Thunder Power Holdings, Inc.(AIEV) - 2022 Q4 - Annual Report

Preliminary Information FORM 10-K Filing Details Feutune Light Acquisition Corporation's 2022 Form 10-K confirms its non-accelerated, smaller reporting, and emerging growth company status, with all required filings completed - Feutune Light Acquisition Corporation is filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2022[1] - The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company[6] - The registrant has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days[4] Forward Looking Statements The report contains forward-looking statements regarding the company's future expectations, business combination, personnel, financing, and financial performance post-IPO - The report includes forward-looking statements about the company's ability to complete its initial business combination, retain or recruit officers/employees, potential conflicts of interest, and ability to obtain additional financing[10] - These statements are based on current expectations and beliefs but involve risks and uncertainties that may cause actual results to differ materially[11] - The company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable laws[11] PART I ITEM 1. BUSINESS Feutune Light Acquisition Corporation is a blank check company (SPAC) formed to effect a business combination, completed its IPO in June 2022, raising $97.75 million, with proceeds placed in a trust account, and explicitly prohibits business combinations with entities based in or having majority operations in China - Feutune Light Acquisition Corporation is a blank check company formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination[15] - The company consummated its IPO on June 21, 2022, issuing 9,775,000 units, generating gross proceeds of $97,750,000, with $99,216,250 placed in a trust account[16] - The company will not undertake its initial business combination with an entity based in or having the majority of its operations in China (including Hong Kong and Macau)[15][19] - On March 21, 2023, the Sponsor deposited $977,500 into the Trust Account, extending the period to consummate an initial business combination by three months, from March 21, 2023, to June 21, 2023[25] Overview Feutune Light Acquisition Corporation is a Delaware-incorporated blank check company focused on identifying and acquiring a target business, explicitly excluding those based in or primarily operating in China - The company is a newly organized blank check company formed as a Delaware corporation for the purpose of effecting a business combination[15] - The company will not undertake its initial business combination with an entity based in or having the majority of the company's operations in China (including Hong Kong and Macau)[15] IPO and Private Placement Proceeds (June 21, 2022) | Item | Amount ($) | Source Chunk | | :--- | :--- | :--- | | IPO Gross Proceeds | $97,750,000 | 16 | | Private Placement Gross Proceeds | $4,988,750 | 16 | | Total Proceeds to Trust Account | $99,216,250 | 16 | Permission Required from the PRC Authorities for our Business Combination and Relevance of PRC Regulations As a Delaware corporation with no operations in China and U.S. citizen officers/directors, the company does not require permission from Chinese authorities for its operations or business combination, thus avoiding PRC regulations - The company is a Delaware corporation with no operations in China and all officers and directors are U.S. citizens, thus not requiring permission from Chinese authorities for business combinations[20] - The company's Certificate of Incorporation prohibits undertaking an initial business combination with any company based in or having the majority of its operations in China (including Hong Kong and Macau)[19] - The company does not consider itself a China-based issuer and is not subject to PRC foreign exchange control rules[22] Certain Potential Restrictions or Negative Impacts The company faces potential limitations in its search for a target due to perceived ties to China by some management/sponsor members, and CFIUS review could delay or block a U.S. business combination - Some management and sponsor members have historical ties to China/Hong Kong, which might negatively impact the perception of potential non-China/non-Hong Kong-based target companies[23] - Two members of the sponsor are Hong Kong citizens and U.S. permanent residents, potentially subjecting proposed business combinations with U.S. businesses in regulated industries to CFIUS review[24] - CFIUS review could limit the pool of potential targets, delay the business combination, or even lead to its prohibition, risking liquidation if not completed within the limited timeframe[24] Extension of the Period of Time to Consummate Initial Business Combination The company extended its period to complete an initial business combination by three months to June 21, 2023, facilitated by a $977,500 deposit into the Trust Account by the Sponsor - The company extended its business combination period by three months, from March 21, 2023, to June 21, 2023[25] Extension Payment Details | Item | Amount ($) | Source Chunk | | :--- | :--- | :--- | | Total Extension Payment | $977,500 | 25 | | Sponsor Contribution | $600,000 | 28 | | Company Working Capital (Short-Term Loan to Sponsor) | $377,500 | 28 | - An unsecured, non-interest bearing promissory note was issued to the Sponsor for the Extension Payment, convertible into Private Units at $10.00 per unit upon business combination[26][27] Effecting the Initial Business Combination The company's strategy is to acquire targets that can grow revenue and earnings, explicitly excluding China-based entities, with a fair market value of at least 80% of the Trust Account assets - The business strategy is to identify and acquire potential targets that can materially grow revenue and earnings, excluding China-based entities[29] - The initial business combination must involve one or more target businesses with an aggregate fair market value of at least 80% of the assets held in the Trust Account[30] - Funds from the Trust Account can be used for consideration, general corporate purposes, or working capital post-combination, and additional financing may be obtained[31][32] Status as a Public Company The company's public status offers target businesses a more certain and cost-effective path to public listing, and as an 'emerging growth company,' it benefits from reduced reporting requirements - The company's existing public status offers target businesses an alternative to traditional IPOs, potentially being more certain and cost-effective[35] - The company is an 'emerging growth company' under the JOBS Act, allowing it to take advantage of certain exemptions from reporting requirements, such as auditor attestation and reduced executive compensation disclosures[37] - The company intends to use the extended transition period for complying with new or revised financial accounting standards[38] Financial Position With approximately $95.8 million available in the Trust Account for a business combination, the company offers target businesses liquidity, growth capital, or balance sheet strengthening, with flexibility in financing methods Funds Available for Business Combination | Item | Amount ($) | Source Chunk | | :--- | :--- | :--- | | Funds in Trust Account (initially) | $95,795,000 | 40 | | Deferred Underwriting Compensation | $3,421,250 | 40 | - The company offers target businesses options for liquidity, capital for growth, or balance sheet strengthening[40] - The company has the flexibility to use cash, debt, or equity securities, or a combination, for its initial business combination, but has not secured third-party financing[40] Lack of Business Diversification Post-business combination, the company's success will likely depend entirely on a single business, as it lacks resources to diversify operations, exposing it to significant adverse developments - After the initial business combination, the company's success may depend entirely on the future performance of a single business due to limited resources for diversification[41] - A lack of diversification could subject the company to negative economic, competitive, and regulatory developments in a single industry[41] Limited Ability to Evaluate the Target's Management Team The company acknowledges that its assessment of a target business's management may not be accurate, and the future management may lack the necessary skills for a public company - The company's assessment of a prospective target business's management may not be correct, and future management may lack the skills for a public company[42] - The future role of current management and board members in the target business is uncertain, and there's no assurance of recruiting additional skilled managers[42][43] Stockholders May Not Have the Ability to Approve our Initial Business Combination Stockholder approval for a business combination is not always required by Delaware law, though Nasdaq listing rules may mandate approval under specific conditions, with the company retaining discretion to seek approval Stockholder Approval Requirements for Transaction Types | Type of Transaction | Approval is Required (Delaware Law) | | :--- | :--- | | Purchase of assets | No | | Purchase of stock of target not involving a merger with the company | No | | Merger of target into a subsidiary of the company | No | | Merger of the company with a target | Yes | - Nasdaq listing rules require stockholder approval for significant share issuances (≥20%), transactions involving directors/officers/substantial stockholders with a 5% or greater interest, or transactions resulting in a change of control[45] - The company retains discretion to seek stockholder approval even when not legally required, based on factors like timing, cost, risk of disapproval, and legal complexities[46] Permitted Purchases of our Securities Founders, advisors, or their affiliates may purchase company shares in private or open market transactions to increase the likelihood of stockholder approval for a business combination or to meet closing conditions - Founders, advisors, or their affiliates may purchase shares in privately negotiated transactions or on the open market to increase the likelihood of stockholder approval or satisfy closing conditions for a business combination[47][49] - Such purchases would not use funds from the Trust Account and would comply with Regulation M and other federal securities laws[48][52] - These purchases could reduce the public 'float' and the number of beneficial holders, potentially impacting the listing or trading of securities[50] Redemption Rights for Public Stockholders upon Completion of the Initial Business Combination Public stockholders can redeem their shares for cash at a per-share price based on the Trust Account balance, anticipated to be approximately $10.15 per share, while founders waive their redemption rights and vote in favor of the business combination - Public stockholders have the right to redeem their shares for cash upon completion of the initial business combination, at a per-share price from the Trust Account, initially anticipated to be approximately $10.15[53] - Founders waive redemption rights for their Founder and Private Shares and have agreed to vote all their shares in favor of the business combination, potentially increasing the likelihood of approval[53][54] - Redemption is contingent on the company maintaining at least $5,000,001 in net tangible assets after such redemption and payment of underwriters' fees[56] Limitation on Redemption upon Completion of Initial Business Combination Public stockholders are restricted from redeeming more than 20% of the shares sold in the IPO to prevent undue influence and ensure the company can meet minimum net worth or cash requirements for a target business - Public stockholders are restricted from seeking redemption rights for more than an aggregate of 20% of the shares sold in the IPO ('Excess Shares')[58] - This restriction is intended to discourage stockholders from using redemption rights to force premium purchases or block business combinations, especially when a target requires minimum net worth or cash[58] - Stockholders retain the ability to vote all their shares, including Excess Shares, for or against the business combination[58] Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights Public stockholders exercising redemption rights must tender their certificates physically or electronically via DWAC prior to the tender offer close or business combination vote, ensuring an irrevocable election - Public stockholders exercising redemption rights must tender their certificates to the transfer agent prior to the tender offer close or business combination vote[59] - This delivery can be physical or electronic via the Depository Trust Company's DWAC System, with electronic delivery being advisable due to the short exercise period[59] - The requirement for prior delivery ensures that a redeeming holder's election is irrevocable once the business combination is approved, preventing an 'option window' post-completion[61] Redemption of Public Shares and Liquidation if no Initial Business Combination If the company fails to complete a business combination within 18 months of the IPO, it will liquidate, redeeming public shares at approximately $10.15 per share, with warrants expiring worthless - If no initial business combination is completed within 18 months of the IPO, the company will liquidate, redeeming public shares at a per-share price from the Trust Account[64] - Warrants and rights will expire worthless upon liquidation if no business combination is completed[64] - Founders waive their rights to liquidating distributions from the Trust Account for their Founder and Private Shares[65] - The company seeks waivers from vendors and service providers to protect the Trust Account, but cannot guarantee protection from all claims, and stockholders could potentially be liable for creditor claims in a dissolution[70][74] Competition The company faces intense competition from other blank check companies, private equity groups, and operating businesses for acquisition targets, many of whom possess greater financial and human resources - The company faces intense competition from other blank check companies, private equity groups, and operating businesses for acquisition targets[79] - Competitors often possess greater financial, technical, human, and other resources[79] - The company's limited financial resources, potential redemptions, and outstanding warrants may create a competitive disadvantage[79] Facilities The company's executive offices are located at 48 Bridge Street Building A, Metuchen, New Jersey 08840, and the current office space is considered adequate for its operations - The company's executive offices are located at 48 Bridge Street Building A, Metuchen, New Jersey 08840[80] - The current office space is considered adequate for current operations[92] Employees The company has three executive officers who devote time as needed for the business combination process and does not intend to have full-time employees before completing its business combination - The company has three executive officers: Mr. Xuedong (Tony) Tian (CEO), Dr. Lei Xu (Chairwoman and President), and Ms. Yuanmei Ma (CFO)[81] - Executive officers are not obligated to devote specific hours but intend to dedicate necessary time to the business combination process[81] - The company does not intend to have any full-time employees prior to the completion of its business combination[81] Periodic Reporting and Financial Information The company is subject to SEC reporting obligations and will provide audited financial statements of prospective target businesses in accordance with U.S. GAAP, also evaluating internal control procedures as required by the Sarbanes-Oxley Act - The company is subject to SEC reporting obligations under the Exchange Act, requiring annual, quarterly, and current reports[82][83] - Audited financial statements of prospective target businesses will be provided, likely requiring U.S. GAAP compliance, which may limit the pool of candidates[84] - The company will evaluate internal control procedures for the fiscal year ending December 31, 2023, as required by the Sarbanes-Oxley Act, acknowledging that target companies may not be compliant[85] Legal Proceedings There is no material litigation, arbitration, or governmental proceeding currently pending against the company or its management team, nor is the company aware of any legal exposure with a material adverse effect - There is no material litigation, arbitration, or governmental proceeding currently pending against the company or its management team[86] - The company is not aware of any legal proceeding, investigation, claim, or other legal exposure that has a more than remote possibility of having a material adverse effect[92] ITEM 1A. RISK FACTORS As a smaller reporting company, the registrant highlights key risks, including potential inability to complete a business combination with a U.S. target due to foreign investment regulations and CFIUS review, which could lead to liquidation - The company may be unable to complete an initial business combination with a U.S. target if it is subject to U.S. foreign investment regulations and CFIUS review, potentially leading to prohibition[87][88] - The risk arises because a key sponsor member is a Hong Kong citizen and U.S. permanent resident, potentially classifying the company as a 'foreign person' under CFIUS rules[88] - Failure to obtain required approvals within the limited timeframe could force liquidation, resulting in public stockholders receiving only $10.00 per share and warrants/rights expiring worthless[88] - Enforcing legal rights against officers and directors of the post-combination entity located outside the United States may be difficult for U.S. investors, especially given the lack of reciprocal recognition and enforcement treaties with the PRC[89][90] ITEM 1B. UNRESOLVED STAFF COMMENTS This item is not applicable to the company ITEM 2. PROPERTIES The company does not own any material real estate or physical properties; its principal executive offices are located at 48 Bridge Street, Building A, Metuchen, New Jersey 08840, which are considered adequate - The company does not own any real estate or other physical properties materially important to its operations[92] - The principal executive offices are located at 48 Bridge Street, Building A, Metuchen, New Jersey 08840, and are considered adequate[92] ITEM 3. LEGAL PROCEEDINGS The company is not currently involved in any material litigation or legal proceedings, nor is it aware of any investigations or claims that could have a material adverse effect - The company is not currently a party to any material litigation or other legal proceedings[92] - The company is not aware of any legal proceeding, investigation, claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on its business, financial condition, or results of operations[92] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the company PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The company's Units, Class A Common Stock, Warrants, and Rights began trading on Nasdaq in June and August 2022, with limited record holders, and it does not intend to pay cash dividends prior to a business combination - The company's Units (FLFVU), Class A Common Stock (FLFV), Warrants (FLFVW), and Rights (FLFVR) began trading on the Nasdaq Capital Market in June and August 2022[95] Holders of Record (March 15, 2023) | Security | Holders of Record | | :--- | :--- | | Class A Common Stock | 2 | | Class B Common Stock | 8 | | Units | 1 | | Separately Traded Warrants | 1 | | Separately Traded Rights | 1 | - The company has not paid cash dividends and does not intend to prior to the completion of an initial business combination, planning to retain any future earnings for business operations[97] - A private placement of 498,875 Private Units was completed simultaneously with the IPO, generating $4,988,750, with units sold to the Sponsor and US Tiger, subject to transfer restrictions[98] ITEM 6. [RESERVED] This item is reserved and not applicable to the company as a smaller reporting company ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The company, a blank check company, has no revenue and incurred losses from inception, relying on securities sales and sponsor loans, and faces substantial doubt about its ability to continue as a going concern due to liquidity needs and mandatory liquidation if no business combination is completed by June 21, 2023 - The company is a blank check company with no revenue, incurring losses from inception, and relies on securities sales and sponsor loans[103] - The IPO on June 21, 2022, generated $97,750,000, with $99,216,250 placed in a trust account[104] - The business combination period was extended to June 21, 2023, by a $977,500 deposit into the Trust Account by the Sponsor[107] - Management has determined that liquidity concerns and mandatory liquidation raise substantial doubt about the company's ability to continue as a going concern[121] Results of Operations From inception (January 19, 2022) through December 31, 2022, the company's activities were limited to formation, IPO, and evaluating business combination candidates, resulting in a net income of $537,881 from non-operating interest income - The company's activities from inception to December 31, 2022, were limited to formation, IPO, and evaluating business combination candidates, with no operating revenues[111] - Non-operating income is generated from interest on investments held in the Trust Account[111] Financial Performance (Inception to Dec 31, 2022) | Metric | Amount ($) | | :--- | :--- | | Net Income | $537,881 | | Interest Earned on Trust Account | $1,309,248 | | Loss from Operations | $(508,379) | | Income Taxes | $262,988 | Liquidity and Capital Resources and Going Concern As of December 31, 2022, the company had $546,632 in cash and $623,347 in working capital, but faces substantial doubt about its ability to continue as a going concern due to potential insufficient operational funds and mandatory liquidation if a business combination is not completed by June 21, 2023 Liquidity Position (December 31, 2022) | Metric | Amount ($) | | :--- | :--- | | Cash | $546,632 | | Working Capital | $623,347 | - The company's liquidity needs were satisfied through initial sponsor payments and proceeds from the IPO and Private Placement[113] - Substantially all funds in the Trust Account are intended for the business combination, with funds outside the Trust Account used for identifying and evaluating targets[116][117] - Management has determined that liquidity concerns and mandatory liquidation raise substantial doubt about the company's ability to continue as a going concern[121][271] Off-Balance Sheet Financing Arrangements As of December 31, 2022, the company had no off-balance sheet arrangements, obligations, assets, or liabilities, and has not engaged in transactions creating relationships with unconsolidated entities or special purpose entities - As of December 31, 2022, the company had no obligations, assets, or liabilities considered off-balance sheet arrangements[121] - The company has not participated in transactions creating relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements[121] Contractual Obligations As of December 31, 2022, the company had no long-term debt or lease obligations, with its primary contractual obligation being a $3,421,250 deferred underwriting compensation payable only upon the completion of a business combination - As of December 31, 2022, the company had no long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities[122] Contractual Obligations (December 31, 2022) | Obligation | Amount ($) | | :--- | :--- | | Deferred Underwriting Compensation | $3,421,250 | - The deferred underwriting compensation is payable to the underwriters solely upon the completion of the business combination[122] Critical Accounting Policies and Estimates The company's critical accounting policies involve estimates for financial statement preparation, particularly concerning investments held in the Trust Account, warrants, Class A Common Stock subject to redemption, and income taxes - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts[123] - Investments in the Trust Account are held in money market funds invested in U.S. Treasury securities, carried at fair value, with interest income recognized[123] - Warrants are accounted for as equity instruments, with fair value estimated using the Monte Carlo Model (e.g., IPO Warrants valued at $2.7 million, Private Placement Warrants at $0.1 million)[125][127] - Class A Common Stock subject to possible redemption is classified as temporary equity and presented at redemption value ($10.25 per share as of Dec 31, 2022)[128] - Income taxes are accounted for under ASC 740, recognizing deferred tax assets and liabilities, with a valuation allowance established when realization is not more likely than not[132] Recent Accounting Pronouncements The company adopted ASU 2020-06 on January 1, 2023, which simplifies accounting for convertible debt and equity-linked instruments, without a material effect on its financial statements - The company adopted ASU 2020-06 on January 1, 2023, which aims to reduce the complexity of accounting for convertible debt and other equity-linked instruments[138] - The adoption of ASU 2020-06 did not have a material effect on the company's financial statements[138] - Management does not believe any other recently issued, but not effective, accounting standards would materially affect its financial statements[139] ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, the company is not required to provide disclosures under this item ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The company's financial statements and related notes are included elsewhere in this Annual Report, starting on page F-1 - The company's financial statements and notes are included starting on page F-1 of this Annual Report[140] ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES In October 2022, Friedman combined with Marcum, leading to Marcum's appointment as the new auditor, with no disagreements on accounting principles or financial disclosure during Friedman's tenure - In October 2022, Friedman combined with Marcum, and Marcum was subsequently appointed as the company's independent registered public accounting firm[140] - Friedman had issued reports for the company's IPO, expressing uncertainty about the company's ability to continue as a going concern[141][142] - There were no disagreements with Friedman on accounting principles, financial statement disclosure, or auditing scope/procedure, nor any 'reportable events' during their service period[143] - Neither the company nor anyone on its behalf consulted with Marcum regarding accounting principles, audit opinions, or disagreements prior to their engagement[145] ITEM 9A. CONTROLS AND PROCEDURES As of December 31, 2022, the company's disclosure controls and procedures were effective, but a material weakness in accounting for complex equity instruments related to its IPO rendered internal control over financial reporting ineffective - As of December 31, 2022, the company's disclosure controls and procedures were evaluated and concluded to be effective[147] - Management determined that the company did not maintain effective internal control over financial reporting as of December 31, 2022, due to a material weakness in accounting for complex equity instruments related to the IPO[152] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the controls during the quarter ended December 31, 2022[154] Evaluation of Disclosure Controls and Procedures The company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective as of December 31, 2022, acknowledging that controls provide only reasonable assurance - The company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective as of December 31, 2022[147] - Disclosure controls and procedures provide only reasonable, not absolute, assurance and are subject to inherent limitations and resource constraints[148] Management's Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, but as of December 31, 2022, a material weakness in accounting for complex equity instruments rendered controls ineffective, despite management's belief that financial statements are fairly presented - Management is responsible for establishing and maintaining adequate internal control over financial reporting, designed to provide reasonable assurance regarding financial reporting reliability[149][151] - As of December 31, 2022, management determined that the company did not maintain effective internal control over financial reporting due to a material weakness in accounting for complex equity instruments related to the IPO[152] - Despite the material weakness, management believes the financial statements fairly present the company's financial position, results of operations, and cash flows[152] Changes in Internal Control over Financial Reporting There have been no material changes in the company's internal control over financial reporting during the quarter ended December 31, 2022 - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2022[154] ITEM 9B. OTHER INFORMATION There is no other information to disclose under this item ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS This item is not applicable to the company PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The company's leadership includes executive officers and independent directors, with an Audit Committee and Compensation Committee, but potential conflicts of interest exist due to officers' and directors' affiliations with other entities Directors and Executive Officers | Name | Age | Position | | :--- | :--- | :--- | | Xuedong (Tony) Tian | 51 | Chief Executive Officer, Director | | Lei Xu | 46 | Chairwoman and President | | Yuanmei Ma | 51 | Chief Financial Officer | | Kevin Vassily | 56 | Director | | David Ping Li | 57 | Director | | Michael Davidov | 48 | Director | - Mr. Vassily, Mr. Li, and Mr. Davidov are determined to be independent directors according to NASDAQ listing standards[166] - The company has an Audit Committee (chaired by Mr. Li, an audit committee financial expert) and a Compensation Committee (chaired by Mr. Vassily), both consisting of independent directors[167][169] - Potential conflicts of interest exist due to officers' and directors' fiduciary or contractual obligations to other entities, including other SPACs and US Tiger Securities, Inc., which may compete for acquisition opportunities[177][180][184] Director Independence A majority of the company's board of directors must be independent under NASDAQ listing standards, with Mr. Vassily, Mr. Li, and Mr. Davidov designated as independent directors - A majority of the board of directors must be independent as per NASDAQ listing standards[166] - Mr. Vassily, Mr. Li, and Mr. Davidov are determined to be 'independent directors'[166] Audit Committee The Audit Committee consists of independent directors Mr. Vassily, Mr. Li (Chairman), and Mr. Davidov, with Mr. Li designated as an 'audit committee financial expert,' overseeing independent auditors and related party transactions - The Audit Committee members are Mr. Vassily, Mr. Li (Chairman), and Mr. Davidov, all independent directors[167] - Mr. Li qualifies as an 'audit committee financial expert'[168] - The committee's functions include appointing and overseeing independent auditors, pre-approving services, reviewing auditor independence, and approving related party transactions[168] Compensation Committee The Compensation Committee, comprising Mr. Vassily (Chairman), Mr. Li, and Mr. Davidov, reviews and approves executive compensation and incentive plans, primarily focusing on business combination-related compensation prior to a merger - The Compensation Committee members are Mr. Vassily (Chairman), Mr. Li, and Mr. Davidov[169] - Key functions include reviewing and approving CEO and other executive officer compensation, reviewing executive compensation policies, and administering incentive plans[169][170] - Prior to the business combination, the committee will primarily review and recommend compensation arrangements related to the combination, as no cash compensation is paid to existing officers/directors for pre-combination services[171] Director Nominations The company does not have a standing nominating committee; instead, a majority of independent directors may recommend director nominees, with the board considering various qualifications - The company does not have a standing nominating committee; a majority of independent directors may recommend nominees[173] - The board considers educational background, diversity of professional experience, business knowledge, integrity, reputation, independence, and wisdom when evaluating director nominees[175] Code of Ethics The company has adopted a code of ethics applicable to all executive officers, directors, and employees, codifying business and ethical principles and requiring avoidance of conflicts of interest - A code of ethics has been adopted, applying to all executive officers, directors, and employees[176] - The code codifies business and ethical principles and requires avoidance of conflicts of interest[176] Conflicts of Interest Conflicts of interest may arise as affiliates of the company's founders may compete for acquisition opportunities, and officers and directors have fiduciary obligations to other entities, potentially requiring them to present business opportunities elsewhere first - Affiliates of the company's founders may compete for acquisition opportunities, and investment ideas generated within the founders' network may be directed to other entities[177] - Officers and directors have existing fiduciary or contractual obligations to other entities, which may require them to present business opportunities to those entities before the company[180] - The company's amended and restated certificate of incorporation renounces interest in corporate opportunities unless expressly offered to a person solely in their capacity as a company director or officer and suitable for the company[180][183] - Founders have agreed to vote their Founder Shares, Private Shares, and any Public Shares purchased in favor of the business combination[181][186] Section 16(a) Beneficial Ownership Reporting Compliance Based on a review of forms furnished, the company believes that all Section 16(a) reports required to be filed by executive officers, directors, and greater than 10% beneficial owners were timely filed for the fiscal year ended December 31, 2022 - All Section 16(a) forms required to be filed by executive officers, directors, and greater than 10% beneficial owners were timely filed for the fiscal year ended December 31, 2022[188] ITEM 11. EXECUTIVE COMPENSATION The company has no employment agreements with executive officers and has not paid cash compensation for services rendered, but the Sponsor transferred 505,000 Founder Shares to officers, directors, and the secretary as compensation - The company has not entered into employment agreements with executive officers and has not paid cash compensation for services rendered[189][190] - The Sponsor transferred 505,000 Founder Shares to officers, directors, and the secretary as compensation prior to the IPO closing[190] - Officers, directors, or their affiliates will be reimbursed for out-of-pocket expenses incurred in identifying potential target businesses and performing due diligence[190] - Post-business combination, directors or management team members who remain with the company may be paid consulting or management fees, with amounts determined by the combined company's board[191] Employment Agreements The company has not entered into any employment agreements with its executive officers and has not made any agreements to provide benefits upon termination of employment - The company has not entered into any employment agreements with its executive officers[189] - No agreements have been made to provide benefits upon termination of employment[189] Executive Officers and Director Compensation No cash compensation has been paid to officers or directors for services, but 505,000 Founder Shares were transferred from the Sponsor to officers and directors, and out-of-pocket expenses will be reimbursed - No cash compensation has been received by officers or directors for services rendered to the company[190] Founder Shares Transferred to Officers and Directors | Recipient | Founder Shares Transferred | | :--- | :--- | | Mr. Xuedong (Tony) Tian (CEO) | 141,000 | | Dr. Lei Xu (Chairwoman & President) | 153,000 | | Ms. Yuanmei Ma (CFO) | 141,000 | | Ms. De Mi (Secretary) | 10,000 | | Mr. Kevin Vassily (Independent Director) | 20,000 | | Mr. David Ping Li (Independent Director) | 20,000 | | Mr. Michael Davidov (Independent Director) | 20,000 | - Officers, directors, and their affiliates will be reimbursed for out-of-pocket expenses incurred on the company's behalf[190] - After the business combination, directors or management team members may receive consulting or management fees from the combined company, with amounts determined by the post-combination board[191] ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS This section details the beneficial ownership of the company's Common Stock by significant holders and management, with Feutune Light Sponsor LLC and Sau Fong Yeung as the largest beneficial owners, and outlines transfer restrictions on Founder and Private Shares - The table sets forth beneficial ownership of Common Stock by over 5% owners, officers, directors, and the group as a whole[194] Beneficial Ownership of Common Stock (as of Annual Report Date) | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership of Class A Common Stock | Approximate Percentage of outstanding Class A Common Stock | Amount and Nature of Beneficial Ownership of Class B Common Stock | Approximate Percentage of Outstanding Class B Common Stock | Approximate Percentage of Outstanding All Common Stock (as converted) | | :--- | :--- | :--- | :--- | :--- | :--- | | Feutune Light Sponsor LLC | 478,875 | 4.63% | 1,938,750 | 79.34% | 18.76% | | Sau Fong Yeung | 478,875 | 4.63% | 1,938,750 | 79.34% | 18.76% | | Sam Yu | 198,155 | 1.92% | 802,241 | 32.83% | 7.76% | | Verakin JX (U.S.) Inc. | 82,565 | - | 334,267 | 13.68% | 3.23% | | Xuedong (Tony) Tian | - | - | 117,030 | 4.79% | 1.10% | | Lei Xu | - | - | 126,990 | 5.20% | 1.20% | | Yuanmei Ma | - | - | 117,030 | 4.79% | 1.10% | | Kevin Vassily | - | - | 20,000 | * | * | | David Ping Li | - | - | 20,000 | * | * | | Michael Davidov | - | - | 20,000 | * | * | | De Mi | - | - | 8,300 | * | * | - Founder Shares and Private Shares are subject to transfer restrictions, with specific lock-up periods (e.g., 50% of Founder Shares for six months post-combination or earlier if stock price reaches $12.50, remaining 50% for six months post-combination)[200] - Founders or affiliates may loan funds (up to $3,000,000) for transaction costs, convertible into Private Shares at $10.00 per share upon business combination[201] ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The Sponsor acquired Founder Shares for $25,000 and transferred 505,000 to management and directors, and a private placement of 498,875 Private Units was completed with the Sponsor and US Tiger, with the company's related party policy requiring audit committee review and approval of such transactions - The Sponsor acquired 2,443,750 Founder Shares for $25,000, and transferred 505,000 of these to officers, directors, and the secretary[203][204] - The transferred Founder Shares are subject to a performance condition (occurrence of a Business Combination) for compensation expense recognition[205] - A private placement of 498,875 Private Units was completed with the Sponsor and US Tiger for $4,988,750, with these units subject to transfer restrictions[206] - The company has adopted a code of ethics and its audit committee is responsible for reviewing and approving related party transactions to minimize conflicts of interest[215][216] Founder Shares and Private Units The Sponsor initially acquired 2,443,750 Founder Shares for $25,000, subsequently transferring 505,000 to management and directors, and a private placement of 498,875 Private Units was completed with the Sponsor and US Tiger - The Sponsor acquired 2,443,750 Founder Shares for $25,000[203] - 505,000 Founder Shares were transferred to officers, directors, and the secretary, with a fair value of $776,235, recognized as compensation upon business combination[204][205] - A private placement of 498,875 Private Units was completed with the Sponsor and US Tiger for $4,988,750[206] - Founder Shares and Private Units are subject to transfer restrictions, including lock-up periods post-business combination[207] Promissory Note On February 2, 2022, the Sponsor loaned the company up to $500,000 for IPO expenses via a non-interest bearing, unsecured promissory note, which was repaid on June 21, 2022 - The Sponsor loaned the company up to $500,000 for IPO expenses on February 2, 2022[209] - The loan was non-interest bearing, unsecured, and had an outstanding balance of $280,000 prior to the IPO[209] - The loan was repaid on June 21, 2022, with no outstanding balance as of December 31, 2022[209] Working Capital Loans The Sponsor or its affiliates may provide working capital loans of up to $3,000,000 to finance transaction costs for a business combination, convertible into Private Shares at $10.00 per share upon completion - The Sponsor or its affiliates may loan the company funds (up to $3,000,000) for working capital or transaction costs related to a business combination[210] - Such loans may be convertible into Private Shares at $10.00 per share at the lender's option upon completion of the business combination[210] - As of December 31, 2022, the company had no borrowings under the working capital loans[211] Others Post-business combination, management team members may receive consulting or management fees, and the company has a registration rights agreement for various shares, with a code of ethics and audit committee review to manage related party transactions - After the initial business combination, management team members who remain with the company may be paid consulting, management, or other fees from the combined company[212] - The company has a registration rights agreement for Private Shares, working capital loan shares, and Founder Shares[213] - The company's code of ethics and audit committee review process are in place to manage and approve related party transactions and minimize conflicts of interest[215][216] RELATED PARTY POLICY The company has not yet adopted a formal policy for reviewing related party transactions, but its code of ethics requires avoiding conflicts of interest, and the audit committee is responsible for reviewing and approving such transactions - The company has not yet adopted a formal policy for the review, approval, or ratification of related party transactions[214] - A code of ethics requires avoiding conflicts of interest, and the audit committee is responsible for reviewing and approving related party transactions[215][216] - Procedures are intended to determine if related party transactions impair director independence or present conflicts of interest[217] - To minimize conflicts, the company requires an independent opinion for affiliated business combinations and limits finder's fees, reimbursements, or cash payments to founders prior to completion of an initial business combination[218] ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES This section details the public accounting fees paid to Friedman and Marcum for services rendered from inception through December 31, 2022, with audit fees paid to both firms, and services approved by either the board of directors or the audit committee - Public accounting fees were paid to Friedman and Marcum for services from January 19, 2022, through December 31, 2022[221] Public Accounting Fees (Inception to Dec 31, 2022) | Firm | Service | 2022 Fees ($) | | :--- | :--- | :--- | | Friedman LLP | Audit Fees | $54,000 | | Marcum LLP | Audit Fees | $12,000 | - Services prior to the audit committee's formation (June 16, 2022) were approved by the board of directors; subsequent services were approved by the audit committee[224] Public Accounting Fees The company incurred audit fees from Friedman LLP ($54,000) and Marcum LLP ($12,000) for professional services related to the audit of annual financial statements and statutory/regulatory filings for the period from inception through December 31, 2022 Public Accounting Fees (Inception to Dec 31, 2022) | Firm | Service | 2022 Fees ($) | | :--- | :--- | :--- | | Friedman LLP | Audit Fees | $54,000 | | Marcum LLP | Audit Fees | $12,000 | - Audit fees cover professional services for the audit of annual financial statements and services related to statutory and regulatory filings, including the IPO[223] Pre-Approval of Services Due to the audit committee's formation on June 16, 2022, services rendered before this date were approved by the board of directors, while all subsequent services have been approved by the audit committee - The audit committee was formed on June 16, 2022, so not all services were pre-approved by the committee[224] - Services prior to the audit committee's formation were approved by the board of directors[224] - All services subsequent to the formation of the audit committee have been approved by the audit committee[224] PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES This section lists the financial statements required to be included in the Annual Report on Form 10-K and provides an index of exhibits, with all supplemental schedules omitted as the information is either included in the financial statements or notes, or is not required/applicable - The financial statements required for this Annual Report are included in Item 8[226] - All supplemental schedules have been omitted as the information is included in the financial statements or notes, or is not required/applicable[226] - The exhibit index includes documents such as the Underwriting Agreement, Amended and Restated Certificate of Incorporation, Bylaws, Specimen Certificates, Warrant Agreement, Right Agreement, Registration Rights Agreement, Private Placement Units Purchase Agreements, Indemnity Agreements, Promissory Notes, Code of Ethics, and various certifications[227][228] ITEM 16. FORM 10-K SUMMARY This item indicates that there is no Form 10-K Summary provided Financial Statements Report of Independent Registered Public Accounting Firm Marcum LLP audited Feutune Light Acquisition Corp.'s financial statements, issuing an unqualified opinion but highlighting a 'going concern' uncertainty due to dependence on completing a business combination and insufficient cash/working capital - Marcum LLP audited the financial statements of Feutune Light Acquisition Corp. for the period from January 19, 2022 (inception) through December 31, 2022[234] - The auditors issued an unqualified opinion, stating the financial statements present fairly, in all material respects, the financial position and results of operations in conformity with U.S. GAAP[234] - An explanatory paragraph highlights a 'going concern' uncertainty due to the company's dependence on completing a business combination and insufficient cash/working capital, raising substantial doubt about its ability to continue[235] Balance Sheet As of December 31, 2022, Feutune Light Acquisition Corporation reported total assets of $101,240,621, primarily from investments held in the Trust Account ($100,525,498), total liabilities of $3,832,932, and a total stockholders' deficit of $(2,797,902) Balance Sheet (December 31, 2022) | Item | Amount ($) | | :--- | :--- | | Assets: | | | Cash | $546,632 | | Prepaid expenses | $168,491 | | Investments held in Trust Account | $100,525,498 | | Total Assets | $101,240,621 | | Liabilities: | | | Accrued expenses | $91,776 | | Franchise tax payable | $56,918 | | Income taxes payable | $194,636 | | Deferred tax liability | $68,352 | | Deferred underwriters' discount | $3,421,250 | | Total Liabilities | $3,832,932 | | Temporary Equity: | | | Class A common stock subject to possible redemption | $100,205,591 | | Stockholders' Deficit: | | | Class A common stock | $56 | | Class B common stock | $244 | | Accumulated deficit | $(2,798,202) | | Total Stockholders' Deficit | $(2,797,902) | | Total Liabilities, Temporary Equity and Stockholders' Deficit | $101,240,621 | Statement of Income For the period from inception through December 31, 2022, the company reported a net income of $537,881, driven by $1,309,248 in interest earned on Trust Account investments, offset by operating and tax expenses Statement of Income (Inception to Dec 31, 2022) | Item | Amount ($) | | :--- | :--- | | Formation and operating costs | $451,461 | | Franchise tax expenses | $56,918 | | Loss from Operations | $(508,379) | | Interest earned on investments held in Trust Account | $1,309,248 | | Income before income taxes | $800,869 | | Income taxes | $262,988 | | Net Income | $537,881 | | Basic and diluted net income per share, common stock subject to possible redemption | $0.81 | | Basic and diluted net loss per share, common stock attributable to Feutune Light Acquisition Corporation | $(1.49) | Statement of Changes in Stockholders' Deficit For the period from inception through December 31, 2022, the company's stockholders' deficit changed from $0 to $(2,797,902), influenced by IPO proceeds, offering costs, and reclassification of redeemable common stock Statement of Changes in Stockholders' Deficit (Inception to Dec 31, 2022) | Item | Class A Shares | Class A Amount ($) | Class B Shares | Class B Amount ($) | Additional Paid-in Capital ($) | Accumulated Deficit ($) | Total Stockholders' Deficit ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of January 19, 2022 (inception) | - | $ - | - | $ - | $ - | $ - | $ - | | Founder shares issued to initial stockholder | - | - | 2,443,750 | $244 | $24,756 | - | $25,000 | | Sale of public units through public offering | 9,775,000 | $978 | - | - | $97,749,022 | - | $97,750,000 | | Sale of private placement shares | 498,875 | $50 | - | - | $4,988,700 | - | $4,988,750 | | Issuance of representative shares | 60,000 | $6 | - | - | $517,809 | - | $517,815 | | Offering costs | - | - | - | - | $(6,411,757) | - | $(6,411,757) | | Reclassification of common stock subject to redemption | (9,775,000) | $(978) | - | - | $(93,829,247) | - | $(93,830,225) | | Accretion of carrying value to redemption value | - | - | - | - | $(9,193,929) | $(3,336,083) | $(12,530,012) | | Net Income | - | - | - | - | - | $537,881 | $537,881 | | Balance as of December 31, 2022 | 558,875 | $56 | 2,443,750 | $244 | $2,797,902 | $(2,798,202) | $(2,797,902) | Statement of Cash Flows For the period from inception through December 31, 2022, the company experienced a net change in cash of $546,632, with significant cash inflows from financing activities offset by outflows from investing and operating activities Statement of Cash Flows (Inception to Dec 31, 2022) | Cash Flow Activity | Amount ($) | | :--- | :--- | | Net Cash Used in Operating Activities | $(528,176) | | Net Cash Used in Investing Activities | $(99,216,250) | | Net Cash Provided by Financing Activities | $100,291,058 | | Net Change in Cash | $546,632 | | Cash, End of Period | $546,632 | - Operating activities resulted in a net cash outflow, with interest earned on Trust Account investments being a significant non-cash adjustment[248] - Investing activities primarily involved the purchase of investments held in the Trust Account[248] - Financing activities were the main source of cash, driven by proceeds from the public offering and private placement[248] Notes to Financial Statements The notes provide detailed information on the company's organization, significant accounting policies, and financial instruments, inclu