IPO and Trust Account - The company completed its initial public offering on June 26, 2020, raising gross proceeds of $40 million from the sale of 4,000,000 units at $10.00 per unit[30]. - A total of $46 million is currently held in the trust account for the benefit of public stockholders, following additional sales and deposits[32]. - The amount in the trust account as of December 31, 2022, was $10.77 per public share[63]. - Following the shareholder vote to amend the articles of association, 633,792 ordinary shares were redeemed, leaving approximately $41.5 million in the trust account, equating to about $10.46 per public share[85]. - After a subsequent extension, 1,025,281 shares were redeemed, resulting in approximately $31.2 million remaining in the trust account, or about $10.60 per public share[86]. - A further redemption of 2,375,991 shares left approximately $6.1 million in the trust account, with a pro rata portion of about $10.72 per public share[87]. - Following the latest extension, 159,203 shares were redeemed, leading to approximately $4.4 million in the trust account, or about $10.77 per public share[88]. - The company will distribute the remaining funds in the trust account to public shareholders if the initial business combination is not completed by the deadline[89]. - The company plans to enter voluntary liquidation after the redemption of public shares, which will not delay the payment of redemption proceeds[90]. - The company has agreed to waive redemption rights for initial shareholders regarding founder shares and private units if the initial business combination is not completed by April 23, 2023[91]. - The redemption price for warrants is set at $0.01 per warrant, contingent on the ordinary shares' last sale price being at least $16.50 for 20 trading days within a 30-day period[92]. - If the initial business combination is not consummated by April 23, 2023, rights and warrants will expire worthless[93]. - The estimated per-share redemption amount upon dissolution is approximately $10.46, but may be less due to creditor claims[96]. - As of December 31, 2022, the company had access to approximately $55,789 not placed in the trust account to cover potential claims[101]. Business Combination Strategy - The company primarily targets growth businesses with a total enterprise value between $200 million and $300 million, aiming for significant revenue and earnings growth[28]. - The company seeks to acquire businesses that can benefit from being publicly traded and have the potential for strong free cash flow generation[30]. - The company entered into a Merger Agreement with Nukkleus Inc., which will result in Nukkleus becoming the Nasdaq-listed parent company upon completion[36]. - The company intends to utilize cash from its IPO and private placement, along with potential new debt, for its initial business combination[41]. - The target business or businesses must have a collective fair market value equal to at least 80% of the value of the trust account at the time of the agreement[53]. - The company anticipates structuring its initial business combination to acquire 100% of the equity interest or assets of the target business[54]. - The company may not pursue an initial business combination with another blank check company or a similar company with nominal operations[50]. - The company intends to use substantially all funds held in the Trust Account for the Business Combination and working capital for the target business[141]. - A Business Combination requires the Company to have net tangible assets of at least $5,000,001 and a majority of shares voted in favor of the transaction[220]. Financial Performance and Position - For the year ended December 31, 2022, the company reported a net loss of $967,614, with operating costs amounting to $1,202,399[133]. - The net loss for the year ended December 31, 2022, was $967,614, compared to a net loss of $599,127 for the year ended December 31, 2021, reflecting an increase of approximately 61.6%[200]. - Operating costs increased to $1,202,399 in 2022 from $670,916 in 2021, indicating a rise of approximately 79.2%[200]. - Total liabilities rose to $3,976,493 as of December 31, 2022, compared to $2,115,409 as of December 31, 2021, marking an increase of approximately 88%[197]. - The accumulated deficit increased to $(7,800,252) as of December 31, 2022, from $(5,712,294) as of December 31, 2021, reflecting a deterioration in financial position[197]. - The company had cash of $6,110,807 at the end of 2022, a significant increase from $283,403 at the end of 2021[197]. - The company has not generated any operating revenues to date and does not expect to do so until after completing a Business Combination[132]. - The company has no long-term debt or off-balance sheet financing arrangements as of December 31, 2022[147]. - The company raised gross proceeds of $40,000,000 from its Initial Public Offering on June 26, 2020, with 4,000,000 units sold at $10.00 per unit[212]. - The company incurred $2,069,154 in transaction costs related to the Initial Public Offering, including $1,610,000 in underwriting fees[138]. - The company accounts for ordinary shares subject to possible redemption as temporary equity, reflecting uncertain future events[153]. - The weighted average shares outstanding decreased to 4,636,222 in 2022 from 6,111,000 in 2021, representing a reduction of approximately 24.1%[200]. Management and Operations - The management team has extensive operational experience across various sectors, including biopharmaceuticals, consumer retail, and information technology, which aids in identifying acquisition opportunities[25]. - The management team emphasizes the importance of due diligence in evaluating prospective target businesses, including financial reviews and management assessments[29]. - The company has a proactive sourcing strategy focusing on companies in sectors experiencing significant outbound investment in the Asia-Pacific region[26]. - The company will conduct extensive due diligence on prospective target businesses, including meetings with management and facility inspections[51]. - The company may seek to recruit additional managers to supplement the incumbent management of the target business after the initial business combination[58]. - Management assessed the effectiveness of internal controls over financial reporting and identified a material weakness related to complex financial instruments as of December 31, 2022[164]. - The company plans to enhance internal controls and processes to better comply with complex accounting standards, although no assurance can be provided regarding the effectiveness of these initiatives[165]. - There were no changes in internal control over financial reporting that materially affected the company during the most recent fiscal quarter[167]. - Management does not believe that any recently issued accounting standards will have a material effect on financial statements[158]. - The company maintains disclosure controls to ensure timely and accurate reporting in SEC filings, which were deemed effective as of December 31, 2022[162]. - The company has not experienced any disagreements with accountants on accounting and financial disclosure[161]. Market and Competition - The company faces intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[106]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[111]. - The company intends to remain an emerging growth company until it meets specific revenue or market value thresholds[113]. - The company does not own any real estate or physical properties essential to its operations, currently leasing office space at no cost[116]. - There is no ongoing litigation against the company or its officers[117].
Nukkleus(NUKK) - 2022 Q4 - Annual Report