Feutune Light Acquisition (FLFV) - 2024 Q1 - Quarterly Report

Part I – FINANCIAL INFORMATION Item 1. Financial Statements The company, a special purpose acquisition company (SPAC), reported a net loss of $18,535 for the three months ended March 31, 2024, a significant shift from a net income of $611,090 in the same period of 2023, primarily due to lower interest income and higher operating costs. As of March 31, 2024, the company had $55.0 million in its trust account and a significant stockholders' deficit of ($7.16 million). The financial statements highlight a working capital deficit and a going concern uncertainty, contingent on the successful completion of a business combination by its deadline Consolidated Balance Sheet Highlights | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $35,622 | $18,330 | | Investments held in Trust Account | $55,000,411 | $54,075,630 | | Total Assets | $55,043,533 | $54,139,686 | | Liabilities & Equity | | | | Total Liabilities | $33,948,700 | $6,255,643 | | Class A common stock subject to possible redemption | $28,707,598 | $54,003,501 | | Total Stockholders' Deficit | ($7,162,765) | ($6,119,458) | Consolidated Statements of Operations Highlights | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Loss from Operations | ($513,689) | ($161,200) | | Interest earned on investment held in Trust Account | $700,936 | $1,092,899 | | Net Income (Loss) | ($18,535) | $611,090 | | Basic and diluted net loss per share (attributable to FLAC) | ($0.10) | ($0.09) | - The company is a blank check company formed to enter into a business combination. It has not commenced any operations and will not generate operating revenue until a business combination is completed[26][28] - On October 26, 2023, the company entered into a Merger Agreement with Thunder Power Holdings Limited (TPH), an electric vehicle technology innovator and manufacturer[39][40] - The company has extended its deadline to consummate a business combination multiple times through monthly extension payments, funded by the merger target, TPH. The current deadline is December 21, 2024, upon maximum extension[43][45][58] - In March 2024, 2,378,699 shares of Class A common stock were tendered for redemption, resulting in a $26,060,074 liability to redeeming shareholders[44][73] - Management has determined that the company's liquidity situation and the mandatory liquidation requirement if a business combination is not completed raise substantial doubt about its ability to continue as a going concern[59][176] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's status as a blank check company explicitly prohibited from merging with a China-based entity. The report details recent developments, including multiple extensions to the business combination deadline, now potentially until December 21, 2024, funded by merger partner Thunder Power Holdings Limited (TPH). The company's financial condition is precarious, with a working capital deficit of $30.0 million and reliance on loans from its sponsor and TPH. These factors lead to a substantial doubt about the company's ability to continue as a going concern - The company is a blank check company and 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[150][152] - On March 18, 2024, stockholders approved extending the business combination deadline up to nine times on a monthly basis until December 21, 2024, by depositing $60,000 into the trust account for each one-month extension[158] - The merger partner, Thunder Power Holdings Limited (TPH), has been funding the monthly extensions and will continue to do so. In exchange, the company issues unsecured promissory notes to TPH[159][163] Financial Condition Summary (as of March 31, 2024) | Metric | Value | | :--- | :--- | | Cash | $35,622 | | Working Capital Deficit | $30,034,328 | - The company's liquidity needs are met through payments from its Sponsor and proceeds from the Private Placement. To fund working capital deficiencies, the Sponsor or its affiliates may provide loans, up to $3,000,000 of which can be converted into units at $10.00 per unit[168][173] - Management has concluded that liquidity concerns and the mandatory liquidation requirement if a business combination is not completed raise substantial doubt about the company's ability to continue as a going concern[176] Quantitative and Qualitative Disclosures about Market Risk This section is not applicable to the company - The company has indicated that Quantitative and Qualitative Disclosures About Market Risk are not applicable[188] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded that as of March 31, 2024, they were not effective. No material changes to internal control over financial reporting occurred during the quarter - Based on an evaluation as of March 31, 2024, the company's chief executive officer and chief financial officer concluded that the company's disclosure controls and procedures were not effective[189] - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, its internal controls[192] Part II – OTHER INFORMATION Legal Proceedings The company is not a party to any material legal proceedings, and none have been threatened against it - The company is not currently a party to any material legal proceedings[194] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Prospectus, Annual Reports on Form 10-K, a prior Form 10-Q, and the Form S-4 registration statement related to the proposed business combination with Thunder Power - As of the date of this report, there have been no material changes to the risk factors disclosed in previous SEC filings, including the IPO prospectus and annual reports[195] Unregistered Sales of Equity Securities and Use of Proceeds On June 21, 2022, the company completed a private placement of 498,875 units at $10.00 per unit, generating gross proceeds of $4,988,750. The net proceeds from the IPO and the private placement, totaling $99,216,250, were placed in a trust account - Simultaneously with its IPO, the company sold 498,875 Private Placement Units at $10.00 per unit to its Sponsor and US Tiger, generating gross proceeds of $4,988,750[196] - Net proceeds of $99,216,250 from the IPO and Private Placement were placed in the Trust Account[199] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[200] Mine Safety Disclosures This section is not applicable to the company - Not applicable[201] Other Information The company reports no other information - None[202] Exhibits This section lists the exhibits filed as part of the quarterly report, including amendments to the merger agreement, various promissory notes, and officer certifications - The report includes exhibits such as amendments to the Merger Agreement with Thunder Power, promissory notes related to extension payments, and CEO/CFO certifications[204]