or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the initial Business Combination and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, 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, shareholder approval of the transactions is required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote any Founder Shares (as defined in Note 4) and Public Shares held by it in favor of approving a Business Combination. Additionally, Public Shareholders may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

 

Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.

 

F-8

 

 

The Sponsor and the Company’s officers and directors have agreed to waive: (i) their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of the Company’s Business Combination and (ii) their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its 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 its initial Business Combination within the Combination Period).

 

The Sponsor and the Company’s officers and directors have agreed to waive (i) their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of the Company’s Business Combination and (ii) their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its 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 its initial Business Combination within the Combination Period).

 

On December 27, 2021, the Company held its 2021 annual general meeting of shareholders and approved, among other things, an amendment to the Amended and Restated Memorandum and Articles of Association to extend the date by which the Company must consummate a Business Combination (the “First Extension Amendment”). The First Extension Amendment extended the date by which the Company must consummate a Business Combination from January 17, 2022 (which was 18 months from the closing of the Initial Public Offering) to October 17, 2022 (or such earlier date as determined by the board of directors of the Company (the “Board”)). In connection with the First Extension Amendment, shareholders holding 9,669,449 Public Shares exercised their right to redeem such Public Shares for a pro rata portion of the Trust Account (the “First Extension Redemption”). On January 7, 2022, the Company paid from the Trust Account an aggregate amount of $96,761,060, or approximately $10.00 per share to redeeming shareholders in the First Extension Redemption. For each one-month extension, the Sponsor agreed to contribute to the Company, as a loan, $0.03 for each Public Share not redeemed in connection with the First Extension Amendment (the “First Contribution”). First Contributions in the amount of $141,167 were payable monthly through the Company’s extension date in October 2022 (if the Sponsor fully extends the term the Company has to complete an initial Business Combination). The Sponsor had the sole discretion as to whether to continue extending for additional calendar months until October 17, 2022.

 

On October 12, 2022, the Company held its 2022 annual general meeting of shareholders and approved, among other things, an amendment to the Amended and Restated Memorandum and Articles of Association to extend the date by which the Company must consummate a Business Combination (the “Second Extension Amendment”). The Second Extension Amendment extended the date by which the Company must consummate a Business Combination from October 17, 2022 to July 17, 2023 (or such earlier date as determined by the Board). In connection with the Second Extension Amendment, shareholders holding 4,188,197 Public Shares exercised their right to redeem such Public Shares for a pro rata portion of the Trust Account (the “Second Extension Redemption”). In October 2022, the Company paid from the Trust Account an aggregate amount of $43,282,728, or approximately $10.33 per share, to redeeming shareholders in the Second Extension Redemption. For each one-month extension, the Sponsor agreed to contribute to the Company, as a loan, $0.033 for each Public Share not redeemed in connection with the Second Extension Amendment (the “Second Contribution”). Second Contributions in the amount of $153,655 are payable monthly through the Company’s extension date in July 2023 (if the Sponsor fully extends the term the Company has to complete an initial Business Combination). For the year ended December 31, 2022, $1,321,743 was borrowed under the Promissory Notes (see Note 4) and deposited in the Trust Account. The Sponsor has the sole discretion as to whether to continue extending for additional calendar months until July 17, 2023.

 

The Company must consummate a Business Combination by July 17, 2023 (if the Sponsor fully extends the term the Company has to complete an initial Business Combination) (the “Combination Period”). If the Company has not completed 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 not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands 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 Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

 

F-9

 

 

The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 5) 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 other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per-share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

 

On September 26, 2022, the Company entered into an Agreement and Plan of Merger with Indiev, Inc, a California corporation (“Indiev”), MLAC Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), the Sponsor and the other parties thereto (as may be amended and/or restated from time to time, the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, (i) prior to closing (the “Closing”) of the transactions contemplated by the Merger Agreement (collectively, the “Transactions”), Indiev shall convert from a corporation incorporated under the laws of the State of California into a Delaware corporation (the “Conversion”), and the Company will continue out of the Cayman Islands and into the State of Delaware to re-domicile and become a Delaware corporation (the “Domestication”), and (ii) at the Closing , Merger Sub will merge with and into Indiev (the “Merger”), with Indiev continuing as the surviving entity and wholly-owned subsidiary of the Company (“New INDI”), and with each Indiev stockholder receiving shares of the Company’s common stock at the Closing. Simultaneously with entering into the Merger Agreement, the Company entered into a Subscription Agreement with Mr. Hai Shi (“PIPE Investor”) to purchase a total of 1.5 million shares of the Company’s Class A common stock (after giving effect to the Domestication) in a private investment in public equity (“PIPE”) in the Company at $10.00 per share with aggregate gross proceeds to of $15,000,000, to be consummated immediately prior the Closing, but after the Domestication.

 

In connection with the Transactions, Indiev stockholders will receive a number of shares of New INDI common stock having an aggregate value of $600,000,000, subject to the following adjustments: the aggregate value will be decreased by the amount of Indiev’s indebtedness, net of cash and cash equivalents, unpaid transaction expenses and transaction bonuses, in each case, as of the Closing, and the aggregate value will be increased by the amount by which the Company’s transaction expenses exceed $5 million, unless the Sponsor elects to instead pay such excess to the Company in cash to cancel a number of Class B ordinary shares of the Company held by the Sponsor equal to the amount of such excess (with each Class B ordinary share valued at $10).

 

In addition, the Indiev stockholders immediately prior to the Transactions (the “Earnout Participants”) will, as a group, have the contingent right to receive up to an additional 20,000,000 shares of New INDI common stock (the “Earnout Shares”) as follows: (i) the Earnout Participants will receive 5,000,000 of the Earnout Shares if the Company’s consolidated net sales of electric automobile vehicles for the 12-month period beginning with the start of the first calendar quarter starting after the Closing (the “First Sales Earnout Year”) is at least 400, at an average effective pre-tax sales price of $55,000 per vehicle, and will receive another 10,000,000 of the Earnout Shares if the consolidated net sales of electric automobile vehicles for next 12-month period after the First Sales Earnout Year is at least 2,000, at an average effective pre-tax sales price of $55,000 per vehicle. The Earnout Participants will receive another 5,000,000 of the Earnout Shares if the volume weighted-average stock price of New INDI common stock is at least $12.50 per share for any 20 trading day period within any 30 trading day period beginning 150 days after the Closing until December 31, 2024. For more information about the Transactions and the PIPE, see the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2022 and Form S-4 on February 3, 2023.

 

F-10

 

 

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the assets in the Trust Account, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect 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”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered public accounting firm), prospective target businesses and 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 and Going Concern

 

As of December 31, 2022, the Company had approximately $34,000 in its operating bank accounts available to fund a Business Combination. As of December 31, 2022, the Company’s working capital deficit was approximately $3,797,000. In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, may, but is not obligated to, loan the Company funds as may be required (“Working Capital Loans”) (see Note 4). As discussed in Note 4, the Sponsor has advanced the Company $3,232,050 through December 31, 2022 under the agreements for the Promissory Notes (as defined in Note 4).

 

In connection with the Company’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) Topic 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company does not currently have adequate liquidity to sustain operations, which consist solely of pursuing a Business Combination. While the Company expects to have sufficient access to additional sources of capital if necessary, there is no current commitment on the part of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately be available. Additionally, the Company has determined that if the Company is unable to complete a Business Combination during the Combination Period, then the Company will cease all operations except for the purpose of liquidating. The Company’s liquidity requirements, date for mandatory liquidation raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period. The Company intends to complete a Business Combination before the mandatory liquidation date. 

 

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure 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 as such 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 of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

 

F-11

 

 

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 consolidated financial statements with another public company that is neither (i) an emerging growth company nor (ii) an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

 

Use of Estimates

 

The preparation of the accompanying consolidated financial statements in conformity with 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 dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

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 consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. One of the more significant accounting estimates included in the accompanying consolidated financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.

 

 Class A Ordinary Shares Subject to Possible Redemption

 

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2022 and 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the accompanying consolidated balance sheets.

 

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, and redemption of a portion of Class A ordinary shares in January and October 2022, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.

 

F-12

 

 

At December 31, 2022 and 2021, the Class A ordinary shares reflected in the accompanying consolidated balance sheets are reconciled in the following table:

 

		December 31, 2022				December 31, 2021
Gross proceeds		$	143,750,000			$	143,750,000
Less:
Proceeds allocated to Public Warrants			(3,090,625	)			(3,090,625	)
Class A ordinary shares issuance costs			(8,208,498	)			(8,208,498	)
Plus:
Accretion of carrying value to redemption value			11,299,123				11,299,123
Class A ordinary shares subject to possible redemption			143,750,000				143,750,000
Class A ordinary shares tendered for redemption			-				(96,694,490	)
Class A ordinary shares redeemed from the Trust Account			(140,043,788	)			-
Accretion of shares subject to redemption			1,691,577				-
Class A ordinary shares subject to possible redemption		$	5,397,789			$	47,055,510

 

Offering Costs

 

 Offering costs consist of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounting to $8,394,984, of which $8,208,498 was charged to ordinary shares subject to redemption upon the completion of the Initial Public Offering and $186,486 of costs allocated to the warrants was charged to operations.

 

Warrant Liability

 

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 ASC 480 and FASB ASC Topic 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, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital 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 consolidated statements of operations. The fair value of the Private Placement Warrants was estimated using the quoted prices in an active market (see Note 8). For periods subsequent to the detachment of the Public Warrants (as defined in Note 3) from the Units, the close price of the Public Warrant price was used as the fair value of the Public Warrants at each relevant date.

  

Income Taxes

 

FASB ASC Topic 740, “Income Taxes”, prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

 

The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.

 

F-13

 

 

Net Income Per Ordinary Share

 

The Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per ordinary share is computed by dividing net income by the weighted-average number of ordinary shares outstanding for the period. Income or loss is allocated on a pro rata basis to each of the two classes of ordinary shares. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.

 

The calculation of diluted income per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the Private Placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 11,562,500 Class A ordinary shares in the aggregate. As of December 31, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods presented.

 

The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):

 

		Year Ended December 31, 2022								Year Ended December 31, 2021
		Class A				Class B				Class A				Class B
Basic and diluted net income per ordinary share
Numerator:
Allocation of net income, as adjusted		$	1,583,751			$	1,424,332			$	4,840,373			$	1,210,093
Denominator:
Basic and diluted weighted-average shares outstanding			3,995,981				3,593,750				14,375,000				3,593,750
Basic and diluted net income per ordinary share		$	0.40			$	0.40			$	0.34			$	0.34

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation maximum coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

 

Fair Value of Financial Instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the Company’s accompanying consolidated balance sheets, primarily due to their short-term nature, except for derivative warrant liabilities (see Note 8). The Company invests in U.S. Treasury securities which are comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities, or a combination thereof. To mitigate the risk that the Company may be deemed to be an investment company for purposes of the Investment Company Act, in September 2022, the Company instructed the trustee of its Trust Account to liquidate the assets held in the Trust Account and instead hold all funds in a demand deposit account at a bank.

 

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

 

Recent Accounting Pronouncements

 

The Company’s management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

 

F-14

 

 

NOTE 3 — INITIAL PUBLIC OFFERING

 

Pursuant to the Initial Public Offering, the Company sold 12,500,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant (“Public Warrant”). On July 21, 2020, in connection with the underwriters’ exercise of the over-allotment option in full, the Company sold an additional 1,875,000 Units at a price of $10.00 per Unit. Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7).

 

NOTE 4 — RELATED PARTY TRANSACTIONS

 

Founder Shares

 

In March 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 2,875,000 Class B ordinary shares (the “Founder Shares”). In June 2020, the Company declared a share dividend of 0.25 of a share for each Class B ordinary share in issue, resulting in the Sponsor holding an aggregate of 3,593,750 Founder Shares. All shares have been retroactively stated to reflect the share dividend. The Founder Shares included an aggregate of up to 468,750 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the number of Founder Shares would equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. In connection with the underwriters’ exercise of the over-allotment option in full, 468,750 Founder Shares are no longer subject to forfeiture.

 

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any Founder Shares until the earlier to occur of (i) one year after the completion of the Company’s Business Combination or (ii) subsequent to a Business Combination, (x) if the last sale price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s Business Combination or (y) the date following the completion of a Business Combination on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

 

Private Placement

 

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased 4,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $4,000,000. On July 21, 2020, in connection with the underwriters’ exercise of the over-allotment option in full, the Sponsor purchased an additional 375,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant. The Private Placement Warrants were deemed to be derivative warrant liabilities at issuance and recorded at fair value. Amounts paid by the Sponsor in excess of the warrants fair value ($2,473,094) were treated as a capital contribution. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.

 

Promissory Notes – Related Party

 

On March 31, 2020, the Company issued an unsecured promissory note (the “IPO Promissory Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The IPO Promissory Note was non-interest-bearing and payable on the earlier of (i) December 31, 2020 or (ii) the completion of the Initial Public Offering. The outstanding balance under the IPO Promissory Note of $246,330 was repaid upon the closing of the Initial Public Offering on July 17, 2020.

 

F-15

 

 

The Company has issued four unsecured promissory notes in the amount of up to $300,000, $300,000, $1,297,500 and $153,655, which were issued on August 2, 2021, October 20, 2021, March 29, 2022 and October 17, 2022, respectively (the “Promissory Notes”). The Promissory Notes are non-interest-bearing and payable at the earlier of (i) the date on which the initial Business Combination is completed or (ii) the date of liquidation of the Company. The Promissory Notes are not convertible into equity or warrants. As of December 31, 2022, and 2021, the Company had $2,051,155 and $600,000, respectively, in outstanding borrowings under the Promissory Notes, including $300,000 under each of the August 2, 2021 and October 20, 2021 notes, and $1,297,500 under the March 29, 2022 note, and $153,655 under the October 17, 2022 note. On October 17, 2022, the Company issued a promissory note in the aggregate principal amount of up to $153,655 to the Sponsor of the Company in connection with Second Extension Amendment.

 

The Company issued an unsecured promissory note, dated March 29, 2022, in the amount of up to $1,000,000, to the Sponsor (the “Working Capital Note”). The proceeds of the Working Capital Note will be used for costs in connection with the Company’s initial Business Combination or as general working capital. The Working Capital Note is non-interest-bearing and payable (subject to the waiver against trust provisions) on the earlier of (i) the date on which the initial Business Combination is consummated or (ii) the date of the Company’s liquidation. The Working Capital Note is not convertible into equity or warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. At December 31, 2022 and 2021, the Company had $1,000,000 and $0, respectively, in outstanding borrowings under the Working Capital Note. The outstanding borrowings on the Working Capital Note are included in the “Promissory notes – related party” line item on the accompanying consolidated balance sheets.

 

Related Party Loans

 

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required as Working Capital Loans. If the Company completes a Business Combination, the Company may repay the Working Capital Loans. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants.

 

Due to affiliate

 

An affiliate of the Company advanced $180,895 for costs of certain regulatory fees incurred by the Company. The Company will reimburse this amount to the affiliate in 2023. At December 31, 2022 and 2021, the balance due to affiliate totaled $180,895 and $-, respectively.

 

NOTE 5 — COMMITMENTS AND CONTINGENCIES

 

Risks and Uncertainties

 

Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Management is continuing to evaluate the impact of the ongoing military conflict between Russia and Ukraine and has concluded that while it is reasonably possible that the conflict could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Registration Rights

 

Pursuant to a registration rights agreement entered into on July 14, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

F-16

 

 

Underwriting Agreement

 

The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $2,500,000 in the aggregate. As a result of the underwriters’ election to exercise their over-allotment in full on July 21, 2020, the underwriters were paid an additional cash underwriting discount of $375,000.

 

In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. A portion of such amount, not to exceed 25% of the total amount of the deferred fee held in the Trust Account, may be re-allocated or paid to unaffiliated thirds parties that assist the Company in consummating a Business Combination. The election to re-allocate or make any such payments to unaffiliated third parties will be solely at the discretion of the Company’s management team, and such unaffiliated third parties will be selected by the management team at their sole and absolute discretion.

 

On September 26, 2022, simultaneously with the execution of the Merger Agreement, the Company and BTIG, LLC, as representative for the underwriters thereunder (“BTIG”) entered into an amendment (the “Amendment to Underwriting Agreement”) to the underwriting agreement, dated as of July 14, 2020, between the Company and BTIG (the “Underwriting Agreement”), pursuant to which amendment, BTIG agreed to revise the deferred underwriting fee payable to the underwriters of the Initial Public Offering with respect to this specific Closing from $5,031,250 in cash to a total of $1,500,000 in cash and 200,000 shares of the Company common stock (the “Representative Shares”), both deliverable at the Closing, and in exchange therefore, the Company agreed to (i) eliminate its right to pay a portion of deferred underwriting fee to third parties that did not participate in the Initial Public Offering that assist the Company with its initial Business Combination, (ii) add BTIG and the other Initial Public Offering underwriters as a “Holder” party to the Registration Rights Agreement, dated as of July 14, 2020, by and among the Company and the Sponsor, with respect to the Representative Shares, which will become “Registrable Securities” thereunder, and (iii) in connection with the Transactions, provide access to, and cooperate with, BTIG and its Representatives for its diligence review, use efforts to provide the Initial Public Offering underwriters with comfort letters, negative assurance letters and other documents from auditors and lawyers, and provide certain customary representations and warranties, covenants and indemnification to the Initial Public Offering underwriters. The amendment to the underwriter agreement has not been reflected on the accompanying consolidated balance sheet as of December 31, 2022 since the revised consideration is only modified in connection with a specific transaction and not an unconditional waiver. This amendment will be reflected upon the resolution of the contingent aforementioned specific Closing.

 

NOTE 6 — SHAREHOLDERS’ DEFICIT

 

Preference Shares

 

The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2022 and 2021, there were no preference shares issued or outstanding.

 

Class A Ordinary Shares

 

The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. At December 31, 2022 and December 31, 2021, there were 517,314 and 4,705,551 Class A ordinary shares issued and outstanding, which are presented as temporary equity. In December 2021, and in connection with the First Extension Amendment, shareholders holding 9,669,449 Public Shares exercised their right to redeem such Public Shares for a pro rata portion of the Trust Account and tendered the shares for redemption. Such Public Shares were redeemed in January 2022. In October 2022, and in connection with the Second Extension Amendment, shareholders holding 4,188,197 Public Shares exercised their right to redeem such Public Shares for a pro rata portion of the Trust Account and tendered the shares for redemption.

 

F-17

 

 

Class B Ordinary Shares

 

The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share. At both December 31, 2022 and 2021, there were 3,593,750 Class B ordinary shares issued and outstanding.

 

Holders of Class A ordinary shares and Class B ordinary shares vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law; provided that only holders of Class B ordinary shares have the right to vote on the appointment of directors prior to the Company’s initial Business Combination.

 

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the sum of all ordinary shares issued and outstanding upon completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination and any private placement equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company).

 

NOTE 7 — WARRANTS

 

At December 31, 2022 and 2021, the Company had 7,187,500 Public Warrants and 4,375,000 Private Placement Warrants outstanding. At December 31, 2022 and 2021, the fair value of the Public Warrants was $143,750 and $2,923,156, respectively, and the fair value of the Private Placement Warrants was $87,603 and $1,805,125, respectively.

 

Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

 

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.

 

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the Company’s Business Combination, the Company will use its best efforts to file, and within 60 business days following the Business Combination to have declared effective, a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

F-18

 

 

Once the warrants become exercisable, the Company may redeem the Public Warrants for redemption:

 

●

in whole and not in part;

 

●

at a price of $0.01 per warrant;

 

●

upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and

 

●

if, and only if, the last sale price of the Company’s Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, 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 we send the notice of redemption to the warrant holders.

 

If and when the warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public 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 Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public 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 Public 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 Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.

 

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital-raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted-average trading price of its Class A ordinary shares during the 20-trading-day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

 

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (x) the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (y) the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees and (z) the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

 

F-19

 

 

NOTE 8 — FAIR VALUE MEASUREMENTS

 

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

	Level 1:	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
	Level 2:	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
	Level 3:	Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

 

The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with FASB ASC Topic 320, “Investments - Debt and Equity Securities.” Held-to-maturity U.S. Treasury securities are those securities that the Company has the ability and intent to hold until maturity. Held-to-maturity U.S. Treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. Trust Account investments in money market funds are presented at fair value.

 

At December 31, 2022, assets held in the Trust Account were comprised of $5,397,789 in cash. During the year ended December 31, 2022, the Company did not withdraw any interest income from the Trust Account. In January and October 2022, $96,761,060 and $43,282,728 were withdrawn from the account to redeem Class A ordinary shares tendered for redemption.

 

At December 31, 2021, assets held in the Trust Account were comprised of $178 in cash and $143,849,142 in U.S. Treasury securities.

 

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

 

		Level		Fair Value
Money Market Funds		1		$	143,849,142

 

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2022 and 2021 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

 

The fair value of the derivative warrant liabilities at December 31, 2022 is as follows:

 

Description		Level		Fair Value
Derivative Warrant Liabilities – Public Warrants		1		$	143,750
Derivative Warrant Liabilities – Private Placement Warrants		2			87,603
				$	231,353

  

The fair value of the derivative warrant liabilities at December 31, 2021 is as follows:

 

Description				Level		Fair Value
Derivative Warrant Liabilities – Public Warrants				2		$	2,923,156
Derivative Warrant Liabilities – Private Placement Warrants				3			1,805,228
						$	4,728,384

 

F-20

 

 

 Private Warrants

 

The Private Placement Warrants are classified as Level 2 when a quoted market price for a similar instrument is available. When an observable market quote is not available, a Modified Black Scholes Model is used and the Private Placement Warrants are classified as Level 3. For the year ended December 31, 2022, the warrant liability for the private warrants were transferred from Level 3 to Level 2.

 

The key inputs into the Modified Black-Scholes Model for the Private Warrants were as follows at December 31, 2021:

 

Input		December 31, 2021
Expected term (years)			0.40
Expected volatility			6.6	%
Risk-free interest rate			1.30	%
Exercise price		$	11.50
Fair value of the ordinary share price		$	10.21

 

The following table presents the changes in the fair value of the Private Placement Warrant liabilities:

 

		Private Placement Warrants
Fair value as of January 1, 2021		$	4,639,385
Change in fair value of derivative warrant liabilities			(2,834,157	)
Fair value as of December 31, 2021		$	1,805,228

 

Level 3 financial liabilities consist of the Private Placement Warrant liability for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. There were no transfers of Level 3 assets or liabilities for the year ended December 31, 2021.

 

		Private Placement Warrants
Fair value as of January 1, 2022		$	1,805,228
Change in fair value of derivative warrant liabilities			(1,717,625	)
Transfer to Level 2			(87,603	)
Fair value as of December 31, 2022		$	-

 

Transfer from Levels 1, 2, and 3 are recognized at the end of the reporting period in which change in valuation technique or methodology occurs. The estimated fair value of the Private Placement Warrants were transferred from Level 3 measurement to a Level 2 during the year ended December 31, 2022 and was $1,805,228.

  

NOTE 9 — SUBSEQUENT EVENTS

 

The Company evaluated subsequent events and transactions that occurred after the accompanying consolidated balance sheet date up to the date that the accompanying consolidated financial statements were issued. Based upon this review, except as disclosed below, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the accompanying consolidated financial statements.  

 

On March 31, 2023, the Company issued an unsecured promissory note (the “2023 Note”) in the amount of up to $1,000,000 to the Sponsor, the proceeds of which will be used for costs in connection with a Business Combination and as general working capital. The 2023 Note is non-interest bearing and payable (subject to the waiver against trust provisions) on the earlier of (i) the date on which the Business Combination is consummated and (ii) the date of the liquidation of the Company. The 2023 Note is not convertible into equity or warrants. As of March 31, 2023, borrowings under the 2023 Note totaled $500,895. 

 

F-21

 

 

SIGNATURES

 

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

 

	Malacca Straits Acquisition Company Limited
Dated: March 31, 2023	By:	/s/ Gordon Lo
		Gordon Lo
		Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Name		Title		Date
/s/ Gordon Lo		Chief Executive Officer		March 31, 2023
Gordon Lo		(Principal Executive Officer)
/s/ Stanley Wang		Chief Financial Officer and Director		March 31, 2023
Stanley Wang		(Principal Financial Officer and Principal Accounting Officer)
/s/ Vince Ming Shu Leung		Director		March 31 2023
Vince Ming Shu Leung
/s Ping He		Director		March 31, 2023
Ping He
/s/ Eugene Ty Tan		Director		March 31, 2023
Eugene Ty Tan

 

 

50