FAT PROJECTS ACQUISITION CORP - Quarter Report: 2023 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 ☐

☒Quarterly Report

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2023

Fat Projects Acquisition Corp

(Exact name of registrant as specified in its charter)

27 Bukit Manis Road

Singapore, 099892

(Address of principal executive offices, including zip code)

(65) 8590-2056

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

As of May 12, 2023, there were 485,593 shares of the Company’s Class A Ordinary Shares, $0.0001 par value per share (the “Class A Shares”) (including 4,304 Class A Shares in unseparated units) and 2,875,000 of the Company’s Class B Ordinary Shares, $0.0001 par value per share issued and outstanding (the “Class B Shares”).

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 1 2 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒   No ☐

FAT PROJECTS ACQUISITION CORP.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FAT PROJECTS ACQUISITION CORP.

CONDENSED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed financial statements.

FAT PROJECTS ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these unaudited condensed financial statements.

FAT PROJECTS ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED AS OF MARCH 31, 2023

FOR THE THREE MONTHS ENDED MARCH 31, 2022

The accompanying notes are an integral part of these unaudited condensed financial statements.

FAT PROJECTS ACQUISITION CORP.

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS

The accompanying notes are an integral part of these unaudited condensed financial statements.

FAT PROJECTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Organization, Business Operation and Going Concern

Fat Projects Acquisition Corp (the “Company”) was incorporated as a Cayman Islands exempted company on April 16, 2021. The Company was incorporated for the purpose of effecting a merger, capital share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). As described below, the Company has selected a target for its initial business combination and entered into a Business Combination Agreement with that target.

As of March 31, 2023, the Company had not commenced any operations. All activity for the period from April 16, 2021 (inception) through March 31, 2023, relates to the Company’s formation and the Initial Public Offering (“IPO”) described below and since the closing of the IPO, the search for a prospective initial business combination, the negotiation of the Business Combination Agreement described below and the preparation and filing on October 5, 2022 with the Securities and Exchange Commission (the “SEC”) of a registration statement on Form S-4 with respect to the Business Combination and subsequent amendments thereto (as amended, the “Form S-4”). The Company will not generate any operating revenues until after the completion of its initial business combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

The Company’s sponsor is Fat Projects SPAC Pte Ltd, a Singapore corporation (the “Sponsor”).

The registration statement for the Company’s IPO was declared effective on October 12, 2021 (the “Effective Date”). On October 15, 2021, the Company’s consummated the IPO of 11,500,000 units at $10.00 per unit (the “Units”) (including the underwriters’ over-allotment option), which is discussed in Note 3 (the “IPO”), and the sale of 2,865,000 warrants (the “Private Placement Warrants”), each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor that closed simultaneously with the IPO.

The Company must complete one or more initial business combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with the initial business combination. However, the Company will complete the initial business combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.

Following the closing of the IPO, management has agreed that an amount equal to at least $10.00 per Unit sold in the IPO, including the proceeds of the Private Placement Warrants, are being held in a trust account (“Trust Account”) and will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its tax obligations and up to $100,000 of interest that may be used for its dissolution expenses, the proceeds from the IPO and the sale of the placement warrants will not be released from the Trust Account until the earliest to occur of: (a) the completion of the initial business combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial business combination or certain amendments to the Company’s charter prior thereto or to redeem 100% of the public shares if the Company does not complete its initial business combination within the Combination Period as defined below or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, and (c) the redemption of the public shares if the Company is unable to complete its initial business combination within the deadline specified in its Amended and Restated Articles and Memorandum of Association, as amended, which is currently by June 15, 2023, but which may be extended by the Company by up to seven additional 1-month periods to January 15, 2024 if the Company deposits or causes to be deposited $24,280 into the Trust Account for each 1-month extension (the “Combination Period”) subject to applicable law.

The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial business combination either (i) in connection with a shareholder meeting called to approve the initial business combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial business combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or share exchange listing requirements.

The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the Trust Account was initially $10.00 per public share, however, there is no guarantee that investors will receive $10.00 per share upon redemption. The per-share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters.

All ordinary shares subject to redemption are recorded at a redemption value and classified as temporary equity following the completion of the IPO, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if the Company seeks shareholder approval and a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.

The shareholders of the Company approved the First Amendment to the Amended and Restated Memorandum and Articles of Association of the Company (the “First Charter Amendment”) at a January 13, 2023 Shareholders Meeting, changing the structure and cost of the Company’s right to extend the date (the “Termination Date”) by which the Company must either (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “business combination”), or else (ii) cease its operations if it fails to complete such business combination, and redeem or repurchase 100% of the Company’s Class A ordinary shares included as part of the units sold in the IPO.

In connection with the approval of the First Charter Amendment on January 13, 2023, holders of 6,058,262 of the public shares exercised their right to redeem those shares for cash at an approximate price of $10.16 per share, for an aggregate of approximately $61.57 million, leaving 5,441,738 public shares outstanding after the January 13, 2023 shareholders meeting.

On January 17, 2023, February 15, 2023, March 21, 2023, the Company deposited three tranches of $312,900, for an aggregate of $938,700, into the Company’s Trust Account, which came from cash on hand of the Company and from proceeds of loans from shareholders of the Company’s Sponsor and other designees of the Company who received non-interest bearing, unsecured promissory notes in consideration for the loans and which enables the Company to extend the period of time it has to consummate its initial business combination by three one-month increments from January 15, 2023 to April 15, 2023.

On April 14, 2023, the shareholders of the Company approved the Second Amendment to the Amended and Restated Memorandum and Articles of Association of the Company (the “Second Charter Amendment”), to extend the Termination Date by up to nine (9) one-month extensions to January 15, 2024 (each of which is referred to as an “Extension”, and such later date, the “Extended Deadline”) provided that (i) the Company or its Sponsor (or any of either of their affiliates or permitted designees) will deposit on or prior to (i) in case of the first such extension, the deadline for the Company to consummate a Business Combination prior to such extension, or the next business day if such deadline is not a business day, and (ii) for each subsequent extension, the last day of the immediately preceding extension for each such extension, or the next business day if such last day is not a business day (each a “Deadline Date”) into the Trust Account the lesser of (x) $50,000 or (y) $0.05 per share for each Public Share outstanding as of the applicable Deadline Date for each such one-month extension until January 15, 2024 unless the closing of the Company’s initial business combination shall have occurred (the “Extension Payment”) in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination, which notes may be convertible at the option of the holder at any time after the consummation of the Company’s Initial Business Combination into warrants that are identical to the placement warrants (as defined in the registration statement) at a conversion price of $1.00 per warrant, and (ii) the procedures relating to any such extension, as set forth in the Trust Agreement, shall have been complied with.

In connection with the approval of the Second Charter Amendment on April 14, 2023, holders of 4,956,145 shares of Class A Ordinary Shares exercised their right to redeem those shares for cash at an approximate price of $10.46 per share, for an aggregate of approximately $51.82 million, leaving 485,593 public shares outstanding after the April 14, 2023 shareholders meeting.

On April 17, 2023 and May 15, 2023, the Company deposited two tranches of $24,280 into the Trust Account, to extend the period of time it has to consummate its initial business combination by two one-month periods from April 15, 2023 to June 15, 2023. In April 2023, the Company raised an additional $109,280, under the $1,000,000 Promissory Note Offering, for extension deposits.

If the Company is unable to complete the initial business combination by the Termination Date, the Company will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to the Company’s obligations under the laws of Cayman Islands to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete its initial business combination within Combination Period.

The Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to any Founder Shares and public shares held by them in connection with the completion of the initial business combination, (ii) waive their redemption rights with respect to any Founder Shares and public shares held by them in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial business combination or certain amendments to the Company’s charter prior thereto or to redeem 100% of the public shares if the Company does not complete its initial business combination within the Combination Period, or (B) with respect to any other provision relating to any rights of holders of the Company’s Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete its initial business combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its initial business combination within the prescribed time frame.

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per public share due to reductions in the value of the Trust Account, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor has no material assets. Therefore, the Company cannot assure you that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses. Our independent registered public accounting firm, our principal legal counsel and the underwriters of the offering, have not executed agreements with us waiving such claims to the monies held in the Trust Account.

The anchor investors (as defined in Note 3) will not be entitled to (i) redemption rights with respect to any Founder Shares held by them in connection with the completion of the initial business combination, (ii) redemption rights with respect to any Founder Shares held by them in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association in a manner that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company has not consummated an initial business combination within the Combination Period or (iii) rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete the initial business combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial business combination within the Combination Period).

Subject to the requirement that each anchor investor purchase 100% of the units allocated to it in the IPO, in connection with the closing of the IPO the Sponsor sold 75,000 founder shares to each anchor investor (750,000 founder shares in the aggregate) at their original purchase price of approximately $0.009 (See Note 6).

Merger

On August 26, 2022, the Company entered into a Business Combination Agreement with Avanseus Holdings Pte. Ltd., a Singapore private company limited by shares (“Avanseus”) (as may be amended and/or restated from time to time, the “Business Combination Agreement”).

The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Avanseus (other than the PIPE Investment as defined below, which will require further approval of each board of directors), subject to the approval of the Company’s shareholders.

The Business Combination Agreement provides for a series of transactions, pursuant to which, among other things, Avanseus’ shareholders will exchange all of their outstanding Avanseus shares in consideration for newly issued Company Class A Ordinary Shares (the “Share Exchange”), subject to the conditions set forth in the Business Combination Agreement, with Avanseus thereby becoming a wholly owned subsidiary of the Company (the Share Exchange and the other transactions contemplated by the Business Combination Agreement, together, the “Business Combination” or the “Proposed Transaction”). In connection with the Business Combination, the Company will change its corporate name to “Avanseus Holdings Corporation” (“New Avanseus”).

The Business Combination Agreement, prior to the Second BCA Amendment described below in Note 6, provided that the Company will use its commercially reasonable efforts to enter into and consummate subscription agreements in form and substance mutually acceptable to the Company and Avanseus with investors mutually reasonably acceptable to the Company and Avanseus pursuant to which such investors will agree to purchase up to an aggregate of $35 million of (i) the Company’s Series A Convertible Preference Shares, which shares will be convertible into the Company’s Class A Ordinary Shares, and/or (ii) the Company’s Class A Ordinary Shares, with such purchases to be consummated prior to or substantially currently with the closing of the Share Exchange (the “PIPE Investment”).

The Business Combination is expected to close in the second quarter of 2023, following the receipt of the required approval by the Company’s shareholders and the fulfillment of other customary closing conditions.

On October 3, 2022, the Company and Avanseus entered into a First Amendment to Business Combination Agreement (the “First BCA Amendment”) to amend the previously announced Business Combination Agreement dated August 26, 2022. The BCA Amendment amended the Original Business Combination Agreement to (1) add a mutual condition to the obligations of the Company and Avanseus to close the transactions contemplated in the Business Combination Agreement that holders of the Company’s Class A Ordinary Shares redeem an aggregate of at least 5,200,000 of such shares so that Avanseus will be the acquiror for accounting purposes at both the minimum and maximum redemption levels required to be disclosed in the Registration Statement on Form S-4 to be filed with the Commission pursuant to the Business Combination Agreement, (2) replace the form of Incentive Equity Plan attached to the Original Business Combination Agreement with an amended Incentive Equity Plan to conform the eligible participants in the plan to the eligible participants listed in the Original Business Combination Agreement, (3) improve the description of the Nasdaq listing process in the Business Combination Agreement for the Company Class A Ordinary Shares to be issued to Avanseus’ shareholders and pursuant to the Incentive Equity Plan and (4) provide that subscription agreements for PIPE investors be mutually reasonably acceptable to Avanseus as well as the Company.

The Company filed the initial Form S-4 with SEC with respect to the Business Combination on October 5, 2022. It filed Amendments No. 1, 2, 3 and 4 to the Form S-4 on November 25, 2022, January 6, 2023, March 20, 2023 and May 11, 2023.

On February 14, 2023, Avanseus and the Company entered into a Second Amendment to Business Combination Agreement (the “Second BCA Amendment”) to further amend the Original Business Combination Agreement. The Second BCA Amendment further amends the Original Business Combination Agreement to:

Liquidity, Capital Resources and Going Concern

As of March 31, 2023, the Company had $3,880 in its operating bank account and working capital deficit of $2,580,404.

The Company’s liquidity needs prior to the IPO, had been satisfied through a payment from the Sponsor of $25,000 (see Note 5) for the founder shares to cover certain offering costs, the loan under an unsecured promissory note from the Sponsor of up to $300,000 (see Note 5), and borrowings from related parties (see Note 5). Subsequent to the consummation of the IPO, the Company’s liquidity has been satisfied through the net proceeds from the IPO and the Private Placement held outside of the Trust Account, a Working Capital Loan of $90,000 (see Note 5) and promissory notes issued to related parties and third parties (see Note 5).

In order to finance transaction costs in connection with a Business Combination, the Sponsor, initial shareholders, officers, directors or their affiliates may, but are not obligated to, provide the Company Working Capital Loans, as defined below (see Note 5). As of March 31, 2023 and December 31, 2022, the Company had outstanding balance of $90,000 and $90,000 from Sponsor under the Working Capital Loans, respectively.

In connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company’s ability to continue as a going concern. Moreover, the Company may need to obtain additional financing either to complete the initial business combination or because it becomes obligated to redeem a significant number of its Public Shares upon consummation of the initial business combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of its initial business combination. If the Company is unable to complete the initial business combination because it does not have sufficient funds available to it, it will be forced to cease operations and liquidate the Trust Account. In addition, following the initial business combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations.

In addition, management has determined that the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a business combination, raises substantial doubt about the Company’s ability to continue as a going concern. The Company has until June 15, 2023 (or until as late as January 15, 2024 if the Company extends the Termination Date as authorized under the Second Charter Amendment to consummate a business combination, by up to seven additional 1-month periods by depositing or causing to be deposited $24,280 into the Trust Account for each 1-month extension). It is uncertain that the Company will be able to consummate a business combination by this time. If a business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution unless there are further extensions as described above. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 15, 2023 (or by January 15, 2024 if the Company extends the Termination Date as authorized under the Second Charter Amendment). Management has determined that the mandatory liquidation, should a business combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern.

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of this financial statement. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.

Additionally, as a result of the military action commenced in February 2022 by the Russian Federation in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. Further, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2—Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the period presented. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on March 13, 2023.

The interim results for the three months ended March 31, 2023, are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any future periods.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $3,880 and $72,800 and no cash equivalents as of March 31, 2023 and December 31, 2022, respectively.

Investments Held in Trust Account

On March 31, 2023 and December 31, 2022, the assets held in the Trust Account consist of United States Treasury securities. The Company classifies its United States Treasury securities with original maturities within three months as trading securities in accordance with ASC 320 Topic. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in gain on Investments Held in Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information and classifies as Level 1 measurements.

During the three months ended March 31, 2023 and 2022, the Company did not withdraw any of the interest income from the Trust Account to pay its tax obligations.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. As of March 31, 2023 and December 31, 2022, the Company had not experienced losses on this account and management believes the Company was not exposed to significant risks on such account.

Offering Costs associated with the Initial Public Offering

The Company complies with the requirements of the ASC 340-10-S99-1. Offering costs consisted of legal, accounting, underwriting fees, other costs incurred through the IPO that were directly related to the IPO, and fair value in excess of consideration paid with respect to the Founder Shares sold to the anchor investors. The Company incurred offering costs amounting to $11,883,987 as a result of the IPO consisting of $1,150,000 of underwriting commissions, $1,092,380 fair value of Representative Shares, $4,025,000 of deferred underwriting commissions, $554,107 of other offering costs and $5,062,500 of fair value in excess of consideration paid with respect to the Founder Shares sold to the anchor investors. Of the total offering costs, $11,284,247 was charged to temporary equity upon the completion of the IPO and $599,740 was charged to equity.

Debt Issuance Costs

The Company complies with the requirements of Staff Accounting Bulletins Topic 5: Miscellaneous Accounting, A. Expenses of Offering. This interpretive response suggests that Specific incremental costs directly attributable to a proposed or actual offering of securities may properly be deferred and charged against the gross proceeds of the offering. However, management salaries or other general and administrative expenses may not be allocated as costs of the offering and deferred costs of an aborted offering may not be deferred and charged against proceeds of a subsequent offering. A short postponement (up to 90 days) does not represent an aborted offering. As a result of this response, the Company has concluded that the transfer of the Subscriber Shares (as defined in Note 5) will be recorded as a debt issuance cost and amortized over the life of the promissory note entered into by the subscriber.

Income Taxes

The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2023. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2023 and December 31, 2022, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with federal income tax regulations, income taxes are not levied on the Company, but rather on the individual owners. United States (“U.S.”) taxation would occur on the individual owners if certain tax elections are made by U.S. owners and the Company were treated as a passive foreign investment company. Additionally, U.S. taxation could occur to the Company itself if the Company is engaged in a U.S. trade or business. The Company is not expected to be treated as engaged in a U.S. trade or business at this time.

Net Loss Per Ordinary Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Remeasurement adjustments associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.

The calculation of diluted loss per share does not consider the effect of the warrants issued in connection with the (i) IPO, and (ii) the private placement because the warrants are contingently exercisable, and the contingencies have not yet been met. The warrants are exercisable to purchase 14,365,000 Class A ordinary shares in the aggregate. As of March 31, 2023 and December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.

The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. No warrants were exercised during the three months ended March 31, 2023 and 2022. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the period. In connection with the underwriters exercise of their over-allotment option on October 15, 2021, 375,000 Class B ordinary shares were no longer subject to forfeiture. These shares were excluded from the calculation of weighted average shares outstanding until they were no longer subject to forfeiture. Accretion of the carrying value of Class A ordinary shares to redemption value is excluded from net loss per ordinary share because the redemption value approximates fair value.

In connection with the approval of the First Charter Amendment on January 13, 2023, holders of 6,058,262 of the public shares exercised their right to redeem those shares for cash at an approximate price of $10.16 per share, for an aggregate of approximately $61.57 million, leaving 5,441,738 public shares outstanding after as of March 31, 2023.

The following table reflects the calculation of basic and diluted net loss per ordinary share:

Ordinary Shares Subject to Possible Redemption

The 11,500,000 Public Warrants and 2,865,000 Private Placement Warrants were issued in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants meet the criteria for equity treatment thereunder, each warrant is recorded as equity. The Company accounts for its outstanding warrants as equity-classified instruments based on such guidance.

All of the 11,500,000 ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with a business combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Public Shares have been classified outside of permanent equity.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.

The Company issued to EF Hutton and/or its designees, 115,000 Class A ordinary shares upon the consummation of the IPO. EF Hutton has agreed (i) to waive its redemption rights with respect to such ordinary shares in connection with the completion of the initial business combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such ordinary shares if the Company fails to complete its initial business combination within the Combination Period (See Note 7).

As of March 31, 2023 and December 31, 2022, the ordinary shares subject to possible redemption reflected on the balance sheet are reconciled in the following table:

Share Based Compensation

The Company complies with ASC 718 Compensation — Stock Compensation regarding interest in founder shares acquired by directors of the Company at prices below fair value. The interest in acquired shares shall vest upon the Company consummating an initial business combination (the “Vesting Date”). If prior to the Vesting Date, the director ceases to be a director, the interest in the founder shares will be forfeited. The interest in the founder shares owned by the director (1) may not be sold or transferred, until six months after the consummation of a Business Combination, and (2) may not be entitled to redemption from the funds held in the Trust Account, or any liquidating distributions. The Company has until June 15, 2023 (or until as late as January 15, 2024 if the Company extends the Termination Date as authorized under the Second Charter Amendment to consummate a business combination, by up to seven additional 1-month periods by depositing or causing to be deposited $24,280 into the Trust Account for each 1-month extension, or such later date as the Company’s shareholders may approve by an extension in accordance with the Company’s amended and restated memorandum and articles of association) to consummate a Business Combination, and if a Business Combination is not consummated, the Company will liquidate and the interest in the founder shares will become worthless (see Note 5).

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’ own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.

Level 1—Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3—Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

Financial Instruments

The Company will account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of warrant issuance and as of each subsequent annual period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company accounts for its outstanding warrants as equity-classified.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Note 3—Initial Public Offering

Public Units

On October 15, 2021, the Company sold 11,500,000 Units at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one redeemable warrant (the “Public Warrants”).

Ten qualified institutional buyers or institutional accredited investors which are not affiliated with the Company, the Sponsor, the directors or any member of the Company’s management (the “anchor investors”) purchased 950,000 Units each, or 9,500,000 in the aggregate, in the IPO at the offering price of $10.00 per Unit. There can be no assurance that the anchor investors will retain their shares, if any, prior to or upon the consummation of the initial business combination.

Following the closing of the IPO on October 15, 2021, $115,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into the Trust Account, invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.

Public Warrants

Each warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial business combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A ordinary share during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the initial business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under “Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.

The warrants will become exercisable on the later of 12 months from the closing of the IPO or the completion of the Company’s initial business combination, and will expire five years after the completion of the Company’s initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company has not registered the Class A ordinary shares issuable upon exercise of the warrants at this time. However, the Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial business combination, the Company will use its best efforts to file with the SEC a registration statement covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants, to cause such registration statement to become effective within 60 business days following the initial business combination and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will has failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.

Redemption of warrants. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):

Note 4—Private Placement

Simultaneously with the closing of the IPO, the Company’s Sponsor purchased an aggregate of 2,865,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $2,865,000. The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable (except to certain permitted transferees) until 30 days after the completion of the initial business combination and they will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. In accordance with one of the permitted exceptions to the restrictions on transfer of the Private Warrants, promptly after the completion of the IPO, the Sponsor distributed all of the Private Warrants to its shareholders. Therefore, the Sponsor itself no longer holds any of the Private Warrants, and all of the Private Warrants are held by the Sponsor’s Shareholders (the “Sponsor’s Shareholders”).

The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis. The placement warrants (including the Class A ordinary shares issuable upon exercise of the placement warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial business combination, subject to certain exceptions.

The Private Warrants are identical to the Public Warrants except that, so long as the Private Warrants are held by the Sponsor or its permitted transferees, (i) they (including the Class A Ordinary Shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the initial business combination, and (ii) they will be entitled to registration rights.

Note 5—Related Party Transactions

Founder Shares

On April 22, 2021, the Sponsor paid, $25,000, or approximately $0.009 per share, to cover certain offering costs and expenses in consideration for 2,875,000 Class B ordinary shares, par value $0.0001. Up to 375,000 Founder Shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The underwriters fully exercised their over-allotment option at the IPO resulting in no Founder Shares being subject to forfeiture.

The Sponsor, directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares (or Class A ordinary shares issuable upon conversion thereof), subject to certain limited exceptions, until the earlier of (A) six months after the date of the Company’s initial business combination or (B) subsequent to the Company’s initial business combination, (x) if the reported last sale price of the Company’s Class A ordinary shares equals or exceeds US $12.00 per share (as adjusted for share subdivisions, share dividends, right issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial business combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their shares for cash, securities or other property.

In September 2021, the Company received expressions of interest from anchor investors to purchase Units in the IPO. Subject to each anchor investor purchasing 100% of the Units allocated to it, in connection with the closing of the IPO the Sponsor sold 75,000 founder shares to each anchor investor (750,000 founder shares in the aggregate) at their original purchase price of approximately $0.009 per share. The Company accounted for the fair value in excess of consideration paid with respect to the number of Founder Shares sold to the anchor investors as an offering cost reflected as an increase to additional paid in capital offset by a reduction of the offering proceeds upon completion of the IPO. The fair value of each Founder Share was determined to be $6.75 per share or approximately $5,062,500 (see note 6). Valuation of the Founder Shares was determined using an internal valuation model driven primarily by the initial issuance price of our Class A ordinary shares, an assumed value of $1.00 for the warrants included in the Units, and a 75% probability of successfully completing an initial business combination.

In accordance with one of the permitted exceptions to the restrictions on transfer of the founder shares, on October 18, 2021, the Sponsor transferred 2,070,000 Class B ordinary shares held by it to its Sponsor’s Shareholders, which include all of the Company’s directors and executive officers or companies controlled by them.

Share Based Compensation

In April and May 2021, the Company’s sponsor transferred interests in a total of 55,000 Founder Shares to directors.

The Company has determined the valuation of the Class B ordinary shares as of the Grant Dates. The valuation resulted in a fair value of approximately $1.45 per share as of the Grant Dates, or an aggregate of $79,821 for the 55,000 shares. As vesting of Founder Shares to directors is contingent upon the closing of an initial business combination, a performance condition is not probable of occurring at March 31, 2023 and December 31, 2022. Upon consummation of an initial Business Combination the Company will recognize $79,821 in compensation expense.

Due from Related Party

Since April 16, 2021 (inception), related parties have paid for certain offering costs and expenses on behalf of the Company. At December 31, 2021 an excess of $50,000 was repaid to those related parties and was due back to the Company. On April 26, 2022, the Company was repaid all amounts due to the Company from the related parties.

Due to Related Party

As of March 31, 2023, the Company had due to related party balance of $42,835, consisting of unpaid administrative fee of $30,000, travel reimbursement of $3,731 and operating expenses paid by Sponsor on behalf of the Company of $9,104.

Promissory Note—Related Party

On May 6, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the IPO. These loans were non-interest bearing, unsecured and due at the earlier of October 31, 2021, or the closing of the IPO. As of March 31, 2023 and December 31, 2022, no amount was outstanding on the promissory note. The promissory note has expired, and no borrowings are permitted on this note.

On January 8, 2023, the Company’s board of directors authorized the Company to raise up to $1 million of funds by the issuance of non-interest-bearing notes (the “$1,000,000 Promissory Note Offering” and the notes offered therein, the “Zero-Interest Notes”) to fund extensions of the deadline to complete the Company’s initial business combination. Certain of the holders of the Founder Shares other than the anchor investors agreed among themselves to transfer up to 5% of their Founder Shares to subscribers to this note offering and the $1,062,500 Promissory Note Offering described in Note 6 below at a rate of one share for each $10 of principal amount of notes to incentivize subscriptions (the “Subscriber Shares”). The Company has concluded that the transfer of the subscriber shares will be recorded as a debt issuance cost and amortized on a straight line basis over the life of the promissory note entered into by the subscriber.

For the three months ended March 31, 2023, the Company issued an aggregate of $298,260 in principal amount of Zero-Interest Notes in the $1,000,000 Promissory Note Offering to 17 related parties providing funding in that amount for the extension deposits. The Zero-Interest Notes are non-interest-bearing and will be payable on the earlier to occur of (i) the date on which Company consummates its initial business combination and (ii) December 31, 2023.

Certain of the holders of the Founder Shares other than the anchor investors agreed to transfer Class B ordinary shares as an inducement to the subscribers to the Zero-Interest Notes to purchase the notes. In connection with the issuance of $298,260 Zero-Interest Notes, the Company recorded $288,851 as debt issuance costs, in the accompanying condensed balance sheets, for the fair value of 29,826 Subscriber Shares to be transferred to investors.

For the three months ended March 31, 2023, the Company recognized $50,056 of interest expense, included in interest expense of 107,231 on the condensed statement of operations, associated with amortization of the debt issuance costs for the fair value of 29,826 Subscriber Shares to be transferred to investors.

As of March 31, 2023 the promissory note – related party, net was as follows:

Working Capital Loans

In order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial business combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that the initial business combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. On December 22, 2022, the Company borrowed $90,000 from the Sponsor under the Working Capital Loan, which is convertible into warrants as described above. The loan is non-interest bearing and payable on the earliest to occur of (i) the date which the Company consummates its initial business combination and (ii) the date that the winding up of the Company is effective (such date, the “Maturity Date”). The principal balance may be prepaid at any time, at the election of the Company.

As of both March 31, 2023, and December 31, 2022, the Company had $90,000 of outstanding borrowings under the Working Capital Loans.

Office Space, Secretarial and Administrative Services

Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company has agreed to pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial support and administrative services. For the three months ended March 31, 2023 and 2022, the expense for office space, secretarial and administrative services was $30,000 and $30,000, respectively. On March 31, 2023, and December 31, 2022, the unpaid balance was $30,000 and $0, respectively, and reported on the balance sheet as due to related party.

Note 6—Promissory Note - Third Party

On January 26, 2023, the Company’s board of directors authorized the Company to raise up to $1,062,500 of funds (the “1,062,500 Promissory Note Offering”) for working capital (which can also be used to fund extensions of the deadline to complete our initial business combination) through a private offering of promissory notes bearing simple interest at a rate of 15% per annum (the “Interest-Bearing Notes”) to prospective investors who are not our sponsor, directors or officers or any of their or our affiliates (“non-affiliates”). Certain of the holders of the Founder Shares other than the anchor investors have agreed among themselves to transfer up to 5% of their Founder Shares to subscribers to this note offering and the $1,000,000 Promissory Note Offering described in Note 5 above at a rate of one share for each $10 of principal amount of notes to incentivize subscriptions. The Company has concluded that the transfer of the subscriber shares will be recorded as a debt issuance cost and amortized on a straight line basis over the life of the promissory note entered into by the subscriber.

For the three months ended March 31, 2023, the Company issued an aggregate principal amount of $607,740 Interest-Bearing Notes to 4 non-affiliates under the $1,062,500 Promissory Note Offering, providing funding of $607,740 for the extension deposits and working capital. These notes will be payable on the earlier to occur of (i) the date on which Company consummates its initial business combination and (ii) December 31, 2023.

In connection with the issuance of $607,740 Interest-Bearing Notes, the Company recorded $594,791 as deferred debt financing costs, in the accompanying condensed balance sheets, for the fair value of 60,774 Subscriber Shares to be transferred to investors.

For the three months ended March 31, 2023, the Company recognized $57,175 interest expense included in interest expense of 107,231 on the condensed statement of operations, associated with amortization of the debt issuance costs for the fair value of 60,774 Subscriber Shares to be transferred to investors.

For the three months ended March 31, 2023, the Company accrued $7,800 interest expense in relation to the Interest-Bearing Notes.

As of March 31, 2023 the promissory note – third party, net was as follows:

Note 7—Commitments & Contingencies

Registration Rights

The holders of (i) the Founder Shares, (ii) the representative shares, (iii) the Placement Warrants (including component securities contained therein), (iv) warrants (including securities contained therein) that may be issued upon conversion of Working Capital Loans, (v) any Class A ordinary shares issuable upon the exercise of the Placement Warrants, (vi) any Class A ordinary shares that may be issued upon exercise of the warrants as part of the Working Capital Loans and (vii) Class A ordinary share issuable upon conversion of the Founder Shares, will be entitled to registration rights pursuant to a registration rights agreement signed on October 12, 2021, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

The Company granted the underwriters a 45-day option from the date of the IPO to purchase up to an additional 1,500,000 units to cover over-allotments, if any. At the IPO, the underwriters fully exercised their option to purchase the additional 1,500,000 units.

The underwriters were paid a cash underwriting discount of one percent (1%) of the gross proceeds of the IPO, or $1,150,000. Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO, or $4,025,000, upon the completion of the Company’s initial business combination.

Anchor Investors

The Sponsor entered into an agreement with ten strategic investors (each referred to as an “anchor investor”) for the purchase of 75,000 Founder Shares each at the same price the Sponsor paid ($0.009 per share). The anchor investors purchased 9,500,000 Units in the IPO. The Company can make no assurance that the anchor investor will retain their shares, if any, upon the completion of the Company’s Business Combination. As a result of the Founder Shares and Private Placement Warrants that the anchor investor may hold, it may have different interests with respect to a vote on an initial business combination than other public shareholders (see Note 5). The Company believes that in connection with the First Charter Amendment and the Second Charter Amendment, the anchor investors redeemed most or all of the Class A ordinary shares that were included in the Units they purchased in the IPO.

The Company accounted for the fair value in excess of consideration paid with respect to the number of Founder Shares sold to the anchor investors as an offering cost reflected as an increase to additional paid in capital offset by a reduction of the offering proceeds upon completion of the IPO. The fair value of each Founder Share was determined to be $6.75 per share or approximately $5,062,500 in the aggregate for all 750,000 Founder Shares transferred to the anchor investors (see note 5). Valuation of the Founder Shares was determined using an internal valuation model and classified as a Level 3 valuation. The valuation was driven primarily by the initial issuance price of the Public Units, an assumed value of $1.00 for the warrants included in the Units, and a 75% probability of successfully completing an initial business combination.

Class B Shares Related to Debt Issuance

On January 2023, the Company’s board of directors authorized the Company to raise up to $1,062,500 of interest bearing notes and up to $1 million of non-interest bearing notes, See Note 6 and Note 5, respectively. Certain of the holders of the Founder Shares other than the anchor investors have agreed among themselves to transfer up to 5% of their Founder Shares to subscribers to this note offering at a rate of one share for each $10 of principal amount of notes to incentivize subscriptions. The Company has concluded that the transfer of the subscriber shares will be recorded as a debt issuance cost and amortized on a straight-line basis over the life of the promissory note entered into by the subscriber.

The fair value of each Subscriber Share was determined to be $9.61-$9.87 per share (depending on the terms of each Zero-Interest Note and Interest-Bearing Notes as defined in Note 5 and Note 6) or $883,642 in the aggregate for all 90,600 Subscriber Shares transferred to the note investors (see note 5 and note 6). Valuation of the Subscriber Shares was determined using the Monte Carlo Model and classified as Level 3 in the fair value hierarchy. The key inputs for Monte Carlo Model includes 1) Volatility of 5.2% -8.2%, 2) risk- free rate of 4.64% -5.11%, 3) stock price of $10.22 -$10.49 per share and 4) estimated term of 0.80 - 0.95 years.

Representative Shares

The Company issued to EF Hutton and/or its designees (the “Representatives”) 115,000 Class A ordinary shares upon the consummation of the IPO. EF Hutton has agreed not to transfer, assign or sell any such ordinary shares until the completion of the initial business combination. In addition, EF Hutton has agreed (i) to waive its redemption rights with respect to such ordinary shares in connection with the completion of the initial business combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such ordinary shares if the Company fails to complete its initial business combination within the Combination Period.

The ordinary shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the commencement of sales of the registration statement of which the IPO forms a part pursuant to Rule 5110(e)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(e)(1), these securities may not be sold, transferred, assigned, pledged or hypothecated or the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statement of which the IPO forms a part, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the commencement of sales of the IPO except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners, registered persons or affiliates or as otherwise permitted under Rule 5110(e)(2).

The Company accounted for the fair value of the Class A ordinary shares issued to the Representatives as an offering cost reflected as an increase to additional paid in capital offset by a reduction of the offering proceeds upon completion of the IPO. The fair value of each Class A ordinary share was determined to be $9.00 per share or approximately $1,092,380. Valuation of the Class A ordinary shares was determined using an internal valuation model and classified as a Level 3 valuation. The valuation was driven primarily by the initial issuance price of the Public Units, and an assumed value of approximately $1 for the warrants included in the Units.

Note 8—Shareholders’ Deficit

Preference shares—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 and with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2023, and December 31, 2022, there were no preference shares issued or outstanding.

Class A ordinary shares—The Company is authorized to issue 300,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of March 31, 2023, and December 31, 2022, there were 115,000 Class A ordinary shares issued or outstanding, excluding 5,441,738 and 11,500,000 ordinary shares, respectively, subject to possible redemption.

Class B ordinary shares—The Company is authorized to issue 30,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote for each Class B ordinary share. On March 31, 2023, and December 31, 2022, there were 2,875,000 Class B ordinary shares issued and outstanding.

Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.

The Class B ordinary shares and will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have redemption rights or be entitled to liquidating distributions from the Trust Account if the Company does not consummate an initial business combination) at the time of the initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon the completion of the IPO, plus (ii) the total number of Class A ordinary shares issued, deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued or to be issued to any seller in the initial business combination and any Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team upon conversion of Working Capital Loans, unless the holders of a majority of the then-outstanding Class B ordinary shares agree to waive such adjustment with respect to such issuance or deemed issuance at the time thereof. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.

Note 9—Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the unaudited condensed financial statements were issued. Based on this review, other than described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

Second Charter Amendment

In a second extraordinary general meeting held on April 14, 2023, shareholders approved the Second Charter Amendment, changing the structure and cost of the Company’s right to extend the Termination Date. The Second Charter Amendment allows the Company to extend the Termination Date by up to nine (9) one-month Extensions to January 15, 2024, provided that if any Extended Deadline ends on a day that is not a business day, such Extended Deadline would be automatically extended to the next succeeding business day. To obtain each 1-month extension, the Company, the sponsor or any of their affiliates or designees are required to deposit into Trust Account by the deadline applicable prior to the extension an amount equal to the lesser of $50,000 or (b) $0.05 per share for each of the public shares outstanding as of the deadline prior to the extension (after giving effect to redemptions in connection with the approval of the First Charter Amendment by the Company’s shareholders with respect to the first such extension.)

Redemption of Shares

In connection with the approval of the Second Charter Amendment, holders of 4,956,145 of the public shares exercised their right to redeem those shares for cash at an approximate price of $10.46 per share, for an aggregate of approximately $51.82 million, leaving 485,593 of the public shares outstanding. Thus the cost for each one-month Extension is now $24,280.

Extension of Deadline to Complete the Company’s Initial Business Combination.

The Company has exercised its right to extend the deadline to complete its initial business combination twice to date. On April 17, 2023, the Company deposited an aggregate of $24,280 (representing $0.05 per public share) into the Company’s Trust Account to extend the period of time it has to consummate its initial business combination by one month from April 15, 2023 to May 15, 2023, and on May 15, 2023, the Company deposited another $24,280 into the Trust Account to further extend the deadline to June 15, 2023. These Extensions are the first and second of up to nine one-month extensions permitted under the Company’s governing documents. As of May 5, 2023, the balance in the Trust Account was approximately $5.1 million or approximately $10.59 per outstanding public share. The Company has seven remaining 1-month extensions available to it under the Second Charter Amendment.

Debt Capital Financing for Extension Funds and Working Capital

In April 2023, the Company raised an additional $109,280, under the $1,000,000 Promissory Note Offering, for extension deposits.

On May 4, 2023, Fat Projects International Investments and Holdings Limited (“FPI”), a shareholder of FATP’s Sponsor that received FATP Class B Ordinary Shares and Private Placement warrants shortly after the closing of FATP’s IPO which is controlled by FATP’s Co-Chief Executive Officers, David Andrada and Tristan Lo, sold 127,000 Class B Ordinary Shares to a private investor for $250,000 and loaned the proceeds to FATP in return for a non-interest-bearing, unsecured promissory note in that principal amount. This transaction was not part of either the $1,000,000 Promissory Note Offering or the $1,062,500 Promissory note Offering but rather was a separate transaction. Each of FATP’s six directors other than Mr. Andrada and Mr. Lo waived their right to receive 10,000 compensator Class B Ordinary Shares (for an aggregate of 60,000 shares) from FPI upon consummation of FATP’s initial business combination to be included in the shares sold to the private investor.

On April 19, 2023, the Company received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that, since the Company’s press release filed on April 17, 2023 reported 485,593 publicly held shares, the Company no longer complies with Listing Rule 5450(b)(2)(B), due to the Company’s failure to meet the minimum 1,100,000 publicly held shares requirement for continued listing on the Nasdaq Global Market. The notice is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on the Nasdaq Global Market.

The notice states that the Company has until June 5, 2023 to submit a plan to regain compliance with Listing Rule 5450(b)(2)(B). The Company is exploring all options to regain compliance with Listing Rule 5450(b)(2)(B). The Company intends to submit a plan to regain compliance with Listing Rule 5450(b)(2)(B) within the required timeframe. If Nasdaq accepts the Company’s plan, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the Notice to evidence compliance with Listing Rule 5450(b)(2)(B). If Nasdaq does not accept the Company’s plan, the Company will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel.

On May 5, 2023, the Company received a written notice from Nasdaq indicating that since the number of Total Holders (which includes both beneficial holders and holders of record) of the Company’s common stock was less than 400 based on a shareholder analysis provided by the Company at Nasdaq’s request to Nasdaq on May 4, 3023, the Company was no longer in compliance with the Nasdaq Global Market continued listing criteria set forth in Listing Rule 5450(a)(2) that requires the Company to maintain 400 Total Holders of its common stock. The notice is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on the Nasdaq Global Market.

The notice states that the Company has until June 20, 2023 to submit a plan to regain compliance with Listing Rule 5450(a)(2). The Company is exploring all options to regain compliance with Listing Rule 5450(a)(2). The Company intends to submit a plan to regain compliance with Listing Rule 5450(a)(2) within the required timeframe. If Nasdaq accepts the Company’s plan, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the notice to evidence compliance with Listing Rule 5450(a)(2). If Nasdaq does not accept the Company’s plan, the Company will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,” “Fat Projects Acquisition Corp” “our,” “us” or “we” refer to Fat Projects Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

We are a blank check company incorporated on April 16, 2021 as a Cayman Islands exempted company and formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more target businesses. While our efforts to identify a target business may span many industries and regions worldwide, we focus our search for prospects within the supply chain, transportation, logistics, finance, sustainability/ESG, food, agriculture, e-commerce, and/or big data sectors. We intend to effectuate our initial business combination using cash from the proceeds of our Initial Public Offering and the private placement of the Private Units, the proceeds of the sale of our shares in connection with our initial Business Combination, shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

We expect to continue to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to complete our initial business combination will be successful.

Proposed Business Combination

On August 26, 2022, we entered into a Business Combination Agreement with Avanseus Holdings Pte. Ltd., a Singapore private company limited by shares (“Avanseus”) (the “Original Business Combination Agreement” and as it has been amended and may be further amended and/or restated from time to time, the “Business Combination Agreement”).

The Business Combination Agreement and the transactions contemplated thereby were approved by our board of directors and the Avanseus board of directors (other than the PIPE Investment as described below and the definitive financing agreements that replaced the PIPE Investments when we entered into the Second BCA Amendment described below, which will require further approval of the boards of directors), subject to the approval of our shareholders.

The Business Combination Agreement provides for a series of transactions, pursuant to which, among other things, Avanseus’ shareholders will exchange all of their outstanding Avanseus shares in consideration for newly issued Company Class A Ordinary Shares (the “Share Exchange”), subject to the conditions set forth in the Business Combination Agreement, with Avanseus thereby becoming our wholly owned subsidiary (the Share Exchange and the other transactions contemplated by the Business Combination Agreement, together, the “Business Combination” or the “Proposed Transaction”). In connection with the Business Combination, we will change our corporate name to “Avanseus Holdings Corporation” (“New Avanseus”).

The Original Business Combination Agreement provided that the Company would use its commercially reasonable efforts to enter into and consummate subscription agreements in form and substance mutually acceptable to the Company and Avanseus with investors mutually reasonably acceptable to the Company and Avanseus pursuant to which such investors would agree to purchase up to an aggregate of $35 million of (i) the Company’s Series A Convertible Preference Shares, which shares would be convertible into the Company’s Class A Ordinary Shares, and/or (ii) the Company’s Class A Ordinary Shares, with such purchases to be consummated prior to or substantially currently with the closing of the Share Exchange (the “PIPE Investment”).

On October 3, 2022, Avanseus and we entered into a First Amendment to Business Combination Agreement (the “First BCA Amendment”) to amend the Original Business Combination Agreement to (1) add a mutual condition to the obligations of Avanseus and us to close the transactions contemplated in the Business Combination Agreement that holders of the Company’s Class A Ordinary Shares redeem an aggregate of at least 5,200,000 of such shares so that Avanseus will be the acquiror for accounting purposes at both the minimum and maximum redemption levels required to be disclosed in the Registration Statement on Form S-4 to be filed with the Commission pursuant to the Business Combination Agreement, (2) replace the form of Incentive Equity Plan as defined in and attached to the original Business Combination Agreement with an amended Incentive Equity Plan to conform the eligible participants in the plan to the eligible participants listed in the original Business Combination Agreement, (3) improve the description of the Nasdaq listing process in the Business Combination Agreement for our Class A Ordinary Shares to be issued to Avanseus’ shareholders and pursuant to the Incentive Equity Plan and (4) provide that subscription agreements for PIPE investors be mutually reasonably acceptable to Avanseus as well as us.

On February 14, 2023, Avanseus and we entered into a Second Amendment to Business Combination Agreement (the “Second BCA Amendment”) to further amend the Original Business Combination Agreement as amended by the First BCA Amendment to (1) amend the definition of Acquiror Transaction Expenses to exclude expenses that are expressly deferred, waived or converted to equity by written agreement of the parties to which they are owed on terms satisfactory to Avanseus, (2) delete provisions related to a PIPE offering by us and provisions related to a pool of one million of our Class A Ordinary Shares to be issued for purposes mutually acceptable to us and Avanseus, (3) delete a closing condition that required the combined companies to have at least $5,000,001 of net tangible assets at Closing, (4) add a new closing condition that we enter into one or more definitive financing agreements with terms mutually acceptable to us and Avanseus with one or more post-closing financing providers acceptable to both us and Avanseus, which may include the issuance of up to one million of our Class A ordinary shares as origination fees to the post-closing financing providers, (5) amend the minimum cash closing condition to reduce the amount of cash that the combined companies must have at Closing after the payment of their transaction expenses from $25 million to $4 million and to require that post-closing financing shall provide for additional proceeds to us in the amount of $6 million upon the effectiveness of a registration statement registering our shares that may be issued to the post-closing financing providers pursuant to the definitive financing agreements, (6) extend the Agreement End Date, which is the date that either we or Avanseus may terminate the Business Combination Agreement without cause (provided that the terminating party is not itself in material breach of the Business Combination Agreement), from February 22, 2023 to July 15, 2023, and (7) delete the closing condition added by the First BCA Amendment that holders of at least 5,200,000 publicly held Class A ordinary shares redeem such shares at the closing of the transactions contemplated in the Business Combination since the redemption of 6,058,262 Class A ordinary shares in connection with the January 13, 2023 amendment to our amended and restated memorandum and articles of association rendered such condition unnecessary.

The Business Combination is expected to close in the second quarter of 2023, following the receipt of the required approval by our shareholders and the fulfillment of other customary closing conditions.

Charter Amendments and Share Redemptions

In an extraordinary general meeting held on January 13, 2023, shareholders approved an amendment to our amended and restated memorandum and articles of association (the “First Charter Amendment”), changing the structure and cost of our right to extend the Termination Date by which we must either (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “business combination”), or else (ii) cease our operations if we fail to complete such business combination, and redeem or repurchase 100% of our public shares included as part of the units sold in our initial public offering.

The First Charter Amendment allowed us to extend the Termination Date by up to six (6) one-month Extensions to July 15, 2023, provided that if any Extended Deadline ended on a day that is not a business day, such Extended Deadline would be automatically extended to the next succeeding business day. To obtain each 1-month extension, we, our sponsor or any of their affiliates or designees would be required to deposit into our Trust Account with Continental by the deadline applicable prior to the extension $0.0575 per share for each of our public shares outstanding as of the deadline prior to the extension (after giving effect to redemptions in connection with the approval of the First Charter Amendment by our shareholders with respect to the first such extension).

In connection with the approval of the First Charter Amendment, holders of 6,058,262 of our public shares exercised their right to redeem those shares for cash at an approximate price of $10.16 per share, for an aggregate of approximately $61.57 million, leaving 5,441,738 of our public shares outstanding.

In a second extraordinary general meeting held on April 14, 2023, shareholders approved a second amendment to our amended and restated memorandum and articles of association (the “Second Charter Amendment”) changing the structure and cost of our right to extend the Termination Date. The Second Charter Amendment allows us to extend the Termination Date by up to nine (9) one-month Extensions to January 15, 2024, provided that if any Extended Deadline ended on a day that is not a business day, such Extended Deadline would be automatically extended to the next succeeding business day. To obtain each 1-month extension, we, our sponsor or any of their affiliates or designees are required to deposit into our Trust Account with Continental by the deadline applicable prior to the extension an amount equal to the lesser of $50,000 or (b) $0.05 per share for each of our public shares outstanding as of the deadline prior to the extension (after giving effect to redemptions in connection with the approval of the First Charter Amendment by our shareholders with respect to the first such extension.

In connection with the approval of the Second Charter Amendment, holders of 4,956,145 of our public shares exercised their right to redeem those shares for cash at an approximate price of $10.46 per share, for an aggregate of approximately $51.82 million, leaving 485,593 of our public shares outstanding. Thus the cost for each one-month Extension is now $24,280.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through March 31, 2023, were organizational activities, those necessary to prepare for our Initial Public Offering, described below, and, after our Initial Public Offering, identifying a target company for an initial Business Combination, negotiating the Business Combination Agreement and the preparation and filing on October 5, 2022 with the SEC the Form S-4 with respect to the Business Combination and three subsequent amendments thereto. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Accounts. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses and expenses incurred in connection with negotiating the Business Combination Agreement and preparing and filing the Form S-4 and amendments thereto.

For three months ended March 31, 2023, we had a net loss of $344,303, which consisted of formation and operating costs $866,046, interest expenses accrued on promissory notes issued to third party of $7,800, interest expenses recognized on amortization of deferred debt financing costs $107,231, offset by interest earned on investments held in Trust Account of $636,774.

For three months ended March 31, 2022, we had a net loss of $158,139, which consisted of formation and operating costs of $189,075 and interest earned on investments held of $30,936.

For three months ended March 31, 2023, net cash provided by investing activities was $60,629,159, which consisted of cash withdrawn from Trust Account in connection with redemption $61,567,859, partially offset by investments held in Trust Account of $938,700.

For three months ended March 31, 2022, net cash provided by/used in investing activities was $0.

For three months ended March 31, 2023, net cash used in financing activities was $60,661,859, which consisted of redemption of Class A ordinary shares $61,567,859, partially offset by proceeds from issuance of promissory note to third party of $607,740 and proceeds from issuance of promissory note to related party of $298,260.

For three months ended March 31, 2022, net cash provided by/used in financing activities was $0

Liquidity, Capital Resources and Going Concern

On October 15, 2021, we consummated our Initial Public Offering of 11,500,000 Units at a price of $10.00 per Unit, generating gross proceeds of $115,000,000. Simultaneously with the closing of our Initial Public Offering, we consummated the sale of 2,865,000 Placement Warrants to the Sponsor at a price of $1.00 per Warrant, generating gross proceeds of $2,865,000.

For three months ended March 31, 2023, cash used in operating activities was $36,220. Our net loss of $344,303 resulted from formation and operating costs of $866,046, interest expenses accrued on promissory notes issued to third party of $7,800 and interest expenses recognized on amortization of deferred debt financing costs $107,231, partially offset by interest earned on investments held in the Trust Account of $636,774. Changes in operating assets and liabilities provided $829,826 of cash from operating activities.

For three months ended March 31, 2022, cash used in operating activities was $189,654. Net loss of $158,139 was affected by interest earned on investments held in the Trust Account of $30,936. Changes in operating assets and liabilities provided $579 of cash from operating activities.

As of March 31, 2023, we had investments of $56,770,325 held in the Trust Accounts. In connection with the approval of the Second Charter Amendment on April 14, 2023, holders of 4,956,145 of the public shares exercised their right to redeem those shares for cash at an approximate price of $10.46 per share, for an aggregate of approximately $51.82 million, leaving approximately $5 million held in the Trust Account after the redemption on April 14, 2023. We intend to use substantially all of the funds held in the Trust Accounts, including any amounts representing interest earned on the Trust Accounts (less taxes paid and deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes. During the period ended March 31, 2023, we did not withdraw any interest earned on the Trust Accounts. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Accounts will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of March 31, 2023, we had cash of $3,880 outside of the Trust Accounts. We intend to use the funds held outside the Trust Accounts primarily to structure, negotiate and complete our initial business combination.

In order to fund working capital deficiencies or finance transaction costs in connection with our initial business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the Trust Accounts to repay such loaned amounts but no proceeds from our Trust Accounts would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants identical to the Placement Warrants, at a price of $1.00 per warrant at the option of the lender. As of March 31, 2023, the Company borrowed $90,000 from Sponsor under such working capital loans.

As described below, in January 2023, our board authorized us to issue up to $1 million in principal amount of non-interest-bearing notes to fund extensions of the deadline to complete our initial business combination and to issue up to $1,062,500 of 15% interest-bearing notes to non-affiliates of our Sponsor and our officers and directors to raise working capital. As of May 15, 2023, there was an aggregate principal amount of $407,540 of non-interest-bearing notes and $607,740 of interest-bearing notes outstanding.

In connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company’s ability to continue as a going concern. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

In addition, management has determined that the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a business combination, raises substantial doubt about the Company’s ability to continue as a going concern. The Company had until October 15, 2022, which was automatically extended to January 15, 2023 when we filed the Form S-4 on October 5, 2022, to consummate a business combination.

On January 13, 2023, at a virtual general meeting of shareholders, the shareholders entitled to vote at the general meeting cast their votes and approved a proposal to change the structure and cost of our right to extend the date by which we must consummate a business combination by up to six (6) one-month extensions to July 15, 2023, provided that we, or our Sponsor, deposit into the Trust Account $0.0575 per public share.

Then again, on April 14, 2023, at a virtual special meeting of shareholders, the shareholders entitled to vote at the special meeting cast their votes and approved a proposal to change our right to extend the date by which we must consummate a business combination by up to nine (9) one-month extensions to January 15, 2024, provided that we, or our Sponsor, deposit into the Trust Account the lesser of (x) $50,000 or (y) $0.05 $0.0575 per public share. On April 17, 2023, the Company deposited into the Trust Account an aggregate of $24,280 representing $0.05 per share for each of our 485,593 publicly held Class A ordinary shares remaining outstanding after redemptions of 4,956,145 of our Class A ordinary shares in connection with the amendment to our charter approved by its shareholders on April 14, 2023. This extended the deadline to complete our initial business combination to May 15, 2023. On May 15, 2023, we deposited the second $24,280 into Trust Account, to extend the deadline to complete our initial business combination to June 15, 2023.

It is uncertain that the Company will be able to consummate the Business Combination with Avanseus or any other business combination by June 15, 2023. If a Business Combination is not consummated by June 15, 2023, there will be a mandatory liquidation and subsequent dissolution unless there are further extensions as described above. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after January 15, 2024 (assuming no further extensions). We currently expect to continue to obtain one-month extensions until the Business Combination with Avanseus is consummated.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2023. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

On December 17, 2022, we issued a non-interest-bearing promissory note in the principal amount of $90,000 to our sponsor in consideration for a $90,000 working capital loan. The note is convertible at the option of the holder into warrants that are substantially identical to our private placement warrants upon the completion of our initial business combination.

Our board of directors has authorized us (1) to raise up to $1 million of funds by the issuance of non-interest bearing notes to fund extensions of the deadline to complete our initial business combination and (2) to raise up to $1,062,500 of funds for working capital (which can also be used to fund extensions of the deadline to complete our initial business combination) through a private offering of promissory notes bearing simple interest at a rate of 15% per annum to prospective investors who are not our sponsor, directors or officers or any of their affiliates. As of May 15, 2023, there was an aggregate principal amount of $407,540 of non-interest-bearing notes and $607,740 of interest-bearing notes outstanding.

Except as described in the two preceding paragraphs, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee up to $10,000 for office space, utilities and secretarial and administrative support services. We began incurring these fees on October 12, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

The underwriters are entitled to a deferred fee of $4,025,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement.

Critical Accounting Policies and Significant Estimates

This management’s discussion and analysis of our financial condition and results of operations is based on our unaudited financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these unaudited financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Debt Issuance Costs

The Company complies with the requirements of Staff Accounting Bulletins Topic 5: Miscellaneous Accounting, A. Expenses of Offering. This interpretive response suggests that Specific incremental costs directly attributable to a proposed or actual offering of securities may properly be deferred and charged against the gross proceeds of the offering. However, management salaries or other general and administrative expenses may not be allocated as costs of the offering and deferred costs of an aborted offering may not be deferred and charged against proceeds of a subsequent offering. A short postponement (up to 90 days) does not represent an aborted offering. As a result of this response, the Company has concluded that the transfer of the Subscriber Shares (as defined in Note 5 of the condensed financial statements) will be recorded as a debt issuance cost and amortized over the life of the promissory note entered into by the subscriber.

The fair value of each Subscriber Share was determined to be $9.61-$9.87 per share (depending on the terms of each Zero-Interest Notes and Interest-Bearing Notes as defined in Note 5 and Note 6) or approximately $883,642 in the aggregate for all 90,600 Subscriber Shares transferred to the notes investors (see note 5 and note 6). Valuation of the Subscriber Shares was determined using Monte Carlo Model and classified as a Level 3 valuation. The Key inputs for Monte Carlo Model includes 1) Volatility of 5.2% -8.2%, 2) risk- free rate of 4.64% -5.11%, 3) stock price of $10.22 -$10.49 per share and 4) estimated term of 0.80 - 0.95 years.

Ordinary Shares Subject to Possible Redemption

We account for our ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, all Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of our balance sheet.

Net Loss Per Ordinary Share

We comply with the accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. At March 31, 2023 and December 31, 2022, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of us. As a result, diluted loss per ordinary share is the same as basic loss per ordinary share for the period presented.

Financial Instruments

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of warrant issuance and as of each subsequent annual period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company accounts for its outstanding warrants as equity-classified.

Recent Accounting Standards

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As of March 31, 2023, we were not subject to any market or interest rate risk. Following the consummation of our Initial Public Offering, the net proceeds received into the Trust Accounts, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain money market funds that invest solely in US treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures for the three months ended March 31, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were not effective due to a material weakness related to our internal control over financial reporting process and related party transactions. Additionally, like many blank check companies, we lack adequate resources to properly account for and report our transactions to our auditors. Due to the impact on our financial statements, we determined we have a material weakness.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting except as follows.

Management has identified a material weakness in internal controls related to the financial reporting process and related party transactions and to properly account for and report our transactions. In light of the material weakness identified, we have been implementing processes to identify and appropriately apply applicable accounting requirements. We plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on March 13, 2023. We may disclose additional factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

On April 22, 2021, we issued 2,875,000 founder shares to the Fat Projects PTE. LTD. (the “Sponsor”) for an aggregate purchase price of $25,000, or approximately $0.009 per share, pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. In September 2021, the Company received expressions of interest from anchor investors to purchase Units in the IPO. Subject to each anchor investor purchasing 100% of the Units allocated to it, in connection with the closing of the initial public offering (the “Initial Public Offering”) the Sponsor sold 75,000 founder shares to each anchor investor (750,000 founder shares in the aggregate) at their original purchase price of approximately $0.009 per share. The Company accounted for the fair value in excess of consideration paid with respect to the number of Founder Shares sold to the anchor investors as an offering cost reflected as an increase to additional paid in capital offset by a reduction of the offering proceeds upon completion of the IPO. The fair value of each Founder Share was determined to be $6.75.

On October 15, 2021, we consummated the Initial Public Offering of 10,000,000 units (the “Units”). Each Unit consists of one Class A ordinary share of the Company, $0.0001 par value per share (the “Class A Ordinary Shares”) and one warrant of the Company (each, a “Warrant”), each whole Warrant entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, subject to adjustment, pursuant to the Company’s registration statements on Form S-1 (File No. 333-257126). The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $100,000,000. On October 13, 2021, the underwriters notified the Company of their exercise of the over-allotment option in full and purchased 1,500,000 additional Units (the “Additional Units”) at $10.00 per Unit upon the closing of the over-allotment option, generating gross proceeds of $15,000,000. The over-allotment option closed on October 15, 2021. As previously reported on a Form 8-K, on October 15, 2021, simultaneously with the consummation of the Initial Public Offering, the Company consummated the private placement (the “Private Placement”) of an aggregate of 2,865,000 warrants (“Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $2,865,000.

A total of $115,000,000 was deposited in a Trust Account established for the benefit of the Company’s public shareholders, with Continental Stock Transfer & Trust Company acting as trustee. For a description of the use of the proceeds generated in the Initial Public Offering, see Part I, Item 2 of this Quarterly Report.

On December 17, 2022, we issued a non-interest-bearing promissory note in the principal amount of $90,000 to our sponsor in consideration for a $90,000 working capital loan. The note is convertible at the option of the holder into warrants that are substantially identical to our private placement warrants upon the completion of our initial business combination.

Our amended and restated memorandum and articles of association and our IPO prospectus permit us to issue non-interest-bearing notes to our sponsor and/or affiliates or designees of us or our sponsor to fund the payments into the Trust Account required to obtain extensions to the deadline for us to complete our initial business combination. On January 8, 2023, our board of directors has authorized us to raise up to $1 million of funds by the issuance of non-interest bearing notes to fund such extensions, and as of May 15, 2023, there was an aggregate principal amount of $407,540 of non-interest-bearing notes outstanding. Certain of the holders of our founder shares other than the anchor investors have agreed among themselves to transfer up to 5% of their founder shares to subscribers to the note offering at a rate of one share for each $10 of principal amount of notes to incentivize subscriptions.

On January 26, 2023, our board of directors has also authorized us to raise up to $1,062,500 of funds for working capital (which can also be used to fund extensions of the deadline to complete our initial business combination) through a private offering of promissory notes bearing simple interest at a rate of 15% per annum to prospective investors who are not our sponsor, directors or officers or any of their affiliates. Certain of the holders of our founder shares other than the anchor investors have agreed among themselves to transfer up to 5% of their founder shares to subscribers to the note offering at a rate of one share for each $10 of principal amount of notes to incentivize subscriptions. As of May 15, 2023, there was an aggregate principal amount of $607,740 of interest-bearing notes outstanding.

On May 4, 2023, Fat Projects International Investments and Holdings Limited (“FPI”), a shareholder of FATP’s Sponsor that received FATP Class B Ordinary Shares and Private Placement warrants shortly after the closing of FATP’s IPO which is controlled by FATP’s Co-Chief Executive Officers, David Andrada and Tristan Lo, sold 127,000 Class B Ordinary Shares to a private investor for $250,000 and loaned the proceeds to FATP in return for a non-interest-bearing, unsecured promissory note in that principal amount. This transaction was not part of either the $1,000,000 Promissory Note Offering or the $1,062,500 Promissory note Offering but rather was a separate transaction. Each of FATP’s six directors other than Mr. Andrada and Mr. Lo waived their right to receive 10,000 compensator Class B Ordinary Shares (for an aggregate of 60,000 shares) from FPI upon consummation of FATP’s initial business combination to be included in the shares sold to the private investor.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

Beginning in January 2023, the Company has issued a series of non-interest-bearing, unsecured notes in a private offering of up to $1 million in aggregate principal amount and a separate series of 15% interest-bearing, unsecured notes in a private offering of up to $1.06 million in aggregate principal amount. Existing holders of the Company’s Class B Ordinary Shares other than the anchor investors agreed to contribute up to 5% of their Class B Ordinary Shares to be transferred to investors in the notes at a rate of 1 share for each $10 in principal amount of notes to incentivize investors to purchase the notes. The purpose of the note offerings is to raise capital to fund extensions to the deadline for the Company to complete its initial business combination and to raise working capital. The Company did not initially consider the notes and related subscription agreements to be material because of the dollar amounts were small compared to the Company’s assets; however, with the passage of time and evolution of events – primarily redemptions from the Company’s trust account in connection with the April 14, 2023 amendment to the Company’s charter and increases in the aggregate amount of notes issued and outstanding – the Company has determined that the notes and related subscription agreements have now become material. The forms of the notes and subscription agreements are filed herewith as Exhibits 10.1, 10.2 and 10.3 and the foregoing summary is qualified in its entirety by such exhibits which shall be deemed incorporated herein by reference.

On May 4, 2023, Fat Projects International Investments and Holdings Limited, a Singapore private limited company controlled by the Company’s Co-CEOs David Andrada and Tristan Lo, sold 127,000 Class B Ordinary Shares for $250,000 to a private investor and loaned the proceeds to the Company pursuant to a non-interest-bearing, unsecured note to provide the Company with working capital. The Company’s directors and officers other than Mr. Andrada and Mr. Lo, waived the contingent right of their personal holding companies to receive from Fat Projects International Investments and Holdings Limited following consummation of the Company’s initial business combination, 10,000 Class B Ordinary Shares each (for an aggregate of 70,000 shares), which shares were included in the sale to the private investor. The share purchase agreement and note are filed herewith as Exhibits 10.4 and 10.5 and the foregoing summary is qualified in its entirety by such exhibits which shall be deemed incorporated herein by reference.

Item 6. Exhibits.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.