UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2021

 

or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                   to                  

 

Commission File Number: 001-39383

 

Malacca Straits Acquisition Company Limited

(Exact name of registrant as specified in its charter)

 

Cayman Islands   N/A
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

Unit 601-2
St. George’s Building
2 Ice House Street
Central, Hong Kong
  N/A
(Address of principal executive offices)   (Zip Code)

 

+852 21060888

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on
which registered
Units, each consisting of one Class A Ordinary Share and one-half of one Redeemable Warrant   MLACU   The Nasdaq Stock Market LLC
Class A Ordinary Shares, par value $0.0001 per share   MLAC   The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one Class A Ordinary Share for $11.50 per share   MLACW   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

 

As of August 12, 2021, there were 14,375,000 Class A ordinary shares, $0.0001 par value per share, and 3,593,750 Class B ordinary shares, $0.0001 par value per share, issued and outstanding.

 

 

 

 

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

 

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2021

TABLE OF CONTENTS

 

  Page
Part I. Financial Information   1
Item 1. Financial Statements   1
Condensed Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020 1
Condensed Statements of Operations for the Three and Six Months ended June 30, 2021 and 2020 (unaudited) 2
Condensed Statements of Changes in Shareholders’ Equity for the Three and Six Months ended June 30, 2021 and 2020 (unaudited) 3
Condensed Statements of Cash Flows for the Six Months ended June 30, 2021 and 2020 (unaudited) 4
Notes to Condensed Financial Statements (unaudited) 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20
Item 3. Quantitative and Qualitative Disclosures About Market Risk 23
Item 4. Controls and Procedures 23
Part II. Other Information 24
Item 1. Legal Proceedings 24
Item 1A. Risk Factors 24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24
Item 3. Defaults Upon Senior Securities 24
Item 4. Mine Safely Disclosures 24
Item 5. Other Information 24
Item 6. Exhibits 24
Signatures 25

 

i

 

 

Part I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONDENSED BALANCE SHEETS

  

ASSETS   June 30,
2021 (unaudited)
    December 31,
2020
 
Current Assets            
Cash   $ 221,808     $ 730,837  
Prepaid expenses and other current assets     29,833       75,844  
Total Current Assets     251,641       806,681  
                 
Cash and marketable securities held in Trust Account     143,837,424       143,815,744  
TOTAL ASSETS   $ 144,089,065     $ 144,622,425  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current Liability – Accounts payable and accrued expenses   $ 147,417     $ 81,485  
Derivative warrant liabilities     11,299,688       12,186,260  
Deferred underwriting fee payable     5,031,250       5,031,250  
Total Liabilities     16,478,355       17,298,995  
                 
Commitments and Contingencies    
 
     
 
 
                 
Ordinary shares subject to possible redemption, 12,261,070 and 12,232,342 shares at redemption value at June 30, 2021 and December 31, 2020, respectively     122,610,700       122,323,420  
                 
Shareholders’ Equity                
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding    
     
 
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 2,113,930 and 2,142,658 shares issued and outstanding (excluding 12,261,070 and 12,232,342 shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively     211       214  
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 3,593,750 shares issued and outstanding at June 30, 2021 and December 31, 2020     359       359  
Additional paid-in capital     12,337,701       12,624,978  
Accumulated deficit     (7,338,261 )     (7,625,541 )
Total Shareholders’ Equity     5,000,010       5,000,010  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 144,089,065     $ 144,622,425  

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

1

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2021     2020     2021     2020  
                         
Operating costs   $ 329,817     $ 792     $ 620,974     $ 8,112  
Loss from operations     (329,817 )     (792 )     (620,974 )     (8,112 )
                                 
Other income (loss):                                
Interest income - bank     1      
      2        
Interest earned on marketable securities held in Trust Account     4,541      
      21,680        
Change in fair value of derivative warrant liabilities     (2,821,308 )    
      886,572        
Net income (loss)   $ (3,146,583 )   $ (792 )   $ 287,280     $ (8,112 )
                                 
Weighted average shares outstanding of Class A redeemable ordinary shares, basic and diluted     14,375,000      
      14,375,000        
Basic and diluted net income (loss) per share, Class A redeemable ordinary shares   $ (0.00 )   $     $ (0.00 )   $  
Weighted average shares outstanding of Class B non-redeemable ordinary shares (1)     3,593,750       3,125,000 (1)     3,593,750       3,125,000 (1)
                                 
Basic and diluted net income (loss) per share, Class B non-redeemable ordinary shares (1)   $ (0.88 )   $ (0.00 )   $ 0.07     $ (0.00 )

 

(1) Excludes an aggregate of up to 468,750 Class B ordinary shares that were subject to forfeiture if the over-allotment option wa not exercised in full or in part by the underwriters (see Note 4).

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

2

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

Three and Six Months Ended June 30, 2021

 

    Class A Ordinary
Shares
  Class B Ordinary
Shares
   

Additional

Paid-in

    Accumulated     Total Shareholders’  
    Shares     Amount     Shares     Amount     Capital    

Deficit

    Equity  
Balance – January 1, 2021     2,142,658     $ 214       3,593,750     $ 359     $ 12,624,978     $ (7,625,541 )   $ 5,000,010  
                                                         
Change in value of Class A ordinary shares subject to possible redemption     (343,387 )     34      
     
      (3,433,836 )    
      (3,433,870 )
                                                         
Net income          
           
            3,433,863       3,433,863  
Balance – March 31, 2021     1,799,271     $ 180       3,593,750     $ 359     $ 9,191,142     $ (4,191,678 )   $ 5,000,003  
                                                         
Change in value of Class A ordinary shares subject to possible redemption     314,659       31                   3,146,559             3,146,590  
Net loss                                   (3,146,583 )     (3,146,583 )
                                                         
Balance – June 30, 2021     2,113,930     $ 211       3,593,750     $ 359     $ 12,337,701     $ (7,338,261 )   $ 5,000,010  
                                         

Three and Six Months Ended June 30, 2020

 
   
      Class A Ordinary
Share
      Class B Ordinary
Share
     

Additional

Paid-in

      Accumulated      

Total

Shareholders’

 
      Shares       Amount       Shares       Amount       Capital       Deficit       Equity  
Balance – January 1, 2020    
    $
     
    $
    $
    $
    $
 
                                                         
Issuance of Class B ordinary shares to Sponsor (1)
   
     
      3,593,750       359       24,641      
      25,000  
                                                         
Net loss          
           
     
      (7,320 )     (7,320 )
Balance – March 31, 2020    
    $
      3,593,750     $ 359     $ 24,641     $ (7,320 )   $ 17,680  
                                                         
Net loss                                   (792 )     (792 )
                                                         
Balance – June 30, 2020         $       3,593,750     $ 359     $ 24,641     $ (8,112 )   $ 16,888  

 

(1) Includes an aggregate of up to 468,750 Class B ordinary shares that were subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters (see Note 4).

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

3

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

    Six Months Ended
June 30,
 
    2021     2020  
Cash Flows from Operating Activities:            
Net income (loss)   $ 287,280     $ (8,112 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:                
Interest earned on marketable securities held in Trust Account     (21,680 )        
Payment of formation and operating costs through promissory note by Sponsor             1,707  
Change in fair value of derivative warrant liabilities     (886,572 )        
Changes in operating assets and liabilities:                
Prepaid expenses and other current assets     46,011          
Accounts payable and accrued expenses     65,932       6,405  
Net cash used in operating activities     (509,029 )    
 
                 
Cash Flows from Financing Activities:                
Proceeds from promissory notes             10,000  
Net cash provided by financing  activities           10,000  
                 
Net Change in Cash     (509,029 )     10,000  
Cash – Beginning     730,837      
 
Cash – Ending   $ 221,808     $ 10,000  
                 
Non-Cash Investing and Financing Activities:                
Change in redemption value of Class A ordinary shares subject to possible redemption   $ 287,280     $
 
Deferred offering costs paid directly by Sponsor from proceeds of issuance of Class B ordinary shares   $
    $ 25,000  
Deferred offering costs paid through promissory note – related party   $
    $ 164,623  
Deferred offering costs included in accrued offering costs   $
    $ 43,493  

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

4

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

Note 1 — Description of Organization and Business Operations

 

Malacca Straits Acquisition Company Limited (formerly known as Bilbao Street Limited, the “Company”) was incorporated in the Cayman Islands on July 17, 2019. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company changed its name to Malacca Straits Acquisition Company Limited on February 26, 2020.

 

While the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus its search on businesses which are currently part of Southeast Asian business conglomerates in the media, food processing, renewable energy and healthcare industries. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

 

All activity through June 30, 2021 relates to the Company’s formation, the initial public offering (the “Initial Public Offering”), which is described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

 

The registration statement for the Company’s Initial Public Offering was declared effective on July 14, 2020. On July 17, 2020, the Company consummated the Initial Public Offering of 12,500,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), generating gross proceeds of $125,000,000 which is described in Note 3.

 

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 4,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per warrant in a private placement to Malacca Straits Management Company Limited (the “Sponsor”), generating gross proceeds of $4,000,000, which is described in Note 4.

 

Following the closing of the Initial Public Offering on July 17, 2020, an amount of $125,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the United States, which has been 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 money market funds selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination and (ii) the redemption of any Public Shares properly tendered in connection with a shareholder vote to amend the Amended and Restated Memorandum and Articles of Association to (A) modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete its initial Business Combination within the Combination Period (as defined below) or (B) with respect to any other provision relating to shareholders’ rights or pre-Business Combination activity and (iii) the redemption of all of the Public Shares if the Company is unable to complete its initial Business Combination within the Combination Period (as defined below), subject to applicable law.

 

5

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

On July 21, 2020, the underwriters exercised their over-allotment option in full, resulting in an additional 1,875,000 Units issued for an aggregate amount of $18,750,000. In connection with the underwriters’ exercise of their over-allotment option, the Company also consummated the sale of an additional 375,000 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $375,000. A total of $18,750,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $143,750,000.

 

Transaction costs amounted to $8,394,954, consisting of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $488,704 of other offering costs. Transaction costs of $186,456 attributable to the warrants were expensed.

 

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 Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The rules of the stock exchange that the Company lists its securities on require that the Company’s initial Business Combination must be with one or more target businesses that have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the Company signing a definitive agreement in connection with the initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the issued and 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 complete a Business Combination successfully.

 

The Company will provide the holders of its issued and outstanding Public Shares (the “public shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The public shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination (initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and net of taxes payable), divided by the number of then issued and outstanding Public Shares. The per-share amount to be distributed to public shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

 

6

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

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 after payment of underwriters’ fees and commissions or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the initial Business Combination and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transactions is required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote any Founder Shares (as defined in Note 4) and Public Shares held by it in favor of approving a Business Combination. Additionally, public shareholders may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

 

Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.

 

The Sponsor and the Company’s officers and directors have agreed to waive: (i) their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of the Company’s Business Combination and (ii)  their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its initial Business Combination within the Combination Period (as defined below) (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete its initial Business Combination within the Combination Period).

 

The Company will have until January 17, 2022 to complete a Business Combination (the “Combination Period”). If the Company has not completed 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 not more than ten business days thereafter, redeem the 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 on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

 

7

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 5) 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 other 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 Initial Public Offering price per Unit ($10.00).

 

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect 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 Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, 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 public accounting firm), prospective target businesses and 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 Going Concern

 

As of June 30, 2021, the Company had approximately $222,000 in its operating bank accounts available to fund a Business Combination. In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”) (see Note 4).

 

In connection with the Company’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has determined that if the Company is unable to complete a Business Combination during the Combination Period, then the Company will cease all operations except for the purpose of liquidating. The Company’s liquidity requirements, date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period. The Company intends to complete a Business Combination before the mandatory liquidation date.

  

8

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

Note 2 — Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X 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 interim 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 (as amended) for the year ended December 31, 2020, as filed with the SEC on June 2, 2021. The interim results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

  

9

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

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 condensed 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 events. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.

 

Ordinary Shares Subject to Possible Redemption

 

The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2021 and December 31, 2020, 12,261,070 and 12,232,342, respectively, shares of Class A ordinary shares, subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s unaudited condensed balance sheet.

 

10

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

Offering Costs

 

Offering costs consist of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounting to $8,394,954 of which $8,208,498 were charged to shareholders’ equity upon the completion of the Initial Public Offering and $186,486 of costs allocated to the warrants were charged to operations.

 

Warrant Liability

 

The Company accounts for the warrants in accordance with the guidance contained in ASC 815-40 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The Private Placement Warrants are valued using a Modified Black Scholes Option Pricing Model and the Public Warrants (as defined below) for periods where no observable traded price was available were valued using a Monte Carlo simulation. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date.

 

Income Taxes

 

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2021, there were no unrecognized tax benefits 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 considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.

 

Net Income (Loss) Per Ordinary 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 income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company has not considered the effect of warrants sold in the initial public offering and private placement to purchase 11,562,500 shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

 

11

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

The Company’s unaudited condensed statements of operations includes a presentation of income (loss) per share for ordinary shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per share, basic and diluted, for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account of $4,541 and $21,680 for the three and six months ended June 30, 2021, respectively, by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net income (loss) per share, basic and diluted, for Class B non-redeemable ordinary shares is calculated by dividing the net income (loss), adjusted for income attributable to Class A redeemable ordinary shares of $4,541 and $21,680 for the three and six months ended June 30, 2021, respectively, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the period. Class B non-redeemable ordinary shares includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. At June 30, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, net income (loss) per share is the same as basic net income (loss) per share.

 

For the three and six months ended June 30, 2020, the weighted average shares were reduced for the effect of an aggregate 468,750 Class B ordinary shares that were subject to forfeiture in connection with the over-allotment option. At June 30, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per share is the same as basic net loss per share.

 

The following table reflects the calculation of basic and diluted net (loss) per ordinary share (in dollars, except per share amounts):

 

    Three
Months Ended
June 30,
2021
    Three
Months
Ended
June 30,
2020
    Six
Months
Ended
June 30,
2021
    Six
Months
Ended
June 30,
2020
 
                         
Redeemable Class A Ordinary Shares                        
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares                        
Interest Income from Trust Account   $ 4,541     $ -     $ 21,680     $ -  
Net Earnings   $ 4,541     $ -     $ 21,680     $ -  
                                 
Denominator: Weighted Average Redeemable Class A Ordinary Shares                                
Redeemable Class A Ordinary Shares, Basic and Diluted     14,375,000       -       14,375,000       -  
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares   $ 0.00     $ 0.00     $ 0.00     $ 0.00  
                                 
Non-Redeemable Class B Ordinary Shares                                
Numerator: Net Income (Loss) minus Redeemable Net Earnings                                
Net Income (Loss)   $ (3,146,583 )   $ (792 )   $ 287,280     $ (8,112 )
Redeemable Net Earnings     (4,541 )     -       (21,680 )     -  
Non-Redeemable Net Income (Loss)   $ (3,151,124 )   $ (792 )   $ 265,600     $ (8,112 )
                                 
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares                                
Non-Redeemable Class B Ordinary Shares, Basic and Diluted     3,593,750       3,125,000       3,593,750       3,125,000  
Earnings (loss)/Basic and Diluted Non-Redeemable Class B Ordinary Shares(1)   $ (0.88 )   $ (0.00 )   $ 0.07     $ (0.00 )

 

(1) Excludes an aggregate of up to 468,750 Class B ordinary shares that were subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters for the three and six month periods ended June 30, 2020.

 

12

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage of $250,000. The Company has 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 Measurement,” approximates the carrying amounts represented in the Company’s unaudited condensed balance sheet, primarily due to their short-term nature, except for derivative warrant liabilities (see Note 8). The Company invests in U.S treasury securities with are comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government treasury obligations, or a combination thereof.

 

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

 

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

 

Recent Accounting Pronouncements

 

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU 2020-06 did not impact the Company’s financial position, results of operations or cash flows.

 

The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. 

 

Note 3 — Initial Public Offering

 

Pursuant to the Initial Public Offering, the Company sold 12,500,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant (“Public Warrant”). On July 21, 2020, in connection with the underwriters’ exercise of the over-allotment option in full, the Company sold an additional 1,875,000 Units at a price of $10.00 per Unit. Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7).

 

13

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

Note 4 — Related Party Transactions

 

Founder Shares

 

In March 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 2,875,000 Class B ordinary shares (the “Founder Shares”). In June 2020, the Company declared a share dividend of 0.25 of a share for each Class B ordinary share in issue, resulting in the Sponsor holding an aggregate of 3,593,750 Founder Shares. All shares have been retroactively stated to reflect the share dividend. The Founder Shares included an aggregate of up to 468,750 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the number of Founder Shares would equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. In connection with the underwriters’ exercise of the over-allotment option in full, 468,750 Founder Shares are no longer subject to forfeiture. 

 

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any Founder Shares until the earlier to occur of (i) one year after the completion of the Company’s Business Combination or (ii) subsequent to a Business Combination, (x) if the last sale price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s Business Combination or (y) the date following the completion of a Business Combination on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

 

Private Placement

 

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased 4,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $4,000,000. On July 21, 2020, in connection with the underwriters’ exercise of the over-allotment option in full, the Sponsor purchased an additional 375,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant. The Private Placement Warrants were deemed to be derivative warrant liabilities at issuance and recorded at fair value. Amounts paid by the Sponsor in excess of the warrants fair value ($2,473,094) was treated as a capital contribution. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.

 

Promissory Note – Related Party

 

On March 31, 2020, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2020 or (ii) the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $246,330 was repaid upon the closing of the Initial Public Offering on July 17, 2020. On August 2, 2021 the Company entered into a Promissory Note agreement with its Sponsor for funding of $300,000. The unsecured promissory note is non-interest bearing and payable at the earlier of (i) the date on which the initial Business Combination is completed and (ii) the date of liquidation of the Company.

 

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 (the “Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of June 30, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Working Capital Loans.

 

Related Party Website Services

 

During the three and six months ended June 30, 2021, the Company received website services from a service provider in which the Company’s Chief Financial Officer and Director, Stanley Wang, is a minority shareholder. For the three and six months ended June 30, 2021, the Company incurred $nil and $13,900, respectively, for such services. There were no costs incurred for services under this agreement for the three and six-month periods ended June 30, 2020.

  

14

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

Note 5 — Commitments and Contingencies

 

Risks and Uncertainties

 

Management is continuing to evaluate 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 and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Registration Rights

 

Pursuant to a registration rights agreement entered into on July 14, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A 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) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities are entitled to make up to three demands, excluding short form 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 the 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. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Underwriting Agreement

 

The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $2,500,000 in the aggregate. As a result of the underwriters’ election to exercise their over-allotment in full on July 21, 2020, the underwriters were paid an additional cash underwriting discount of $375,000.

 

In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. A portion of such amount, not to exceed 25% of the total amount of the deferred fee held in the Trust Account, may be re-allocated or paid to unaffiliated thirds parties that assist the Company in consummating a Business Combination. The election to re-allocate or make any such payments to unaffiliated third parties will be solely at the discretion of the Company’s management team, and such unaffiliated third parties will be selected by the management team in their sole and absolute discretion.

 

Note 6 — Shareholders’ Equity

 

Preference Shares — The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2021 and December 31, 2020, there were no preference shares issued or outstanding.

 

Class A Ordinary Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. At June 30, 2021, there were 2,113,930 Class A ordinary shares issued and outstanding, excluding 12,261,070 Class A ordinary shares subject to possible redemption. At December 31, 2020, there were 2,142,658 Class A ordinary shares issued and outstanding, excluding 12,232,342 Class A ordinary shares subject to possible redemption.

 

Class B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 3,593,750 Class B ordinary shares issued and outstanding.

 

Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law; provided that only holders of Class B ordinary shares have the right to vote on the appointment of directors prior to the Company’s initial Business Combination.

 

15

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

  

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the sum of all ordinary shares issued and outstanding upon completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company).

 

Note 7 — Warrants

 

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) 12 months from the closing of the Initial Public Offering or (b) 30 days after the completion of a Business Combination. 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 Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No Public 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 the exercising holder, or an exemption is available.

 

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the Company’s Business Combination, the Company will use its best efforts to file, and within 60 business days following the Business Combination to have declared effective, a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy 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 best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

Once the warrants become exercisable, the Company may redeem the Public Warrants for redemption:

 

  in whole and not in part;

 

  at a price of $0.01 per warrant;

 

  upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and

 

  if, and only if, the last sale price of the Company’s Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, 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 we send to the notice of redemption to the warrant holders.

 

16

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

If and when the warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification. 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 share 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.

 

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

 

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (x) the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (y) the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees and (z) the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

 

Note 8 — Fair Value Measurements

 

At June 30, 2021, assets held in the Trust Account were comprised of $138 in cash and $143,837,286 held in money market funds, which were invested in U.S. treasury securities. During the period ended June 30, 2021, the Company did not withdraw any interest income from the Trust Account.

 

17

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

 

    Level     Fair
Value
 
Money Market Funds     1     $ 143,837,286  

 

At December 31, 2020, assets held in the Trust Account were comprised of $273 in cash and $143,815,471 in U.S. treasury securities. During the year ended December 31, 2020, the Company did not withdraw any interest income from the Trust Account.

 

The gross holding gains and fair value of held-to-maturity securities at December 31, 2020 are as follows:

 

    Held-To-Maturity   Level   Amortized
Cost
    Gross
Holding
Gain
    Fair
Value
 
December 31, 2020   U.S. Treasury Securities (Mature on 1/12/2021)   1   $ 143,815,471     $ 2,091     $ 143,817,562  

 

 

The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at June 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The fair value of the derivative warrant liabilities at June 30, 2021 are as follows:

 

Description   Level   Fair
Value
 
Derivative Warrant Liabilities – Public Warrants   1   $ 7,007,813  
Derivative Warrant Liabilities – Private Placement Warrants   3     4,291,875  
        $ 11,299,688  

 

The fair value of the derivative warrant liabilities at December 31, 2020 are as follows:

 

Description   Level   Fair
Value
 
Derivative Warrant Liabilities – Public Warrants   1   $ 7,546,875  
Derivative Warrant Liabilities – Private Placement Warrants   3     4,639,385  
        $ 12,186,260  

 

The Public Warrants were valued using quoted prices in an active market.

 

Private Warrants

 

The Private Placement Warrants were valued using a Modified Black Scholes Model, which is considered to be a Level 3 fair value measurement. The Modified Black Scholes Model uses a Black Scholes Option Pricing Model that is modified to reduce the value of the Private Placement Warrants for a discount on the lack of marketability of the instrument as well as for the probability of consummation of the Business Combination. The primary unobservable inputs utilized in determining the fair value of the Private Placement Warrants is the discount for lack of marketability and the probability of consummation of the Business Combination. The probability assigned to the consummation of the Business Combination was 80% which was determined based on a hybrid approach of both observed success rates of business combinations for special purpose acquisition companies and the Sponsors’ track record for consummating similar transactions.

 

18

 

 

MALACCA STRAITS ACQUISITION COMPANY LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

The key inputs into the Modified Black Scholes Model for the Private Warrants were as follows at June 30, 2021: 

 

Input   June 30,
2021
 
Expected term (years)     0.25  
Expected volatility     15.3 %
Risk-free interest rate     0.91 %
Exercise price   $ 11.50  
Fair value of the ordinary share stock price   $ 9.90  

 

The key inputs into the Modified Black Scholes Model for the Private Warrants were as follows at December 31, 2020:

 

Input   December 31,
2020
 
Expected term (years)     0.52  
Expected volatility     15.0 %
Risk-free interest rate     0.34 %
Exercise price   $ 11.50  
Fair value of the ordinary share price   $ 10.00  

 

The following table presents the changes in the fair value of the Private Placement Warrant liabilities:

 

    Private
Warrants
 
Fair value as of January 1, 2021   $ 4,639,385  
Change in fair value of derivative warrant liabilities     (347,510 )
Fair value as of June 30, 2021   $ 4,291,875  

 

Level 3 financial liabilities consist of the Private Placement Warrant liability for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

 

Note 9 — Business Combination

 

On March 22, 2021, the Company issued a press release announcing the execution of a definitive Business Combination Agreement, dated as of March 21, 2021 (the “Business Combination Agreement”), with PT Asia Vision Network, an Indonesian limited liability company (“AVN”) and indirect 99.99% owned subsidiary of PT MNC Vision Networks TBK, an Indonesian public limited liability company (“MNC Group”), the Sponsor and MNC Entertainment Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of AVN (“Merger Sub”). Pursuant to the Business Combination Agreement, subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of AVN, and with AVN becoming the successor US-listed company to the Company. For additional information including the definitive Business Combination Agreement, please refer to the Form 8-Ks filed with the SEC on March 25, 2021 and May 21, 2021.

  

Note 10 — Subsequent Events

 

The Company evaluated subsequent events and transactions that occurred after the unaudited condensed balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, except as disclosed, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

 

19

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 

 

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Malacca Straits Acquisition Company Limited. References to our “management” or our “management team” refer to our officers and directors, references to the “Sponsor” refer to Malacca Straits Management Company Limited. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

 

Special Note Regarding Forward-Looking Statements

 

This Quarterly Report includes “forward-looking statements” that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its initial public offering (the “Initial Public Offering”) filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 

Overview

 

We are a blank check company incorporated on July 17, 2019 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination (“Business Combination”) using cash from the proceeds of the Initial Public Offering and the sale of the private placement warrants (the “Private Placement Warrants”), our shares, debt or a combination of cash, equity and debt.

  

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

 

Recent Developments

 

On March 21, 2021, we entered into a definitive business combination agreement (“Business Combination Agreement”) with PT Asia Vision Network, an Indonesian limited liability company (“AVN”) and indirect 99.99% owned subsidiary of PT MNC Vision Networks TBK, an Indonesian public limited liability company (“MNC Group”), the Sponsor and MNC Entertainment Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of AVN (“Merger Sub”). Pursuant to the Business Combination Agreement, subject to the terms and conditions set forth therein, Merger Sub will merge with and into our company, with our company surviving the merger as a wholly-owned subsidiary of AVN, and with AVN becoming the successor US-listed company to our company.

 

Results of Operations

 

We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception to June 30, 2021 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and, after the Initial Public Offering, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee (the “Trust Account”). We incur 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 completing a Business Combination.

 

20

 

 

For the six months ended June 30, 2021, we had a net income of $287,280, which consisted of operating expenses of $620,974, primarily offset by interest earned on investments held in the Trust Account of $21,680 and the change in fair value of derivative warrant liabilities of $886,572.

 

For the three months ended June 30, 2021, we had a net loss of $3,146,583, which consisted of operating expenses of $329,817, primarily offset by interest earned on investments held in the Trust Account of $4,541 and the change in fair value of derivative warrant liabilities of $(2,821,308).

 

For the three and six months ended June 30, 2020, we had a net loss of $792 and $8,112, respectively, which consisted of operating expenses related to the Company’s formation.

 

Liquidity and Capital Resources

 

On July 17, 2020, we consummated the Initial Public Offering of 12,500,000 units, and on July 21, 2020, we consummated the sale of an additional 1,875,000 units which included the full exercise by the underwriters of their over-allotment option, at $10.00 per unit, generating aggregate gross proceeds of $143,750,000. Each unit consists of one Class A ordinary share of the Company, par value $0.0001 per share, and one-half of one redeemable warrant of the Company, with each whole warrant entitling the holder thereof to purchase one share of Class A ordinary share for $11.50 per share. Simultaneously with the closing of the Initial Public Offering and the full exercise of the over-allotment option, we consummated the sale of an aggregate of 4,375,000 Private Placement Warrants to our Sponsor at a price of $1.00 per warrant, generating aggregate gross proceeds of $4,375,000.

 

Following the Initial Public Offering, the exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of $143,750,000 was placed in the Trust Account. We incurred $8,394,954 in transaction costs, including $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $488,704 of other offering costs in connection with the Initial Public Offering and the sale of the Private Placement Warrants. Of these amounts, transactions costs of $186,456 attributable to the issuance of the warrants were expensed.

 

For the six months ended June 30, 2021, net cash used in operating activities was $509,029. Net income of $287,280 was offset by interest earned on marketable securities held in Trust Account of $21,680, and change in the fair value of derivative warrant liabilities of ($886,572). Changes in operating assets and liabilities provided $111,943 of cash from operating activities.

 

At June 30, 2021, we had cash and investments held in the Trust Account of $143,837,424. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable (if applicable) and deferred underwriting commissions) to complete our Business Combination. To the extent that our shares or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the post-Business Combination entity, make other acquisitions and pursue our growth strategies.

 

At June 30, 2021, we had cash of $221,808 held outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, properties or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

 

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants identical to the Private Placement Warrants, at a price of $1.00 per warrant at the option of the lender.

 

If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating and consummating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our 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 complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. On August 2, 2021, the Company entered into a promissory note with its Sponsor for funding of $300,000. The unsecured promissory note is non-interest bearing and payable at the earlier of (i) the date on which the initial Business Combination is completed and (ii) the date of liquidation of the Company. Such proceeds were used to fund working capital.

 

21

 

 

Going Concern

 

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s Accounting Standards Update 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have determined that if the Company is unable to complete a Business Combination by January 17, 2022 (the “Combination Period”), then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period. We intend to complete a Business Combination before the mandatory liquidation date.

 

Off-Balance Sheet Financing Arrangements

 

We had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements, as of June 30, 2021. 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

 

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below.

 

The underwriters are entitled to a deferred fee of $0.35 per unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement. A portion of such amount, not to exceed 25% of the total amount of the deferred fee held in the Trust Account, may be re-allocated or paid to unaffiliated thirds parties that assist us in consummating a Business Combination. The election to re-allocate or make any such payments to unaffiliated third parties will be solely at the discretion our management team, and such unaffiliated third parties will be selected by the management team in their sole and absolute discretion.

  

Pursuant to a registration rights agreement entered into on July 14, 2020, the holders of the Class B ordinary shares (“Founder Shares”), Private Placement Warrants and any warrants that may be issued upon conversion of working capital loans (the “Working Capital Loans”) (and any Class A 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) are entitled to registration rights requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). 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 the completion of a Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering the Company’s securities. We will bear the expenses incurred in connection with the filing of any such registration statements.

 

Critical Accounting Policies

 

The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

 

Derivative Warrant Liabilities

 

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. 

  

22

 

 

We issued 7,187,500 public warrants to investors in our Initial Public Offering and issued 4,375,000 Private Placement Warrants. All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of the public warrants was initially measured using a Monte Carlo simulation approach with subsequent measurements based off the quarterly trading price, whereas the fair value of the Private Placement Warrants was estimated initially and subsequently using a Modified Black Scholes Model.

 

Ordinary Shares Subject to Possible Redemption

 

We account for our ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption is presented as temporary equity, outside of the shareholders’ equity section of our unaudited condensed balance sheet.

 

Net Income (Loss) Per Ordinary Share

 

We apply the two-class method in calculating earnings per share. Net income per ordinary share, basic and diluted for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net loss per common share, basic and diluted for Class B non-redeemable ordinary shares is calculated by dividing the net income (loss), less income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the periods presented.

 

Recent Accounting Standards

 

In August 2020, the FASB issued Accounting Standard Update (ASU) No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity(Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. As permitted by the standard, the Company has elected to early adopt this standard in its first quarter of 2021 with no impact upon adoption.

 

Management does not believe that there are any other recently issued, but not yet effective, accounting standards, 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information otherwise required under this item.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Evaluation of Disclosure Controls and Procedures

 

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2021. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, solely due to the Company’s restatement of its financial statements to reclassify the Company’s warrants as described in the Form 10-K/A filed on June 2, 2021, a material weakness existed and our disclosure controls and procedures were not effective as of June 30, 2021.

 

Changes in Internal Control Over Financial Reporting

 

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There was no change in our internal control over financial reporting that occurred during the three months ended June 30, 2021, covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting as the circumstances that led to the restatement of our financial statements had been identified during the reporting period. Management has implemented remediation steps to address the material weakness and to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.

 

23

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

None.

 

ITEM 1A. RISK FACTORS.

  

There have been no material changes from the risk factors previously disclosed in our Amendment No. 1 to our annual report on Form 10-K/A filed with the SEC on June 2, 2021.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

For a description of the use of the proceeds generated in our Initial Public Offering and private placement, see Part I, Item 2 of this Quarterly Report. There has been no material change in the planned use of the proceeds from the Initial Public Offering and private placement as is described in the Company’s final prospectus related to the Initial Public Offering.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

ITEM 6. EXHIBITS.

 

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

 

No.   Description of Exhibit
2.1   Waiver and Amendment Letter Agreement No. 1, dated as of May 17, 2021, by and among Malacca Straits Acquisition Company Limited, PT MNC Vision Networks TBK, PT Asia Vision Network and Malacca Straits Management Company Limited, incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K with the SEC on May 21, 2021.
3.1   Amended and Restated Memorandum and Articles of Association, incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K with the SEC on July 17, 2020.
4.1   Warrant Agreement, dated July 14, 2020, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K with the SEC on July 17, 2020.
31.1*   Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**   Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**   Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*   XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*   Inline XBRL Taxonomy Extension Schema Document
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

 

* Filed herewith.

 

** Furnished.

 

24

 

 

SIGNATURES

 

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  MALACCA STRAITS ACQUISITION COMPANY LIMITED
     
Date: August 13, 2021   /s/ Kenneth Ng
  Name: Kenneth Ng
  Title: Chief Executive Officer and President
    (Principal Executive Officer)
     
Date: August 13, 2021   /s/ Stanley Wang
  Name:  Stanley Wang
  Title: Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 

25

 

 

00-0000000 468750 false --12-31 Q2 0001807594 0001807594 2021-01-01 2021-06-30 0001807594 us-gaap:CommonClassAMember 2021-08-12 0001807594 us-gaap:CommonClassBMember 2021-08-12 0001807594 2021-06-30 0001807594 2020-12-31 0001807594 us-gaap:CommonClassAMember 2021-06-30 0001807594 us-gaap:CommonClassAMember 2020-12-31 0001807594 us-gaap:CommonClassBMember 2021-06-30 0001807594 us-gaap:CommonClassBMember 2020-12-31 0001807594 2021-04-01 2021-06-30 0001807594 2020-04-01 2020-06-30 0001807594 2020-01-01 2020-06-30 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-12-31 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2020-12-31 0001807594 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001807594 us-gaap:RetainedEarningsMember 2020-12-31 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001807594 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001807594 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001807594 2021-01-01 2021-03-31 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-03-31 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-03-31 0001807594 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001807594 us-gaap:RetainedEarningsMember 2021-03-31 0001807594 2021-03-31 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-04-01 2021-06-30 0001807594 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0001807594 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-06-30 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-06-30 0001807594 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001807594 us-gaap:RetainedEarningsMember 2021-06-30 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-12-31 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2019-12-31 0001807594 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001807594 us-gaap:RetainedEarningsMember 2019-12-31 0001807594 2019-12-31 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001807594 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001807594 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001807594 2020-01-01 2020-03-31 0001807594 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-03-31 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2020-03-31 0001807594 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001807594 us-gaap:RetainedEarningsMember 2020-03-31 0001807594 2020-03-31 0001807594 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001807594 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2020-06-30 0001807594 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001807594 us-gaap:RetainedEarningsMember 2020-06-30 0001807594 2020-06-30 0001807594 us-gaap:IPOMember 2020-07-02 2020-07-17 0001807594 us-gaap:PrivatePlacementMember 2021-01-01 2021-06-30 0001807594 2020-07-02 2020-07-17 0001807594 us-gaap:OverAllotmentOptionMember 2020-07-05 2020-07-21 0001807594 us-gaap:PrivatePlacementMember 2020-07-21 0001807594 2020-07-05 2020-07-21 0001807594 us-gaap:WarrantMember 2021-06-30 0001807594 us-gaap:PrivatePlacementMember 2021-01-01 2021-06-30 0001807594 2020-01-01 2020-12-31 0001807594 us-gaap:IPOMember 2021-06-30 0001807594 us-gaap:IPOMember 2021-01-01 2021-06-30 0001807594 us-gaap:CommonClassAMember 2021-01-01 2021-06-30 0001807594 mlac:ClassARedeemableOrdinarySharesMember 2021-04-01 2021-06-30 0001807594 mlac:ClassARedeemableOrdinarySharesMember 2021-01-01 2021-06-30 0001807594 us-gaap:CommonClassBMember 2021-01-01 2021-06-30 0001807594 us-gaap:OverAllotmentOptionMember 2020-07-02 2020-07-21 0001807594 2020-07-02 2020-07-21 0001807594 mlac:FounderSharesMember 2020-03-02 2020-03-31 0001807594 us-gaap:CommonClassBMember 2020-03-02 2020-03-31 0001807594 us-gaap:DividendDeclaredMember 2020-06-30 0001807594 mlac:FounderSharesMember 2020-01-01 2020-06-30 0001807594 us-gaap:OverAllotmentOptionMember 2020-01-01 2020-06-30 0001807594 mlac:FounderSharesMember 2020-01-01 2020-06-30 0001807594 us-gaap:PrivatePlacementMember 2021-06-30 0001807594 2020-03-01 2020-03-31 0001807594 2020-07-01 2020-07-17 0001807594 us-gaap:SubsequentEventMember 2021-08-01 2021-08-02 0001807594 2020-03-30 2020-03-31 0001807594 us-gaap:OverAllotmentOptionMember 2021-01-01 2021-06-30 0001807594 us-gaap:WarrantMember 2021-01-01 2021-06-30 0001807594 us-gaap:CashAndCashEquivalentsMember 2021-06-30 0001807594 us-gaap:USTreasurySecuritiesMember 2021-06-30 0001807594 us-gaap:CashAndCashEquivalentsMember 2020-12-31 0001807594 us-gaap:USTreasurySecuritiesMember 2020-12-31 0001807594 us-gaap:FairValueInputsLevel1Member 2021-06-30 0001807594 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member 2020-01-01 2020-12-31 0001807594 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0001807594 us-gaap:FairValueInputsLevel1Member us-gaap:WarrantMember 2021-06-30 0001807594 us-gaap:FairValueInputsLevel3Member us-gaap:PrivatePlacementMember 2021-06-30 0001807594 us-gaap:FairValueInputsLevel1Member us-gaap:WarrantMember 2020-12-31 0001807594 us-gaap:FairValueInputsLevel3Member us-gaap:PrivatePlacementMember 2020-12-31 0001807594 2021-03-22 xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure
Malacca Straits Acquisit... (NASDAQ:MLAC)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024 Malacca Straits Acquisit... 차트를 더 보려면 여기를 클릭.
Malacca Straits Acquisit... (NASDAQ:MLAC)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024 Malacca Straits Acquisit... 차트를 더 보려면 여기를 클릭.