Sagaliam Acquisition Corp - Annual Report: 2022 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _________ TO _________

Commission File Number 001-41182

SAGALIAM ACQUISITION CORP.

(Exact name of Registrant as specified in its Charter)

Registrant’s telephone number, including area code: (213) 616-0011

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒

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 12 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 ☐

As of April 26, 2023, there were 1,471,337 shares of Class A common stock (including 956,337 shares of Class A common stock subject to redemption) and 2,875,000 shares of Class B common stock, $0.0001 par value, issued and outstanding).

Table of Contents

CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K for the year ended December 31, 2022, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections, concerning our business, operations, and financial performance and condition as well as our plans, objectives, and expectations for business operations and financial performance and condition. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. You can identify these statements by words such as “anticipate,” “assume,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “should,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Annual Report on Form 10-K may turn out to be inaccurate. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, those risks and uncertainties described herein under “Item 1A—Risk Factors.” You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The forward-looking statements are based on information available to us as of the filing date of this Annual Report on Form 10-K. Unless required by law, we do not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise. You should, however, review the factors and risks we describe in the reports we will file from time to time with the Securities and Exchange Commission, or the SEC, after the date of this Annual Report on Form 10-K. Forward-looking statements in this Annual Report may include, for example, statements about:

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

PART I

References in this Annual Report on Form 10-K (this “Annual Report”) to “we,” “us,” “our,” the “Company” or “Sagaliam” are to Sagaliam Acquisition Corp., a blank check company incorporated as a Delaware corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Sagaliam Sponsor LLC, a Delaware limited liability company. References to our “initial stockholders” refer to our Sponsor and each of our independent directors.

Overview

We are a blank check company incorporated in Delaware on March 31, 2021. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, or the initial business combination. We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act) and, as such, we are subject to all of the risks associated with early stage and emerging growth companies.

As of December 31, 2022, we had not commenced any operations. All activity for the period from March 31, 2021 (inception) through December 31, 2022 relates to our formation, initial public offering (“IPO”), operating costs, and expenses related to finding a business combination target as further described below. We will not generate any operating revenues until after the consummation of our initial business combination, at the earliest. We generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO. We have selected December 31 as our fiscal year end.

Initial Public Offering

On December 23, 2021, we consummated our initial IPO of 11,500,000 units, including 1,500,000 units issued pursuant to the full exercise of the underwriters’ over-allotment option. Each unit consists of one share of Class A capital stock, par value $0.0001 and one right, with each right entitling the holder to receive one-eighth (1/8) of one share of Class A common stock. The units were sold at a price of $10.00 per unit, generating gross proceeds of $115.0 million.

Simultaneously with the closing of the IPO, we consummated the sale of 400,000 units at a price of $10.00 per unit in a private placement to our Sponsor, generating gross proceeds of $4.0 million. In connection with the consummation of the IPO, we issued to the representative and/or its designees 115,000 representative’s shares.

Upon the closing of the IPO and the private placement, $116.15 million ($10.10 per unit) of the net proceeds of the IPO and certain of the proceeds from the private placement were placed in a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee, which 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 of 1940, which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the trust account as described below.

On December 22, 2022, we entered into an amendment to our underwriting agreement dated December 20, 2021 (the “Underwriting Agreement”) with EF Hutton, Division of Benchmark Investments, LLC (the “Underwriter”). Pursuant to the terms of the amendment, the Underwriter has agreed to reduce the amount of the Deferred Underwriting Commission (as defined in the Underwriting Agreement) payable to the Underwriter under the Underwriting Agreement from $4,025,000 in cash to $3,025,000 in cash.

The 2022 Charter Amendment and Related Stockholder Redemptions

Under Sagaliam’s previous charter, Sagaliam had until December 23, 2022 (the “Original Deadline Date”) to consummate its initial business combination, unless otherwise extended either (a) automatically for four months upon the execution of a business combination agreement and filing of a preliminary proxy statement with the SEC prior to the Original Deadline Date or (b) for successive three-month periods up to two times from the Original Deadline Date by the Sponsor depositing additional funds into the trust account.

Sagaliam’s Board believed that there was not sufficient time before the Original Deadline Date to consummate the business combination. Therefore, Sagaliam’s Board determined that it is in the best interests of Sagaliam’s stockholders to extend the date by which we must consummate a business combination in order to provide Sagaliams’ stockholders with the opportunity to participate in the prospective investment.

As reported by Sagaliam’s Form 8-K filed with the SEC on December 23, 2022, on December 22, 2022, Sagaliam’s shareholders voted in favor of amending Sagaliam’s charter to allow it more time to complete our initial business combination up until October 23, 2023 (the “Extended Deadline Date”).

The charter amendment provides Sagaliam with the option to extend the date by which it must complete its initial business combination from the Original Deadline Date by up to ten successive one-month periods up to an Extended Deadline Date by the Sponsor depositing the lesser of (x) $120,000 or (y) $0.06 per share for each public share of Sagaliam that is not redeemed in connection with our special meeting held on December 22, 2022 for each one-month extension after December 23, 2022 into the trust account at each extension election. As reported by Sagaliam’s Form 8-K filed with the SEC on January 23, 2023, Sagaliam extended the date by which it has to complete its business combination from January 23, 2023 to February 23, 2023. As reported by Sagaliam’s Form 8-K filed with the SEC on February 24, 2023, Sagaliam extended the date by which it has to complete its business combination from February 23, 2023 to March 23, 2023. As reported by Sagaliam’s Form 8-K filed with the SEC on April 3, 2023, Sagaliam extended the date by which it has to complete its business combination from March 23, 2023 to April 23, 2023. As reported by Sagaliam’s Form 8-K filed with the SEC on April 24, 2023, Sagaliam extended the date by which it has to complete its business combination from April 23, 2023 to May 23, 2023. If Sagaliam’s business combination is not consummated by the Extended Deadline Date or if Sagaliam fails to deposit additional funds into the trust account after each extension election, then Sagaliam will cease all operations except for the purpose of winding up and Sagaliam will distribute amounts in the trust account as provided in the charter, unless it further amends the charter.

In connection with the charter amendment, 10,543,663 shares were redeemed at a price of $10.21 per share and $107,595,680.53 was removed from the trust account to pay Sagaliam public stockholders who requested redemption of their Sagaliam Shares. As of December 31, 2022, the trust account balance was $9,843,440.

Proposed Business Combination

Business Combination Agreement

On November 16, 2022, we entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”) by and among Sagaliam, Allenby Montefiore Limited, a private company limited by shares organized and existing under the Laws of the Republic of Cyprus (“PubCo”), AEC Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of PubCo (“PubCo Merger Sub”), Supraeon Investments Limited, a private company limited by shares organized and existing under the Laws of the Republic of Cyprus (“Supraeon”), and GLD Partners, LP, a Delaware limited partnership (“Seller”). Arabian Entertainment Company Limited, a limited liability company organized under the Laws of the Kingdom of Saudi Arabia (“AEC”) is a majority-owned subsidiary of Supraeon, with Seller as the only other owner of shares of AEC.

Pursuant to the Business Combination Agreement, Supraeon may terminate the Business Combination Agreement and abandon the Merger at any time prior to the Merger Effective Time by written notice to Sagaliam if Sagaliam has not received commitments in the form of mutually agreed Subscription Agreements (as defined in the Business Combination Agreement) for at least fifty percent of the Minimum Cash Amount before December 15, 2022. On February 23, 2023, Supraeon notified Sagaliam that as Sagaliam did not receive such commitments before December 15, 2022, Supraeon was electing to terminate the Merger and the Business Combination Agreement. All related ancillary agreements entered into in connection with the Business Combination Agreement were also terminated on February 23, 2023. For additional information regarding the Business Combination Agreement and related ancillary agreements, see our Current Reports on Form 8-K filed with the SEC on November 16, 2022 and March 1, 2023, respectively. All capitalized terms used herein and not defined shall have the meanings ascribed to them in the Business Combination Agreement, the Seller Support Agreement, the Sponsor Support Agreement, the Amended and Restated Registration Rights Agreement and the Lock-up Agreement.

Membership Interest Purchase Agreement

On March 23, 2023, GLD Sponsor Member, LLC, a Delaware limited liability company (the “Seller”), entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with BN Holdings Trust, a Nevada Trust (“BN Holdings Trust”) and Sagaliam Sponsor, LLC (the “Sponsor”), pursuant to which BN Holdings Trust agreed to purchase all of the issued and outstanding equity interests in the Sponsor from the Seller, which constitutes 100% of the membership interests in the Sponsor. The consummation of the transactions contemplated by the Purchase Agreement (the “Closing”) is expected to take place at 10:00 am., New York time, on or before May 19, 2023.

There are a number of conditions precedent to the Closing including the delivery of an amended letter agreement, pursuant to which Sagaliam Acquisition Corp. (the “Company”) and EF Hutton, as underwriter to the Company, will consent to the transfer of certain Class A units and Class B Shares from the Sponsor to certain individuals and entities as listed in the Purchase Agreement. The Purchase Agreement also requires (i) the delivery of a release in favor of the Seller by the Sponsor and certain third parties, (ii) the delivery of indemnification and hold harmless agreements between BN Holdings Trust and certain third parties, including the current directors of the Company, (iii) the assumption by BN Holdings Trust of certain obligations of the Sponsor and the Company, each of which are to be paid as of the closing date of a business combination for the Company, (iv) the maintenance of directors’ and officers’ liability insurance and (v) the resignation of the current officers of the Sponsor.

Initial Business Combination

Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the private placement units, although substantially all of these net proceeds are intended to be applied generally toward consummating a business combination. The Nasdaq Stock Market LLC (“Nasdaq”) rules provide that the business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time we sign a definitive agreement to enter a business combination. We will only complete a business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the capabilities of our management team and our Sponsor to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns in the telecommunications, media, and technology industries.

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our 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 our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares, subject certain limitations. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of a business combination with respect to our rights.

If we are unable to complete a business combination by October 23, 2023 if all extension rights are exercised, and our stockholders have not further amended our certificate of incorporation to extend such date, we 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 (less taxes payable and up to $150,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

Our Business Strategy

Although our efforts to identify a prospective target business will not necessarily be limited to a particular industry, sector or region, we intend to capitalize on our expertise in the telecommunications, media, and technology industries.

We believe that the telecommunications, media and technology industries present attractive characteristics of long-term growth prospects globally, stable and cycle-resistant demand, fragmented markets with opportunities for consolidation, a lack of dominant players and global brands, predictable digital transition patterns and a large universe of growing and profitable targets.

We believe that five long-term trends are driving positive transformation in the telecommunications, media and technology industries, creating opportunities for long-term value creation in the sector specifically and, more broadly, in the associated knowledge economy. These drivers of transformation are: (i) digitization (the use of digital content and services), (ii) responsiveness (designing and offering products and services on a customized or bespoke basis for the individual), (iii) privatization (the growing private supply of media, content and services), (iv) automation (the use of artificial intelligence and data to enhance the efficacy and efficiency of product delivery platforms) and (v) globalization (the international development and dissemination of content, certification, technology and brands). We intend to take advantage of these long-term trends and the associated consolidation and value-creation opportunities.

Our acquisition and value creation strategy is to identify, acquire and, after our initial business combination, fundamentally enhance a company in the public markets. We intend to seek a company in an industry that complements the experience and expertise of our management team and is a business to which we believe we can add value.

Our management team is deeply familiar with the trends of our target industries and brings an investing approach that offers multiple competitive advantages in sourcing, evaluating and executing on opportunities, including being:

Our Business Combination Criteria

Consistent with our business strategy, we have developed the following general criteria and guidelines that we believe are important in evaluating prospective initial business combinations. We will use these criteria and guidelines in evaluating business combination opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet them in our stockholder communications related to our initial business combination would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.

Our Business Combination Process

In evaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things, a review of historical and projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our Sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our Sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations to present the opportunity to such entity, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

Our Sponsor and our officers and directors own founder shares following the IPO. Because of this ownership, our Sponsor and our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers or directors were to be included by a target business as a condition to any agreement with respect to our initial business combination. Our Sponsor paid an aggregate of $25,000, or approximately $0.009 per founder share, and accordingly, the Sponsor could potentially make a substantial profit even if the company selects an acquisition target that substantially declines in value and is unprofitable for public stockholders.

Selection of a Target Business and Structuring of our Initial Business Combination

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of our initial business combination will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.

In any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account for purposes of Nasdaq’s 80% of net assets test.

To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

In evaluating a prospective business target, we expect to conduct a thorough due diligence review, which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and other information that will be made available to us.

Competition

In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial business combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding rights, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.

Human Capital Management

We currently have four executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the initial business combination process we are in. We do not intend to have any full-time employees prior to the completion of our initial business combination.

As a smaller reporting company, we are not required to include risk factors in this annual report. As of the date of this document, there have been no material changes to the risk factors disclosed in our final prospectus dated December 20, 2021, preliminary proxy statement dated November 25, 2022 and definitive proxy statement dated November 29, 2022 filed with the SEC, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition.

None.

Our executive offices are located at 1800 Avenue of the Stars, Suite 1475, Los Angeles, CA 90067. Our executive offices are provided to us by an affiliate of our Sponsor. Commencing on May 1, 2021, we have agreed to pay our Sponsor a total of $20,000 per month for the provision of officers’ cash salaries, office space, utilities and secretarial and administrative support. We consider our current office space adequate for our current operations.

In Re Argon Credit, LLC, et al., Debtors, Case No. 16-39654 (U.S. Bankruptcy Court Northern District of Illinois Eastern Division).

On December 16, 2016, Argon Credit, LLC and Argon X, LLC (collectively the “Debtors”) filed petitions for relief under chapter 11 of title 11 of the United States Code. On January 11, 2017, Debtors’ bankruptcy cases were converted to chapter 7 cases. On December 14, 2018, the chapter 7 trustee filed an adversary proceeding as case number 18-ap-00948 (the “Bankruptcy Complaint”) against multiple defendants, including Barry Kostiner, asserting claims for aiding and abetting breach of fiduciary duty. As to Mr. Kostiner, the Bankruptcy Complaint alleged that, while an employee of the Debtor, he aided and abetted the former CEO of Argon Credit, Raviv Wolfe, in breaching his fiduciary duties to Argon Credit, by, among other things, knowingly participating in a scheme to funnel assets away from the Debtors and their creditors, double pledging Argon Credit’s assets, and knowingly submitting false or misleading financial reports to the Debtors’ secured lender to conceal the transfer of Argon Credit’s assets. On July 11, 2019, Mr. Kostiner, appearing through counsel, filed an answer denying all allegations against him set forth in the Bankruptcy Complaint.

On August 12, 2021, the trustee filed a Motion for the Entry of an Order Pursuant to Bankruptcy Rule 9019 Approving Settlement with Mr. Kostiner. Under the terms of the proposed settlement, Mr. Kostiner would pay the trustee $35,000 in exchange for dismissal with prejudice from the suit and the exchange of mutual releases (the “Proposed Settlement”). Each of the trustee and Mr. Kostiner concluded that the Proposed Settlement was in their respective best interests in light of the contested nature of the Complaint, the costs that both parties would incur in connection with the litigation of same the uncertain outcome from protracted litigation. The trustee argued that the Proposed Settlement was reasonable based upon: (a) the range of potential outcomes taking into account the defenses that Mr. Kostiner could assert; (b) the likelihood of recovering more given Mr. Kostiner’s financial condition; (c) Argon Credit’s director and officers’ liability insurance policy had been exhausted; and (d) the Debtors’ pre-petition lender had recently filed a complaint against many of the parties originally named by the trustee in its adversary proceeding, including Mr. Kostiner, and this action further reduces the likelihood of recovery against Mr. Kostiner, because at a minimum, he will be forced to pay to defend that action. On September 3, 2021, the Bankruptcy Court issued an order approving the settlement, and on November 18, 2021, the Bankruptcy Court issued an order granting the motion to voluntarily dismiss the proceeding against Mr. Kostiner.

Fund Recovery Services, LLC v. RBC Capital Markets, LLC, et al., Case No. 1:20-cv-5730 (U.S. District Court for the Northern District of Illinois Eastern Division.

On September 25, 2020, Fund Recovery Services, LLC (“Fund”), as assignee of Princeton Alterative Income Fund, L.P. (“PAIF”) filed a complaint in the above-referenced action asserting a variety of claims against 37 defendants, including Mr. Kostiner. On May 15, 2021, Fund filed an amended complaint against 34 of the defendants, including Mr. Kostiner (the “Amended Complaint”). The claims against Mr. Kostiner in the Amended Complaint include: (i) violation of 18 U.S.C. 1962(2) by the conduct and participation in a RICO enterprise through a pattern of racketeering activity; (ii) violation of 18 U.S.C. 1962(d) by conspiracy to engage in a pattern of racketeering activity; (iii) fraud/intentional misrepresentation; (iv) aiding and abetting fraud/intentional misrepresentation; (v) fraudulent concealment; (vi) aiding and abetting fraudulent concealment; (vii) fraudulent/intentional inducement; (viii) conversion; (ix) aiding and abetting conversion; (x) civil conspiracy; and (xi) tortious interference with contractual relations. The Amended Complaint seeks damages of approximately $240 million jointly and severally against all defendants, together with treble and punitive damages, among other relief.

The Amended Complaint, as it pertains to Mr. Kostiner, covers much of the same conduct that is the subject of the Bankruptcy Complaint described above and stems from a transaction that Argon Credit entered into with Spartan Specialty Finance, LLC (“Spartan”). Argon, a consumer finance platform that made high-interest, unsecured loans to credit-impaired borrowers, financed its loans through a revolving credit facility provided by PAIF. Mr. Kostiner was the sole member of Spartan and was also, for a period of time, the Vice President of Capital Markets at Argon. Argon and Spartan entered into an agreement whereby Spartan agreed to purchase a portfolio of loans from Argon. Spartan financed the acquisition by obtaining a loan from Hamilton Funding (“Hamilton”). The Amended Complaint alleges that PAIF had a perfected security interest in the loans that Argon improperly sold to Spartan (which were financed by Hamilton Funding), and that defendants, including Mr. Kostiner, engaged in a scheme to induce PAIF to initially lend funds, later to increase its credit line, and ultimately convert and deprive PAIF of its property by numerous acts of fraud.

On July 1, 2021, defendants, including Mr. Kostiner, filed a consolidated motion to dismiss the Amended Complaint in its entirety against them, based on the following arguments: (a) the RICO claims (Counts (1)-(2)) are time-barred; (b) Fund lacks standing to bring Counts 1-11; (c) Fund is collaterally estopped from litigating the issues that are the subject of the Amended Complaint; (d) the allegations in the Amended Complaint fail to satisfy the requirements of Rules 8 and 9(b) of the Federal Rules of Civil Procedure; (e) the Amended Complaint failed to allege a duty sufficient to support its allegations in Counts 1-7; (f) Fund failed to adequately plead the elements of a valid RICO claim; and (g) Fund failed to adequately plead the elements of any of its state law claims (Counts 3-13).

By Memorandum and Order dated January 17, 2022, the Court found that the Amended Complaint failed to adequately plead the elements of count one (violation of 18 U.S.C. 1962(2) by the conduct and participation in a RICO enterprise through a pattern of racketeering activity) and count two (violation of 18 U.S.C. 1962(d) by conspiracy to engage in a pattern of racketeering activity). The Court accordingly granted Defendants’ motion to dismiss those claims, and based on the dismissal of those claims, granted the motion to dismiss the remaining claims based on state law, counts three through six, for lack of subject matter jurisdiction. The Order provides that Plaintiff has until February 8, 2022, to file a motion for leave to amend with a proposed amended complaint that adequately states a claim over which the Court has subject matter jurisdiction, otherwise the Court will issue a final judgment in accordance with its Order.

On February 22, 2022, PAIF filed a Revised Second Amended Complaint (“RSA Complaint”) against 25 defendants, including Mr. Kostiner. The RSA Complaint incorporates information from witness statements and journal entries from alleged Argon insiders. The claims against Mr. Kostiner in the RSA Complaint include: (i) fraud/intentional misrepresentation; (ii) aiding and abetting fraud/intentional misrepresentation; (iii) fraudulent concealment; (iv) aiding and abetting fraudulent concealment; (v) fraudulent/intentional inducement; (vi) conversion; (vii) aiding and abetting conversion; (viii) civil conspiracy; and (ix) tortious interference with contractual relations. The Amended Complaint seeks damages of approximately $240 million jointly and severally against all defendants, together with treble and punitive damages, among other relief.

By order dated September 30, 2022, the Court denied Fund’s motion to file a second amended complaint for failure to assert a viable RICO claim, and directed the Clerk to enter judgment dismissing Fund’s civil RICO claims with prejudice and dismissing the state-law claims for lack of supplemental jurisdiction.

In re Spartan Specialty Finance I SPV, LLC, Case No. 16-22881-rdd (U.S. Bankruptcy Court for the Southern District of New York White Plains Division).

On June 29, 2016, Spartan filed a petition for relief under chapter 11 of title 11 of the United States Code. It did so in order to resolve a loan dispute that it had with Hamilton, including Hamilton’s alleged right to access cash accounts that Spartan had pledged as collateral. On May 26, 2017, the bankruptcy court approved a Stipulation and Agreement Resolving Debtor’s Motion for Use of Cash Collateral and Fixing Amount of Secured Claim, between Hamilton, Spartan, and Mr. Kostiner, in his individual capacity. Spartan’s bankruptcy petition was dismissed as part of the Court’s approval of the Settlement.

Except for the actions set forth above, there is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such, and we and our officers and directors have not been subject to any such proceeding in the 12 months preceding the date of this report.

Not applicable.

PART II

Market Information

Our units, Class A common stock and rights each trade on the Nasdaq Global Market under the symbols “SAGAU”, “SAGA” and “SAGAR”, respectively. Our units commenced public trading on December 21, 2021, and our Class A common stock and rights commenced separate public trading on February 8, 2022. Our Class B common stock is not listed on any exchange.

Holders of Record

As of May 19, 2023, there were 2 holders of record of our units, 4 holders of record of our Class A common stock, 19 holders of our Class B common stock and 1 holders of record of our rights.

Dividend Policy

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings

Unregistered Sales

On April 5, 2021, our Sponsor purchased 2,875,000 shares of our Class B common stock for an aggregate purchase price of $25,000, and later transferred a total of 225,000 shares of Class B common stock to our officers and directors. The 2,875,000 shares of Class B common stock include 375,000 shares subject to forfeiture if the underwriter’s over-allotment option was not exercised in full. As the underwriters exercised the over-allotment option in full, the 375,000 shares of Class B common stock were not forfeited.

The initial holders of the Class B common stock have agreed not to transfer, assign or sell any of the founder shares until the earlier of (i) one year after the date of the consummation of our initial business combination or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing 150 days after our initial business combination, the Class B common stock will no longer be subject to such transfer restrictions.

Simultaneously with the closing of the IPO, our Sponsor purchased an aggregate of 400,000 private units in a private placement at a price of $10.00 per unit, for an aggregate purchase price of $4,000,000. The private placement units are identical to the units sold in the IPO, except they and the underlying securities are subject to certain transfer restrictions and entitled to certain registration rights as described in this report.

Ten “qualified institutional buyers” as that term is defined in Rule 144A of the Securities Act or “accredited investors” as that term is defined in Regulation D of the Securities Act (who are not affiliated with any member of our management team), whom we refer to as the anchor investors, have each purchased 9.9% of the units sold in the IPO, or 990,000 units, excluding any units sold pursuant to the underwriters’ exercise of their over-allotment opinion. As each anchor investor purchased 100% of the units allocated to it, in connection with the closing of the IPO, our Sponsor sold 20,000 founder shares to each anchor investor, or an aggregate of 200,000 founder shares to all ten anchor investors, at a purchase price of approximately $0.0029 per share. On November 5, 2021, our Chief Executive Officer, Mr. Barry Kostiner transferred 50,000 Class B common stock back to our Sponsor, leaving our Sponsor with 2,500,000 shares and our officers and directors with 175,000, respectively of our Class B common stock.

Use of Proceeds from Registered Offerings

On December 23, 2021, we consummated our IPO of 11,500,000 units, including 1,500,000 units issued to underwriters upon full exercise of their over-allotment option. EF Hutton, division of Benchmark Investments, LLC (the “Underwriter”), acted as the representative of several underwriters for the IPO. The securities sold in the IPO were registered under the Securities Act on a registration statement on Form S-1 (No. 333-256473). The SEC declared the registration statement effective on December 20, 2021.

In connection with the IPO, we incurred offering costs of approximately $7,525,729 (after reduction of $1,000,000), including $1,150,000 of underwriting fees, $4,025,000 of deferred underwriting fees, $1,150,000 for the fair value of Class A shares issued to underwriter as representative shares, $1,634,620 for the fair value of the Founder Shares in excess of amounts paid by anchor investors, and $566,109 of other offering costs. Other incurred offering costs consisted principally of preparation fees related to the Initial Public Offering. A total of $116,150,000 of the proceeds from the IPO and the sale of the private placement units, was placed in a U.S. based trust account, maintained by Continental Stock Transfer & Trust Company, acting as trustee.

On December 22, 2022, we entered into certain amendment to Underwriting Agreement dated December 20, 2021 with the Underwriter. Pursuant to the terms of the amendment, the Underwriter has agreed to reduce the amount of the deferred underwriting commission (as defined in the Underwriting Agreement) payable to the Underwriter under the Underwriting Agreement from $4,025,000 in cash to $3,025,000 in cash.

Except for the above, there has been no material change in the planned use of the proceeds from the IPO and private placement as is described in our final prospectus related to the IPO. For a description of the use of the proceeds generated from the Initial Public Offering, see “Item 1. Business.”

Performance Graph

The performance graph has been omitted as permitted under rules applicable to smaller reporting companies.

Issuer Purchases of Equity Securities

None.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our financial statements and related notes included in Part II, Item 8 of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Overview

We are a blank check company incorporated in Delaware on March 31, 2021. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, or the initial business combination. We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Startups Act of 2012 and, as such, we are subject to all of the risks associated with early stage and emerging growth companies.

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

Results of Operations

Our entire activity since inception up to December 31, 2022 was related to our formation and IPO. Since the IPO, our activity has been limited to the search for a prospective initial business combination target. We will not generate any operating revenues until the consummation of our initial business combination. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the year ended December 31, 2022, we had net loss of $3,410,277, which consisted of $4,565,139 in operating costs, $240,000 in general and administrative costs, $115,126 in franchise tax expense offset by $1,509,988 in income earned on marketable securities held in Trust Account.

For the period from March 31, 2021 (inception) through December 31, 2021, we had net loss of $313,787, which consisted of $10,806 in operating costs, $160,000 in general and administrative expenses, $150,000 in franchise tax expense, offset by $7,019 in income earned on marketable securities held in Trust Account.

Liquidity and Capital Resources

On December 23, 2021, we consummated our IPO of 11,500,000 units, including 1,500,000 units issued pursuant to the full exercise of the Underwriters’ over-allotment option. Each unit consists of one share of Class A capital stock, par value $0.0001 and one right, with each right entitling the holder to receive one-eighth of one share of Class A common stock. The units were sold at a price of $10.00 per unit, generating gross proceeds of $115.0 million.

Simultaneously with the closing of the IPO, we consummated the sale of 400,000 units at a price of $10.00 per unit in a private placement to our Sponsor, generating gross proceeds of $4.0 million. In connection with the consummation of the IPO, we issued to the representative and/or its designees 115,000 representative’s shares.

Upon the closing of the IPO and the private placement, $116.15 million ($10.10 per unit) of the net proceeds of the IPO and certain of the proceeds from the private placement were placed in a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee. We incurred $8,525,729 in IPO related transaction costs, including $4,025,000 of deferred underwriting fees, which was reduced from $4,025,000 to $3,025,000 pursuant to certain amendment to Underwriting Agreement entered between us and the Underwriter on December 22, 2022, $1,150,000 of cash underwriting fees, $1,150,000 for the fair value of shares of Class A common stock issued to Underwriters as representative shares, $1,634,620 for the fair value of the founder shares in excess of amounts paid by anchor investors, and $566,109 of offering costs.

On December 22, 2022, our shareholders voted in favor of amending our charter to allow us more time to complete our initial business combination up until October 23, 2023 (the “Extended Deadline Date”).

The charter amendment provides us with the option to extend the date by which we must complete our initial business combination from the Original Deadline Date by up to ten successive one-month periods up to an Extended Deadline Date by the Sponsor depositing the lesser of (x) $120,000 or (y) $0.06 per share for each public share of Sagaliam that is not redeemed in connection with our special meeting held on December 22, 2022 for each one-month extension after December 23, 2022 into the trust account at each extension election. As reported by Sagaliam’s Form 8-K filed with the SEC on January 23, 2023, Sagaliam extended the date by which it has to complete its business combination from January 23, 2023 to February 23, 2023. As reported by Sagaliam’s Form 8-K filed with the SEC on February 24, 2023, Sagaliam extended the date by which it has to complete its business combination from February 23, 2023 to March 23, 2023. As reported by Sagaliam’s Form 8-K filed with the SEC on April 3, 2023, Sagaliam extended the date by which it has to complete its business combination from March 23, 2023 to April 23, 2023. As reported by Sagaliam’s Form 8-K filed with the SEC on April 24, 2023, Sagaliam extended the date by which it has to complete its business combination from April 23, 2023 to May 23, 2023. If Sagaliam’s Business Combination is not consummated by the Extended Deadline Date or if Sagaliam fails to deposit additional funds into the trust account after each extension election, then Sagaliam will cease all operations except for the purpose of winding up and Sagaliam will distribute amounts in the trust account as provided in the charter, unless it further amends the charter.

In connection with the charter amendment, 10,543,663 shares were redeemed at a price of $10.21 per share and $107,595,680.53 was removed from the trust account to pay Sagaliam public stockholders who requested redemption of their Sagaliam Shares. As of December 31, 2022, the trust account balance was $9,843,440.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less deferred underwriting commissions and income taxes payable), to complete our initial business combination. 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 account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

On August 23, 2022, we issued a convertible promissory note (the “Promissory Note”) to our Sponsor. Pursuant to the Promissory Note, the Sponsor agreed to loan us an aggregate principal amount up to $1,500,000. The principal of this Promissory Note may be drawn down from time to time prior to the earlier of: (i) October 23, 2023 or (ii) the date on which we consummate an initial business combination with a target business (a “Business Combination”), upon written request from us to the Sponsor. The Promissory Note was issued to fund our working capital. The Promissory Note is non-interest bearing and all outstanding amounts under the Promissory Note will be due on the earlier of: (i) October 23, 2023 or (ii) the date on which we consummate a Business Combination (the “Maturity Date”). If a Business Combination is not announced prior to October 23, 2023, the unpaid principal balance of the Promissory Note, and all other sums payable with regard to the Promissory Note, shall automatically and immediately become due and payable, in all cases without any action on the part of the Sponsor. All or a portion of the amounts outstanding under the Promissory Note may be converted on the Maturity Date into units at a price of $10.00 per unit at the option of the Sponsor. The units would be identical to our outstanding private placement units that were issued to the Sponsor in a private placement at the time of our initial public offering. The Promissory Note contains customary events of default, including, among others, those relating to our failure to make a payment of principal when due.

The Sponsor has the right, but not the obligation, to convert any outstanding principal amount under this Promissory Note, in whole or in part, into our units (the “Units”) by providing us with written notice of its intention to convert any outstanding principal amount under this Promissory Note at least one business day prior to the closing of a Business Combination. The Units would be identical to the private placement units. The number of Units to be received by the Sponsor in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to Sponsor by (y) $10.00. The outstanding balance of the Promissory Note as of December 31, 2022 is $721,500.

As of December 31, 2022, we had $3,116 in its operating bank accounts, $9,843,440 in marketable securities held in the trust account to be used for a business combination or to repurchase or redeem its common stock in connection therewith and a working capital deficit of $3,854,273. Until the consummation of a business combination, we will be using the funds not held in the trust account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the initial business combination.

In order to fund working capital deficiencies or finance transaction costs in connection with an 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 an initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that an initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts.

Going Concern

In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have until October 23, 2023 to consummate the proposed initial business combination. It is uncertain that we will be able to consummate the proposed initial business combination by this time. If a business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of our Company. Additionally, we may not have sufficient liquidity to fund the working capital needs of our Company through one year from the issuance of these financial statements. Our management has determined that the liquidity condition and mandatory liquidation, should a business combination not occur, and potential subsequent dissolution, raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after October 23, 2023. We intend to complete the proposed initial business combination before the mandatory liquidation date. However, there can be no assurance that we will be able to consummate any business combination by October 23, 2023. In addition, we may need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors or third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern through the liquidation date of October 23, 2023 or through one year from the issuance of these financial statements.

Contractual Obligations

An agreement to pay our Sponsor a monthly fee of $20,000 for cash salary, office space, utilities, secretarial, and administrative support services. We began incurring these fees on May 1, 2021 and will continue to incur these fees monthly until the earlier of the consummation of an initial business combination or our liquidation.

The Underwriters are entitled to a deferred fee of up to $3,025,000 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 we complete the initial business combination, subject to the terms of the Underwriting Agreement.

Commitments and Contingencies

Registration Rights

The holders of the Class A common stock issuable upon conversion of the founder shares, private placement Shares, shares of Class A common stock underlying the private placement rights, the representative’s shares and shares of Class A common stock included in or underlying the units that may be issued upon conversion of working capital loans will have registration rights to require Sagaliam to register a sale of any shares of Class A common stock held by them pursuant to a registration rights agreement signed on or around the effective date of the IPO. These holders will be entitled to make up to three demands, excluding short form registration demands, that Sagaliam registers such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by Sagaliam. Notwithstanding the foregoing, the Underwriters may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the IPO registration statement.

Underwriting Agreement

The Underwriters were entitled to an underwriting discount of $0.20 per unit, or $2.3 million in the aggregate, paid upon the closing of the IPO.

On December 22, 2022, we entered into a certain amendment (“Amendment”) to Underwriting Agreement dated December 20, 2021 with the Underwriter. Pursuant to the terms of the amendment, the Underwriter has agreed to reduce the amount of the deferred underwriting commissions (as defined in the Underwriting Agreement) payable to the Underwriter under the Underwriting Agreement from $4,025,000 in cash to $3,025,000 in cash.

The deferred underwriting commissions will become payable to the Underwriters from the amounts held in the trust account solely in the event that we complete our initial business combination, subject to the terms of the Underwriting Agreement and Amendment.

Critical Accounting Policies and Estimates

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (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 stockholder 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. We have 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, we, 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 our 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 Estimate

The preparation of the financial statement in conformity with U.S. GAAP requires our 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 statement.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ from those estimates.

Marketable Securities Held in Trust Account

At December 31, 2022, substantially all of the assets held in the Trust Account were held in money market funds, which are invested primarily in U. S. Treasury securities. Our investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in other income earned on marketable securities held in Trust Account in the accompanying statement of operations. The estimated fair value of investments held in Trust Account are determined using available market information.

As of December 31, 2022, we had $9,843,440 in cash held in the Trust Account.

Class A Common Stock Subject to Possible Redemption

We account for our common stock subject to possible redemption in accordance with the guidance in ASC 480. Common stock subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock 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) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. We recognize changes in redemption value immediately as they occur and adjusts the carrying value of redeemable class A common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable class A common stock are affected by charges against additional paid-in capital and accumulated deficit.

As of December 31, 2022, 956,337 shares of class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of our balance sheet.

Offering Costs associated with the Initial Public Offering

We comply with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. We incurred offering costs amounting to $7,525,729 consisting of $1,150,000 of underwriting fees, $3,025,000 of deferred underwriting fees (reduced to $3,025,000), $1,150,000 for underwriting related costs recognized for representative shares, $1,634,620 for the fair value of the founder shares in excess of amounts paid by anchor investors, and $566,109 of other offering costs.

Income Taxes

We account for income taxes under 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.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on our evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in our financial statement. Since we were incorporated on March 31, 2021, the evaluation was performed for the years 2021and 2022 tax years which will be the only periods subject to examination.

We recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2022. We are currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

Net Loss per Ordinary Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Income and losses are shared pro rata between Class A ordinary shares subject to possible redemption and non-redeemable ordinary shares. Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted-average number of ordinary shares outstanding for the respective period. Non-redeemable ordinary shares include Founder Shares, Representative Shares, and Private Placement Shares as these shares do not have any redemption features.

Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.

Recent Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021.

Off-Balance Sheet Arrangements and Contractual Obligations

As of December 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

JOBS Act

The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We have elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that is held by non-affiliates equals or exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

This information appears following Item 15 of this Annual Report on Form 10-K and is incorporated herein by reference.

None.

Evaluation of Disclosure Controls and Procedures

As of December 31, 2022, management, with the participation of our Chief Executive Officers, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officers, to allow timely decisions regarding required disclosures.

Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer concluded that as of December 31, 2022, we did not maintain effective disclosure controls and procedures because of the material weaknesses in internal control over financial reporting described below

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management concluded that a deficiency in internal control over financial reporting existed relating to the lack of evidence documenting a formal review of the Company’s account reconciliations, financial close process, and financial statement preparation constituted a material weakness as defined in the SEC regulations.

Management is in the process of enhancing its procedures to include evidence of management’s detailed review of account reconciliations, financial close process, and financial statement preparation. 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.

Management’s Report on Internal Controls over Financial Reporting

“This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.”

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the three months ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Management is in the process of enhancing its procedures to include evidence of management’s detailed review of account reconciliations, financial close process, and financial statement preparation.

None.

Not applicable.

PART III

Officers and Directors

Our officers and directors as of December 31, 2022 were as follows:

Mr. Barry Kostiner – Chief Executive Officer. Mr. Kostiner is serving as the Chief Executive Officer of Sagaliam Acquisition Corp. Additionally, Mr. Kostiner has served as the President of Legacy Tech Partners, LLC (LTP), a microcap-focused EdTech investment vehicle, since February 2021 and has also been a Manager of Capital Markets at Legacy Education (OTC: LEAI) since March 2021. Mr. Kostiner joined the Board of Directors of LEAI in May 2021. Mr. Kostiner has served as the Interim Chief Executive Officer of Legacy Education Alliance since December 1, 2021.

Mr. Kostiner was the CFO of Ameri Holdings Inc. (Nasdaq: AMRH) from October 2018 through December 2020. The operations of AMRH, including its global IT services business focused on SAP with operations in both the U.S. and India, was acquired by management, with the residual Nasdaq vehicle acquired by Enveric Biosciences (Nasdaq: ENVB), an evidence-based cannabinoid pharma company focused on palliative therapies for cancer patients. Mr. Kostiner has been a consultant to ENVB since January 2021. From May 2016 through October 2018, Mr. Kostiner was a consultant to Cypress Skilled Nursing, a healthcare facility operator and from May 2017 through October 2018 he was a consultant to LinKay Technologies Inc., an artificial intelligence incubator with a portfolio of intellectual property focused on AI and LiDAR / geospatial technology, with research staff in India and New York. Mr. Kostiner’s 20-year career in energy includes eight years at Goldman Sachs and Merrill Lynch and their affiliates, with a focus on energy trading and portfolio management, as well as serving as the CEO of an oil & gas SPAC (Nasdaq: PGRI) from 2005 through 2009. Mr. Kostiner earned a Bachelor’s of Science degree in Electrical Engineering and a Master’s of Science in Operations Research from MIT. His thesis on the mathematics of electric industry deregulation was sponsored by Harvard’s Kennedy School of Government.

Mr. Barry Kostiner is a named defendant in an ongoing litigation. See Item 3 for further details.

Mr. Thomas W. Neukranz – Chief Financial Officer and Director. Mr. Neukranz is serving as Chief Financial Officer and a director of Sagaliam Acquisition Corp. Mr. Neukranz has served as Managing Director of Capital Markets for GLD Partners, LP since July 2020. Prior to joining GLD, Mr. Neukranz served as Head of Capital Markets for CleanFund Inc., from July 2017 to August 2019, and as Executive Vice President of Aegon Investment Management, from February 2017 to August 2018. From 1993 to 2000, Mr. Neukranz was a Partner and Head of the Institutional businesses at RS Investments, Vice President, Global Head of Exchange Derivatives at Goldman Sachs and Head of Exchange Traded Derivatives at JP Morgan. Previously, Mr. Neukranz was responsible for derivative hedging for Bank of America and Lehman Brothers. Mr. Neukranz began his career on the floor of the Board of Trade in Chicago. Mr. Neukranz has serves on the Board of the Stanford Cancer Institute since 2016 and served as Chairman from 2017 through 2019. Mr. Neukranz received a B.S. in Industrial Management from Purdue University and holds Series 7 and 63 FINRA licenses. On May 5, 2023 Mr. Neukranz resigned his position effective May 7, 2023

Ms. Jiayin Liu – Vice President, Business Development. Ms. Liu is serving as Vice President, Business Development of Sagaliam Acquisition Corp. Ms. Liu has served as Director of Finance for GLD Partners, LP since July 2020. Prior thereto, Ms. Liu served as Senior Financial Analyst for CleanFund Commercial PACE Capital, Inc., from March 2017 to June 2020, and served as Business Analyst for Industrial and Commercial Bank of China in 2015. Ms. Liu received a B.S. in Economics and Finance from the University of Western Ontario, and a Master’s Degree in Financial Analysis from the University of San Francisco.

Mr. George Caruolo — Director and Chairman. Mr. Caruolo joined our board of directors December 20, 2021 and was appointed Chairman on June 23, 2022. Mr. Caruolo has been the principal of his own law firm for nearly 40 years and a government relations strategy advisor based in Rhode Island for over 24 years. He has represented privately held and publicly traded clients in the areas of healthcare, electric utilities, solar energy, gaming, heavy construction, developmental disabilities and Native American tribal affairs, as well as in other areas, both regionally and nationally. He is a director of Allegro, LLC, a fintech company. He was an elected state representative and majority leader of the Rhode Island General Assembly, has chaired the Rhode Island Education Board and has served on other boards of directors. Mr. Caruolo received a Bachelor’s Degree from Harvard University and a Juris Doctor degree from Suffolk University Law School.

Mr. Gabriel Del Virginia — Director. Mr. Del Virginia joined our board of directors on December 20, 2021. Mr. Del Virginia has more than 30 years of experience providing legal representation in various types of public and private business entities in corporate, mergers and acquisitions, financing, litigation and financial restructuring matters, as an associate at several prominent national law firms, including Milbank Tweed Hadley & McCloy, and thereafter as principal of his own law firm, where he has practiced for over 10 years. Mr. Del Virginia also served on the board of directors Sysorex Global Holdings Corp. (SYRX), a Nasdaq-listed technology company that provides data analytics and location-based solutions and services to commercial and government customers worldwide. He is a graduate of Rutgers University and Rutgers Law School.

Mr. Glauco Lolli-Ghetti — Director. Mr. Lolli-Ghetti joined our board of directors on December 20, 2021. Since 2019, Mr. Lolli-Ghetti has served as Head of Development at Palatine Capital Partners, a real estate private equity firm, where he is responsible for development investment strategies across acquisition and entitlement. Prior to joining Palatine, Mr. Lolli-Ghetti founded Urban Muse, a real estate investment company responsible for developing 372,000 square feet of mixed-use properties with an aggregate cost of $397 million. Prior to forming Urban Muse, Mr. Lolli-Ghetti was development manager at Federal Realty Investment Trust, a publicly traded REIT with a market cap of $6.75 billion. Mr. Lolli-Ghetti received a Bachelor’s Degree from Lehigh University.

Number and Terms of Office of Officers and Directors

As of December 31, 2022, we had four directors. Our board of directors has been divided into two classes, with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. The term of office of the first class of directors, consisting of Messrs. Del Virginia and Lolli-Ghetti, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Messrs. Neukranz and Caruolo, will expire at the second annual meeting of stockholders.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, Vice Presidents, Secretary, Treasurer, Assistant Secretaries and such other offices as may be determined by the board of directors.

Director Independence

Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Messrs. Caruolo, Del Virginia and Lolli-Ghetti are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent directors are present.

Committees of the Board of Directors

Our board of directors has two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and Nasdaq rules require that the compensation committee of a listed company be comprised solely of independent directors.

Audit Committee

We have established an audit committee of the board of directors. Messrs. Caruolo, Del Virginia and Lolli-Ghetti serve as members of our audit committee, and Mr. Caruolo chairs the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. Each of Messrs. Caruolo, Del Virginia and Lolli-Ghetti meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.

Each member of the audit committee is financially literate and our board of directors has determined that Mr. Caruolo qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

We have adopted an audit committee charter, which details the principal functions of the audit committee, including:

the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us;

pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;

setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence;

reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

Compensation Committee

We have established a compensation committee of our board of directors. Messrs. Del Virginia and Lolli-Ghetti serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent Messrs. Del Virginia and Lolli-Ghetti are independent, and Mr. Del Virginia chairs the compensation committee.

We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including:

reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other office;

reviewing on an annual basis our executive compensation policies and plans;

implementing and administering our incentive compensation equity-based remuneration plans;

assisting management in complying with our proxy statement and annual report disclosure requirements;

approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;

if required, producing a report on executive compensation to be included in our annual proxy statement; and

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and shall be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

Compensation Committee Interlocks and Insider Participation

None of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving on our board of directors.

Special Committee

On October 13, 2022, Sagaliam’s board of directors discussed forming a special committee of independent directors (the “Special Committee”) to explore a possible business combination. In the meeting, Sagaliam’s board of directors appointed George Caruolo, Gabriel Del Virginia and Glauco Lolli-Ghetti to the Special Committee, and appointed George Caruolo as chairperson. The board of directors delegated to the Special Committee the authority to (i) establish, approve, modify, monitor and direct the process and procedures related to the review and evaluation of a possible transaction, including the authority to determine not to proceed with any such process, procedures, review or evaluation; (ii) respond to any communications, inquiries or proposals regarding a possible transaction; (iii) review, evaluate, investigate, pursue and negotiate the terms and conditions of a possible transaction; (iv) solicit expressions of interest or other proposals for possible transactions to the extent the Special Committee deems appropriate; (v) determine on behalf of the board of directors and Sagaliam whether a possible transaction is advisable and is fair to, and in the best interests of, Sagaliam and its stockholders (or any subset of the stockholders of Sagaliam that the Special Committee determines to be appropriate); (vi) reject or approve a possible transaction, or recommend such rejection or approval to Sagaliam’s board of directors; (vii) effect or recommend to Sagaliam’s board of directors the consummation of a possible transaction; (viii) review, analyze, evaluate and monitor all proceedings and activities of Sagaliam related to a possible transaction; and (ix) take such other actions as the Special Committee may deem to be necessary or appropriate for the Special Committee to discharge its duties, the Special Committee shall act for the benefit of Sagaliam and its stockholders who may participate as sellers, solely in such stockholders’ capacities as sellers, in a possible transaction. A Special Committee charter was adopted during the October 13, 2022 meeting.

Director Nominations

The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate in the consideration and recommendation of director nominees are Messrs. Caruolo, Del Virginia and Lolli-Ghetti. In accordance with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.

The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics and our audit and compensation committee charters as exhibits to the IPO registration statement. You will be able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Conflicts of Interest

Members of our management team do not have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such member solely in his or her capacity as a director or officer of the company. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

Our officers and directors may become officers or directors of another special purpose acquisition company with a class of securities registered under the Exchange Act, even prior to us entering into a definitive agreement for our initial business combination.

Ten “qualified institutional buyers” as that term is defined in Rule 144A of the Securities Act or “accredited investors” as that term is defined in Regulation D of the Securities Act (who are not affiliated with any member of our management team), whom we refer to as the anchor investors, have each purchased 9.9% of the units to be sold in the IPO, or 990,000 units, excluding any units sold pursuant to the Underwriters’ exercise of their over-allotment opinion. As each anchor investor purchased 100% of the units allocated to it, in connection with the closing of the IPO, our Sponsor sold 20,000 founder shares to each anchor investor, or an aggregate of 200,000 founder shares to all ten anchor investors, at a purchase price of approximately $0.0029 per share.

Other potential conflicts of interest include:

None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time.

In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

Our initial stockholders have agreed to waive their redemption rights with respect to any founder shares, any private placement shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our initial stockholders have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our initial business combination by the date by which Sagaliam must complete its initial business combination, which can be extended by up to ten successive one-month periods up to October 23, 2023 by depositing additional funds into the trust account. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement units held in the trust account will be used to fund the redemption of our public shares, and the private placement units (and the underlying securities) will expire worthless. Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of (i) six months after the date of the consummation of our initial business combination or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, subject to certain exceptions. Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. Notwithstanding the foregoing, if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing 150 days after our initial business combination, the founder shares will no longer be subject to such transfer restrictions. With certain limited exceptions, the private placement units and the securities underlying such rights will not be transferable, assignable or saleable by our Sponsor or its permitted transferees until the later of 30 days after the completion of our initial business combination and one year after the completion of the IPO. Since our Sponsor and officers and directors may directly or indirectly own common stock and rights following the IPO our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.

Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

Our Sponsor, officers or directors may have a conflict of interest with respect to evaluating a business combination and financing arrangements as we may obtain loans from our Sponsor or an affiliate of our Sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such working capital loans may be convertible into units at a price of $10.00 per unit (which, for example, would result in the holders being issued 150,000 units, if $1,500,000 of loans were so converted), at the option of the lender. Such units would be identical to the private placement units.

The conflicts described above may not be resolved in our favor.

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

the corporation could financially undertake the opportunity;

the opportunity is within the corporation’s line of business; and

it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.

Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or contractual obligations:

Accordingly, if any of the above executive officers or directors becomes aware of a business combination opportunity which is suitable for any of the above entities to which he or she has current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our Sponsor, officers or directors. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.

In the event that we submit our initial business combination to our public stockholders for a vote, pursuant to the letter agreement, our Sponsor, officers and directors have agreed to vote any founder shares and private placement shares held by them and any public shares purchased during or after the IPO (including in open market and privately negotiated transactions) in favor of our initial business combination.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons. Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all reports applicable to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner in accordance with Section 16(a) of the Exchange Act.

Executive Officer and Director Compensation

Commencing on May 1, 2021, we agreed to pay our Sponsor a total of $20,000 per month for the provision of officers’ cash salaries, office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation (and, in the case of officers’ cash salaries, subject to any applicable notice periods), we will cease paying these monthly fees. The $20,000 monthly amount includes a monthly cash salary of $10,000 for our CEO, Barry Kostiner, a monthly cash salary of $3,000 for our CFO, Thomas Neukranz, and a monthly cash salary of $1,000 for our Vice President, Business Development, Jiayin Liu. Other than disclosed herein, none of our officers has received any cash compensation for services rendered to us. The services to be provided by these officers shall include evaluation of potential business combination opportunities, preparation of financial reports, SEC and regulatory compliance and any other administrative functions that pertain to our operation. As we are a shell company, these officers may have obligations to other entities, and the officers are not required to allocate a minimum percentage of time to our Company. The employment agreements with each officer specify the individual salary amounts and are filed as exhibits to the IPO registration statement. In addition to the foregoing cash compensation, as additional consideration for their services, our Sponsor transferred 100,000 founder shares to Mr. Kostiner (50,000 of which were transferred back to the Sponsor on November 5, 2021), 40,000 founder shares to Mr. Neukranz and 10,000 founder shares to Ms. Liu.

As consideration for their services as members of our board of directors, our Sponsor transferred 25,000 founder shares each to Messrs. Caruolo, Del Virginia and Lolli-Ghetti.

Other than the foregoing, no compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our Sponsor, officers, directors or any affiliate of our Sponsor, officers or directors, prior to or in connection with any services rendered in order to effectuate the consummation of our initial business combination (regardless of the type of transaction).] However, these persons will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments made to our Sponsor, officers, directors or any affiliate of our Sponsor, officers or directors. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing reimbursement payments to our Sponsor, officers, directors or any affiliate of our Sponsor, officers or directors for their out-of-pocket expenses incurred in connection with activities on our behalf.

After the completion of our initial business combination, directors or officers who remain with the combined companies may be paid consulting or management fees or other compensation from the combined company. All of this compensation will be disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed initial business combination. We have not established any limit on the amount of such compensation. It is unlikely that the amount of such compensation will be known at the time of the proposed initial business combination, because the directors of the post-combination business will be responsible for determining officer and director compensation.

We do not intend to take any action to ensure that our officers or directors maintain their positions after the consummation of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain after our initial business combination. The existence or terms of any such employment or consulting arrangements may influence our officers’ and directors’ motivation to identify or select a target business, but we do not believe that opportunities for our officers or directors to remain after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our officers or directors that provide for benefits upon termination of employment.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of our common stock as of May 19, 2023, by:

each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;

each of our executive officers and directors; and

all our executive officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our common stock beneficially owned by them. The table below does not reflect the Class A common stock underlying the right entitling the holder to receive upon consummation of our initial business combination as of May 19, 2023.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Changes in Control

None.

Certain Relationships and Related Transactions

The following is a summary of transactions since our formation on March 31, 2021, to which we have been a participant in which the amount involved exceeded or will exceed the lesser of $1,172,211 or 1% of the average of our total assets as of December 31, 2022, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.

Relationship to Supraeon

GLD Management, Inc. is the sole member of GLD Principal Strategies LLC. GLD Principal Strategies LLC owns 9% of the interest in GLD Sponsor Member, LLC which is the sole member of the Sponsor. In addition, GLD Management, Inc. is the general partner of the Seller and owns 1% of the interest in the Seller. In February 2022, the Seller purchased AEC and subsequently transferred the substantial majority of its shares to its wholly-owned subsidiary, Supraeon. The Seller continues to hold 250 shares of AEC. In connection with the consummation of the transactions, the Seller shall receive an aggregate number of PubCo Ordinary Shares with an aggregate value equal to $180,000,000 from the PubCo. On February 23, 2023 the Business Combination Agreement with related party was terminated.

In addition, Thomas W. Neukranz, Sagaliam’s Chief Financial Officer, has also been serving as Managing Director of Capital Markets of the Seller since July 2020; Jiayin Liu, Sagaliam’s Vice President, Business Development, has also been serving as Director of Finance for the Seller since July 2020.

Founder Shares

On April 5, 2021, our Sponsor subscribed to purchase 2,875,000 shares of Class B common stock, par value $0.0001 per share, or the founder shares, for an aggregate price of $25,000, and later transferred a total of 225,000 founder shares to our officers and directors, leaving our Sponsor with 2,650,000 founder shares. (up to 375,000 of which remained subject to forfeiture by our Sponsor if the Underwriters’ over-allotment option were not exercised in full). The underwriter exercised its over-allotment option in full on December 21, 2021; thus, these 375,000 founder shares were no longer subject to forfeiture.

Ten “qualified institutional buyers” as that term is defined in Rule 144A of the Securities Act or “accredited investors” as that term is defined in Regulation D of the Securities Act (who are not affiliated with any member of our management team), whom we refer to as the anchor investors, have each purchased 9.9% of the units to be sold in the IPO, or 990,000 units, excluding any units sold pursuant to the Underwriters’ exercise of their over-allotment option. In connection with the closing of the IPO, our Sponsor sold 20,000 founder shares to each anchor investor at a purchase price of approximately $0.0029 per share, leaving our Sponsor with 2,450,000 founder shares.

On November 5, 2021, Barry Kostiner transferred 50,000 founder shares back to the Sponsor, leaving our Sponsor with 2,450,000 founder shares and our officers. & directors with 175,000 founder shares. 

The initial stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the founder shares until the earlier to occur of: (i) one year after the completion of the initial business combination or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. Notwithstanding the foregoing, if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing 150 days after our initial business combination, the founder shares will no longer be subject to such transfer restrictions. With certain limited exceptions, the private placement units and the securities underlying such rights will not be transferable, assignable or saleable by our Sponsor or its permitted transferees until the later of 30 days after the completion of our initial business combination and one year after the completion of the IPO. Since our Sponsor and officers and directors may directly or indirectly own common stock and rights following the IPO, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.

Private Placement Shares

Simultaneously with the closing of the IPO, we issued 400,000 private placement units at a price of $10.00 per private placement unit to our Sponsor, generating proceeds of $4.0 million. Each private placement unit consist of one share of our Class A common stock and one right entitling the holder to receive one-eighth of one share of Class A common stock at the closing of our initial business combination.

Related Party Loans

Promissory Note – Related Party

On August 23, 2022, Sagaliam Acquisition Corp. (the “Company”) issued a convertible promissory note (the “Promissory Note”) to our Sponsor. Pursuant to the Promissory Note, the Sponsor agreed to loan the Company an aggregate principal amount up to $1,500,000. The principal of this Promissory Note may be drawn down from time to time prior to the earlier of: (i) October 23, 2023 or (ii) the date on which the Company consummates an initial business combination with a target business (a “Business Combination”), upon written request from the Company to the Sponsor. The Promissory Note was issued to fund working capital of the Company. The Promissory Note is non-interest bearing and all outstanding amounts under the Promissory Note will be due on the earlier of: (i) October 23, 2023 or (ii) the date on which the Company consummates a Business Combination (the “Maturity Date”). If a Business Combination is not announced prior to October 23, 2023, the unpaid principal balance of the Promissory Note, and all other sums payable with regard to the Promissory Note, shall automatically and immediately become due and payable, in all cases without any action on the part of the Sponsor. All or a portion of the amounts outstanding under the Promissory Note may be converted on the Maturity Date into units at a price of $10.00 per unit at the option of the Sponsor. The units would be identical to the Company’s outstanding private placement units that were issued to the Sponsor in a private placement at the time of the Company’s initial public offering. The Promissory Note contains customary events of default, including, among others, those relating to the Company’s failure to make a payment of principal when due.

The Sponsor has the right, but not the obligation, to convert any outstanding principal amount under this Promissory Note, in whole or in part, into units (the “Units”) of Sagaliam by providing Sagaliam with written notice of its intention to convert any outstanding principal amount under this Promissory Note at least one business day prior to the closing of a Business Combination. The Units would be identical to the private placement units. The number of Units to be received by the Sponsor in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to Sponsor by (y) $10.00.

The outstanding balance of the Promissory Note as of December 31, 2022 is $721,500.

Line of Credit—Related Party

On April 6, 2021, our Sponsor agreed to loan us up to $300,000 to cover expenses related to the IPO pursuant to a promissory note. On December 17, 2021, our Sponsor agreed to increase the principal amount under the promissory note to $400,000. This loan was non-interest bearing and payable on the earlier of the completion of the initial public offering or the date we determine not to conduct an initial public offering. We borrowed $400,000 under the promissory note, and on December 23, 2021, we repaid the promissory note in full.

Administrative Support Agreement

Commencing on May 1, 2021, we began paying our Sponsor $20,000 per month for office space and administrative and support services. Upon completion of our initial business combination or liquidation (and, in the case of officers’ cash salaries, subject to any applicable notice periods), we will cease paying these monthly fees.

Our Sponsor, executive officers and directors, or their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations targets. Our audit committee will review, on a quarterly basis, all payments that are made to our Sponsor, executive officers or directors, or their affiliates.

Transaction Support Agreement

In connection with the execution of the Business Combination Agreement, Supraeon, Sagaliam and the Sponsor entered into the Sponsor Support Agreement, which provides, among other things, that the Sponsor will vote in favor of (i) the transactions set forth in the Business Combination Agreement and (ii) the other transaction proposals. In addition, in connection with the execution of the Business Combination Agreement, Supraeon, Sagaliam and Seller, entered into the Seller Support Agreement, which provides, among other things, that Seller will approve (i) the transactions set forth in the Business Combination Agreement and (ii) the other transaction proposals. On February 23, 2023, in connection with the termination of the Business Combination Agreement, the Sponsor Support Agreement, the Seller Support Agreement and all related ancillary agreements in connection with the Business Combination Agreement were terminated on February 23, 2023. For more information regarding the transaction support agreement, please see “Item 1. Business—Proposed Business Combination” for a description of this agreement.

Registration Rights Agreement

Please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Registration Rights Agreement” for a description of this agreement.

Policy for Approval of Related Party Transactions

The audit committee of our board of directors has adopted a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.

Director Independence

Please see “Item 10. Directors, Executive Officers and Corporate Governance—Director Independence” and “—Committees of the Board of Directors” for information regarding the independence of the board of directors and the committees of the board of directors.

The following table represents aggregate fees billed to us by Marcum LLP, our independent registered public accounting firm for the periods indicated.

Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and reviews of our quarterly financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings.

Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. We did not pay Marcum LLP any audit-related fees for the year ended December 31, 2022 and for the period from March 31, 2021 (inception) through December 31, 2021.

Tax Fees. We did not pay Marcum LLP for professional services relating to tax compliance, tax planning and tax advice for the year ended December 31, 2022. We did pay Marcum LLP $5,154 for professional services for tax compliance for the period from March 31, 2021 (inception) through December 31, 2021.

All Other Fees. All other fees consist of fees billed for all other services. We did not pay Marcum LLP any other fees for the year ended December 31, 2022 and for the period from March 31, 2021 (inception) through December 31, 2021.

Pre-Approval Policy

Our audit committee was formed upon the closing of our IPO. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). The audit committee did pre approve our auditors for 2022.

PART IV

The following documents are filed as part of this report:

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 19, 2023.

POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes and appoints Barry Kostiner with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

SAGALIAM ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Sagaliam Acquisition Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Sagaliam Acquisition Corp. (the “Company”) as of December 31, 2022 and 2021, the related statements of operations, changes in stockholders’ deficit and cash flows for the year ended December 31, 2022 and for the period from March 31, 2021 (inception) through December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 and for the period from March 31, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company’s auditor since 2021.

Tampa, FL

May 19, 2023

SAGALIAM ACQUISITION CORP.

BALANCE SHEETs

The accompanying notes are an integral part of the financial statements.

SAGALIAM ACQUISITION CORP.
STATEMENTs OF OPERATIONS

The accompanying notes are an integral part of the financial statements.

SAGALIAM ACQUISITION CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

For the year ended December 31, 2022

For the period from March 31, 2021 (Inception) to December 31, 2021

The accompanying notes are an integral part of the financial statements.

SAGALIAM ACQUISITION CORP.

STATEMENTS OF CASH FLOWS