UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
or
For the transition period from to
Commission
File No.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices, including zip code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The | ||||
| The | ||||
| The |
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.
Indicate
by check mark whether the registrant has submitted electronically, if any, 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
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | ☐ |
| ☒ | 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes
As
of May 22, 2024, there were
AIB ACQUISITION CORPORATION
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
i
Item 1. Interim Financial Statements
AIB ACQUISITION CORPORATION
CONDENSED BALANCE SHEETS
| March 31, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses - current | ||||||||
| Total current assets | ||||||||
| Cash and investments held in the Trust Account - non-current | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, REDEEMABLE CLASS A ORDINARY SHARES, AND SHAREHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Promissory note - related party | ||||||||
| Advance from related party | ||||||||
| Convertible note - related party | ||||||||
| Total current liabilities | ||||||||
| LONG TERM LIABILITIES | ||||||||
| Deferred underwriting fee - non-current | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES (NOTE 6) | ||||||||
| REDEEMABLE CLASS A ORDINARY SHARES | ||||||||
| Class A ordinary shares subject to possible redemption, $ | ||||||||
| SHAREHOLDERS’ DEFICIT | ||||||||
| Preference shares, $ | ||||||||
| Class A ordinary shares; $ | ||||||||
| Class B ordinary shares; $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES, REDEEMABLE CLASS A ORDINARY SHARES, AND SHAREHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements
1
AIB ACQUISITION CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| General and administrative expenses | $ | $ | ||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest earned on cash and investments held in the Trust Account | ||||||||
| Unrealized gain on investments held in the Trust Account | ||||||||
| Total other income | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| $ | $ | |||||||
| $ | ( | ) | $ | ( | ) | |||
| $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of these unaudited condensed financial statements
2
AIB ACQUISITION CORPORATION
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2024
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance — January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Accretion for Class A Ordinary Shares to redemption value | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance — March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2023
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance — January 1, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Accretion for Class A Ordinary Shares to redemption value | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance — March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements
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AIB ACQUISITION CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||
| Interest earned on cash and investments held in the Trust Account | ( | ) | ( | ) | ||||
| Unrealized loss on investments held in the Trust Account | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Investment of cash into Trust Account | ( | ) | ( | ) | ||||
| Cash withdrawn from Trust Account in connection with redemption | ||||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Advances from related party | ||||||||
| Proceeds from promissory note – related party | ||||||||
| Proceeds from convertible promissory note – related party | ||||||||
| Redemption of ordinary shares | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net Change in Cash | ( | ) | ||||||
| Cash – Beginning of period | ||||||||
| Cash – End of period | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Accretion for Class A ordinary shares to redemption amount | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements
4
AIB ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2024
(UNAUDITED)
Note 1 — Description of Organization and Business Operations and Liquidity
AIB Acquisition Corporation (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on June 18, 2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses (“Business Combination”).
The Company is not limited to a particular industry or geographic region for purposes of completing a Business Combination, although the Company is focused on business in the fintech industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of March 31, 2024, the Company had not commenced any operations. All activity from June 18, 2021 (inception) through March 31, 2024 relates to the Company’s formation and IPO (as defined below), and, since the IPO, the search for and consummation of 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 will generate non-operating income in the form of interest income earned on investments from the proceeds derived from the IPO.
The
Company’s Registration Statement on Form S-1 initially filed with the Securities and Exchange Commission (“SEC”) on
January 5, 2022 (File No. 333-260594), as amended, was declared effective on January 18, 2022). On January 21, 2022, the Company consummated
its initial public offering (the “IPO”) of
Simultaneously
with the closing of the IPO, the Company consummated the sale of
Simultaneously
with the closing of the IPO and the Private Placement, the Company consummated the closing of the sale of
Offering
costs for the IPO and Overallotment Units amounted to $
Following
the closing of the IPO, the Private Placement and sale of the Overallotment Units, $
5
The
Company’s management (“Management”) has broad discretion with respect to the specific application of the net proceeds
of the IPO and the Private Placement, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company
must complete one or more initial Business Combinations having an aggregate fair market value of at least
The
Company will provide the holders of the 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 shareholder
meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will
seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will
be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account, which, as of March 31, 2024,
was $
All
of the Public Shares contain a redemption feature that allows for the redemption of such Public Shares in connection with the Company’s
liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain
amendments to the Company’s amended and restated memorandum and articles of incorporation (the “Amended and Restated Charter”).
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity” (“ASC 480”) Subtopic 10-S99, redemption provisions not solely within
the control of a company require Class A ordinary shares subject to redemption to be classified outside of permanent equity. Given that
the Public Shares are issued with other freestanding instruments (i.e., the Public Rights), the initial carrying value of the Public
Shares classified as temporary equity is the allocated proceeds determined in accordance with FASB ASC Topic 470-20 “Debt with
Conversion and other Options”. The Public Shares are subject to ASC 480 Subtopic 10-S99. If it is probable that the equity instrument
will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date
of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption
date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of
the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.
While redemptions cannot cause the Company’s net tangible assets to fall below $
Redemptions of the Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an agreement relating to the Business Combination. If the Company seeks shareholder approval of the Business Combination, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination, or such other vote as required by law or stock exchange rule. 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 Charter, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction 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 and other holders of our Founder Shares (as defined in Note 5) prior to our Initial Public Offering (the “Initial Shareholders”) have agreed to vote their Founder Shares and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
6
Notwithstanding
the foregoing, the Amended and Restated Charter 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
The
Sponsor, officers and directors have agreed not to propose an amendment to the Amended and Restated Charter that would affect the substance
or timing of the Company’s obligation to redeem
The
Initial Shareholders have also agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete
a Business Combination within the Combination Period (as defined below). However, if the Initial Shareholders should acquire Public Shares
in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if
the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights
to its deferred underwriting commission (see Note 6) 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 residual assets remaining available for distribution (including Trust Account assets) may be less than $
Extensions of the Combination Period
The
Company initially had until January 21, 2023, 12 months from the closing of the Initial Public Offering, to consummate the initial Business
Combination. On January 18, 2023, the Company held an extraordinary general meeting of shareholders (the “First Extension Meeting”)
and approved, among other things, amendments to the second amended and restated memorandum and articles of association (the “First
Extension Amendment”) to (i) extend the date by which we must consummate an initial Business Combination from January 21, 2023
to October 21, 2023, and (ii) to permit the board of directors of the Company (the “Board”), in its sole discretion, to elect
to wind up the Company’s operations on an earlier date than October 21, 2023. In connection with the vote to approve the First
Extension Amendment and the Trust Amendment (as defined below), Public Shareholders holding
On January 19, 2023, upon the shareholders’ approval of the trust amendment proposal at the First Extension Meeting, the Company entered into an amendment (the “Trust Amendment”) to the Investment Management Trust Agreement, dated January 18, 2022 (the “Trust Agreement”), by and between the Company and Continental, to extend the date by which the Company would be required to consummate a Business Combination from January 21, 2023 to October 21, 2023, or such earlier date as determined by the Board, in its sole discretion.
On
October 19, 2023, the Company held an extraordinary general meeting of shareholders in lieu of an annual meeting of shareholders (the
“Second Extension Meeting”) and approved, among other things, an amendment to the Amended and Restated Charter to extend
the date by which the Company has to consummate an initial Business Combination from October 21, 2023 to January 21, 2025, or such earlier
date as determined by the Board (the “Second Extension Amendment”). In connection with vote to approve the Second Extension
Amendment, Public Shareholders holding
7
If
the Company is unable to complete a Business Combination by January 21, 2025, the extended date (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 (i) its income and franchise taxes and (ii) up to $
To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, on February 6, 2024, the Company instructed Continental 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 at Citibank, with Continental continuing to act as trustee, until the earlier of the consummation of the Company’s initial Business Combination or liquidation. As a result, following the liquidation of investments in the Trust Account, the remaining proceeds from the IPO and Private Placement are no longer invested in U.S. government securities or money market funds.
Founder Share Conversion
On
October 18, 2023, the Company issued an aggregate of
The
Nasdaq Notices
On
May 11, 2023, the Company received two deficiency letter (the “First Nasdaq Letter” and the “Second Nasdaq Letter”)
from the Listing Qualifications Department (the “Nasdaq Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying
the Company that, for the preceding 30 consecutive business days, the Company’s Market Value of Listed Securities (“MVLS”)
was below the $
The
First Nasdaq Letter and Second Nasdaq Letter received had no immediate effect on the Company’s Nasdaq listing. The Nasdaq Listing
Rules provided the Company a compliance period of 180 calendar days in which to regain compliance. If at any time during this compliance
period, the Company’s MVLS closed at $
On September 25, 2023, the Company received a deficiency letter (the “Third Nasdaq Letter”) from the Nasdaq Staff notifying the Company that the Company’s Public Holders were below the 400 Public Holders minimum requirement for continued inclusion on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(2) (the “Public Holders Requirement”).
The Third Nasdaq Letter had no immediate effect on the Company’s Nasdaq listing. The Nasdaq rules provided the Company 45 calendar days to submit a plan to regain compliance and a compliance period of up to 180 calendar days in which to evidence compliance.
On November 22, 2023, the Company received a notice (the “Nasdaq Notice”) from the Nasdaq Staff indicating that since it received the First Nasdaq Letter and Second Nasdaq Letter, the Company had not regained compliance with either of the MVLS Requirement or the MVPHS Requirement.
Pursuant to the Notice, unless a hearing is timely requested before the Nasdaq Hearings Panel (the “Panel”), the Company’s securities would be subject to suspension and delisting from The Nasdaq Global Market at the opening of business on December 1, 2023, and a Form 25-NSE would be filed with the SEC, which would remove the Company’s securities from listing and registration on Nasdaq. Alternatively, the Company could consider applying to list its securities on The Nasdaq Capital Market, provided the Company satisfies the requirements for continued listing on that market. The Nasdaq Capital Market is a continuous trading market that operates in substantially the same manner as The Nasdaq Global Market. In connection with the First Nasdaq Letter, Second Nasdaq Letter and Third Nasdaq Letter, the Company timely requested a hearing before the Panel.
8
In connection with the First Nasdaq Letter, Second Nasdaq Letter and Third Nasdaq Letter, the Company timely requested a hearing before the Panel and the hearing to appeal the Nasdaq Notice was held on February 22, 2024 (see Note 1). The Company’s securities continued to trade on The Nasdaq Global Market until the hearing process concluded and the Panel issued a written decision. There can be no assurance that the Panel will grant the Company’s request for a suspension of delisting or continued listing on The Nasdaq Global Market.
On February 13, 2024, the Company received a letter from the Nasdaq Staff indicating that the Company regained compliance with the MVPHS requirement. On March 14, 2024, the Panel issued its decision, which granted the Company’s request for continued listing, subject to certain conditions, including that (i) on or before May 1, 2024, the Company advises the Panel on the status of the SEC review of the registration statement on Form F-4 to be field with the SEC by PS International Group Ltd., an exempted company incorporated with limited liability in the Cayman Islands (the “Pubco”), relating to the PSI Business Combination and containing a proxy statement of the Company, (ii) or before May 15, 2024, the Company holds a shareholder meeting and obtain approval for completion of its initial business combination; and (iii) on or before May 20, 2024, the Company closes its Business Combination and the new entity shall demonstrate compliance with Listing Rule 5505.
On May 7, 2024, the Company received written notice (the “Notice Letter”) from the Panel indicating that the Panel had determined to delist the Company’s securities from Nasdaq and that trading in the Company’s securities would be suspended at the open of trading on May 9, 2024, due to the Company’s failure to satisfy the terms of the Panel’s March 14, 2024 decision listed above. On May 1, 2024, the Company notified the Panel that it would not be able to close its initial Business Combination by the Panel’s May 20, 2024 deadline. Accordingly, the Panel determined to delist the Company’s securities from Nasdaq as set forth in the Notice Letter.
Following suspension of trading on Nasdaq, the Company’s units, ordinary shares and rights have been eligible to trade on the OTC Markets under the tickers “ACCUF,” “AIBAF,” and “AACRF,” respectively. Nasdaq will complete the delisting by filing a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities and Exchange Act of 1934 on Form 25 with the SEC after the applicable Nasdaq review and appeal periods have lapsed and/or upon the closing of the Company’s initial Business Combination.
PSI Business Combination
On December 27, 2023, the Company entered into the PSI Business Combination Agreement with the Sponsor, Pubco, First Merger Sub, Second Merger Sub, and PSI (see Note 6).
Risks and Uncertainties
The Company’s results of operations and its 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. The Company’s 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, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in Ukraine and the Middle East. The Company 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 the Company’s ability to complete an initial Business Combination.
On
August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for,
among other things, a new U.S. federal
Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. Because there is a possibility that the Company may acquire a U.S. domestic corporation or engage in a transaction in which a domestic corporation becomes our parent or our affiliate and the Company’s securities trade on Nasdaq, the Company may become a “covered corporation”.
9
Liquidity, Capital Resources and Going Concern
As
of March 31, 2024, the Company had $
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, provide the Company with working capital.
If the Company’s 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, the Company may have insufficient funds available to operate its business prior to our Business Combination. Moreover, it may need to obtain other financing either to complete our Business Combination or because it becomes obligated to redeem a significant number of the Public Shares upon consummation of our Business Combination, in which case it may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of the Business Combination. If the Company is unable to complete the Business Combination because it does not have sufficient funds available to it, the Company will be forced to cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
On January 19, 2023, upon the shareholders’ approval of the Extension Amendment and the Trust Amendment, the Company entered into the Trust Amendment to extend the date by which the Company would be required to consummate a Business Combination from January 21, 2023 to October 21, 2023, or such earlier date as determined by the Board, in its sole discretion. Subsequently, on October 19, 2023, upon the shareholders’ approval of the Second Extension Amendment, the Company entered into the Second Extension Amendment to extend the date by which the Company would be required to consummate a Business Combination from October 21, 2023 to January 21, 2025, or such earlier date as determined by the Board, in its sole discretion. As a result, the Company has up to 36 months from the closing of the IPO on January 21, 2022 to consummate a Business Combination, unless further extended as permitted by the Amended and Restated Charter. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution.
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements — Going Concern”, Management has determined that mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance of the financial statements.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of the Management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s 2023 Annual Report. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.
10
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed 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 date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires Management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
11
Cash and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had $
Cash and Investments Held in the Trust Account
As of March 31, 2024, all of the assets held in the Trust account were held in an interest-bearing demand deposit account. As of December 31, 2023, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Earnings on these trading securities are included in dividends, interest earned, and unrealized gain on cash and investments held in the Trust Account in the accompanying statements of operations and are automatically reinvested therefore are considered as an adjustment to reconcile net income (loss) to net cash used in operating activities in the statements of cash flows. The fair value for these trading securities are determined using quoted market prices in active markets for identical assets.
During
the three months March 31, 2024, interest earned from the Trust Account amounted to $
During
the year ended December 31, 2023, interest and dividends earned from the Trust Account amounted to $
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 ASC 480. Shares of Class A Ordinary Shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A Ordinary Shares (including Class A Ordinary Shares that features 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, Class A Ordinary Shares are classified as shareholders’ equity. The Company’s Public Shares sold in the IPO feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
In
connection with the First Extension Meeting held on January 18, 2023, shareholders holding
In
connection with the Second Extension Meeting held on October 19, 2023, shareholders holding
Accordingly,
on March 31, 2024 and December 31, 2023,
| Class A Ordinary Shares subject to possible redemption, January 1, 2023 | ||||
| Less: | ||||
| Redemptions – January 18, 2023 and October 19, 2023 | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Class A Ordinary Shares subject to possible redemption, December 31, 2023 | $ | |||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Class A Ordinary Shares subject to possible redemption, March 31, 2024 | $ |
12
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Corporation limit of $
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 Measurements and Disclosures,” equals or approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023. Management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company is not currently aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to tax examinations by major taxing authorities since inception. There is currently no taxation imposed by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. Management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is a Cayman Islands exempted company 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 period presented.
Net Income (Loss) Per Ordinary Share
The
Company has two outstanding classes of Ordinary Shares, which are referred to as Class A Ordinary Shares and Class B Ordinary Shares.
Class A Ordinary Shares include redeemable and non-redeemable shares. Earnings and losses are shared pro rata between the two classes
of Ordinary Shares and between the redeemable and the non-redeemable Ordinary Shares. The
13
| FOR THE THREE MONTHS ENDED MARCH 31, 2024 | ||||||||||||
| Redeemable | Non-redeemable | |||||||||||
| NUMERATOR | Class A | Class A | Class B | |||||||||
| Numerator: | ||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | |||||
| Net income including accretion of temporary equity to redemption value | ||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | |||||||
| Denominator: | ||||||||||||
| Weighted Average Shares Outstanding including Ordinary Shares subject to redemption | ||||||||||||
| $ | $ | ( | ) | $ | ||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2023 | ||||||||||||
| Redeemable | Non-redeemable | |||||||||||
| NUMERATOR | Class A | Class A | Class B | |||||||||
| Numerator: | ||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net income including accretion of temporary equity to redemption value | ||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | |||||
| Denominator: | ||||||||||||
| Weighted Average Shares Outstanding including Ordinary Shares subject to redemption | ||||||||||||
| $ | $ | ( | ) | $ | ( | ) | ||||||
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant
to the IPO, the Company sold
NOTE 4 — PRIVATE PLACEMENT
On
January 21, 2022, simultaneously with the consummation of the IPO and sale of the Overallotment Units, the Company consummated the
issuance and sale of
A portion of the proceeds from the Private Placement were added to the proceeds from the IPO to be 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 Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Units and any underlying securities will be worthless.
14
NOTE 5 — RELATED PARTY TRANSACTIONS
Founder Shares
On
July 30, 2021, the Sponsor purchased
The
Initial Shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the
earlier to occur of: (A) six months after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x)
if the closing price of the Class A Ordinary Shares equals or exceeds $
On
October 18, 2023, the Company issued an aggregate of
Administrative Support Agreement
The
Company pays the Sponsor a fee of up to $
Related Party Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, certain of the Company’s officers and
directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company
completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released
to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that
a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working
Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans
would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $
On
January 23, 2023, the Company issued an unsecured promissory note (the “Working Capital Note” in the principal amount of
up to $
As
of March 31, 2024 and December 31, 2023, there was $
15
Related Party Extension Loans
On
January 20, 2023, the Company issued a promissory note (the “First Extension Note”) in the aggregate principal amount of
up to $
In
connection with the Second Extension Amendment, on October 19, 2023, the Company issued a promissory note (the “Second Extension
Note”) in the aggregate principal amount of up to $
The Company agreed to deposit $
As
of March 31, 2024 and December 31, 2023, there was $
Advance from Related Party
For
the year-to-date period ended March 31, 2024 and December 31, 2023, the Sponsor paid expenses totaling $
For
the period ended March 31, 2024 and 2023, the Sponsor advanced $
As
of March 31, 2024 and December 31, 2023, the Company owes the Sponsor $
On
January 20, 2022, the Company entered into an engagement agreement with HG, LLP, an affiliate of Jie Gao, the Chief Financial
Officer of the Company, pursuant to which HG, LLP would provide certain financial advisor services in connection with assisting the
Company in preparing the financial portions of the Company’s quarterly reports and annual reports. The Company will pay HG,
LLP $
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, Private Units and Conversion Units (and all underlying securities) are entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the IPO. The holders of a majority of these securities will be entitled to make up to three 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. However the registration rights provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidating 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.
16
Underwriting Agreement
In
connection with the IPO, $
On
December 21, 2023, the Company and Maxim entered into an amendment to the Underwriting Agreement, pursuant to which, in lieu of the $
Legal fees
On
January 27, 2022, the Company entered into an agreement (the “EGS Agreement”) with Ellenoff Grossman & Schole LLP to
act as U.S. securities council to the Company in connection with pending acquisition targets for the Company to acquire consistent with
its Initial Public Offering and assist in U.S. securities work related to the Initial Business Combination. The fee structure for
this agreement permits amounts invoiced to be paid in installments and/or deferred until closing, with any balance owed at the closing
of the Business Combination to be subject to a certain premium. As of March 31, 2024 and December 31, 2023, the total outstanding amount
for services provided by EGS, including any amount not paid and the deferred portion that is contingent upon the closing of a Business
Combination, was $
Business Combination Agreement
On December 27, 2023, the Company entered into a Business Combination Agreement (the “PSI Business Combination Agreement”, and the transactions and agreements contemplated by the PSI Business Combination Agreement, the “PSI Business Combination”) with the Sponsor, in the capacity as the representative of the Company and the shareholders of the Company immediately prior to the Second Merger Effective Time (as defined in the PSI Business Combination Agreement), Pubco, PSI Merger Sub I Limited, an exempted company incorporated with limited liability in the Cayman Islands and a wholly-owned subsidiary of the Pubco (the “First Merger Sub”), PSI Merger Sub II Limited, an exempted company incorporated with limited liability in the Cayman Islands and a wholly-owned subsidiary of the Pubco (the “Second Merger Sub”), and PSI Group Holdings Ltd 利航國際控股有限公司, an exempted company incorporated with limited liability in the Cayman Islands (“PSI”).
Pursuant to the PSI Business Combination Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the PSI Business Combination Agreement, (a) the First Merger Sub will merge with and into PSI (the “First Merger”), with PSI surviving the First Merger as a wholly-owned subsidiary of the Pubco and the outstanding shares of PSI being converted into the right to receive shares of the Pubco; and (b) one business day following the First Merger, the Second Merger Sub will merge with and into the Company (the “Second Merger”), with the Company surviving the Second Merger as a wholly-owned subsidiary of the Pubco and the Company’s outstanding securities being converted into the right to receive substantially equivalent securities of the Pubco.
Related Agreements and Documents
Lock-Up Agreements
Simultaneously with the execution of the PSI Business Combination Agreement, the Pubco, the Sponsor, PSI and the Company have entered into lock-up agreements with certain holders of the Founder Shares and with certain holders of the Company’s securities. These lock-up agreements provide for a lock-up period commencing on the Closing Date (as defined in the PSI Business Combination Agreement) and ending on the earlier of (i) the 6-month anniversary of the Closing (as defined in the PSI Business Combination Agreement) and (ii) the date on which Pubco completes a liquidation, merger, capital stock exchange, reorganization, bankruptcy or other similar transaction that results in all of the outstanding Pubco Ordinary Shares being (as defined in the PSI Business Combination Agreement) converted into cash, securities or other property, with respect to Pubco Ordinary shares held by the such shareholder. The parties’ undertakings in the Lock-Up Agreements were made as a condition to the willingness of PSI and the Company to enter into the PSI Business Combination Agreement and as an inducement and in consideration therefor.
Support Agreement
Simultaneously
with the execution of the PSI Business Combination Agreement, the Pubco, the Company, PSI, the Sponsor and certain shareholders of PSI
have entered into a Support Agreement (the “Support Agreement”), pursuant to which, among other things, the Sponsor and the
shareholders of PSI have agreed (a) to support the adoption of the PSI Business Combination Agreement and the approval of the PSI Business
Combination, subject to certain customary conditions, and (b) not to transfer any of their subject shares (or enter into any arrangement
with respect thereto), subject to certain customary conditions. In addition, the Sponsor agreed in the Support Agreement that, to the
extent the Sponsor fails to pay or otherwise discharge any “Excess SPAC Expense Amount” (defined as the amount, if any, by
which the aggregate amounts payable in cash for the Company’s accrued transaction expenses at the Closing, and any loans owed by
the Company to the Sponsor for transaction and other administrative costs and expenses, exceeds $
17
Registration Rights Agreement
Simultaneously with the execution of the PSI Business Combination Agreement, the Pubco, certain shareholders of the Company and PSI, entered into a Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the parties listed under “Investor” on the signature page thereto will be provided the right to demand registrations, piggy-back registrations and shelf registrations with respect to Registrable Securities (as defined in the Registration Rights Agreement). The Registration Rights Agreement contains customary covenants regarding registration procedures and mutual indemnification obligations, among other matters. The parties’ undertakings in the Registration Rights Agreement are made were made as a condition to the willingness of PSI and the Company to enter into the PSI Business Combination Agreement and as an inducement and in consideration therefor.
Advisory Agreement
On
December 21, 2023, Maxim was engaged by the Company as its sole M&A advisor for the PSI Business Combination. If the Company has
a Closing of the PSI Business Combination, during either (i) the term of the engagement of Maxim, or (ii) unless the engagement with
Maxim is terminated by Maxim for convenience or by the Company for cause (in which case, no fee shall be payable) at any time during
a period of twelve (12) months following the termination of the engagement with Maxim, then the Company shall pay to Maxim upon the closing
of the PSI Business Combination, one percent (
Right of First Refusal
Subject
to certain conditions, the Company granted Maxim, for a period beginning on the closing of the IPO and ending 18 months after the
date of the consummation of a Business Combination, a right of first refusal to act as lead left book-running managing underwriter
with at least
Unit Purchase Option
The
Company sold to the underwriters, for
The
Company accounted for the Unit Purchase Option, inclusive of the receipt of $
18
NOTE 7 — SHAREHOLDERS’ DEFICIT
Preference Shares
The
Company is authorized to issue
Class A Ordinary Shares
The
Company is authorized to issue
Class B Ordinary Shares
The
Company is authorized to issue
Holders of shares of Class A Ordinary Shares and shares of Class B Ordinary Shares vote together as a single class on all other matters submitted to a vote of shareholders, except for the election or removal of directors of the Board prior to an initial Business Combination when only Class B Ordinary Shares are entitled to vote.
The
shares of Class B Ordinary Shares will automatically convert into shares of Class A Ordinary Shares at the time of the initial Business
Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A Ordinary Shares, or equity-linked
securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of the initial Business
Combination, the ratio at which shares of Class B Ordinary Shares shall convert into shares of Class A Ordinary Shares will be adjusted
(unless the holders of a majority of the outstanding shares of Class B Ordinary Shares agree to waive such adjustment with respect to
any such issuance or deemed issuance) so that the number of shares of Class A Ordinary Shares issuable upon conversion of all shares
of Class B Ordinary Shares will equal, in the aggregate, on an as-converted basis,
Rights
Except in cases where the Company is not the surviving company in a Business Combination, each holder of a Public Right will automatically receive one-tenth (1/10) of one Class A Ordinary Share upon consummation of a Business Combination, even if the holder of a Public Right converted all shares held by him, her or it in connection with a Business Combination or an amendment to the Amended and Restated Charter with respect to its pre-Business Combination activities. In the event that the Company will not be the surviving company upon completion of a Business Combination, each holder of a Public Right will be required to affirmatively convert his, her or its rights in order to receive the one-tenth (1/10) of a share underlying each Public Right upon consummation of the Business Combination. No additional consideration will be required to be paid by a holder of Public Rights in order to receive his, her or its additional shares of Class A Ordinary Share upon consummation of a Business Combination. The shares issuable upon exchange of the Rights will be freely tradable (except to the extent held by affiliates of the Company). If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the Ordinary Shares will receive in the transaction on an as-converted into Ordinary Share basis.
The Company will not issue fractional shares in connection with an exchange of Public Rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of local law. As a result, the holders of the Public Rights must hold rights in multiples of 10 in order to receive shares for all of the holders’ rights upon closing of a Business Combination. 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 Rights will not receive any of such funds with respect to their Public Rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Rights, and the Public Rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the Public Rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the Rights may expire worthless.
As
of March 31, 2024 and December 31, 2023, there were
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.
At March 31, 2024 and December 31, 2023, the assets held in the Trust Account were held in cash and money market funds which is invested primarily in treasury funds, respectively.
| Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | ||||||||||||
| March 31, 2024 | Level | (Level 1) | (Level 2) | (Level 3) | ||||||||||
| Assets: | ||||||||||||||
| Cash held in the Trust Account | 1 | $ | ||||||||||||
| Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | ||||||||||||
| December 31, 2023 | Level | (Level 1) | (Level 2) | (Level 3) | ||||||||||
| Assets: | ||||||||||||||
| Cash and investments held in the Trust Account | 1 | $ | ||||||||||||
NOTE 9 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
On May 7, 2024, the Company the Notice Letter from the Panel indicating that the Panel had determined to delist the Company’s securities from Nasdaq and that trading in the Company’s securities would be suspended at the open of trading on May 9, 2024, due to the Company’s failure to satisfy the terms of the Panel’s March 14, 2024 decision listed above. On May 1, 2024, the Company notified the Panel that it would not be able to close its initial Business Combination by the Panel’s May 20, 2024 deadline. Accordingly, the Panel determined to delist the Company’s securities from Nasdaq as set forth in the Notice Letter.
Following suspension of trading on Nasdaq, the Company’s units, ordinary shares and rights have been eligible to trade on the OTC Markets under the tickers “ACCUF,” “AIBAF,” and “AACRF,” respectively. Nasdaq will complete the delisting by filing a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities and Exchange Act of 1934 on Form 25 with the SEC after the applicable Nasdaq review and appeal periods have lapsed and/or upon the closing of the Company’s initial Business Combination.
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “us,” “our” or “we” refer to AIB Acquisition Corporation.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q (this “Report”) including, without limitation, statements under this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of the 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 unaudited condensed financial statements and the notes thereto included in this Report under “Item 1 Financial Statements”. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company formed for the purpose of effecting a Business Combination with one or more target businesses. We intend to effectuate our Business Combination using cash from the proceeds of our Initial Public Offering and the Private Placement, our capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure our shareholders that our plans to complete a Business Combination will be successful.
Recent Developments
On February 6, 2024, we instructed Continental 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 at Citibank, 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 invested in U.S. government securities.
PSI Business Combination
On December 27, 2023, we entered into the PSI Business Combination Agreement with, the Sponsor, the Pubco, the First Merger Sub, the Second Merger Sub, and PSI.
Pursuant to the PSI Business Combination Agreement, subject to the terms and conditions set forth therein, at the Closing, (i) the First Merger Sub will merge with and into PSI, with PSI surviving such merger as a wholly-owned subsidiary of the Pubco and the outstanding shares of PSI being converted into the right to receive shares of the Pubco; and (ii) one business day following the First Merger, the Second Merger Sub will merge with and into our Company, with our Company surviving the Second Merger as a wholly-owned subsidiary of the Pubco and our outstanding securities being converted into the right to receive substantially equivalent securities of the Pubco.
On December 21, 2023, we entered into an amendment to the Underwriting Agreement with maxim, pursuant to which, in lieu of the $3,018,750 deferred underwriting fees payable upon the consummation of an initial Business Combination, Maxim or its designee will be entitled to receive 301,875 Deferred Underwriting Shares (as defined in the PSI Business Combination) upon the consummation of the PSI Business Combination.
On December 21, 2023, we engaged Maxim as our sole M&A advisor for the PSI Business Combination. The underwriter will be entitled to receive Pubco Ordinary Shares (as defined in the PSI Business Combination) as payment for its advisory services, which is equivalent to 1.0% of the equity value of the PSI, with unlimited piggyback registration rights and the same rights afforded other holders of the Pubco Ordinary Shares issued in the PSI Business Combination.
For a full description of the PSI Business Combination Agreement and the proposed PSI Business Combination, please see “Item 1. Business” in the 2023 Annual Report.
21
Extensions of Our Combination Period
We initially had until January 21, 2023, 12 months from the closing of our Initial Public Offering, to consummate our initial Business Combination. On January 18, 2023, we held the First Extension Meeting and approved, among other things, amendments to the Amended and Restated Charter to (i) extend the date by which we must consummate an initial Business Combination from January 21, 2023 to October 21, 2023, and (ii) to permit the Board, in its sole discretion, to elect to wind up our operations on an earlier date than October 21, 2023. In connection with the First Extension Amendments, Public Shareholders holding 7,623,698 Ordinary Shares exercised their right to redeem such Public Shares for a pro rata portion of the Trust Account. As a result, an aggregate amount of approximately $78,324,476 (approximately $10.27 per share) was removed from the Trust Account to pay such holders.
On October 19, 2023, we held the Second Extension Meeting and approved, among other things, an amendment to the Amended and Restated Charter to extend the date by which we have to consummate an initial Business Combination from October 21, 2023 to January 21, 2025, or such earlier date as determined by the Board of Directors. In connection with the Second Extension Amendment, Public Shareholders holding 16,501 Ordinary Shares exercised their right to redeem such Public Shares for a pro rata portion of the Trust Account. As a result, $185,030 (approximately $11.21 per share) was removed from the Trust Account to pay such holders.
We may seek to further extend the Combination Period consistent with applicable laws, regulations and stock exchange rules. Such an extension would require the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares. Such redemptions will likely have a material adverse effect on the amount held in our Trust Account, our capitalization, principal shareholders and other impacts on our Company or Management Team, such as our ability to maintain our listing on the Nasdaq Global Market.
Nasdaq Notices
On February 13, 2024, the Company received a letter from the Nasdaq Staff indicating that the Company regained compliance with the MVPHS requirement. On March 14, 2024, the Panel issued its decision, which granted the Company’s request for continued listing, subject to certain conditions, including that (i) on or before May 1, 2024, the Company advises the Panel on the status of the SEC review of the registration statement on Form F-4 to be field with the SEC by PS International Group Ltd., an exempted company incorporated with limited liability in the Cayman Islands, relating to the PSI Business Combination and containing a proxy statement of the Company, (ii) or before May 15, 2024, the Company holds a shareholder meeting and obtain approval for completion of its initial business combination; and (iii) on or before May 20, 2024, the Company closes its Business Combination and the new entity shall demonstrate compliance with Listing Rule 5505.
On May 7, 2024, the Company received the Notice Letter from the Panel indicating that the Panel had determined to delist the Company’s securities from Nasdaq and that trading in the Company’s securities would be suspended at the open of trading on May 9, 2024, due to the Company’s failure to satisfy the terms of the Panel’s March 14, 2024 decision listed above. On May 1, 2024, the Company notified the Panel that it would not be able to close its initial Business Combination by the Panel’s May 20, 2024 deadline. Accordingly, the Panel determined to delist the Company’s securities from Nasdaq as set forth in the Notice Letter.
Following suspension of trading on Nasdaq, the Company’s units, ordinary shares and rights have been eligible to trade on the OTC Markets under the tickers “ACCUF,” “AIBAF,” and “AACRF,” respectively. Nasdaq will complete the delisting by filing a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities and Exchange Act of 1934 on Form 25 with the SEC after the applicable Nasdaq review and appeal periods have lapsed and/or upon the closing of the Company’s initial Business Combination.
Founder Share Conversion
On October 18, 2023, we issued an aggregate of 2,156,249 Class A Ordinary Shares to the Sponsor, upon the conversion of an equal number of Class B Ordinary Shares, held by the Sponsor. The 2,156,249 Class A ordinary Shares issued in connection with the Founder Share Conversion are subject to the same restrictions as applied to the Class B Ordinary Shares before the Founder Share Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial Business Combination as described in the IPO Registration Statement. For more information on the Founder Share Conversion, see “Item 1. Business” in the 2023 Annual Report.
Following the Founder Share Conversion and redemptions in connection with the vote to approve the Second Extension Amendment, there were (i) 3,612,025 Class A Ordinary Shares issued and outstanding and one Class B Ordinary Share issued and outstanding, and (ii) the Sponsor held 69.27% of the outstanding Class A Ordinary Shares.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from our inception through March 31, 2024 were organizational activities and those necessary to prepare for the Initial Public Offering, described below, and since the Initial Public Offering, the search for a prospective and consummation of an initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination, at the earliest. We expect to generate non-operating income in the form of interest income from the proceeds of the Initial Public Offering and Private Placement placed in the Trust Account. 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.
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For the three months ended March 31, 2024, we had a net loss of $399,622, which primarily consists of general and administrative expenses of $521,578, offset by interest earned on cash and investments held in the Trust Account of $121,956.
For the three months ended March 31, 2023, we had a net loss of $8,873, which primarily consists of general and administrative expenses of $288,676, offset by interest earned on investments held in trust account of $276,729 and unrealized gain on investments held in trust account of $3,074.
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, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time 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.
Liquidity, Capital Resources and Going Concern
As of March 31, 2024, we had $6,552 in our operating bank account and working capital deficit of $2,163,786, which excludes cash held in the Trust Account, the liability for convertible note and deferred underwriting fee.
On January 20, 2023, in connection with the vote to approve the First Extension Amendments, we issued the First Extension Note, a promissory note in the aggregate principal amount of $450,000 to the Sponsor, pursuant to which the First Extension Funds were deposited into the Trust Account in monthly installments for the benefit of each Public Share that was not redeemed in connection with the First Extension Amendments. The Sponsor agreed to pay $50,000 (or $0.05 per Public Share not redeemed) per month that the Board decided to take to complete an initial Business Combination, commencing on January 21, 2023 and continuing through October 21, 2023. As of March 31, 2024, an aggregate of $450,000 of the First Extension Funds has been deposited into the Trust Account. The First Extension Note bears no interest and is repayable in full upon the earlier of (i) the date of the consummation of the initial Business Combination, and (ii) the date of our liquidation.
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. Any such Working Capital Loans would be on an interest-free basis and would be repaid only from funds held outside the Trust Account or from funds released to us upon completion of our initial Business Combination. Up to $1,500,000 of such Working Capital Loans may be convertible into Conversion Units at a price of $10.00 per Conversion Unit, at the option of the lender. The Conversion Units would be identical to the Private Units issued to our Sponsor. 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.
On January 23, 2023, we issued the Working Capital Note, a promissory note in the principal amount of up to $500,000 to the Sponsor. The Working Capital Note was issued in connection with advances the Sponsor has made, and may make in the future, to us for working capital expenses. The Working Capital Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which we consummate our initial Business Combination and (ii) the date that our winding up is effective. At the election of the Sponsor, up to $500,000 of the unpaid principal amount of the Working Capital Note may be converted into Conversion Units, each Conversion Unit consisting of one Class A Ordinary Share and one right exchangeable into one-tenth of one Class A Ordinary Share, equal to: (x) the portion of the principal amount of this Working Capital Note being converted, divided by (y) $10.00, rounded up to the nearest whole number of Conversion Units. The Conversion Units are identical to the Private Units issued by us to the Sponsor in the Private Placement. The Conversion Units and their underlying securities are entitled to the registration rights set forth in the Working Capital Note. As of March 31, 2024 and December 31, 2023, there was an outstanding balance of $500,000 on the Working Capital Note.
On October 19, 2023, in connection with the vote to approve the Second Extension Amendment we issued the Second Extension Note, a promissory note in the aggregate principal amount of up to $750,000 to the Sponsor, pursuant to which the Second Extension Funds are deposited into the Trust Account for the benefit of each Public Share that was not redeemed in connection with the Second Extension Amendment. The Sponsor agreed to pay $50,000 (or $0.05 per Public Share not redeemed) per month that the Board decides to take to complete an initial Business Combination, commencing on October 21, 2023 and continuing through January 21, 2025. As of March 31, 2024, $200,000 had been deposited into the Trust Account in connection with the Second Extension Note. The Second Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the initial Business Combination, and (b) the date of our liquidation. As of March 31, 2024, the Trust Account contains approximately $11.66 per remaining Public Share outstanding. As of May 21, 2024, an aggregate of $400,000 (plus applicable interest) of the Second Extension Funds had been deposited into the Trust Account which covers the extension period through June 21, 2024. As such, total Second Extension Funds deposited to date covers the first eight months of extension permitted by the Second Extension Amendment.
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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 Business Combination. Moreover, we may need to obtain other financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
In connection with the our assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements — Going Concern,” Management has determined that mandatory liquidation, should an initial Business Combination not occur within the Combination Period, and potential subsequent dissolution raises substantial doubt about the our ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance of the financial statements and notes thereto included elsewhere in this Report.
We have entered into the Administrative Support Agreement, pursuant to which, we pay our Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of our initial Business Combination or our liquidation, we will cease paying any of these monthly fees. Accordingly, in the event the consummation of our initial Business Combination takes the maximum 36 months, or until January 21, 2025, our Sponsor will be paid up to $10,000 per month ($360,000 in the aggregate) for office space, administrative and support services and is entitled to be reimbursed for any out-of-pocket expenses.
For more information on the agreements we have entered into with Maxim in connection with the PSI Business Combination, please see “PSI Business Combination” in the 2023 Annual Report.
Critical Accounting Estimates
The preparation of unaudited condensed 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 unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. As of the end of the reporting period, we have not identified any critical accounting estimates.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the unaudited condensed financial statements and notes thereto included elsewhere in this Report.
Item 3. 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 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our Management, including our Chief Executive Officer and our Chief Financial Officer (together, the “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-15(e) 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 the end of the period covered by this Report.
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 our Management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes to our internal control over financial reporting during the quarterly period ended March 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II: Other Information
Item 1. Legal Proceedings.
To the knowledge of our Management team, there is no material 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 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. For additional risks relating to our operations, see the section titled “Risk Factors” contained in our (i) our final prospectus filed with the SEC for our IPO; (ii) Annual Report on Form 10-K for the fiscal years ended December 31, 2021, 2022, and 2023 as filed with the SEC on March 29, 2022, March 29, 2023, and on March 21, 2024, respectively; (iii) Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2023, June 30, 2023, March 31, 2023, September 30, 2022, June 30, 2022 and March 31, 2022, as filed with the SEC on November 14, 2023, August 11, 2023, May 15, 2023, November 14, 2022, August 10, 2022 and May 13, 2022, respectively; and (iv) definitive proxy statement, as filed with the SEC on October 5, 2023. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
For risks related to PSI and the PSI Business Combination, please see the registration statement on Form F-4 to be field by Pubco with the SEC once filed.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Use of Proceeds
For a description of the use of proceeds generated in our IPO and the related private placement, see Part II, Item 5 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 29, 2022. There has been no material change in the planned use of the proceeds from our IPO and the private placement as is described in the Company’s final prospectus related to our IPO.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information
Trading Arrangements
During the quarterly period
ended March 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act)
Additional Information
On January 20, 2022, the Company entered into an engagement agreement with HG, LLP, an affiliate of Jie Gao, the Chief Financial Officer of the Company, pursuant to which HG, LLP would provide certain financial advisor services in connection with assisting the Company in preparing the financial portions of the Company’s quarterly reports and annual reports. The Company will pay HG, LLP $5,000 for each 10-Q filing and $10,000 for each 10-K filing. As of March 31, 2024, an aggregate of $60,000 had been paid to HG, LLP for such services. Jie Gao serves as the Managing Member of HG, LLP. Each member of the Company’s audit committee has been informed of Ms. Gao material interest in the engagement agreement, and the Company’s audit committee has determined that the engagement is fair and in the best interests of the Company and has voted to ratify the engagement.
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Report.
| * | Filed herewith. |
| ** | Furnished herewith |
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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.
| Date: May 22, 2024 | AIB ACQUISITION CORPORATION | |
| By: | /s/ Eric Chen | |
| Name: | Eric Chen | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| By: | /s/ Jie Gao | |
| Name: | Jie Gao | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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