A SPAC I Acquisition (ASCA) - 2022 Q4 - Annual Report

Forward-Looking Statements This section outlines forward-looking statements on business combination, financing, and performance, noting inherent risks that could cause actual results to differ - Forward-looking statements cover the company's ability to complete its initial business combination, success in retaining or recruiting officers/employees, potential conflicts of interest, ability to obtain additional financing, pool of prospective target businesses, Nasdaq listing, and financial performance[10] - These statements are based on current expectations but involve risks and uncertainties (some beyond control) that may cause actual results or performance to be materially different from projections, as described under 'Risk Factors'[11] PART I ITEM 1. Business Overview A SPAC I Acquisition Corp. is a blank check company that completed its IPO in February 2022, entered a merger agreement with NewGenIvf Limited, and faced significant redemptions after a shareholder-approved extension IPO and Private Placement Details | Event | Date | Units/Warrants | Price per Unit/Warrant ($) | Gross Proceeds ($) | Trust Account Deposit ($) | | :---- | :--- | :------------- | :--------------------- | :------------- | :-------------------- | | IPO | Feb 17, 2022 | 6,000,000 Units | 10.00 | 60,000,000 | 60,600,000 | | Private Placement | Feb 17, 2022 | 2,875,000 Warrants | 1.00 | 2,875,000 | Included in IPO deposit | | Over-Allotment Option | Mar 1, 2022 | 900,000 Units | 10.00 | 9,000,000 | 9,090,000 | | Additional Private Warrants | Mar 1, 2022 | 270,000 Warrants | 1.00 | 270,000 | Included in Over-Allotment deposit | | Total Trust Account (as of Mar 1, 2022) | | | | | 69,690,000 | - The Company entered into a merger agreement with NewGenIvf Limited on February 15, 2023, for an aggregate consideration of $50,000,000, to be paid entirely in newly issued Class A ordinary shares of the Purchaser at a price of $10.00 per share[17] - Shareholders approved an extension to complete a business combination up to October 17, 2023, resulting in 3,272,305 Class A ordinary shares tendered for redemption and reducing the funds in the Trust Account to approximately $37.3 million[21] - The company is an emerging growth company, eligible for exemptions from certain reporting requirements and can elect to delay compliance with new financial accounting standards[44][45] ITEM 1A. Risk Factors As a smaller reporting company, the registrant is not required to disclose risk factors, but the auditor's report expresses substantial doubt about the company's going concern ability, and potential 'foreign person' classification could impede U.S. business combinations - The independent registered public accounting firm's report expresses substantial doubt about the company's ability to continue as a going concern, citing cash of $54,719 and working capital of $9,721 as of December 31, 2022, alongside significant ongoing costs[48] - If considered a 'foreign person,' the company might be unable to complete an initial business combination with a U.S. target company due to U.S. foreign investment regulations or review by CFIUS, potentially limiting the pool of target businesses and causing delays[49][50][51] ITEM 1B. Unresolved Staff Comments This item is not applicable to the company - This item is not applicable[53] ITEM 2. Properties The company's executive offices are located in Singapore and are deemed adequate for its current operations - The company maintains its executive offices at Level 39, Marina Bay Financial Centre, Tower 2, 10 Marina Boulevard, Singapore 018983, and considers the space adequate for current operations[53] ITEM 3. Legal Proceedings The company is not currently involved in any material litigation or legal proceedings and is unaware of any potential legal exposures that could significantly impact its business or financial condition - The company is not currently a party to any material litigation or other legal proceedings and is unaware of any legal exposure with a more than remote possibility of a material adverse effect[54] ITEM 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[55] PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units, ordinary shares, warrants, and rights commenced trading on Nasdaq in February and March 2022, with significant redemptions in February 2023 reducing the Trust Account balance to approximately $37.3 million - The company's units (ASCAU) began trading on Nasdaq on February 15, 2022, with ordinary shares (ASCA), warrants (ASCAW), and rights (ASCAR) commencing separate trading around March 17, 2022[56] Shareholder and Redemption Data (as of March 1, 2023) | Metric | Value | | :----- | :---- | | Class A Ordinary Shares Issued & Outstanding | 5,421,695 | | Holders of Record | 4 | | Shares Tendered for Redemption (Feb 2023) | 3,272,305 | | Redemption Price per Share | ~$10.29 | | Aggregate Redemption Amount | ~$33.7 million | | Percentage of Public Shares Redeemed | ~47.4% | | Funds Remaining in Trust Account (post-redemption) | ~$37.3 million | - The company has not paid any cash dividends on its ordinary shares to date and does not intend to prior to the completion of its initial business combination[58] ITEM 6. [Reserved] This item is reserved and contains no information - This item is reserved[60] ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section reviews the company's financial condition and operations, including the proposed merger, recent redemptions, and a net income of $500,650 for 2022, while highlighting going concern uncertainty and key accounting policies Results of Operations For the year ended December 31, 2022, the company reported a net income of $500,650, primarily due to interest income from trust account investments, offsetting general and administrative expenses, contrasting with a net loss in the prior period Financial Performance (Year Ended Dec 31, 2022 vs. Inception-Dec 31, 2021) | Metric | Year Ended Dec 31, 2022 ($) | Period from Inception (Apr 29, 2021) through Dec 31, 2021 ($) | | :----- | :---------------------- | :-------------------------------------------------------- | | Net Income (Loss) | 500,650 | (2,250) | | General & Administrative Expenses | 504,907 | 2,250 | | Interest Income | 1,005,557 | 0 | Liquidity and Going Concern As of December 31, 2022, the company's cash outside the Trust Account was $54,719, with working capital of $9,721, leading management to identify substantial doubt about its ability to continue as a going concern due to limited capital and business combination uncertainty Liquidity Snapshot (as of Dec 31, 2022) | Metric | Amount ($) | | :----- | :----- | | Cash outside Trust Account | 54,719 | | Working Capital | 9,721 | | Marketable Securities in Trust Account | 70,694,702 | - On January 27, 2023, the Sponsor loaned the company $500,000 via a non-interest bearing promissory note, payable upon the completion of a Business Combination, to address liquidity needs[75] - Management has determined that conditions raise substantial doubt about the company's ability to continue as a going concern, primarily due to limited capital and the uncertainty of completing a Business Combination by October 17, 2023[77] Off-Balance Sheet Financing Arrangements As of December 31, 2022, the company had no off-balance sheet arrangements, liabilities, or assets and does not engage in transactions with unconsolidated entities for off-balance sheet financing - The company has no obligations, assets, or liabilities considered off-balance sheet arrangements as of December 31, 2022[78] Contractual Obligations As of December 31, 2022, the company had no long-term debt or lease obligations but has commitments related to registration rights for certain warrant holders and a deferred underwriting commission of $2,415,000 payable upon business combination closing - As of December 31, 2022, the company did not have any long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities[80] - Holders of founder shares, private placement warrants, and warrants from Working Capital Loans are entitled to registration rights[81] Underwriting Commissions | Type | Amount ($) | Payment Condition | | :--- | :----- | :---------------- | | Cash Underwriting Discount | 1,380,000 | Paid upon IPO closing and full over-allotment exercise | | Deferred Commission | 2,415,000 | Payable upon closing of a Business Combination | - The company issued 69,000 Class A ordinary shares to Chardan and/or its designees as Representative's Ordinary Shares[83] Critical Accounting Policies The company's critical accounting policies include deferred offering costs, warrant instruments, and Class A ordinary shares subject to possible redemption, with a change in March 2022 to the accretion method for redeemable shares, and net income (loss) per share calculated using the two-class method - Deferred offering costs consist of direct IPO costs charged to shareholders' equity upon IPO completion or to operations if the IPO is unsuccessful[85] - Warrants are accounted for as equity-classified instruments based on an assessment of their specific terms and applicable authoritative guidance (ASC 480 and ASC 815)[86][257] - Class A ordinary shares subject to possible redemption are classified as temporary equity, with changes in redemption value recognized immediately as deemed dividends (reduction to retained earnings or additional paid-in capital)[88][250] - In March 2022, the company changed its accounting method for redeemable shares to the accretion method, recognizing changes in redemption value over an expected 12-month period leading up to a Business Combination[89][91][251][253] - Net income (loss) per share is presented using the two-class method, allocating undistributed income (loss) ratably based on the weighted average number of shares outstanding between redeemable and non-redeemable shares[92][254] Recent Accounting Standards The company is assessing the impact of ASU 2020-06, effective for smaller reporting companies after December 15, 2023, and does not anticipate other recently issued pronouncements to materially affect its financial statements - The company is assessing ASU 2020-06, effective for smaller reporting companies after December 15, 2023, which simplifies accounting for convertible debt and equity-classified contracts, and amends diluted EPS guidance[93] - Management does not believe any other recently issued, but not yet effective, accounting pronouncements would have a material effect on the financial statements[94] JOBS Act As an 'emerging growth company' under the JOBS Act, the company has elected to delay the adoption of new accounting standards and benefits from exemptions from certain reporting requirements - The company qualifies as an 'emerging growth company' under the JOBS Act and has elected to delay the adoption of new or revised accounting standards to comply with private company effective dates[95] - This status provides exemptions from certain reporting requirements, including auditor attestation on internal controls over financial reporting and full executive compensation disclosure[96] 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 - As a smaller reporting company, the company is not required to make disclosures under this item[97] ITEM 8. Financial Statements and Supplementary Data This section incorporates by reference the audited financial statements and supplementary data, including the auditor's report which expresses substantial doubt about the company's ability to continue as a going concern - The financial statements, presented in conformity with U.S. GAAP, include Balance Sheets, Statements of Operations, Statements of Changes in Shareholders' Equity, Statements of Cash Flows, and Notes to Financial Statements[171][194] - The Report of Independent Registered Public Accounting Firm includes an explanatory paragraph expressing substantial doubt about the company's ability to continue as a going concern[195] ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There are no changes in or disagreements with accountants on accounting and financial disclosure to report - No changes in and disagreements with accountants on accounting and financial disclosure[99] ITEM 9A. Controls and Procedures As of December 31, 2022, management evaluated the company's disclosure controls and internal control over financial reporting as effective, with no material changes during the fiscal quarter, and no auditor attestation report due to emerging growth company status - As of December 31, 2022, the company's disclosure controls and procedures were evaluated as effective[100] - Management maintained effective internal control over financial reporting as of December 31, 2022, based on the COSO Internal Control — Integrated Framework (2013)[104] - An attestation report from the independent registered public accounting firm is not included due to the company's status as an emerging growth company[105] - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[106] ITEM 9B. Other Information No other information to report under this item - No other information to report[106] ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - This item is not applicable[106] PART III ITEM 10. Directors, Executive Officers and Corporate Governance This section details the company's four-member Board of Directors, including CEO Claudius Tsang and three independent directors, outlining their fiduciary duties under British Virgin Islands law and mechanisms to address potential conflicts of interest Directors and Executive Officers | Name | Age | Title | | :--- | :-- | :---- | | Claudius Tsang | 46 | Chief Executive Officer, Chief Financial Officer and Chairman | | Abuzzal Abusaeri | 48 | Independent Director | | Giang Nguyen Hoang | 36 | Independent Director | | John Brebeck | 58 | Independent Director | - The Board of Directors consists of four members, with the holder of the outstanding Class B ordinary share having the right to elect all directors prior to the initial business combination[113] - The board has determined that Abuzzal Abusaeri, Giang Nguyen Hoang, and John Brebeck are independent directors under applicable SEC and Nasdaq rules[116] - The company has three standing committees: an audit committee, a compensation committee, and a nominating committee, each comprised solely of independent directors[117] - Directors and officers owe fiduciary duties under British Virgin Islands law, including acting in good faith, exercising powers for conferred purposes, and avoiding conflicts of interest[125] - Potential conflicts of interest exist due to officers' and directors' fiduciary or contractual obligations to other entities, but the company's articles of association renounce interest in opportunities not expressly offered to them in their capacity as a director or officer of the company[128] ITEM 11. Executive Compensation The company has not entered into employment agreements with executive officers or paid cash compensation to date, but executive officers and directors will be reimbursed for out-of-pocket expenses related to business combination activities, subject to board and audit committee review - The company has not entered into employment agreements with executive officers and has not paid any cash compensation for services rendered to date[141][142] - Executive officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with activities on the company's behalf, with no limit on the amount and subject to review by the board and audit committee[142] ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of March 1, 2023, Claudius Tsang beneficially owned 31.8% of outstanding ordinary shares, with other institutional investors holding significant stakes, and founder shares and private warrants are subject to transfer restrictions and registration rights Beneficial Ownership (as of March 1, 2023) | Name | Ordinary Shares Beneficially Owned | Outstanding Ordinary Shares (%) | | :--- | :--------------------------------- | :------------------------------ | | Claudius Tsang | 1,725,000 | 31.8% | | All executive officers and directors as a group (4 individuals) | 1,725,000 | 31.8% | | A SPAC (Holdings) Acquisition Corp. | 1,725,000 | 31.8% | | Shaolin Capital Management LLC | 400,033 | 7.4% | | Polar Asset Management Partners Inc. | 655,600 | 12.0% | | Glazer Capital, LLC | 649,925 | 12.0% | | MMCAP International Inc. SPC | 500,000 | 9.2% | | Karpus Investment Management | 497,850 | 9.2% | - Founder shares and private warrants are subject to transfer restrictions and lock-up provisions, generally until the earlier of six months after the initial business combination or specific share price thresholds ($12.00 per share) are met[149] - Holders of founder shares, private warrants, and warrants that may be issued on conversion of working capital loans are entitled to registration rights, allowing them to demand the company register such securities for resale[150] ITEM 13. Certain Relationships and Related Transactions, and Director Independence This section details related party transactions, including share issuances, private warrant purchases, and a $500,000 promissory note from the sponsor, with the company's code of ethics and audit committee charter governing related party transaction review and affirming director independence - The company issued 2,875,000 Class B ordinary shares to its sponsor, A SPAC (Holdings) Acquisition Corp., which were later repurchased and cancelled, followed by the issuance of 2,300,000 Class A ordinary shares, with 575,000 subsequently cancelled[151] - The sponsor purchased 3,145,000 private warrants for $3,145,000, which are identical to public warrants but have certain registration rights and transfer restrictions[152] - On January 27, 2023, the company issued an unsecured promissory note for up to $500,000 to the Sponsor, which is non-interest bearing and convertible into warrants at $1.00 per warrant at the Sponsor's option[153][298] - The company has adopted a code of ethics and its audit committee charter requires review and approval of related party transactions to avoid conflicts of interest[160][161] - A majority of the company's Board of Directors are independent, as required by Nasdaq listing standards[165] ITEM 14. Principal Accountant Fees and Services The company dismissed Bernstein & Pinchuk LLP and engaged Marcum Bernstein & Pinchuk LLP (now Marcum Asia CPAs LLP) in March 2022, with audit fees totaling $65,790 for 2021 and $108,150 for 2022, and all services pre-approved by the audit committee - Bernstein & Pinchuk LLP was dismissed, and Marcum Bernstein & Pinchuk LLP (now Marcum Asia CPAs LLP) was engaged as the independent registered public accounting firm on March 10, 2022[166] Audit Fees Paid to Accounting Firms | Firm | Period | Audit Fees ($) | | :--- | :----- | :--------- | | Bernstein & Pinchuk LLP | Apr 29, 2021 - Dec 31, 2021 | 65,790 | | Bernstein & Pinchuk LLP | Jan 1, 2022 - Mar 10, 2022 | 26,135 | | Marcum Asia CPAs LLP | Mar 10, 2022 - Dec 31, 2022 | 108,150 | - No audit-related fees, tax fees, or other fees were paid to Bernstein & Pinchuk LLP or Marcum Asia CPAs LLP for the reported periods[168] - The audit committee pre-approves all auditing services and permitted non-audit services to be performed by the auditors[169] PART IV ITEM 15. Exhibits and Financial Statement Schedules This section lists the financial statements, including the Report of Independent Registered Public Accounting Firm, Balance Sheets, Statements of Operations, Statements of Changes in Shareholders' Equity, Statements of Cash Flows, and Notes to Financial Statements, along with an extensive exhibit index detailing various agreements and documents - The section includes financial statements (Balance Sheets, Statements of Operations, Statements of Changes in Shareholders' Equity, Statements of Cash Flows, and Notes) and an Exhibit Index[171] - Key exhibits include the Merger Agreement (dated Feb 15, 2023), Amended and Restated Memorandum and Articles of Association (Feb 14, 2023), Underwriting Agreement, Warrant Agreement, and Registration Rights Agreement[173][174][175][180][182] ITEM 16. Form 10-K Summary This item is not applicable to the company - This item is not applicable[189]