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 Number:
(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) | (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 | ||
Units, each consisting of one ordinary share, one redeemable warrant, and one right | HMACU | The Nasdaq Stock Market LLC | ||
The | ||||
Redeemable warrants, each warrant entitling the holder to purchase one ordinary share at a price of $11.50 per share | HMACW | The Nasdaq Stock Market LLC | ||
Rights, each right entitling the holder to receive one-tenth of one ordinary share | HMACR | The Nasdaq Stock Market LLC |
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 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).
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 | ☐ | |
☒ | 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 November 14, 2022, there were
HAINAN MANASLU ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
HAINAN MANASLU ACQUISITION CORP.
UNAUDITED CONDENSED BALANCE SHEET
September 30, 2022 | December 31, 2021 | |||||||
ASSETS | ||||||||
Cash at bank | $ | $ | ||||||
Prepaid expense | ||||||||
Total current assets | ||||||||
Deferred offering costs | ||||||||
Cash and investments held in trust account | ||||||||
TOTAL ASSETS | $ | $ | ||||||
LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accrued liabilities | $ | $ | ||||||
Promissory note – related party | ||||||||
Amount due to a related party | ||||||||
Total current liabilities | ||||||||
Deferred underwriting compensation | ||||||||
TOTAL LIABILITIES | ||||||||
Commitments and contingencies | ||||||||
Ordinary shares, subject to possible redemption: |
||||||||
Shareholders’ deficit: | ||||||||
Preference shares, par value $ |
||||||||
Ordinary shares, $ |
||||||||
Additional paid-in capital | ||||||||
Accumulated deficit | ( |
) | ( |
) | ||||
Total shareholders’ deficit | ( |
) | ( |
) | ||||
TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT | $ | $ |
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
HAINAN MANASLU ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, |
For the Period from September 10, 2021 (Inception) to September 30, | For the Nine Months Ended September 30, |
For the Period from September 10, 2021 (Inception) to September 30, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
General and administrative expenses | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Total operating expenses | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income | ||||||||||||||||
Interest income earned from trust account | ||||||||||||||||
Interest income | ||||||||||||||||
Other income | ||||||||||||||||
Total other income, net | ||||||||||||||||
Income (loss) before income taxes | ( |
) | ( |
) | ||||||||||||
Income taxes | ||||||||||||||||
NET INCOME (LOSS) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
$ | $ | $ | $ | |||||||||||||
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
HAINAN MANASLU ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
Ordinary shares | Additional | Total | ||||||||||||||||||
Number of shares |
Amount | paid-in capital |
Accumulated deficit |
shareholders’ deficit |
||||||||||||||||
Balance as of January 1, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Net loss | - | ( |
) | ( |
) | |||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Net loss | - | |||||||||||||||||||
Balance as of June 30, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Sale of units in initial public offering | - | |||||||||||||||||||
Sale of units to the Sponsor in private placement | - | |||||||||||||||||||
Initial classification of ordinary shares subject to possible redemption | ( |
) | ( |
) | ( |
) | - | ( |
) | |||||||||||
Allocation of offering costs to ordinary shares subject to possible redemption | - | |||||||||||||||||||
Accretion of carrying value to redemption value | - | ( |
) | ( |
) | ( |
) | |||||||||||||
Net income | - | |||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | - | $ | ( |
) | $ | ( |
) |
Ordinary shares | Additional | Total | ||||||||||||||||||
No. of shares | Amount | paid-in capital | Accumulated deficit | shareholders’ equity | ||||||||||||||||
Balance as of September 10, 2021 (inception) | $ | $ | $ | $ | ||||||||||||||||
Issuance of ordinary shares to the Sponsor | ||||||||||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||
Balance as of September 30, 2021 | $ | $ | $ | ( | ) | $ |
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
HAINAN MANASLU ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2022 |
For the Period from September 10, 2021 (Inception) to September 30, 2021 |
|||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | $ | ( |
) | ||||
Adjustments to reconcile net income to net cash used in operating activities | ||||||||
Interest income earned in cash and investments income held in trust account | ( |
) | ||||||
Change in operating assets and liabilities: | ||||||||
Increase in prepayment | ( |
) | ||||||
Increase in accrual liabilities | ||||||||
Net cash used in operating activities | ( |
) | ( |
) | ||||
Cash flows from investing activities: | ||||||||
Proceeds deposited in trust account | ( |
) | ||||||
Net cash used in investing activities | ( |
) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from initial public offering, net with $ |
||||||||
Proceeds from private placement | ||||||||
Promissory note – related party | ( |
) | ||||||
Accrued expenses | ||||||||
Net cash provided by financing activities | ||||||||
NET CHANGE IN CASH | ||||||||
CASH, BEGINNING OF PERIOD | ||||||||
CASH, END OF PERIOD | $ | $ | ||||||
Non-cash investing and financing activities | ||||||||
Initial classification of ordinary shares subject to possible redemption | $ | ( |
) | $ | ||||
Allocation of offering costs to ordinary shares subject to redemption | $ | $ | ||||||
Accretion of carrying value to redemption value | $ | ( |
) | $ | ||||
Accrued underwriting compensation | $ | $ | ||||||
Deferred offering costs charged to equity | $ | - | ||||||
Deferred offering costs paid by a related party | $ | $ | ||||||
Capital contribution paid to deferred offering cost | $ | $ | ||||||
Deferred offering costs recorded as accrued | $ | $ |
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
HAINAN MANASLU ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND
Hainan Manaslu Acquisition Corp. (the “Company”) is a newly incorporated blank check company incorporated as a Cayman Islands exempted company on September 10, 2021, and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). While the Company may pursue an acquisition opportunity in any business, industry, sector or geographical location, the Company intends to focus on industries that complement the management team’s background, and to capitalize on the ability of the management team and advisor to identify and acquire a business. However, the Company will not consummate its initial Business Combination with an entity or business with China operations consolidated through a variable interest entity (“VIE”) structure.
The Company is an early stage company and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage companies and emerging growth companies. The Company has selected December 31 as its fiscal year end.
As of September 30, 2022, the Company had not yet commenced any operations. All activities through September 30, 2022 related to the Company’s formation and preparation for the initial public offering (the “Initial Public Offering”). The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the funds deposited in the Trust Account (as defined below).
The registration statement for the Company’s Initial Public Offering
was declared effective on August 10, 2022. On August 15, 2022, the Company consummated the Initial Public Offering of
Simultaneously with the closing of the Initial Public Offering, the
Company consummated the sale of
Transaction costs amounted to $
The aggregate amount of $
5
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private Placement Units, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Nasdaq rules provide
that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least
The Company will provide its shareholders with the opportunity to redeem
all or a portion of their public shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. In connection with an Initial Business Combination, the
Company may seek shareholder approval of a Business Combination at a meeting called for such purpose at which shareholders may seek to
redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business Combination
if the Company has net tangible assets of at least $
Notwithstanding the foregoing, if the Company
seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s
Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to
If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the United States Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.
The shareholders will be entitled to redeem their public shares for
a pro rata portion of the amount then in the Trust Account (initially $
The Company will proceed with a Business Combination if the Company
has net tangible assets of at least $
6
The Sponsor and any of the Company’s officers
or directors that may hold Founder Shares (as defined in Note 5) (the “initial shareholders”) are identical to the ordinary
shares included in the Public Units being sold in the Initial Public Offering except that the Founder Shares are subject to certain transfer
restrictions, as described in more detail below: the initial shareholders have entered into a letter agreement with the Company, pursuant
to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares, private placement shares (as defined
below) and public shares in connection with the completion of the initial Business Combination, (ii) to waive their redemption rights
with respect to any Founder Shares, private placement shares and public shares held by them in connection with a shareholder vote to approve
an amendment to the Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of obligation to
provide for the redemption of public shares in connection with an initial Business Combination or to redeem
The Company will have until May 14, 2023 initially
to consummate a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination
within nine months, the Company may extend the period of time to consummate a Business Combination up to nine times, each by an additional
month each time, for a total of 18 months to complete a Business Combination (the “Combination Period”). In order to extend
the time available for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into
the Trust Account $
If the Company is unable to complete a Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but no more than ten business days thereafter, redeem
The Sponsor has agreed that it will be liable
to the Company, if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target
business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below
(i) $
7
Going Concern Consideration
The Company initially had nine months from the
consummation of the Initial Public Offering to consummate the initial Business Combination. If the Company does not complete a Business
Combination within nine months from the consummation of the Initial Public Offering, the Company will trigger an automatic winding up,
dissolution and liquidation pursuant to the terms of the Amended and Restated Memorandum and Articles of Association. As a result, this
has the same effect as if the Company had formally gone through a voluntary liquidation procedure under the Companies Act (As Revised)
of the Cayman Islands. Accordingly, no vote would be required from our shareholders to commence such a voluntary winding up, dissolution
and liquidation. However, the Company may extend the period of time to consummate a Business Combination nine times (for a total of up
to 18 months from the consummation of the Initial Public Offering to complete a Business Combination). If the Company is unable to consummate
the Company’s initial Business Combination by May 14, 2023 (unless further extended), the Company will, as promptly as possible
but not more than ten business days thereafter, redeem
Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern if a Business Combination is not consummated by May 14, 2023 (unless further extended). These unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Risks and Uncertainties
Management has evaluated the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s future financial position and/or search for a target company, there has been a significant impact as of the date of the financial statement. The financial statements do not include any adjustments that might result from the future outcome of this uncertainty.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
● | Basis of presentation |
These accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. The interim financial information provided is unaudited but includes all adjustments which management considers necessary for the fair presentation of the results for these periods. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022.
● | 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, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is not an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
● | Use of estimates |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
8
● | 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. There were no cash equivalents as of September 30, 2022 and December 31, 2021.
● | Cash and investments held in Trust Account |
At September 30, 2022 and December 31, 2021, the assets held in the Trust Account are held in cash and U.S. Treasury securities.
The Company classified investments that are directly invested in U.S. Treasuries as available for sales and money market funds. All marketable securities are recorded at their estimated fair value. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive loss. The Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered other than temporary if they are related to deterioration in credit risk or if it is likely the Company will sell the securities before the recovery of the cost basis. Realized gains and losses and declines in value determined to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the unaudited condensed consolidated statements of operations and comprehensive loss.
● | Deferred offering costs |
Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and that will be charged to shareholders’ equity upon the completion of the Initial Public Offering.
● | Income taxes |
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits as of September 30, 2022 and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
● | Warrant accounting |
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
9
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
As the warrants issued in the Initial Public Offering and private placement meet the criteria for equity classification under ASC 480 and ASC 815, therefore, the warrants are classified as equity.
● | Ordinary shares subject to possible redemption |
The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary
shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject
to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity.
At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain
redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, as of September 30, 2022 and December 31, 2021,
The Company has made a policy election in accordance with ASC 480-10-S99-3A
and recognizes changes in redemption value in accumulated deficit 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. Such changes are reflected in additional paid in capital,
or in the absence of additional capital, in accumulated deficit. For the nine months ended September 30, 2022, the Company record an accretion
of
● | Fair value of financial instruments |
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature.
The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 — |
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.
|
Level 2 — |
Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.
|
Level 3 — | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet. The fair values of cash and cash equivalents, and other current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of September 30, 2022 and December 31, 2021 due to the short maturities of such instruments.
The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
September 30, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
Description | 2022 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
U.S. Treasury securities held in Trust Account* | $ | $ | $ | $ |
December 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
Description | 2021 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
U.S. Treasury securities held in Trust Account* | $ | $ | $ | $ |
* | Included in cash in the cash and investments held in Trust Account on the Company’s unaudited condensed consolidated balance sheets. |
10
● | Net income (loss) per share |
The Company calculates net loss per share in
accordance with ASC Topic 260, “Earnings per Share”. In order to determine the net income (loss) attributable to both the
redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable
ordinary shares and non-redeemable ordinary shares and the undistributed loss is calculated using the total net income (loss) less any
dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding
between the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to redemption value of the ordinary shares
subject to possible redemption was considered to be dividends paid to the public shareholders. As of September 30, 2022, the Company
has not considered the effect of the warrants sold in the Initial Public Offering to purchase an aggregate of
The net income (loss) per share presented in the statements of operations is based on the following:
For the Nine Months Ended | For the Nine Months Ended | |||||||
September 30, 2022 | September 30, 2021 | |||||||
Net income | $ | $ | ||||||
Remeasurement of carrying value to redemption value | ( | ) | ||||||
Net loss including accretion of carrying value to redemption value | $ | ( | ) | $ |
For the Three Months Ended | For the Three Months Ended | |||||||
September 30, 2022 | September 30, 2021 | |||||||
Net income | $ | $ | ||||||
Remeasurement of carrying value to redemption value | ( | ) | ||||||
Net loss including accretion of carrying value to redemption value | $ | ( | ) | $ |
For
the Nine Months Ended | For
the Nine Months Ended | |||||||||||||||
Redeemable ordinary shares | Non- Redeemable ordinary shares | Redeemable | Non- | |||||||||||||
Basic and diluted net loss per share: | ||||||||||||||||
Numerators: | ||||||||||||||||
Allocation of net loss including carrying value to redemption value | $ | ( | ) | $ | ( | ) | $ | $ | - | |||||||
Accretion of carrying value to redemption value | - | |||||||||||||||
Allocation of net income (loss) | $ | $ | ( | ) | $ | $ | - | |||||||||
Denominators: | ||||||||||||||||
Weighted-average shares outstanding | - | |||||||||||||||
$ | $ | ( | ) | $ | $ |
11
For the Three Months Ended September 30, 2022 | For the Three Months Ended September 30, 2021 | |||||||||||||||
Redeemable ordinary shares | Non- Redeemable ordinary shares | Redeemable ordinary shares | Non- Redeemable ordinary shares | |||||||||||||
Basic and diluted net loss per share: | ||||||||||||||||
Numerators: | ||||||||||||||||
Allocation of net loss including carrying value to redemption value | $ | ( | ) | $ | ( | ) | $ | $ | - | |||||||
Accretion of carrying value to redemption value | - | |||||||||||||||
Allocation of net income (loss) | $ | $ | ( | ) | $ | $ | - | |||||||||
Denominators: | ||||||||||||||||
Weighted-average shares outstanding | - | |||||||||||||||
$ | $ | ( | ) | $ | $ |
● | Related parties |
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
● | Concentration of credit risk |
Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
● | Recent accounting pronouncements |
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows. There are no other ASUs being adopted.
Other than the above, there are no other recently issued accounting standards which are applicable to the Company.
NOTE 3 — CASH AND INVESTMENT HELD IN TRUST ACCOUNT
As of September 30, 2022, investment securities
in the Company’s Trust Account consisted of $
Carrying Value as of September 30, 2022 (Unaudited) | Gross Unrealized Holding Gain | Fair Value as of September 30, 2022 (Unaudited) | ||||||||||
Available-for-sale marketable securities | ||||||||||||
U.S. Treasury securities | $ | $ | $ |
Carrying Value as of December 31, 2021 (Audited) | Gross Unrealized Holding Gain | Fair Value as of December 31, 2021 (Audited) | ||||||||||
Available-for-sale marketable securities: | ||||||||||||
U.S. Treasury securities | $ | $ | $ |
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NOTE 4 – INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold
All of the
The Company’s redeemable ordinary share is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
As of September 30, 2022 and December 31, 2021, the ordinary shares reflected on the balance sheet are reconciled in the following table.
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
Gross proceeds | $ | $ | ||||||
Less: | ||||||||
Proceeds allocated Public Warrants | ( | ) | ||||||
Proceeds allocated Public Rights | ( | ) | ||||||
Offering costs of public shares | ( | ) | ||||||
Plus: | ||||||||
Accretion of carrying value to redemption value - 2022 | ||||||||
Ordinary shares subject to possible redemption | $ | $ |
NOTE 5 – PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Company consummated a private placement of
The Private Placement Units are identical to the Public Units sold in the Initial Public Offering except certain registration rights and transfer restrictions.
NOTE 6 – RELATED PARTY TRANSACTIONS
Founder Shares
In September 2021, the Company issued an aggregate
of
Promissory Note — Related Party
On September 24, 2021, the Company issued an unsecured
promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $
As of September 30, 2022 and December 31, 2021,
the Sponsor advanced the Company an aggregate amount of $
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Related Party Working Capital Loans
In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may,
but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a
Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.
Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $
Advances from a Related Party
As of September 30, 2022 and December 31, 2021, the Company had a temporary
advance of $
Related Party Extensions Loans
The Company will have until nine months from the
consummation of the Initial Public Offering to consummate the initial Business Combination. However, if the Company anticipates that the
Company may not be able to consummate the initial Business Combination within nine months, the Company may, but is not obligated to, extend
the period of time to consummate a Business Combination nine times by an additional one month each time (for a total of up to 18 months
to complete a Business Combination). Pursuant to the terms of the Company’s amended and restated memorandum and articles of association
and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company, in order to extend the time
available for it to consummate its initial Business Combination, the Company’s Sponsor, or its affiliates or designees, upon five
days advance notice prior to the applicable deadline, must deposit into the Trust Account $
NOTE 7 – SHAREHOLDERS’ DEFICIT
Ordinary shares
The Company is authorized to issue
As of September 30, 2022, there were
As of December 31, 2021,
Preference shares
The Company is authorized to issue
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Rights
Each holder of a right will receive one-tenth
(1/10) of
If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.
Warrants
Each holder of a warrant is entitled to purchase
The Company may call the warrants for redemption,
in whole and not in part, at a price of $
● | if, and only if, the reported last sale price of ordinary shares equals or exceeds $18 per share, for any 20 trading days within a 30 trading days period ending on the third trading day prior to the notice of redemption to warrant holders, and |
● | if, and only if, there is a current registration statement in effect with respect to the issuance of ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. |
If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
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In addition, if (x) the Company issues additional
ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an
issue price or effective issue price of less than $
The Private Placement Units are identical to the Public Units being sold in the Initial Public Offering except that Private Placement Units will not be transferable, assignable or saleable until 30 days after the completion of the Company’s Business Combination and will be entitled to registration rights.
NOTE 8 – ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION
The Company accounts for its ordinary shares subject to possible redemption
in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject
to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary
shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption
upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other
times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights
that are subject to the occurrence of uncertain future events and considered to be outside of the Company’s control. Accordingly,
as of September 30, 2022 and December 31, 2021,
On August 15, 2022, the Company sold
For the Nine Months Ended September 30, 2022 | For the Year Ended December 31, 2021 | |||||||
Total ordinary shares issued | ||||||||
Share issued classified as equity | ( | ) | ||||||
Share redemption | ||||||||
Ordinary shares, subject to possible redemption |
NOTE 9 – 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.
16
The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
September 30, 2022 | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
Description | (Unaudited) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
U.S. Treasury securities held in Trust Account* | $ | $ | $ | $ |
December 31, 2021 |
Quoted Prices In Active Markets |
Significant Other Observable Inputs |
Significant Other Unobservable Inputs |
|||||||||||||
Description | (Audited) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
U.S. Treasury securities held in Trust Account* | $ | $ | $ | $ |
* |
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration rights agreement entered into on August 15, 2022, the holders of the Founder Shares, Private Placement Units (including securities contained therein), and units issuable upon conversion of Working Capital Loans or extension loans (and) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriter Agreement
The underwriters are entitled to a cash underwriting
discount of
NOTE 11 – 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 available to be issued. Other than as described in these unaudited condensed financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References in this report (the “Quarterly Report”) to “we,” “our”, “us” or the “Company” refer to Hainan Manaslu Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Bright Winlong LLC. Certain capitalized terms used but not defined in the below discussion and elsewhere in this Quarterly Report have the meanings ascribed to them in the footnotes to the accompanying financial statements included as part of this Quarterly Report.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly 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 management for future operations, are forward- looking statements. When used in this Quarterly 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 Quarterly 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 under the laws of the Cayman Islands on September 10, 2021 for the purpose of engaging in a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination, with one or more target businesses or entities. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region, although we intend to focus on industries that complement the management team’s background, and to capitalize on the ability of the management team and advisor to identify and acquire a business. However, we will not consummate our initial Business Combination with an entity or business with China operations consolidated through a VIE structure.
On August 15, 2022, we consummated our Initial Public Offering of 6,900,000 Public Units, inclusive of the over-allotment option of 900,000 Public Units. Each Public Unit consisted of one public share, one Public Warrant and one Public Right. Our Registration Statement on Form S-1 for the Initial Public Offering was declared effective by the SEC on August 10, 2022. Ladenburg Thalmann & Co. Inc., acted as an underwriter for the Initial Public Offering. The Public Units were sold at an offering price of $10.00 per Public Unit, generating gross proceeds of $69,000,000.
Simultaneously with the closing of the on August 15, 2022, we consummated the sale of 341,500 Private Placement Units. The Private Placement Units were sold at a price of $10.00 per Private Placement Unit in the private placement, generating gross proceeds of $3,415,000.
Transaction costs amounted to $4,258,182, consisting of $1,380,000 of underwriting commissions, $2,242,500 of deferred underwriting commissions and $635,682 of other offering costs.
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Results of Operations
All activity from inception up to September 30, 2022 related to our formation and the Initial Public Offering. Since the Initial Public Offering, our activity has been limited to the evaluation of Business Combination candidates, and we will not be generating any operating revenues until the closing and completion of our initial Business Combination. We incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well due diligence expenses in connection with our searches for business combination targets.
For the three months ended September 30, 2022, we had a net income of $129,466, comprising of interest income of $192,418 and other income of $3, partially offset by general and administrative expenses of $62,955.
For the nine months ended September 30, 2022, we had a net income of $116,642, comprising of interest income of $192,419 and other income of $3, partially offset by general and administrative expenses of $75,780.
Liquidity and Capital Resources
As of September 30, 2022, we had cash of $150,385. Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of ordinary shares by the Sponsor, Working Capital Loans provided by the Sponsor under a certain unsecured promissory note and advances from the Sponsor.
On August 15, 2022, we consummated the Initial Public Offering of 6,900,000 Public Units, including 900,000 Public Units upon the full exercise of the underwriter’s over-allotment option. Each Public Unit consists of one public share, one Public Warrant and one Public Right. Each Public Warrant entitling its holder to purchase one ordinary share at a price of $11.50 per share. Each Right entitles the holder to receive one ordinary share upon consummation of our Business Combination. The Public Units were sold at an offering price of $10.00 per Public Unit, generating gross proceeds of $69,000,000.
As of August 15, 2021, a total of $70,035,000 of the net proceeds from the Initial Public Offering and the private placement consummated simultaneously with the closing of the Initial Public Offering were deposited in the Trust Account established for the benefit of our public shareholders.
We intend to use substantially all of the net proceeds of the Initial Public Offering, including the funds held in the Trust Account, to acquire a target business or businesses and to pay our expenses relating thereto. To the extent that our capital stock is used in whole or in part as consideration to effect our Business Combination, the remaining proceeds held in the Trust Account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our Business Combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.
We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern through one year from the date of these financial statements if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
19
Off-balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of September 30, 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as VIEs, 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.
Registration Rights
Pursuant to a registration rights agreement entered into on August 15, 2022, the holders of the Founder Shares, Private Placement Units (including securities contained therein), and units (including securities contained therein) that may be issued on conversion of Working Capital Loans or extension loans (and) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to a deferred fee of 3.25% of the gross proceeds of the Initial Public Offering, or $2,242,500 until the closing of the Business Combination.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with U.S. 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 significant accounting policies or critical accounting estimates.
Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is 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 our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events.
20
Warrant accounting
We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the our own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of comprehensive loss.
As the warrants issued in the Initial Public Offering and private placement meet the criteria for equity classification under ASC 480, therefore, the warrants are classified as equity.
Net Income (Loss) Per Share
We calculate net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net loss by the weighted-average number of ordinary shares outstanding during the period, excluding ordinary shares subject to possible conversion. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional ordinary shares that would have been outstanding if the potential ordinary share equivalents had been issued and if the additional ordinary shares were dilutive. Ordinary shares subject to possible conversion at the balance sheet date, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic and diluted loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings.
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.
21
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
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 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-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 Quarterly Report at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
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.
Changes in Internal Control over Financial Reporting
There have been no changes to our internal control over financial reporting during the quarter ended September 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
22
PART II - OTHER INFORMATION
Item 1. 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 1A. Risk Factors.
As of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in our (i) final prospectus for our Initial Public Offering filed with the SEC, and (ii) Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022. 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None. For a description of the use of proceeds generated in our Initial Public Offering and the private placement, see Part II, Item 2 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, as filed with the SEC on September 20, 2022. There has been no material change in the planned use of proceeds from our Initial Public Offering and the private placement as described in the registration statement on Form S-1, as amended (File No. 333-261340), originally filed with the SEC on November 24, 2021 and declared effective by the SEC on August 10, 2022.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
* | Filed herewith. |
** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements 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.
HAINAN MANASLU ACQUISITION CORP. | ||
Dated: November 14, 2022 | By: | /s/ Zhifan Zhou |
Name: | Zhifan Zhou | |
Title: | Chief Executive Officer | |
(Principal Executive Officer) | ||
Dated: November 14, 2022 | By: | /s/ Wenyi Shen |
Name: | Wenyi Shen | |
Title: | Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
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