Overview

Nova Vision Acquisition Corp. is a blank check company formed in the British Virgin Islands on March 18, 2021. The company’s purpose is to enter into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

Since its inception, Nova Vision has not generated any revenue and has incurred losses from formation costs. The company has relied on the sale of securities and loans from its officers and directors to fund its operations.

On August 10, 2021, Nova Vision completed its initial public offering, selling 5,750,000 units at $10 per unit and raising $57.5 million in gross proceeds. Each unit consisted of one ordinary share, one warrant, and one right. Simultaneously, the company sold 307,500 private units at $10 per unit, raising an additional $3.075 million.

Results of Operations

Since the IPO, Nova Vision’s activity has been limited to evaluating potential business combination candidates. The company has not generated any operating revenue and expects to incur increased expenses as a public company and in its search for a merger target.

For the six months ended June 30, 2024, Nova Vision reported net income of $12,991, which consisted of general and administrative expenses, dividend income, and interest income.

For the six months ended June 30, 2023, the company had net income of $69,385, also from general and administrative expenses, dividend income, and interest income.

Liquidity and Capital Resources

As of June 30, 2024, Nova Vision had $12,929 in cash outside its trust account and a working capital deficit of $3,086,973. The trust account held $58,075,000 in marketable securities from the IPO and private placement proceeds.

The company intends to use the trust account funds, along with any additional capital it raises, to acquire a target business. If a business combination is not completed by September 10, 2024, and an extension is not requested, the company will be required to liquidate.

To extend the deadline for completing a business combination, Nova Vision’s sponsor has issued a series of promissory notes to deposit additional funds into the trust account. As of the report date, the company has until September 10, 2024 to complete a deal, with the ability to further extend the deadline up to February 10, 2025 by issuing additional promissory notes.

Management has expressed substantial doubt about the company’s ability to continue as a going concern if a business combination is not completed by the deadline.

Critical Accounting Policies

Nova Vision has identified several critical accounting policies, including:

• Accounting for warrants as either equity-classified or liability-classified instruments based on their specific terms
• Classifying ordinary shares as either permanent equity or temporary equity based on redemption rights
• Calculating net income per ordinary share, allocating undistributed income between redeemable and non-redeemable shares

These policies require significant management judgment and estimation, which could materially impact the company’s financial statements.

In summary, Nova Vision is a blank check company that has not yet completed a business combination. The company raised significant capital through its IPO and private placement, but faces a looming deadline to find a merger target or face mandatory liquidation. Its financial performance and future outlook are highly dependent on its ability to successfully identify and acquire a suitable business.