BWAQW Blue World Acquisition Corporation

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BLUE WORLD ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

BLUE WORLD ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

BLUE WORLD ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

BLUE WORLD ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

BLUE WORLD ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

BLUE WORLD ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. References to “we”, “us”, “our” or the “Company” are to Blue World Acquisition Corporation, except where the context requires otherwise. The following discussion should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this report.

Overview

We are a blank check exempted company incorporated in the Cayman Islands on July 19, 2021 with limited liability (meaning our public shareholders have no liability, as shareholders of the Company, for the liabilities of the Company over and above the amount paid for their shares) to serve as a vehicle to effect a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more target businesses (the “Business Combination”). Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location. We intend to utilize cash derived from the proceeds of our initial public offering (the “IPO”), our securities, debt or a combination of cash, securities and debt, in effecting a Business Combination.

We presently have no revenue, have had losses since inception from incurring formation and operating costs and have had no operations other than identifying and evaluating suitable acquisition transaction candidates. We have relied upon the working capital available to us following the consummation of the IPO and the Private Placement (as defined below) to fund our operations, as well as the funds loaned by the Sponsor (as defined below), our officers, directors or their affiliates.

On February 2, 2022, we consummated the IPO of 9,200,000 units (the “Units”), which included 1,200,000 Units issued upon the full exercise of the underwriter’s over-allotment option. Each Unit consists of one Class A Ordinary Share, $0.0001 par value per share (the “Class A Ordinary Share”), one-half of one redeemable warrant (the “Warrants”), each whole Warrant entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, and one right (the “Right”), each one Right entitling the holder thereof to exchange for one-tenth of one Class A Ordinary Share upon the completion of our initial Business Combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $92,000,000.

On February 2, 2022, simultaneously with the consummation of the IPO, we completed the private sale (the “Private Placement”) of 424,480 units (the “Private Units”) including 378,480 Private Units to our sponsor, Blue World Holdings Limited (the “Sponsor”), and 46,000 Private Units to Maxim Group LLC (“Maxim”), the sole underwriter of the IPO, respectively, at a purchase price of $10.00 per Private Unit, generating gross proceeds to us of $4,244,800.

The proceeds of $ 92,920,000 ($10.10 per Unit) in the aggregate from the IPO and the Private Placement, were placed in a trust account (the “Trust Account”) established for the benefit of our public shareholders and the underwriter of the IPO with Continental Stock Transfer & Trust Company acting as trustee (the “Trustee”).

Our management has broad discretion with respect to the specific application of the net proceeds of IPO and the Private Placements, although substantially all of the net proceeds are intended to be applied generally towards consummating a Business Combination.

Recent Developments

Extension of the Business Combination Timeline

On March 26, 2024, the Company held an extraordinary general meeting in lieu of an annual general meeting of shareholders of the Company (the “March 2024 Meeting”). At the March 2024 Meeting, the shareholders of the Company approved, among other things, the adoption of the fourth amended and restated memorandum and articles of association of the Company, which provides that the Company has until April 2, 2024 to complete a business combination, and may elect to extend the period to consummate a business combination up to seven times, each by an additional one month, for a total of up to seven months, to November 2, 2024, by depositing $60,000 each month into the Trust Account. In connection with the March 2024 Meeting, 1,059,186 Class A Ordinary Shares were rendered for redemption, and approximately $11.86 million was released from the Trust Account to pay such redeeming shareholders.

As of the date hereof, a total of $1,968,648 had been deposited in the Trust Account for extension of the Company’s timeline to complete a Business Combination (the “Extension Fee”), which have enabled the Company to extend the period of time it has to consummate its initial Business Combination up to June 2, 2024.

As of the date hereto, the Company has issued fifteen (15) unsecured promissory notes for the payment of Extension Fees in the total amount of $1,968,648, among which ten (10) were issued to the Sponsor for a total principal amount of $1,638,648 (collectively, the “Sponsor Extension Notes”) and four (4) were issued to Fuji Solar (as defined below) for a total principal amount of $210,000 (the “Fuji Extension Notes”), and one (1) was issued to ZENIN INVESTMENTS LIMITED (“ZENIN”), one of the shareholders of the Sponsor for a total principal amount of $60,000 (the “ZENIN Extension Note”, together with Sponsor Extension Notes and Fuji Extension Notes, collectively, the “Extension Notes”).

Amendment to the Trust Agreement

At the March 2024 Meeting, the shareholders of the Company approved, among the others, the Company to amend the Investment Management Trust Agreement dated January 31, 2022, as amended on May 2, 2023, June 30, 2023 and January 26, 2024 (the “Trust Agreement”), by and between the Company and the Trustee to provide that the Trustee must commence liquidation of the Trust Account by April 2, 2024, or, if further extended by up to seven one-month extensions (the “Monthly Extension”), up to November 2, 2024.

Promissory Notes – Working Capital Loans

On April 1, 2024, the Company issued an unsecured promissory note (the “Sponsor Note A”) in the amount of $180,000 to the Sponsor. The proceeds of the Sponsor Note A, which may be drawn down from time to time until the Company consummates its initial Business Combination, will be used for general working capital purposes.

On April 19, 2024, the Company issued an unsecured promissory note (the “Sponsor Note B,” together with the Sponsor Note A, the “Sponsor Notes”) in the principal amount of up to $320,000 to the Sponsor. The proceeds of the Sponsor Note B, which may be drawn down from time to time until the Company consummates its initial Business Combination, will be used for general working capital purposes.

Nasdaq Noncompliance Letter

On December 5, 2023, the Company received a letter (the “Letter”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) that, for the previous 30 consecutive business days, the Market Value of Listed Securities (“MVLS”) for the Company was below the $50 million minimum MVLS requirement for continued listing on the Nasdaq Global Market (the “Global Market”) under Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Rule”). The Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities.

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company will have 180 calendar days, or until June 3, 2024 (the “Compliance Period”), to regain compliance with the MVLS Rule. To regain compliance with the MVLS Rule, the MVLS for the Company must be at least $50 million for a minimum of 10 consecutive business days at any time during this Compliance Period. If the Company regains compliance with the MVLS Rule, Nasdaq will provide the Company with written confirmation and will close the matter.

On January 12, 2024, the Sponsor and Fuji Solar Co., Ltd, a Japanese company (“Fuji Solar,” together with the Sponsor, collectively, the “Converting Shareholders”) notified the Company that they elected to convert a total of 700,000 Class B ordinary shares held by them to the same number of Class A Ordinary Shares, among which 400,000 shares held by the Sponsor and 300,000 shares held by Fuji Solar, respectively. On January 17, 2024, 700,000 Class B ordinary Shares held by the Converting Shareholders were converted into the same number of Class A Ordinary Shares (the “Class B Conversion”). As a result of the Class B Conversion, the Company currently has 5,002,246 Class A Ordinary Shares and 1,600,000 Class B Ordinary Shares issued and outstanding, respectively. Class A Ordinary Shares are currently traded on the Global Market under symbol “BWAQ” and deemed by Nasdaq to be the Company’s “Listed Securities” for purposes of Rule 5450(b)(2)(A).

On February 20, 2024, the Company received a written notice from the staff of Nasdaq notifying the Company that the staff has determined that for the last 22 consecutive business days, from January 18, 2024 to February 16, 2024, the Company’s MVLS has been $50 million or greater. Accordingly, the Company has regained compliance with the MVLS Rule and the staff has indicated that the matter is now closed.

Investment Company Act and Liquidation of Investments in the Trust Account into Cash

Since the consummation of the IPO, the Company has deposited the proceeds from the IPO and the Private Placement into the Trust Account to invest in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). As a result, it is possible that a claim could be made that the Company has been operating as an unregistered investment company. If the Company was deemed to be an investment company for purposes of the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which the Company has not allotted funds and may hinder the Company’s ability to complete a business combination. The Company might be forced to abandon its efforts to complete an initial Business Combination and instead be required to liquidate. If the Company is required to liquidate, its investors would not be able to realize the benefits of owning shares in a successor operating business, such as any appreciation in the value of the Company’s securities following such a transaction, its warrants and rights would expire worthless and ordinary shares would have no value apart from their pro rata entitlement to the funds then-remaining in the Trust Account.

The longer that the funds in the Trust Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities there is a greater risk that the Company may be considered an unregistered investment company, in which case the Company may be required to liquidate.

On January 26, 2024, the Company entered into an amendment to the Investment Management Trust Agreement, dated January 31, 2022, as further amended on May 2, 2023 and June 30, 2023 (the “Amendment to the Trust Agreement”), by and between the Company and the Trustee. Pursuant to the Amendment to the Trust Agreement, the Company may instruct the Trustee to (i) hold the funds in the Trust Account uninvested, (ii) hold funds in an interest-bearing bank demand deposit account, or (iii) invest in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.

On January 26, 2024, in order to mitigate the risks of the Company being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), the Company instructed the Trustee to liquidate the U.S. government treasury obligations and money market funds held in the Trust Account by January 31, 2024, the expiry of the 24-month anniversary of the effective date of the Company’s IPO Registration Statement, and to hold all funds in the Trust Account in cash in an interest-bearing bank demand deposit account until the earlier of consummation of the Company’s initial Business Combination or liquidation of the Company.

Amendment No. 3 to the Merger Agreement

On February 29, 2024, the Company entered into an Amendment No. 3 (the “Amendment to the Merger Agreement”) to the Agreement and Plan of Merger, dated as of August 10, 2023, as amended on December 6, 2023 and February 6, 2024 (as the same may be amended, restated or supplemented, the “Merger Agreement”) with TOYO Co., Ltd, a Cayman Islands exempted company (“PubCo”), TOYOone Limited, a Cayman Islands exempted company (“Merger Sub”), TOPTOYO INVESTMENT PTE. LTD., a Singapore private company limited by shares (“SinCo”), Vietnam Sunergy Cell Company Limited, a Vietnamese company, (“TOYO Solar”, together with PubCo, Merger Sub and SinCo, the “Group Companies”, or each individually, a “Group Company”), Vietnam Sunergy Joint Stock Company, a Vietnam joint stock company (“VSUN”), Fuji Solar, WA Global Corporation, a Cayman Islands exempted company (“WAG”), Belta Technology Company Limited, a Cayman Islands exempted company (“Belta”), and BestToYo Technology Company Limited, a Cayman Islands exempted company (“BestToYo”).

The Amendment to the Merger Agreement was entered into to reflect the restructuring of PubCo. Fuji Solar, as the sole shareholder of PubCo, transferred all of the ordinary shares of PubCo (“PubCo Ordinary Shares”) held by Fuji Solar to WAG and Belta, and Belta then further transferred a certain number of PubCo Ordinary Shares to BestToYo, each at a transfer price of US$0.0001 per share (collectively, the “PubCo Shareholder Transfer”), as a result of which WAG holds 6,200 PubCo Ordinary Shares, Belta holds 2,450 PubCo Ordinary Shares, and BestToYo holds 1,350 PubCo Ordinary Shares, respectively, immediately following the PubCo Shareholder Transfer.

Each of WAG, Belta and BestToYo is a newly incorporated holding company wholly owned and controlled by the beneficial owners of Fuji Solar. The beneficial owners of Fuji Solar established WAG, Belta and BestToYo to reflect their indirect beneficial ownerships in PubCo through the equity interests of these three separate entities in PubCo. As of result of the PubCo Shareholder Transfer, WAG, Belta and BestToYo became the only three shareholders of PubCo. Immediately prior to the Merger Closing (as defined below) and consistent with the Merger Agreement, WAG, Belta and BestToYo will collectively hold 41,000,000 PubCo Ordinary Shares, with WAG holding 25,420,000 PubCo Ordinary Shares, Belta holding 10,045,000 PubCo Ordinary Shares and BestToYo holding 5,535,000 PubCo Ordinary Shares, respectively (such transactions, the “PubCo Pre-Closing Restructuring”). The parties to the Amendment to the Merger Agreement also entered into a Joinder Agreement (the “Joinder Agreement”) in connection with the PubCo Pre-Closing Restructuring.

Pursuant to the Amendment to the Merger Agreement, (a) the Group Companies, VSUN, Fuji Solar, WAG, Belta and BestToYo shall consummate a series of transactions involving the Group Companies, including (A) PubCo acquiring one hundred percent (100%) of the issued and paid-up share capital of SinCo from Fuji Solar at an aggregate consideration of SGD1.00 (such transaction, the “Share Exchange”), and (B) SinCo acquiring one hundred percent (100%) of the issued and outstanding shares of capital stock of TOYO Solar from VSUN at an aggregate consideration of no less than US$50,000,000 (the “SinCo Acquisition,” and together with the Share Exchange, the “Pre-Merger Reorganization”), as a result of which (i) SinCo shall become a wholly-owned subsidiary of PubCo, (ii) TOYO Solar shall become a wholly-owned subsidiary of SinCo; and (iii) WAG, Belta and BestToYo (collectively, the “Sellers”) shall become the only shareholders of PubCo, and (b) following the consummation of the Pre-Merger Reorganization, the Company shall merge with and into Merger Sub, with Merger Sub continuing as the surviving company (the “Merger”), as a result of which, among other things, all of the issued and outstanding securities of the Company immediately prior to the filing of the plan of merger with respect to the Merger (the “Plan of Merger”) to the Registrar of Companies of the Cayman Islands, or such later time as may be specified in the Plan of Merger (the “Merger Effective Time”) shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of the holders thereof to receive substantially equivalent securities of PubCo, in each case, upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the provisions of the Companies Act (Revised) of the Cayman Islands and other applicable laws. The Merger, the Pre-Merger Reorganization and each of the other transactions contemplated by the Merger Agreement or any of the other relevant transactional documents are collectively referred to as “Transactions.” The Amendment to the Merger Agreement and the Pre-Closing Restructuring will have no substantive effect on the Merger, the Plan of Merger or the Merger Closing.

As a result of the Amendment to the Merger Agreement and the Joinder Agreement, each of WAG, Belta and BestToYo became a Shareholder (as defined in the Merger Agreement) and a Seller, and is subject to representations, warranties and covenants under the Merger Agreement that are substantially equivalent to those made by Fuji Solar under the Merger Agreement prior to the Amendment to the Merger Agreement. There are no changes to the conditions to consummate the Transactions as a result of the Amendment to the Merger Agreement.

Pursuant to the Amendment to the Merger Agreement, at or prior to the closing of the Merger (the “Merger Closing”), an aggregate of 13,000,000 PubCo Ordinary Shares held by the Sellers (the “Earnout Shares”), consisting of 8,060,000 PubCo Ordinary Shares held by WAG, 3,185,000 PubCo Ordinary Shares held by Belta and 1,755,000 PubCo Ordinary Shares held by BestToYo, respectively, will be deposited with an escrow agent in a segregated escrow account (the “Earnout Escrow Account”) pursuant to an escrow agreement effective upon the Merger Closing and will be released from the Earnout Escrow Account and delivered to the Sellers as following:

Relevant Documents

In connection with the Amendment to the Merger Agreement and PubCo Pre-Closing Restructuring, the parties amended other agreements entered into or to be entered into pursuant to the Merger Agreement (the “Related Agreements”). This section describes the material amendments to the Related Agreements, but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of each of the Related Agreements, copies of each of which are attached hereto as exhibits. Shareholders and other interested parties are urged to read such Related Agreements in their entirety.

Amended and Restated Shareholder Lock-up and Support Agreement

In connection with the Amendment to the Merger Agreement and the PubCo Pre-Closing Restructuring, on February 29, 2024, the Company, PubCo, Fuji Solar, WAG, Belta and BestToYo entered into an amended and restated Shareholder Lock-up and Support Agreement (the “A&R Shareholder Lock-up and Support Agreement”) to amend and restate the Shareholder Lock-up and Support Agreement by and among SPAC, PubCo and Fuji Solar dated August 10, 2023, as further amended on December 6, 2023. Pursuant to A&R Shareholder Lock-up and Support Agreement, each of WAG, Belta and BestToYo has agreed not to, except as set for therein, among other things, transfer any of the Subject Shares (as defined in the A&R Shareholder Lock-Up and Support Agreement) (such shares, the “Sellers Subject Shares”) or grant any proxies or enter into any voting arrangements with respect to the Sellers Subject Shares.

Further, each of WAG, Belta and BestToYo has irrevocably agreed not to transfer any Shareholder Lock-Up Securities (as defined in the A&R Shareholder Lock-Up and Support Agreement) or engage in any short sales with respect to any securities of PubCo during the Shareholder Lock-Up Period (as defined in the A&R Shareholder Lock-Up and Support Agreement).

Revisions to the Form of Sponsor Lock-Up Agreement

In connection with the Amendment to the Merger Agreement, the Sponsor and PubCo agreed to revise the form of the Sponsor Lock-Up Agreement attached as Exhibit C to the Merger Agreement to reflect the addition of the parties, WAG, Belta and BestToYo, to the Merger Agreement.

Revisions to the Form of Registration Rights Agreement

In connection with the Amendment to the Merger Agreement, the parties to the Merger Agreement also agreed to revise the form of the Registration Rights Agreement attached as Exhibit D to the Merger Agreement to reflect the Amendment to the Merger Agreement and the PubCo Pre-Closing Restructuring.

Revisions to the Form of Warrant Assumption Agreement

In connection with the Amendment to the Merger Agreement, the parties to the Merger Agreement also agreed to revise certain terms of the form of the Warrant Assumption Agreement to reflect the Amendment to the Merger Agreement.

PIPE Agreement

On March 6, 2024, the Company entered into a share purchase agreement (the “PIPE Purchase Agreement”) with PubCo and a certain investor, NOTAM Co., Ltd., a Japanese corporation (“NOTAM”), in connection with the Transactions. Pursuant to the PIPE Purchase Agreement, NOTAM agrees to purchase a total of 600,000 Class A Ordinary Shares of the Company (the “PIPE Shares”), at a purchase price of $10.00 per share, for an aggregate purchase price of $6,000,000 (the “PIPE Purchase Price”). Upon the written notice of the Company, at least three (3) business days prior to the reasonably expected closing date of the Transactions provided in such notice, NOTAM will deliver or cause to be delivered the PIPE Purchase Price into an escrow account with Continental Stock Transfer & Trust Company, as the escrow agent (the “Escrow Agent”).

The closing of the sale of the PIPE Shares (the “PIPE Closing”) will be held on the same date and immediately prior to the closing of the Transactions. At the PIPE Closing, the Company will issue and deliver to NOTAM the PIPE Shares against the release of the PIPE Purchase Price by the Escrow Agent to the Company. If the closing of the Transactions does not occur or if the PIPE Shares are not converted into Converted PIPE Shares (as defined below) within thirty (30) days after the PIPE Purchase Price is delivered to the Escrow Agent, the Escrow Agent will automatically return to NOTAM the PIPE Purchase Price.

Pursuant to the Merger Agreement, each ordinary share of the Company, including the PIPE Shares, issued and outstanding immediately prior to the Merger Effective will automatically be converted into the right to receive one (1) PubCo Ordinary Shares (“Converted PIPE Shares”). NOTAM is entitled to make up to two (2) demands that PubCo register such Converted PIPE Shares, if and only if the Converted PIPE Shares are not registered on a registration statement on Form F-4 containing a prospectus/proxy statement relating to the Transactions to be filed by PubCo with the SEC. In addition, NOTAM has certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of the Transactions. PubCo will bear the expenses incurred in connection with the filing of any such registration statements.

Business Combination Shareholder Meeting

On April 15, 2024, the Company issued a press release announcing that it postponed the extraordinary general meeting of its shareholders (the “Business Combination Meeting”) pending the Post-Effective Amendment (as defined below) in connection with the Transactions.

Prior to the Business Combination Meeting, PubCo intends to file with the U.S. Securities and Exchange Commission (the “SEC”) and make available to the Company’s shareholders, a post-effective amendment to the Registration Statement on Form F-4 of PubCo, as amended (File No. 333-277779) (the “Registration Statement,” and such amendment, the “Post-Effective Amendment”), which includes the proxy statement, as amended (the “Proxy Statement,” and such amendment, the “Proxy Statement Amendment”). The Post-Effective Amendment will include financial statements of TOYO Solar as of and for the year ended December 31, 2023.

The Transactions continue to progress and are expected to be completed after the Business Combination Meeting, subject to the satisfaction of all other closing conditions. Following the completion of the Transactions, the combined company will operate as TOYO Co., Ltd and is expected to be listed on the Nasdaq Capital Market under the ticker “TOYO.”

In anticipation of filing of the Post-Effective Amendment with the SEC, the Company postponed the Business Combination Meeting originally scheduled to be held on April 23, 2024, at 9:00 a.m., Eastern Time and will discard the votes previously received accordingly. After the Post-Effective Amendment is declared effective by the SEC, the Company will mail the Proxy Statement Amendment when available to its shareholders as of a record date established for voting on the proposed Business Combination and recollect the vote on the proposals as provided in the Proxy Statement Amendment.

Results of Operations 

We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through March 31, 2024 were organizational activities and those necessary to prepare for the IPO, search for a target company, and effectuate the Transactions with TOYO Solar. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the IPO. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.

For the three months ended March 31, 2024, we had net income of $212,762, which consisted of interest and dividend earned on investment held in Trust Account and interest income of $511,845 offset by formation and operations costs of $299,083.

For the three months ended March 31, 2023, we had net income of $882,620, which consisted of dividend earned on investment held in Trust Account and interest income of $1,002,180 offset by formation and operations costs of $119,560.

For the nine months ended March 31, 2024, we had net income of $849,949, which mainly consisted of interest and dividend earned on investment held in the Trust Account and interest income of $1,672,134 offset by formation and operations costs of $822,185.

For the nine months ended March 31, 2023, we had net income of $1,571,322, which mainly consisted of dividend earned on investment held in the Trust Account and interest income of $2,207,606 offset by formation and operations costs of $636,292.

Liquidity and Capital Resources  

As of March 31, 2024, we had cash outside the Trust Account of $3,036 available for working capital needs. All remaining cash is held in the Trust Account and is generally unavailable for our use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem the ordinary shares. As of March 31, 2024, none of the amount on deposit in the Trust Account was available to be withdrawn as described above.

As of March 31, 2024, we had cash of $3,036 and a working deficit of $2,931,090. We have incurred and expects to continue to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a Business Combination. In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about our ability to continue as a going concern. The management’s plan in addressing this uncertainty is through the working capital loans. In addition, if we are unable to complete a Business Combination within the combination period by June 2, 2024 (or up to November 2, 2024, if extended), unless further extended, our board of directors would proceed to commence a voluntary liquidation and thereby a formal dissolution of us. There is no assurance that our plans to consummate a Business Combination will be successful within the combination period by June 2, 2024 (or up to November 2, 2024, if extended), unless further extended. As a result, management has determined that such additional condition also raise substantial doubt about our ability to continue as a going concern. The unaudited condensed financial statement does not include any adjustments that might result from the outcome of this uncertainty.

For the nine months ended March 31, 2024, net cash used in operating activities was $791,131, which resulted from non-cash interest and dividend earned on investment held in Trust Account of $1,672,126, and increase in prepaid expenses of $6,193, and offset by net income of $915,993, increase in accounts payable and accrued expenses of $6,515, and increase in due to related parties of $30,724.

For the nine months ended March 31, 2023, net cash used in operating activities was $596,564, which resulted from non-cash dividend earned on investment held in Trust Account of $2,207,606, and decrease in accounts payable and accrued expenses of $186, and offset by net income of $1,571,322, decrease in prepaid expenses of $29,750, and increase in due to related parties of $10,156.

For the nine months ended March 31, 2024, net cash provided by investing activities was $28,825,912, which resulted from the withdrawals of investment held in Trust Account of $29,305,912 offset by the purchases of investment held in Trust Account of $480,000.

For the nine months ended March 31, 2023, net cash used in investing activities was $920,000, which resulted from the purchases of investment held in Trust Account of $920,000.

For the nine months ended March 31, 2024, net cash used in financing activities was $28,032,491, which resulted from the redemption of Class A Ordinary Shares of $29,305,912 offset by the proceeds from issuance of promissory notes to a third party of $590,088, the proceeds from issuance of promissory notes to a related party of $590,088 and withdrawals from our Escrow Account of $500,000.

For the nine months ended March 31, 2023, net cash provided by financing activities was $1,245,000, which resulted from the proceeds from issuance of promissory notes to a related party of $1,245,000.

Promissory Notes

In November 2022, July 2023, November 2023 and April 2024, the Company had issued a total of five unsecured promissory notes (the “Sponsor Notes”) in a total principal amount of $1,270,000 to the Sponsor. The proceeds of the Sponsor Notes may be drawn down from time to time until the Company consummates its initial Business Combination, will be used as general working capital purposes. 

In December 2023, the Company issued the Fuji Expenses Note in a principal amount of $33,333 to Fuji Solar for its advancement of one-third (1/3) of the Valuation Firm Expenses pursuant to the Merger Agreement.

From January 2023 to May 2024, a total of $1,968,648 had been deposited in the Trust Account for extension of the Company’s timeline to complete a Business Combination (the “Extension Fee”), which have enabled the Company to extend the period of time it has to consummate its initial Business Combination up to June 2, 2024. The Company has issued fifteen unsecured promissory notes for the payment of Extension Fees in the total amount of $1,968,648, among which ten were issued to the Sponsor for the total principal amount of $1,698,648 and four were issued to Fuji Solar (as defined below) for the total principal amount of $210,000 and one was issued to ZENIN, one of the shareholders of the Sponsor, for a total principal amount of $60,000. The proceeds of the Extension Notes were deposited into the Trust Account for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial Business Combination.

The Extension Notes together with the Sponsor Notes and the Fuji Expenses Note (collectively refer herein as “Promissory Notes”) issued to the Sponsor, Fuji Solar and ZENIN, respectively, have the same payment and conversion term as discussed below.

The Promissory Notes bear no interest and is payable in full upon the earlier to occur of (i) the consummation of the Business Combination or (ii) the date of expiry of the term of the Company (the “Maturity Date”). The following shall constitute an event of default: (i) a failure to pay the principal within five business days of the Maturity Date; (ii) the commencement of a voluntary or involuntary bankruptcy action, (iii) the breach of the Company’s obligations thereunder; (iv) any cross defaults; (v) an enforcement proceedings against the Company; and (vi) any unlawfulness and invalidity in connection with the performance of the obligations thereunder, in which case the Promissory Notes may be accelerated.

The payees of the Promissory Notes, respectively, have the right, but not the obligation, to convert the Promissory Notes, in whole or in part, respectively, into private units (the “Conversion Units”) of the Company, each consisting of one Class A Ordinary Share, one-half of one warrant, and one right to receive one-tenth (1/10) of one Class A Ordinary Share upon the consummation of a Business Combination, as described in the prospectus of the Company (File Number 333-261585), by providing the Company with written notice of the intention to convert at least two business days prior to the closing of the Business Combination. The number of Conversion Units to be received by the payees in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to such payee by (y) $10.00.

Until consummation of the Business Combination, the Company will be using the funds not held in the Trust Account, and any additional funding that may be loaned to us by the Sponsor, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

If our estimates of the costs of undertaking in-depth due diligence and negotiating Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to the Business Combination and will need to raise additional capital. In this event, our officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we consummate an initial Business Combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us upon consummation of the Business Combination, or, at the lender’s discretion, such loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. 

Moreover, we may need to obtain additional financing either to consummate our initial Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial 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 consummate such financing simultaneously with the consummation of our initial Business Combination. Following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

As of March 31, 2024 and June 30, 2023, the Company had borrowings of $2,645,506 and $1,872,085 under the Promissory Notes, respectively.

Due to Related Parties

From time to time, Mr. Liang Shi, the Company’s Director, Chief Executive Officer, Secretary and Chairman, would incur travel costs to search for targets. As of March 31, 2024 and June 30, 2023, due to Mr. Liang Shi amounted to $4,228 and $3,504, respectively.

Administrative Services Agreement

The Company is obligated, commencing from the effective date of the IPO to pay the Sponsor, a monthly fee of $10,000 for general and administrative services. This agreement was signed by the Company and the Sponsor on January 31, 2022 and it will terminate upon completion of the Company’s Business Combination or the liquidation of the Trust Account to public shareholders. The Company has recognized operating costs under the Administrative Services Agreement in the amount of $30,000 in each of the three months ended March 31, 2024 and 2023. The Company has recognized operating costs under the Administrative Services Agreement in the amount of $90,000 in each of the nine months ended March 31, 2024 and 2023. As of March 31, 2024 and June 30, 2023, the Company had $90,000 and $60,000, respectively, accrued under the Administrative Services Agreement due to the Sponsor.

Off-Balance Sheet Financing Arraignments

We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements as of March 31, 2024. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations  

As of March 31, 2024, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

We are obligated to pay Maxim a deferred underwriters’ discount equal to 3.5% of the gross proceeds of the IPO and the underwriter’s full exercise of the over-allotment. Pursuant to the UA Amendment, Maxim agrees to convert the total amount of its deferred underwriting commission in the amount of $3,220,000, or 3.5% of the gross proceeds from the IPO, into 322,000 Deferred Underwriting Shares immediately prior to the consummation of the Company’s initial Business Combination.

The founder shares, the Class A Ordinary Shares included in the Private Units, and any Class A Ordinary Shares that may be issued upon conversion of working capital loans (and any underlying securities) will be entitled to registration rights pursuant to a registration and shareholder rights agreement entered into in connection with the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

Critical Accounting Policies, Judgements and Estimates

Use of estimates

In preparing the unaudited condensed financial statements in conformity with U.S. GAAP, management makes 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 statements and the reported 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 statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results may differ from these estimates.

Cash and Investment held in Trust Account

At March 31, 2024, the assets held in the Trust Account were held in cash in an interest-bearing bank demand deposit account.

We classify our U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments — Debt and Equity Securities.” Held-to-maturity securities are those securities which we have the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying unaudited condensed balance sheet and adjusted for the amortization or accretion of premiums or discounts.

Class A 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 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 our control) are classified as temporary equity. At all other times, ordinary shares classified as shareholders’ equity.

Warrants

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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to 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. As our warrants meet all of the criteria for equity classification, so we will classify each warrant as its own equity.

Fair Value of Financial Instruments

The fair value of our assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Our financial instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:

Income Taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Our management determined that the Cayman Islands is our major tax jurisdiction. We recognize accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense.

We are considered to be an exempted Cayman Islands company, and are presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.

Net Income (Loss) per Share

We have two classes of shares, which are referred to as redeemable ordinary shares and non-redeemable ordinary shares. Earnings and losses are shared pro rata between the two classes of shares.

Recent Accounting Pronouncements

In August 2020, the FASB issued a new standard (ASU 2020-06) to reduce the complexity of accounting for convertible debt and other equity-linked instruments. For certain convertible debt instruments with a cash conversion feature, the changes are a trade-off between simplifications in the accounting model (no separation of an “equity” component to impute a market interest rate, and simpler analysis of embedded equity features) and a potentially adverse impact to diluted earnings per share by requiring the use of the if-converted method. The new standard will also impact other financial instruments commonly issued by both public and private companies. For example, the separation model for beneficial conversion features is eliminated simplifying the analysis for issuers of convertible debt and convertible preferred stock. Also, certain specific requirements to achieve equity classification and/or qualify for the derivative scope exception for contracts indexed to an entity’s own equity are removed, enabling more freestanding instruments and embedded features to avoid mark-to-market accounting. The new standard is effective for companies that are SEC filers (except for smaller reporting companies) for fiscal years beginning after December 15, 2021 and interim periods within that year, and two years later for other companies. Companies can early adopt the standard at the start of a fiscal year beginning after December 15, 2020. The standard can either be adopted on a modified retrospective or a full retrospective basis. The adoption of ASU 2020-06 on July 1, 2022 did not have a material effect on our unaudited condensed financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our unaudited condensed financial statements.

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 principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the quarter ended March 31, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective.   

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer 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 change in our internal control over financial reporting during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material legal proceedings and no material legal proceedings have been threatened by us or, to the best of our knowledge, against us.  

Item 1A. Risk Factors

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

On April 1, 2024, the Company issued the Sponsor Note A in the principal amount of $180,000 to the Sponsor. The proceeds of the Sponsor Note, which may be drawn down from time to time until the Company consummates its initial Business Combination, will be used as general working capital purposes.

On April 19, 2024, the Company issued the Sponsor Note B in the principal amount of up to $320,000 to the Sponsor. The proceeds of the Sponsor Note B, which may be drawn down from time to time until the Company consummates its initial Business Combination, will be drawn from time to time for general working capital purposes.

From January 1, 2024 to the date hereof, the Company issued a total of four (4) Extension Notes, of which one (1) was issued to the Sponsor in a total principal amount of $60,000 on March 1, 2024 and two (2) were issued to Fuji Solar in a total principal amount of $120,000 on February 6, 2024 and April 1, 2024, and one (1) was issued to ZENIN in a total principal amount of $60,000 on May 2, 2024, respectively. The proceeds of the Extension Notes were deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial Business Combination up to June 2, 2024. As of the date hereof, the Company has issued the Extension Notes in the aggregate principal amount of $1,968,648.

The Promissory Notes bear no interest and are payable in full upon the consummation of a Business Combination. The following shall constitute an event of default: (i) a failure to pay the principal within five business days of the Maturity Date; (ii) the commencement of a voluntary or involuntary bankruptcy action, (iii) the breach of the Company’s obligations thereunder; (iv) any cross defaults; (v) an enforcement proceedings against the Company; and (vi) any unlawfulness and invalidity in connection with the performance of the obligations thereunder, in which case the promissory note may be accelerated.

The payees of the Promissory Notes, respectively, have the right, but not the obligation, to convert the Promissory Notes, in whole or in part, respectively, into private units (the “Conversion Units”), each consisting of one Class A ordinary share, one-half of one warrant, and one right to receive one-tenth (1/10) of one Class A ordinary share upon the consummation of a Business Combination, as described in our final prospectus for our IPO filed with the SEC on January 31, 2022, by providing the Company with written notice of the intention to convert at least two business days prior to the closing of the Business Combination. The number of Conversion Units to be received by such payee in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to such payee by (y) $10.00.  

The information of the Promissory Notes contained under Item 2 of Part I above is incorporated herein by reference in response to this item. The issuance of the Promissory Notes was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

On March 6, 2024, the Company entered into the PIPE Purchase Agreement with PubCo NOTAM, in connection with the Transactions. Pursuant to the PIPE Purchase Agreement, NOTAM agrees to purchase a total of 600,000 PIPE Shares, at a purchase price of $10.00 per share, for an aggregate PIPE Purchase Price of $6,000,000.

The issuance of the PIPE Shares to NOTAM will not be registered under the Securities Act of 1933, as amended, and is in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation S promulgated thereunder.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits.

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.

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