NOTES
TO FINANCIAL STATEMENTS
NOTE
1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS
DUET
Acquisition Corp. (the “Company”) is a blank check company incorporated in the State of Delaware on September 20, 2021. The
Company was formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing
all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination
with one or more businesses or entities (“Business Combination”). The Company is not limited to a particular industry or
sector for purposes of consummating a Business Combination.
As
of March 31, 2023, the Company had not commenced any operations. All activity for the period from September 20, 2021 (inception) through
March 31, 2023, relates to the Company’s formation and the initial public offering described below. The Company will not generate
any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering (as defined below).
The Company has selected December 31 as its fiscal year end.
The
Company’s sponsor is DUET Partners LLC (the “Sponsor”). The registration statement for the Company’s Initial
Public Offering was declared effective on January 19, 2022.
On
January 24, 2022, the Company consummated its Initial Public Offering of 7,500,000 units (the “Units” and, with respect to
the Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross
proceeds of $75,000,000, and incurring offering costs of $5,161,516, of which $2,250,500
was for deferred underwriting commissions.
Simultaneously
with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of 356,250 units
(the “Private Placement Units”) to DUET Partners LLC, the sponsor of the Company (the “Sponsor”), at a price
of $10.00 per Private Placement Unit, generating total gross proceeds of $3,562,500 (the “Private Placement”).
Subsequently,
on January 24, 2022, the Company consummated the closing of the sale of 1,125,000 additional units at a price of $10 per unit (the “Units”)
upon receiving notice of the underwriters’ election to fully exercise their overallotment option (“Overallotment Units”),
generating additional gross proceeds of $11,250,000 and incurred additional offering costs of $506,250, of which $337,500 are for deferred
underwriting commissions. Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share (“Class
A Common Stock”), one redeemable warrant of the Company (“Warrant”), with each whole Warrant entitling the holder thereof
to purchase one share of Class A Common Stock for $11.50 per share, subject to adjustment, pursuant to the Company’s registration
statement on Form S-1 (File No. 333-261494).
Simultaneously
with the exercise of the overallotment, the Company consummated the Private Placement of an additional 33,750 Private Placement Units
to the Sponsor, generating gross proceeds of $337,500.
A
total of $87,543,750, comprised of the proceeds from the Offering and the proceeds of private placements that closed on January 20, 2022
and January 24, 2022, net of the underwriting commissions, discounts, and offering expenses, was deposited in a trust account (“Trust
Account”) which may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended
investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as
determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust
Account to the Company’s stockholders, as described below.
Transaction
costs of the Initial Public Offering with the exercise of the overallotment amounted to $5,667,766 consisting of $1,293,750 of cash underwriting
fees, $2,587,500 of deferred underwriting fees and $492,766 of other costs.
Following
the closing of the Initial Public Offering $818,211 of cash was held outside of the Trust Account available for working capital purposes.
As of March 31, 2023, we have available to us $207,880 of cash on our balance sheet and a working capital deficit of $1,169,634.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the 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 80% of the balance in the Trust Account (less any deferred underwriting commissions
and taxes payable on interest earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination.
The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect
a Business Combination.
The
Company will provide its holders of the outstanding Public Shares (the “public stockholders”) 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 stockholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. In connection with a Business Combination, the Company
may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders 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
only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business
Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business
Combination.
The
Company will have until 15 months (subject to a three month extension of time, as set forth in the Company’s registration statement)
from the closing of the Public Offering to consummate a Business Combination (the “Combination Period”). 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 five business days thereafter, redeem 100% of the outstanding
Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned (net of taxes payable and less interest to pay dissolution expenses), divided by the number of then outstanding Public Shares,
which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation
and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements
of applicable law. The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account in
the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be
included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of
such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Public
Offering price per Unit of $10.00.
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 $10.15 per share (whether or not the underwriters’ over-allotment option is exercised
in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and
except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is
deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party
claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors
by endeavoring to have all vendors, service providers (except for the company’s independent registered accounting firm), prospective
target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title,
interest or claim of any kind in or to monies held in the Trust Account.
Liquidity
and Capital Resources
As
of March 31, 2023, the Company had $207,880 of cash in its operating bank account.
The
Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $
from the Sponsor to cover for certain offering costs on the Company’s behalf in exchange for issuance of Founder Shares (as defined
in Note 5), and loan from the Sponsor of $190,478 under the Note (as defined in Note 5). Following the IPO of the Company on January
24, 2022 (as described in Note 1), a total of $193,535 under the promissory note was repaid on January 24, 2022. Subsequent to the consummation
of the Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the
Initial Public Offering and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and
directors may, but are not obligated to, provide the Company Working Capital Loans (as defined in Note 5). As of March 31, 2023, there
were $500,000 outstanding under any Working Capital Loan.
The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition
plans. The Company will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers,
directors, or third parties. 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. The Company
has until January 24, 2024, subject to the nine one-month extensions (as described below), to complete its initial Business Combination.
The Company will mandatorily liquidate in the event it is unable to complete its initial Business Combination within the time period required
by the amended and restated memorandum and articles of association.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements are presented in U.S. Dollars and conformity with accounting principles generally accepted in the United
States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures
normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and
regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary
for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying
unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a
fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s
Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 31, 2023 (the “Annual Report”),
which contains the audited financial statements and notes thereto. The financial information as of December 31, 2022 is derived from the
audited financial statements presented in the Company’s Annual Report. The interim results for the three months ended March 31,
2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future interim periods.
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 stockholder 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 neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements 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 statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ
significantly from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had no cash equivalents as of March 31, 2023 and December 31, 2022.
Marketable
Securities Held in Trust Account
At
March 31, 2023 and December 31, 2022, substantially all of the assets held in the Trust Account were held in mutual funds. At March 31,
2023 and December 31, 2022, the balance in the Trust Account was $89,287,957 and $88,592,161, respectively.
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 Offering and that were charged to stockholders’ equity upon the completion of the Offering. Should the Offering
have proved to be unsuccessful, these deferred costs, as well as additional expenses incurred, would have been charged to operations.
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 the United
States 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 March 31, 2023 and December
31, 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 is subject to income tax examinations
by major taxing authorities since inception.
Our
effective tax rate was 43.73% and nil for the three months ended March 31, 2023 and 2022, respectively. The effective tax rate differs
from the statutory tax rate of 21% for the three months ended March 31, 2023 and 2022, due to transaction costs and the valuation allowance
on the deferred tax assets.
Net
income (loss) per share
The
Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net income (loss) per
share is computed by dividing net loss by the weighted average number of common stock outstanding during the period, excluding common
stock subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 281,250 shares of Class B Common
Stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 6). At March 31, 2023
and March 31, 2022, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or
converted into common stock and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as
basic income (loss) per share for the periods presented.
Offering
Costs Associated with the Initial Public Offering
Offering
costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly
related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public
Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant
liabilities are expensed as incurred, presented as non-operating expenses in the statement of operations. Offering costs associated with
the Class A common stock were charged to stockholders’ equity upon the completion of the Initial Public Offering.
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 which, at times may exceed the Federal depository insurance coverage of $250,000.
On March 31, 2023 and December 31, 2022, the Company had not experienced losses on this account and management believes the Company is not exposed to
significant risks on such account.
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 balance sheet, primarily due to
their short-term nature.
Recent
Accounting Standards
The
Company’s management does not believe that any recently issued, but not yet effective, accounting standards updates, if currently
adopted, would have a material effect on the accompanying financial statement.
Risks
and Uncertainties
Management
is currently evaluating 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 financial position, results of its operations, close of the Offering, and/or
search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Additionally,
as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related
economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which
the Company ultimately consummates a Business Combination, may be materially and adversely affected. Further, the Company’s ability
to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events,
including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms
acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on
the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable.
The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE
3. PUBLIC OFFERING
Pursuant
to the Public Offering, the Company offered for sale up to 8,625,000 Units at a purchase price of $10.00 per Unit. Each Unit consists
of one share of Class A common stock and one redeemable warrant (“Public Warrant”). Each Public Warrant will entitle the
holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share (see Note 7).
NOTE
4. PRIVATE PLACEMENT
The
Sponsor purchased an aggregate of 390,000 placement units at a price of $10.00 per unit, for an aggregate purchase price of $3,900,000.
Each placement unit is identical to the units sold in this offering, except as described in this prospectus. The placement units were
sold in a private placement that closed simultaneously with the closing of this offering. If the Company does not complete a Business
Combination within the Combination Period, the proceeds from the sale of the Placement Units will be used to fund the redemption of the
Public Shares (subject to the requirements of applicable law) and the Placement Warrants will expire worthless.
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
On
October 17, 2021, the Sponsor purchased 2,156,250 founder shares for an aggregate purchase price of $25,000. The Founder Shares include
an aggregate of up to 281,250 shares subject to forfeiture to the extent that the underwriters’ over-allotment is not exercised
in full or in part, so that the number of Founder Shares will equal, on an as-converted basis, approximately 20% of the Company’s
issued and outstanding shares of ordinary shares after the Initial Public Offering.
The
initial stockholders have agreed not to transfer, assign or sell any of the Class B common stock (except to certain permitted transferees
as disclosed herein) until, with respect to any of the Class B common stock, the earlier of (i) six months after the date of the consummation
of a Business Combination, or (ii) the date on which the closing price of the Company’s common stock equals or exceeds $12.00 per
share (as adjusted for share subdivisions, share dividends, reorganizations and recapitalizations) for any 20 trading days within any
30-trading day period commencing after a Business Combination, or earlier, if, subsequent to a Business Combination, the Company consummates
a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the Company’s stockholders
having the right to exchange their common stock for cash, securities or other property.
Promissory
Note – Related Party
On
October 1, 2021, the Sponsor issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an
aggregate principal amount of $300,000,
to be used for payment of costs related to the Initial Public Offering. The note is non-interest bearing and payable on the earlier
of (i) December 31, 2022 or (ii) the consummation of the Initial Public Offering. As of March 31, 2023 and December 31, 2022, the
Company had borrowed $190,478
under the promissory note with the Sponsor which was repaid on January 24, 2022.
Related
Party 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 officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of
a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon completion
of a Business Combination into units at a price of $10.00 per unit. Such units would be identical to the Private Placement Units. 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. As of March 31,
2023 and December 31, 2022, there was $500,000 and $100,000 outstanding under the Working Capital Loans, respectively.
Administrative
Services Arrangement
The
Company’s Sponsor has agreed, commencing from the date that the Company’s securities are first listed on Nasdaq through the
earlier of the Company’s consummation of a Business Combination and its liquidation, to make available to the Company certain general
and administrative services, including office space, utilities and administrative services, as the Company may require from time to time.
The Company has agreed to pay to the Sponsor $10,000 per month for these services during the 15-month period to complete
a business combination. As of March 31, 2023 and December 31, 2022, the Company had paid $120,000 and $30,000 for administrative services,
respectively.
NOTE
6. COMMITMENTS AND CONTINGENCIES
Registration
Rights
The
holders of the Founder Shares, Private Placement Units and warrants that may be issued upon conversion of Working Capital Loans (and
any shares of ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the
Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights
agreement to be signed prior to or on the effective date of Initial Public Offering requiring the Company to register such securities
for resale (in the case of the Founder Shares, only after conversion to shares of Class A ordinary shares). The holders of these securities
will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In
addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent
to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415
under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit
any registration or cause any registration statement to become effective until the securities covered thereby are released from their
lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriters a 45-day option to purchase up to an additional 15% of the total number of Units in the Public Offering
to cover over-allotments. The aforementioned option was exercised in full on January 24, 2022.
The
underwriters were entitled to a cash underwriting discount of one and one-half percent (1.5%) of the gross proceeds of the Public Offering,
or $1,293,750. In addition, the underwriters are entitled to a deferred fee of three percent (3.0%) of the gross proceeds of the Public
Offering, or $2,587,500 upon closing of the Business Combination. The deferred fee will be paid in cash upon the closing of a Business
Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.
Additionally,
86,250 shares of our Class A common stock were issued to the underwriter upon the closing of this offering.
NOTE
7. STOCKHOLDERS’ EQUITY
Class
A Common Stock — Our amended and restated memorandum and articles of association authorize the Company to issue 100,000,000
shares of Class A common stock with a par value of $0.0001
per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. On March 31, 2023 and
December 31, 2022, there were 476,250
shares of Class A Common Stock issued and outstanding, excluding 8,625,000
shares of Class A Common Stock subject to possible redemption.
Class
B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001
per share. Holders of the Company’s Class B common stock are entitled to one vote for each share. As of March 31, 2023 and December
31, 2022, there were 2,156,250 shares of Class B common stock issued and outstanding, such that the Initial Stockholders will maintain
ownership of at least 20% of the issued and outstanding shares after the Public Offering.
Preferred
Shares — The Company is authorized to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such
designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At March 31, 2023
and December 31, 2022, there were no preferred shares issued or outstanding.
Warrants
— Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation
of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years
after the completion of a Business Combination or earlier upon redemption or liquidation.
The
Company will not be obligated to deliver any shares of Class A ordinary shares pursuant to the exercise of a warrant and will have no
obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares
of Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares
of Class A ordinary shares is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption
from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated
to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered
or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.
The
Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination,
the Company will use its commercially reasonable efforts to file, and within 60 business days following a Business Combination to have
declared effective, a registration statement covering the issuance of the shares of Class A ordinary shares issuable upon exercise of
the warrants and to maintain a current prospectus relating to those shares of Class A ordinary shares until the warrants expire or are
redeemed. Notwithstanding the above, if the Class A ordinary shares is at the time of any exercise of a warrant not listed on a national
securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities
Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to
file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available.
Redemption
of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the
Company may redeem the outstanding Public Warrants:
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in whole and not in part; |
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at a price of $0.01 per
Public Warrant; |
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upon a minimum of 30 days’
prior written notice of redemption, or the 30-day redemption period to each warrant holder; and |
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if, and only if, the last
reported sale price of the Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends,
reorganization, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading
day prior to the date on which the Company sends the notice of redemption to warrant holders. |
If
and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register
or qualify the underlying securities for sale under all applicable state securities laws.
If
the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that
wishes to exercise the Public 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 Public Warrants may be adjusted in certain circumstances including
in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except
as described below, the Public 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 Public 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 Public Warrants will not receive
any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held
outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering.
NOTE
8. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date. Based upon this review, other than noted below, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the condensed financial statements:
On
April 6, 2023, the Company issued a press release announcing the termination of its
previously announced business combination agreement and plan of merger with Anteco Systems, S.L and certain other parties has been
terminated by the Company by written notice to the other parties thereto. As a result, the Company will seek an alternative business
combination.
On
April 19, 2023, the Company held a virtual special meeting (the “Special Meeting”)
of its stockholders. At the Special Meeting, the stockholders of the Company entitled to vote at
the meeting cast their votes and approved a proposal to amend the Trust Agreement to allow the Company to extend the date on which Continental
must liquidate the Trust Account if the Company has not completed its initial business combination by an additional nine months, pursuant
to nine one-month extensions, from April 24, 2023 to January 24, 2024 (the “Trust Amendment”) by depositing
into the Trust Account the lesser of (i) $175,000 or (ii) $0.055 per share for each public share that is not redeemed in connection with
the Special Meeting for each such one-month extension, unless the closing of the Company’s initial business combination shall have
occurred.
On
April 21, 2023, the Company deposited an aggregate of $175,000 (the “Extension Payment”) into the Trust Account,
representing approximately $0.03 per public share remaining outstanding after the redemptions described below, which enables the Company
to extend the period of time it has to consummate its initial business combination by one month from April 24, 2023 to May 24, 2023 (the
“First Extension”). The First Extension is the first of up to nine monthly extensions permitted under the Company’s
Amended and Restated Certificate of Incorporation, as amended by the Charter Amendment.
In
connection with the approval of the Extension Amendment Proposal and the Trust Amendment Proposal at the Special Meeting, holders of
3,580,986 shares of the Company’s Class A Common Stock exercised their right to redeem those shares for cash at an approximate
price of $10.38 per share, for an aggregate of approximately $37.2 million. Following the payment of the redemptions, the Trust Account
will have a balance of approximately $52.4 million before the Extension Payment.