Overview

We are a blank check company formed in January 2021 with the purpose of merging with or acquiring another business. As a blank check company, we have not engaged in any operations or generated any revenue to date. Our activities have been focused on preparing for our initial public offering and identifying a target for a potential business combination.

Results of Operations

For the nine months ended September 30, 2024, we had a net loss of $853,947, which was primarily due to general and administrative expenses, franchise tax expenses, and income taxes. This was offset by interest income earned on the funds held in our trust account.

For the nine months ended September 30, 2023, we had a net loss of $9,767, which consisted mainly of general and administrative expenses and franchise tax expenses, offset by interest income.

The key factors that have adversely affected our results of operations include economic uncertainty, volatility in financial markets, supply chain disruptions, and the ongoing effects of the COVID-19 pandemic. These factors could continue to impact our ability to complete a business combination.

Liquidity and Capital Resources

We completed our initial public offering in October 2022, raising $60 million, with an additional $8.5 million raised through the over-allotment option. These funds, along with $2.7 million raised through a private placement, are being held in a trust account to be used for our initial business combination.

As of September 30, 2024, we had $1.1 million remaining in the trust account and $378,755 in cash held outside the trust account. We intend to use the funds in the trust account to complete our initial business combination, with the cash held outside the trust account used for working capital and transaction costs.

If our estimate of the costs to identify a target and complete a business combination is less than the actual amount needed, we may need to obtain additional financing. We could issue additional securities or incur debt to complete a business combination.

Franchise and Income Tax Withdrawals from Trust Account

Since our IPO, we have withdrawn $595,577 from the trust account to pay income and franchise tax liabilities. However, we have not fully remitted these funds to the government authorities, resulting in an excess of $380,312. We have accrued additional tax liabilities that we intend to cover from our operating account and a promissory note from our sponsor, without further withdrawals from the trust account.

Nasdaq Compliance

In July 2024, we received a notice from Nasdaq that our securities would be delisted due to not meeting the minimum market value and publicly held shares requirements. We have appealed this decision and been granted an exception by Nasdaq, subject to meeting certain milestones related to our proposed business combination with Aiways.

Going Concern

Our ability to continue as a going concern is dependent on our completing a business combination by October 2025. If we are unable to do so, we will be required to liquidate. Management has determined that this raises substantial doubt about our ability to continue as a going concern, though they intend to complete a business combination prior to the deadline.

Cybersecurity

We have implemented robust cybersecurity measures to manage risks and protect our information systems. This includes integrating cybersecurity into our overall risk management framework, overseeing third-party provider risks, and continuously evaluating and addressing cybersecurity threats. We have not experienced any material cybersecurity incidents to date.

In summary, as a blank check company, we have incurred losses as we prepare for a potential business combination, which we must complete by October 2025 to avoid mandatory liquidation. Our financial performance and ability to execute on our plans have been impacted by broader economic and market conditions, as well as compliance challenges. However, we remain focused on identifying and completing a value-enhancing business combination within the required timeframe.