Alpha Star Acquisition Corporation(ALSAU) - 2023 Q1 - Quarterly Report

Part I. Financial Information Financial Statements The company reported a net income of $1.15 million for Q1 2023, primarily from trust account gains, but faces substantial doubt about its ability to continue as a going concern Balance Sheets (Unaudited) As of March 31, 2023, total assets were $120.7 million, primarily marketable securities in the trust account, with liabilities at $5.86 million and a stockholders' deficit of $5.79 million Balance Sheet Summary (Unaudited) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Marketable securities held in trust account | $120,639,708 | $118,228,816 | | Total current assets | $120,718,902 | $118,339,807 | | Total Assets | $120,718,902 | $118,339,807 | | Liabilities & Stockholders' Deficit | | | | Promissory note – related party | $2,683,331 | $1,533,332 | | Total current liabilities | $5,861,892 | $4,629,881 | | Ordinary shares subject to possible redemption | $120,647,208 | $118,228,816 | | Total stockholders' deficit | ($5,790,198) | ($4,518,890) | | Total Liabilities and Stockholders' Deficit | $120,718,902 | $118,339,807 | Statements of Operations (Unaudited) The company reported a net income of $1.15 million for Q1 2023, a turnaround from a net loss in 2022, driven by $1.27 million in interest and unrealized gains from trust account securities Quarterly Statement of Operations (Unaudited) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Formation and operational costs | $121,309 | $188,865 | | Total other income (from trust account) | $1,268,393 | $9,386 | | Net Income (Loss) | $1,147,084 | ($179,479) | | Basic and diluted net income (loss) per share (non-redeemable) | ($0.09) | ($0.01) | Statements of Changes in Stockholders' Deficit (Unaudited) The total stockholders' deficit increased to $5.79 million as of March 31, 2023, primarily due to adjustments for ordinary shares subject to redemption, despite the net income for the period Changes in Stockholders' Deficit (Q1 2023) | Description | Amount | | :--- | :--- | | Balance at December 31, 2022 | ($4,518,890) | | Subsequent measurement of ordinary shares subject to redemption | ($2,418,392) | | Net income | $1,147,084 | | Balance at March 31, 2023 | ($5,790,198) | Statements of Cash Flows (Unaudited) Net cash used in operating activities was $84,297 for Q1 2023, with financing activities providing $1.15 million from a sponsor loan, which was used for investing activities to extend the business combination deadline Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 | | :--- | :--- | | Net cash used in operating activities | ($84,297) | | Net cash used by investing activities | ($1,149,999) | | Net cash provided by financing activities | $1,149,999 | | Net decrease in cash | ($84,297) | | Cash at end of period | $26,694 | Notes to Unaudited Financial Statements The notes detail the company's nature as a blank check company, its LOI with Cyclebit Group, and management's determination of substantial doubt about its ability to continue as a going concern - The Company is a blank check company formed to effect a business combination, intending to focus on businesses connected to the Asian market[14][15] - On September 13, 2022, the Company entered into a non-binding letter of intent (LOI) for a business combination with Cyclebit Group, a global payments and SaaS provider[20] - Management has determined there is substantial doubt about the Company's ability to continue as a going concern, as it must consummate a business combination by September 15, 2023, or face liquidation[27] - The Company has issued three promissory notes to its Sponsor to fund extension fees and transaction costs, with an outstanding balance of $2,683,331 as of March 31, 2023[63][64][65] Management's Discussion and Analysis of Financial Condition and Results of Operations Management confirms the company has no operations or operating revenues, with Q1 2023 net income solely from trust account gains, highlighting significant liquidity concerns and reliance on sponsor loans - The company is a blank check company with no operations or operating revenues to date, focusing its activities on identifying a target for a Business Combination[90][92] Quarterly Results Comparison | Period | Net Income / (Loss) | Key Drivers | | :--- | :--- | :--- | | Q1 2023 | $1,147,084 | Interest and unrealized gains of $1,268,393 on trust account securities | | Q1 2022 | ($179,479) | Operating costs of $188,865 offset by minor interest income of $9,386 | - The company faces liquidity challenges and relies on non-obligatory loans from its Sponsor to fund working capital needs and extend the business combination deadline[101] As of March 31, 2023, sponsor promissory note balances were $2,683,331[102] - Key contractual obligations include a $10,000 monthly fee to the Sponsor for administrative services and a deferred underwriting fee of $2,875,000 payable upon closing a Business Combination[105][106] Quantitative and Qualitative Disclosures About Market Risk The company states it is not subject to material market or interest rate risk, as trust account proceeds are invested in short-term U.S. government securities or money market funds - The Company believes there is no material exposure to interest rate risk as funds in the Trust Account are invested in short-term U.S. government securities or money market funds investing in U.S. treasuries[114] Controls and Procedures As of March 31, 2023, management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer evaluated disclosure controls and procedures and concluded they were effective as of March 31, 2023[117] - No changes occurred in the company's internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[118] Part II. Other Information Legal Proceedings The company reports that it is not a party to any legal proceedings as of the filing date of the Form 10-Q - The Company is not party to any legal proceedings[120] Risk Factors The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[121] Unregistered Sales of Equity Securities and Use of Proceeds The company detailed the private placement of 330,000 units to its sponsor for $3.3 million and the use of $115 million in gross IPO proceeds, primarily placed into a trust account - Concurrently with the IPO, the Company sold 330,000 Private Units to its sponsor at $10.00 per unit, generating $3,300,000 in a private placement[122] - The IPO generated gross proceeds of $115,000,000[123] A total of $115,000,000 from the IPO and private placement was placed in a U.S.-based trust account[125] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[127] Mine Safety Disclosures This item is not applicable to the company - Not applicable[127] Other Information The company reports no other information for this item - None[127] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents Filed Exhibits | Exhibit No. | Description | | :--- | :--- | | 31.1 | Certification of Principal Executive Officer (Sec. 302) | | 31.2 | Certification of Principal Financial Officer (Sec. 302) | | 32.1 | Certification of Principal Executive Officer (Sec. 906) | | 32.2 | Certification of Principal Financial Officer (Sec. 906) | | 101 Series | Inline XBRL Documents | Signatures Signatures This section contains the required signatures for the quarterly report