The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization, Business Operations
and Liquidity
Organization and General
LightJump Acquisition Corporation (the “Company”)
is a newly organized blank check company incorporated as a Delaware Company on July 28, 2020. The Company was formed for the purpose of
acquiring, merging with, engaging in capital stock exchange with, purchasing all or substantially all of the assets of, engaging in contractual
arrangements, or engaging in any other similar business combination with a single operating entity, or one or more related or unrelated
operating entities operating in any sector (“Business Combination”).
The Company has selected December 31 as its fiscal
year end.
As of September 30, 2022, the Company had not
commenced any operations. All activity from July 28, 2020 (inception) through September 30, 2022, relates to the Company’s formation
and the initial public offering described below. The Company will not generate any operating revenues until after the completion of its
initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on cash and cash
equivalents from the proceeds derived from the Initial Public Offering (“IPO”) and will recognize changes in the fair value
of its warrant liability as other income (expense).
The Company’s sponsor is LightJump One Founders,
LLC, a Delaware limited liability company (the “Sponsor”).
Financing
The registration statement for the Company’s
IPO was declared effective on January 8, 2021 (the “Effective Date”). On January 12, 2021, the Company consummated
the IPO of 12,000,000 units (each, a “Unit” and collectively, the “Units”) at $10.00 per Unit,
generating gross proceeds of $120,000,000, which is discussed in Note 3.
Simultaneously with the closing of the IPO, the
Company consummated the sale of 3,850,000 warrants (the “Private Warrants”), at a price of $1.00 per Private
Warrant (the “Private Placement”), which is discussed in Note 4.
On January 15, 2021, the underwriters exercised
the over-allotment option in full to purchase 1,800,000 Units (the “Over-allotment Units”), generating aggregate
gross proceeds of $18,000,000. Simultaneously with the closing of the sale of the Over-allotment Units, the Company consummated the sale
of an additional 360,000 Private Warrants at a price of $1.00 per Private Placement Warrant in a private placement to the
Sponsor, generating gross proceeds of $360,000.
Transaction costs of the IPO including the exercise
of over-allotment amounted to $3,465,153 consisting of $2,760,000 of underwriting fees and $705,153 of other offering costs.
Trust Account
Following the closing of the IPO on January 12,
2021 and the exercise of over-allotment on January 15, 2021, $138,000,000 from the net proceeds of the sale of the Units in the IPO
and the sale of the Private Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities,
with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment
Company Act, which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held
in the trust account that may be released to the Company to pay its tax obligations, the proceeds from this Initial Public Offering will
not be released from the trust account until the earlier of: (a) the completion of the Company’s initial business combination,
(b) the redemption of the Company’s public shares if the Company are unable to complete its initial business combination in
the required time period.
On July 8, 2022, LightJump held a special
meeting of stockholders. At the meeting, stockholders holding 11,032,790 Public Shares exercised their right to redeem such shares for
a pro rata portion of the funds in the Trust Account. As a result, $110,507,221 (approximately $10.02 per share) was debited from the
Trust Account to pay such holders.
On July 11, 2022, the Company filed an amendment
to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Extension
Amendment”). The Extension Amendment extends the date by which the Company must consummate its initial business combination from
July 12, 2022 to January 12, 2023 (the “Extension Combination Period”). On August 9, 2022, $276,721 was deposited into the
Trust Account to fund the extension, which is redeemable by the Company’s public stockholders. The $276,721 was funded by proceeds
from the promissory notes issued to the Sponsor during the three months ended September 30, 2022 (see Note 5).
Initial Business Combination
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds are intended to
be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business
Combination successfully. The Company must complete one or more Initial Business Combinations having an aggregate fair market value of
at least 80% of the assets held in the Trust Account (as defined below) (excluding the taxes payable on interest earned and less
any interest earned thereon that is released for taxes) at the time of the agreement to enter into the Initial Business Combination. However,
the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires an interest in the target sufficient for it not to be required to register as an
investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”).
In connection with any proposed initial Business
Combination, the Company will either (1) seek stockholder approval of such initial Business Combination at a meeting called for such purpose
at which public stockholder may seek to convert their public shares, regardless of whether they vote for or against the proposed business
combination or don’t vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of
taxes payable), or (2) provide its public stockholder with the opportunity to sell their public shares to the Company by means of a tender
offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on
deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein.
If the Company determines to engage in a tender
offer, such tender offer will be structured so that each stockholder may tender all of his, her or its shares rather than some pro rata
portion of his, her or its shares. The decision as to whether the Company will seek stockholder approval of a proposed business combination
or will allow stockholder to sell their shares to the Company in a tender offer will be made by the Company, solely in the Company’s
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would
otherwise require us to seek stockholder approval. If the Company determines to allow stockholder to sell their shares to the Company
in a tender offer, it will file tender offer documents with the SEC which will contain substantially the same financial and other information
about the initial business combination as is required under the SEC’s proxy rules.
The common stock subject to redemption is recorded
at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business
Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if
the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
If a stockholder vote is not required by law and
the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended
and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions
pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, stockholder approval of the transactions
is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem
shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally,
each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.
Notwithstanding the foregoing redemption rights,
if the Company seeks stockholder approval of its initial business combination and the Company does not conduct redemptions in connection
with its initial business combination pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides
that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with
respect to more than an aggregate of 15% of the shares sold in our initial public offering, without the Company’s prior consent.
The Company’s sponsor, officers and directors
(the “initial stockholder”) have agreed not to propose any amendment to Amended and Restated Certificate of Incorporation
that would affect the Company’s public stockholder’s ability to convert or sell their shares to the Company in connection
with a business combination as described herein or affect the substance or timing of our obligation to redeem 100% of its public
shares if the Company does not complete a business combination within the Extension Combination Period unless the Company provides its
public stockholder with the opportunity to convert their shares of common stock upon the approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest not previously released
to the Company but net of franchise and income taxes payable, divided by the number of then outstanding public shares.
If the Company is unable to complete its initial
Business Combination within the Extension Combination Period, the Company will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public
shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest
not previously released to the Company (net of taxes payable), 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 liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the Company’s remaining stockholder and its board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above)
to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The Company cannot assure you that it will have funds sufficient to pay or provide for all creditors’ claims.
The Company’s initial stockholder agreed
to waive their rights to liquidating distributions from the Trust Account with respect to any founder shares held by them if the Company
fails to complete its initial business combination within the Extension Combination Period. However, if the initial stockholder acquires
public shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such public
shares if the Company fails to complete a Business Combination during the Extension Combination Period.
Business Combination Agreement
On June 14, 2022, the Company, Moolec Science
Limited, a private limited company incorporated under the laws of England and Wales (“Moolec”), Moolec Science SA, a public
limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg with its registered office
at 17, Boulevard F.W. Raiffeisen, L-2411 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’
Register (Registre de Commerce et des Sociétés, Luxembourg) under number B268440 (“Holdco”), and Moolec Acquisition,
Inc., a Delaware corporation (“Merger Sub”) entered into a Business Combination Agreement (the “Business Combination
Agreement”).
Pursuant to the Business Combination Agreement,
Moolec, Holdco, Merger Sub and the Company will enter into a business combination transaction pursuant to which, among other things, (a)
pursuant to the Exchange Agreements, each of the Moolec Shareholders, effective on the Exchange Effective Time, will contribute its respective
Moolec Ordinary Shares to Holdco in exchange for Holdco Ordinary Shares to be subscribed for by each such Moolec Shareholder (such contributions
and exchanges of the Moolec Ordinary Shares for Holdco Ordinary Shares, collectively, the “Exchange”), (b) as a result of
the Exchange, the Moolec will become a wholly-owned subsidiary of Holdco, (c) immediately prior to the consummation of the Merger but
after the Exchange Effective Time, each of the Moolec SAFE Holders will receive and become holders of issued and outstanding Holdco Ordinary
Shares, in accordance with the applicable Moolec SAFE, (d) following the consummation of the Exchange, Merger Sub will merge with and
into Company, with Company surviving such merger and becoming a direct wholly-owned subsidiary of Holdco (the “Merger”) and,
in the context of the Merger, all Company Common Stock outstanding shall be converted into the right to receive the Merger Consideration
in the form of Holdco Ordinary Shares pursuant to a share capital increase of Holdco, as set forth in this Agreement, and (e) in order
to satisfy the Moolec’s obligations under that certain Consulting Agreement, dated June 18, 2021, by and between the Moolec and
the Moolec’s Chief Financial Officer (“CFO”), CFO will be freely allotted an aggregate of 243,774 Holdco Ordinary Shares
(the “CFO Free Shares”). Capitalized terms used but not defined herein shall have the respective meanings set forth in the
Business Combination Agreement.
Upon the terms and subject to the conditions set
forth in the Business Combination Agreement and the Exchange Agreements at the Exchange Effective Time, the Exchange will take place based
on an exchange ratio of .66787343 used to determine the number of aggregate Holdco Shares valued at $10.00 per Holdco Share for which
the aggregate Moolec Ordinary Shares will be exchanged (the “Exchange Consideration”). The valuation of the Moolec Ordinary
Shares contributed to Holdco by the Moolec Shareholders against new Holdco Shares pursuant to the Exchange shall be deemed to be, as of
the Exchange Effective Time, the sum of $325,000,000.
Pursuant to the Exchange Agreements, each Moolec
Shareholder has also agreed to not transfer any of its Moolec Ordinary Shares before the earlier to occur of the Exchange and the termination
of the Business Combination Agreement pursuant to its terms.
Backstop Agreement
Concurrently with the execution of the Business
Combination Agreement, Union Group Ventures Limited, THEO I SCSp, UG Holdings, LLC and Sponsor entered into the Backstop Agreement (the
“Backstop Agreement”), pursuant to which, among other things, the parties guaranteed, on a several (and not joint) basis,
to backstop an aggregate amount equal to $10,000,000 after taking into account the EarlyBird Fee, conditioned upon Closing on the terms
and subject to the conditions set forth in the Backstop Agreement.
Amendment to Business Combination Marketing
Agreement
On January 8, 2020, the Company entered into that
certain Business Combination Marketing Agreement (“BCMA”) with EarlyBirdCapital, Inc. (“EBC”). It is a condition
to the consummation of the transactions contemplated by the Business Combination Agreement that the Company and EBC enter into an amendment
to the BCMA to provide for, among other things, a change in the compensation to be payable to EBC upon the Closing of the business combination.
On June 14, 2022, the Company and EBC executed an amendment to the BCMA (the “Amendment”) whereby the Company shall pay to
EBC (A) a cash fee at Closing equal to (i) 20% of the aggregate gross proceeds (up to a maximum of $3,830,000) held in the Trust
Account (after redemptions and reduction of all additional payments included in the Trust Account to accommodate all extensions) and received
by the Company in any financing in connection with the Business Combination regardless of the source of such funds, plus (ii) $1,000,000
and (B) in consideration of EBC introducing Moolec to the Company, Holdco shall issue to EBC a number of ordinary shares of Holdco equal
to $2,000,000 divided by the lesser of (y) the volume weighted average price of Holdco’s ordinary shares for the ten trading days
preceding the six month anniversary of the Closing and (z) $10.00, up to a maximum of 600,000 shares (the “Share Fee”). The
Share Fee shall be issued to EBC within five business days of the six month anniversary of the Closing, and Holdco shall register the
resale of the ordinary shares issued to EBC as promptly as practicable after their issuance. The Sponsor shall forfeit to Holdco for cancellation
the same number of shares of common stock payable to EBC under such Share Fee.
Liquidity, Capital Resources and Going Concern
As of September 30, 2022, the Company had $15,486 in
its operating bank account and a working capital deficit of approximately $3.6 million.
Prior to the completion of the IPO, the Company’s
liquidity needs had been satisfied through a payment from the Sponsor of $25,000 (see Note 5) in exchange for the Founder Shares
to cover certain offering costs, and a loan under an unsecured promissory note from the Sponsor of $125,000 (see Note 5). Subsequent
to the consummation of the IPO and Private Placement, the Company’s liquidity needs have been satisfied through the proceeds from
the consummation of the Private Placement not held in the Trust Account.
An affiliate of the Company’s chief executive
officer has agreed to loan the Company an aggregate of up to $150,000 to cover expenses related to the Initial Public Offering pursuant
to a promissory note (see Note 5). This loan is non-interest bearing and payable on demand. The Company had drawn down $125,000 in 2020,
which was still outstanding as of September 30, 2022. The Company issued several additional promissory notes to the Sponsor in principal
of an aggregate of $1,276,861. All notes are not interest bearing and are repayable upon conclusion of business combination. The
principal balance may be prepaid at any time.
In addition, in order to finance transaction costs
in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s
officers and directors may, but are not obligated to, provide the Company Working Capital Loans (see Note 5). To date, there were no amounts
outstanding under any Working Capital Loans.
The Company can raise additional capital through
Working Capital Loans (as defined in Note 5) from the initial stockholders, the Company’s officers, directors, or their respective
affiliates (which is described in Note 5), or through loans from third parties. None of the Sponsor, officers or directors are under any
obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it 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 its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be
available to it on commercially acceptable terms, if at all.
On July 8, 2022, the Sponsor issued a promissory
note to Moolec, pursuant to which, Moolec agreed to loan to the Sponsor up to an aggregate principal amount of $350,000.
On July 11, 2022, the Company filed an amendment
to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Extension
Amendment”). The Extension Amendment extends the date by which the Company must consummate its initial business combination from
July 12, 2022 to January 12, 2023 (the “Extension Combination Period”). On August 9, 2022, $276,721 was deposited into the
Trust Account to fund the extension, which is redeemable by the Company’s public stockholders. The $276,721 was funded by proceeds
from the promissory notes issued to the Sponsor during the three months ended September 30, 2022 (see Note 5).
The Company anticipates that the $15,486 held
outside of the trust account as of September 30, 2022, might not be sufficient to allow the Company to operate until January 12, 2023,
the period it has to consummate an initial business combination, assuming that a business combination is not consummated during that time.
Until consummation of the business combination, the Company will be using the funds not held in the trust account, and any additional
Working Capital Loans from the initial stockholders, the Company’s officers and directors, or their respective affiliates, for identifying
and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and
from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements
of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business
combination.
If the Company is unable to complete its initial
Business Combination within the Extension Combination Period, the Company will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public
shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest
not previously released to the Company (net of taxes payable), 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 liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the Company’s remaining stockholder and its board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above)
to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
It is not certain that The Company would be able to complete a business combination with the period of Initial Business Combination and
Company cannot assure that it will have funds sufficient to pay or provide for creditors’ claims.
These conditions raise substantial doubt about
the Company’s ability to continue as a going concern through the liquidation date if a business combination is not consummated.
These unaudited condensed financial statements do not include any adjustments relating to the recovery of the recorded assets of the classification
of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Risks and Uncertainties
Management is currently evaluating the impact
of the COVID-19 pandemic and the Russian-Ukraine war and has concluded that while it is reasonably possible that the virus and war could
have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific
impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
On August 16, 2022, the Inflation Reduction Act
of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise
tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded
foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its
shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased
at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the
fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition,
certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority
to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any redemption or other repurchase that occurs
after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether
and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise
would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business
Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE”
or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination
but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury.
In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment
of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business
Combination and in the Company’s ability to complete a Business Combination.
Note 2 — Basis of Presentation and
Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial
statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”)
for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information
and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which
include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating
results for the three and nine months ended September 30, 2022 is not necessarily indicative of the results that may be expected through
December 31, 2022.
The accompanying unaudited condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K filed by the
Company with the SEC on April 12, 2022.
Emerging Growth Company Status
The Company is 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
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 of 2002, reduced disclosure
obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding
a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
In addition, Section 107 of the JOBS Act
also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company intends
to take advantage of the benefits of this extended transition period.
Use of Estimates
The preparation of these unaudited condensed financial
statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the
reported amounts of expenses during the reporting period.
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 unaudited condensed financial statements, which management considered in formulating its estimate, could
change in the near term due to one or more future confirming events. Actual results could differ from those estimates.
Cash
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash and cash equivalents. The Company did not have any cash equivalents
at September 30, 2022 and December 31, 2021.
Investment in Trust Account
The proceeds held in the Trust Account will be
invested in U.S. government securities, with a maturity of 180 days or less or in money market funds meeting certain conditions under
Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. Except with respect to interest
earned on the funds held in the Trust Account that may be released to the Company to pay its tax obligations, the proceeds from our initial
public offering will not be released from the Trust Account until the earlier of: (a) the completion of the Company’s initial business
combination, (b) the redemption of the Company’s public shares if the Company is unable to complete its initial business combination
within the Extension Combination Period.
At September 30, 2022 and December 31, 2021, the
assets held in the Trust Account consisted of mutual funds in the amount of $28,132,922 and $138,013,319, respectively, and the Company
had not withdrawn any of the interest income from the Trust Account to pay its tax obligations for the period from July 28, 2020 (inception)
to September 30, 2022. The mutual funds held in the Trust Account were available for sale and reported at fair value.
The carrying value and fair value of mutual funds
held in Trust Account on September 30, 2022 are as follows:
| |
Carrying Value | | |
Fair Value | |
U.S. Money Market | |
$ | 28,132,922 | | |
$ | 28,132,922 | |
The carrying value and fair value of mutual funds
held in Trust Account on December 31, 2021 are as follows:
| |
Carrying Value | | |
Fair Value | |
U.S. Money Market | |
$ | 138,013,319 | | |
$ | 138,013,319 | |
Fair-Value Measurements
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying balance sheet, primarily due to their short-term nature. Fair value is defined as the price that
would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the
measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable
inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
|
● |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
|
● |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Depository Insurance Coverage of $250,000. At September 30, 2022 and December 31, 2021, the Company has not experienced losses on
these accounts and management believes the Company is not exposed to significant risks on such accounts.
Common Stock Subject to Possible Redemption
The Company accounts for its common stock subject
to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common
stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable
common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption
upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other
times, common stock is classified as stockholders’ deficit. The Company’s common stock features certain redemption rights
that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly,
common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit
section of the Company’s condensed balance sheet.
At September 30, 2022, the common stock reflected in the balance sheets
are reconciled in the following table:
Gross Proceeds | |
$ | 138,000,000 | |
Less: Proceeds allocated to Public Warrants | |
| (5,795,688 | ) |
Less: Issuance costs related to common stock | |
| (3,465,153 | ) |
Plus: Remeasurement of carrying value to redemption value | |
| 9,260,841 | |
Common stock subject to possible redemption – December 31, 2021, March 31, 2022, and June 30, 2022 | |
$ | 138,000,000 | |
Less: Payment from Trust Account in connection with redemption of shares | |
| (110,507,221 | ) |
Plus: Subsequent remeasurement of carrying value to redemption value – Extension deposit | |
| 276,721 | |
Plus: Subsequent remeasurement of carrying value to redemption value – Trust interest income (excluding the amount that can be withdrawn from Trust Account) | |
| 5,018 | |
Common stock subject to possible redemption – September 30, 2022 | |
$ | 27,774,518 | |
Net (Loss) Income Per Common Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, Earnings Per Share. Net (loss) income per share is computed by dividing net (loss) income by the weighted
average number of shares of common stock outstanding during the period. The Company has two classes of shares, redeemable common
stock and non-redeemable common stock. Earnings and losses are shared pro rata between the two classes of shares. The Company’s
statement of operations applies the two-class method in calculating net (loss) income per share. Basic and diluted net income (loss) per
common share for redeemable common stock and non-redeemable common stock is calculated by dividing net income (loss), allocated proportionally
to each class of common stock, attributable to the Company by the weighted average number of shares of redeemable common stock and non-redeemable
common stock outstanding.
The Company did not include the warrants as they
are anti-dilutive. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the periods presented.
Accordingly, basic and diluted (loss) income per
common share is calculated as follows:
| |
Three Months ended September 30, | | |
Nine months ended September 30, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
Common stock subject to possible redemption | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Net (loss) income allocable to common stock subject to possible redemption | |
$ | (325,913 | ) | |
$ | 689,662 | | |
$ | (340,293 | ) | |
$ | 42,420 | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Weighted average redeemable common stock, basic and diluted | |
| 4,206,270 | | |
| 13,800,000 | | |
| 10,566,948 | | |
| 13,224,176 | |
Basic and diluted net (loss) income per stock, redeemable common stock | |
$ | (0.08 | ) | |
$ | 0.05 | | |
$ | (0.03 | ) | |
$ | 0.00 | |
| |
| | | |
| | | |
| | | |
| | |
Non-redeemable common stock | |
| | | |
| | | |
| | | |
| | |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Net (loss) income allocable to common stock not subject to redemption | |
$ | (276,613 | ) | |
$ | 178,412 | | |
$ | (114,966 | ) | |
$ | 11,378 | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Weighted average non-redeemable common stock, basic and diluted | |
| 3,570,000 | | |
| 3,570,000 | | |
| 3,570,000 | | |
| 3,546,923 | |
Basic and diluted net (loss) income per stock, common stock | |
$ | (0.08 | ) | |
$ | 0.05 | | |
$ | (0.03 | ) | |
$ | 0.00 | |
On July 8, 2022, LightJump held a special
meeting of stockholders. At the meeting, stockholders holding 11,032,790 Public Shares exercised their right to redeem such shares for
a pro rata portion of the funds in the Trust Account. As a result, $110,507,221 (approximately $10.02 per share) was removed from the
Trust Account to pay such holders.
Offering Costs associated with the Initial
Public Offering
The Company complies with the requirements of
ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) 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 IPO and were
charged to stockholders’ deficit upon the completion of the IPO. The Company determined the Public Warrants qualified for equity
treatment, and accordingly, offering costs in the aggregate of $3,465,153 have been charged to stockholders’ deficit (consisting
of $2,760,000 of underwriting fees and $705,153 of other offering costs).
Warrant Liability
The Company accounts for the Public Warrants and
Private Warrants (as defined in Note 1, 2 and 3) collectively (“Warrants”), as either equity or liability-classified instruments
based on an assessment of the specific terms of the Warrants and the applicable authoritative guidance in Financial Accounting Standards
Board (“FASB”) ASC 815, “Derivatives and Hedging”. The assessment considers whether the Warrants meet all of the
requirements for equity classification under ASC 815, including whether the Warrants are indexed to the Company’s own common stock
and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s
control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted
at the time of issuance of the Warrants and as of each subsequent annual period end date while the Warrants are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, such warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, such warrants are required
to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of liability-classified warrants are recognized as a non-cash gain or loss on the statements of operations.
The Company accounts for the Private Warrants
in accordance with ASC 815-40 under which the Private Warrants do not meet the criteria for equity classification and must be recorded
as liabilities. The fair value of the Private Warrants has been estimated using the Monte Carlo simulation model. See Note 6 for further
discussion of the pertinent terms of the Warrants used to determine the value of the Private Warrants.
The Company evaluated the Public Warrants in accordance
with ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” and concluded that they met the
criteria for equity classification and are required to be recorded as part a component of additional paid-in capital at the time of issuance.
Income Taxes
The Company accounts for income taxes under ASC
740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the unaudited condensed financial statements 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. As of September 30, 2022
and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective tax rate
was (0.79)% and (1.88)% for the three and nine months ended September 30, 2022, and 0.00% and 0.00% for the three and nine months ended
September 30, 2021. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30,
2022, due to changes in fair of warrant liabilities, and the valuation allowance on the deferred tax assets.
While ASC 740 identifies usage of an effective
annual tax rate for purpose of an interim provision, it does allow for estimating individual elements in the current period if they are
significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the
timing of any Business Combination expenses and the actual interest income that will be recognized during the year. The Company has taken
a position as to the calculation of income tax expense in a current period based on ASC 740-270-25-3 which states, “If an entity
is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable
estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item
is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual
elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable
income (loss) and associated income tax provision based on actual results through September 30, 2022.
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.
The Company recognizes 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 September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could
result in significant payments, accruals or material deviation from its position.
The Company has identified the United States as
its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and
compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits
will materially change over the next twelve months.
Recent Accounting Standards
In August 2020, the FASB issued 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):
Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies
accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement
conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share
calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2022. The adoption did not impact the Company’s financial
position, results of operations or cash flows.
Management does not believe that any other recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed
financial statements.
Note 3 — Initial Public Offering
Pursuant to the Initial Public Offering, the Company
sold 12,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of Common Stock, par value $0.0001 per
share and one-half of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder
to purchase one share of Common Stock at a price of $11.50 per share. Each whole warrant will become exercisable 30 days after
the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination,
or earlier upon redemption or liquidation.
On January 15, 2021, the Underwriters exercised
the over-allotment option in full to purchase 1,800,000 Units. The proceeds of $18,000,000 from the over-allotment was
deposited in the Trust Account after deducting the underwriting fees.
The underwriters were paid a cash underwriting
fee of 2.0% of the gross proceeds of the IPO and over-allotment, or $2,760,000 in the aggregate.
Note 4 — Private Placement
Simultaneously with the closing of the IPO, the
Company’s Sponsor purchased an aggregate of 3,850,000 warrants at a price of $1.00 per warrant, for an aggregate
purchase price of $3,850,000, in a private placement. The proceeds from the private placement of the Private Warrants were added to the
proceeds of this Initial Public Offering and placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust
Company, as trustee. If we do not complete an initial business combination within the Extension Combination Period, the proceeds from
the sale of the Private Warrants will be included in the liquidating distribution to our public stockholders and the Private Warrants
will be worthless.
On January 15, 2021, the Underwriters exercised
the over-allotment option in full to purchase 1,800,000 Units. Simultaneously with the closing of the exercise of the overallotment
option, the Company completed the private sale of an aggregate of 360,000 Private Warrants to the Sponsor at a purchase price
of $1.00 per Private Placement Warrant, generating gross proceeds of $360,000.
Note 5 — Related Party Transactions
Founder Shares
On September 11, 2020, the Sponsor paid $25,000,
or approximately $0.009 per share, to cover certain offering costs in consideration for 2,875,000 shares of common stock,
par value $0.0001 (the “Founder Shares”). On January 11, 2021, the Company effected a stock dividend of 0.2 shares
for each share outstanding (the “Dividend”), resulting in there being an aggregate of 3,450,000 Founder Shares outstanding. All
shares and associated amounts have been retroactively restated to reflect the stock dividend. Up to 450,000 Founder Shares were
subject to forfeiture to the extent that the over-allotment option was not exercised in full by the underwriters. On January 15, 2021,
the overallotment was exercised in full and all of the 450,000 shares were no longer subject to forfeiture.
Promissory Note — Related Party
An affiliate of the Company’s chief executive
officer has agreed to loan the Company an aggregate of up to $150,000 to cover expenses related to the Initial Public Offering pursuant
to a promissory note (the “Note”). This loan is non-interest bearing and payable on demand. The Company had drawn down $125,000
in 2020, which was still outstanding as of both September 30, 2022 and December 31, 2021.
During the first quarter of 2022, the Company
entered into three additional promissory notes to related parties: on February 9, 2022, for the amount of $200,000, on February 25, 2022,
for the amount of $203,000, and on March 22, 2022 for the amount of $230,000.
During the second quarter of 2022, the Company
entered into three additional promissory notes to related parties: on April 7, 2022, for the amount of $3,000, on April 11, 2022, for
the amount of $50,000, and on June 29, 2022 for the amount of $80,000.
On July 11, 2022, the Company filed an amendment
to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Extension
Amendment”). The Extension Amendment extends the date by which the Company must consummate its initial business combination from
July 12, 2022 to January 12, 2023 (the “Extension Combination Period”). On August 9, 2022, $276,721 was deposited into the
Trust Account to fund the extension, which is redeemable by the Company’s public stockholders. The $276,721 was funded by proceeds
from the promissory notes issued to the Sponsor.
Besides above, during the third quarter of 2022,
the Company also entered into five additional promissory notes to related parties: on July 8, 2022, for the amount of $7,500, on July
12, 2022, for the amount of $90,000, on July 18, 2022, for the amount of $50,000, on August 5, 2022, for the amount of $6,800, and on
September 21, 2022 for the amount of $79,840.
All notes are not interest bearing and are repayable
upon conclusion of business combination. The principal balance may be prepaid at any time.
All notes were funded as of September 30, 2022.
The outstanding balances as of September 30, 2022 and December 31, 2021 were $1,401,861 and $125,000, respectively.
Due to Related Party
As of September 30, 2022, the Due to Related Party
balance of $330,000 consisted of the unpaid $70,000 Administrative Support Expense (defined below) and $260,000 additional funds from
founders in December 2021.
Working Capital Loans
In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may,
but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a
Business Combination, the Company will repay the Working Capital Loans. In the event that a Business Combination does not close, the Company
may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account
would be used to repay the Working Capital Loans.
Except for the foregoing, the terms of such Working
Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans
would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million
of such Working Capital Loans may be convertible into Private Warrants at a price of $1.00 per warrant. As of September 30, 2022
and December 31, 2021, the Company had no borrowings under the Working Capital Loans.
Administrative Support Agreement
Commencing on the date of the final prospectus,
the Company has agreed to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative services
(“Administrative Support Expense”). Upon completion of the initial Business Combination or the Company’s liquidation,
the Company will cease paying these monthly fees. For the three and nine months ended September 30, 2022 the company incurred an aggregate
of $30,000 and $90,000, respectively, for administrative services.
Note 6 — Fair Value Measurements
The following table presents information about
the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2022, and indicates
the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| |
September 30, | | |
Quoted Prices In Active Markets | | |
Significant Other Observable Inputs | | |
Significant Other Unobservable Inputs | |
| |
2022 | | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | |
Assets: | |
| | |
| | |
| | |
| |
U.S. Money Market held in Trust Account | |
$ | 28,132,922 | | |
$ | 28,132,922 | | |
$ | — | | |
$ | — | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Private Warrant Liability | |
$ | 263,868 | | |
$ | — | | |
$ | — | | |
| 263,868 | |
The following table presents information about
the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2021, and indicates
the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| |
December 31, | | |
Quoted Prices In Active Markets | | |
Significant Other Observable Inputs | | |
Significant Other Unobservable Inputs | |
| |
2021 | | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | |
Assets: | |
| | |
| | |
| | |
| |
U.S. Money Market held in Trust Account | |
$ | 138,013,319 | | |
$ | 138,013,319 | | |
$ | — | | |
$ | — | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Private Warrant Liability | |
$ | 2,198,205 | | |
$ | — | | |
$ | — | | |
| 2,198,205 | |
The Private Warrants were valued using a Monte
Carlo simulation model, which is considered to be a Level 3 fair value measurement. Inherent in an options pricing model are assumptions
related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility
of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate
is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants.
The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical
rate, which the Company anticipates to remain at zero.
There were no transfers between Levels 1, 2 or
3 during the nine months ended September 30, 2022.
The following table provides quantitative information
regarding Level 3 fair value measurements for Private Warrants as of September 30, 2022 and December 31, 2021.
| |
September 30, 2022 | | |
December 31, 2021 | |
Exercise price | |
$ | 11.50 | | |
$ | 11.50 | |
Share price | |
$ | 10.06 | | |
$ | 9.86 | |
Volatility | |
| 4.7 | % | |
| 9.7 | % |
Expected life | |
| 5.13 | | |
| 5.37 | |
Risk-free rate | |
| 4.05 | % | |
| 1.29 | % |
Dividend yield | |
| - | % | |
| - | % |
The following table presents a summary of the
changes in the fair value of the Private Warrants and Representative’s Warrants, a Level 3 liability, measured on a recurring basis
for the three and nine months ended September 30, 2022 and 2021.
| |
Warrant Liability | |
Fair value, January 1, 2022 | |
$ | 2,198,205 | |
Change in fair value | |
| (1,015,792 | ) |
Fair value, March 31, 2022 | |
$ | 1,182,413 | |
Change in fair value | |
| (920,990 | ) |
Fair value, June 30, 2022 | |
$ | 261,423 | |
Change in fair value | |
| 2,445 | |
Fair value, September 30, 2022 | |
$ | 263,868 | |
| |
Warrant Liability | |
Fair value, January 1, 2021 | |
$ | - | |
Initial measurement on January 12, 2021, including over-allotment | |
| 3,861,737 | |
Change in fair value | |
| (1,301,852 | ) |
Fair value, March 31, 2021 | |
$ | 2,559,885 | |
Change in fair value | |
| 1,085,087 | |
Fair value, June 30, 2021 | |
$ | 3,644,972 | |
Change in fair value | |
| (1,197,427 | ) |
Fair value, September 30, 2021 | |
$ | 2,447,545 | |
Note 7 — Commitments and Contingencies
Registration Rights
The holders of the founders’ shares and
representative shares issued and outstanding on the date of the Initial Public Offering, as well as the holders of the Private Warrants
(and the underlying shares) and any warrants the Company’s sponsor, officers, directors or their affiliates may be issued in payment
of working capital loans made to the Company (and all underlying securities), are entitled to registration rights pursuant to an agreement
signed prior to or on the effective date of this Initial Public Offering. The holders of a majority of these securities are entitled to
make up to two demands that the Company registers such securities. The holders of the majority of the founders’ shares, as well
as the holders of the Private Warrants (and the underlying shares) can elect to exercise these registration rights at any time commencing
three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the
representative shares, and warrants issued to our sponsor, officers, directors or their affiliates in payment of working capital loans
made to the Company (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates
a business combination. Notwithstanding anything to the contrary, EarlyBirdCapital Inc. (“EarlyBirdCapital”) may only make
a demand on one occasion and only during the five-year period beginning on the effective date of the registration statement of which this
prospectus forms a part. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the consummation of a business combination; provided, however, that EarlyBirdCapital may participate in
a “piggy-back” registration only during the seven-year period beginning on the effective date of the registration statement
of which this prospectus forms a part. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
Business Combination Marketing Agreement
The Company has engaged EBC as an advisor in connection
with our business combination to assist in holding meetings with stockholders to discuss the potential business combination and the target
business’ attributes, introduce the Company to potential investors that are interested in purchasing its securities in connection
with the business combination, assist in obtaining stockholder approval for the business combination and assist with press releases and
public filings in connection with the business combination. The Company would pay EBC a cash fee for such services upon the consummation
of the business combination in an amount equal to 3.5% of the gross proceeds of the Initial Public Offering. Additionally, the
Company would pay EBC a cash fee equal to 1.0% of the total consideration payable in the proposed business combination if EBC introduces
the Company to the target business with which it completes the business combination; provided that the foregoing fee would not be paid
prior to the date that is 90 days from the effective date of the registration statement.
On June 14, 2022, the Company and EBC executed
an amendment to the BCMA (the “Amendment”) whereby the Company shall pay to EBC (A) a cash fee at Closing equal
to (i) 20% of the aggregate gross proceeds (up to a maximum of $3,830,000) held in the Trust Account (after redemptions and reduction
of all additional payments included in the Trust Account to accommodate all extensions) and received by the Company in any financing in
connection with the Business Combination regardless of the source of such funds, plus (ii) $1,000,000 and (B) in consideration of EBC
introducing Moolec to the Company, Holdco shall issue to EBC a number of ordinary shares of Holdco equal to $2,000,000 divided by the
lesser of (y) the volume weighted average price of Holdco’s ordinary shares for the ten trading days preceding the six month anniversary
of the Closing and (z) $10.00, up to a maximum of 600,000 shares (the “Share Fee”). The Share Fee shall be issued to EBC within
five business days of the six month anniversary of the Closing, and Holdco shall register the resale of the ordinary shares issued to
EBC as promptly as practicable after their issuance. The Sponsor shall forfeit to Holdco for cancellation the same number of shares of
common stock payable to EBC under such Share Fee.
As of September 30, 2022 and December 31, 2021,
these fees are not accrued.
Representative Shares
On October 1, 2020, the Company issued to designees
of EarlyBirdCapital Inc. the 120,000 representative shares for nominal consideration. The Company estimated the fair value of
the stock to be $1,200 based upon the price of the founder shares issued to the Sponsor and were treated as underwriters’ compensation
and charged directly to stockholders’ deficit. The holders of the representative shares have agreed not to transfer, assign or sell
any such shares without the Company’s prior consent until the completion of its initial business combination. In addition, the holders
of the representative shares have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with
respect to such shares in connection with the completion of our initial business combination and (ii) to waive their rights to liquidating
distributions from the trust account with respect to such shares if the Company fails to complete an initial business combination within
the Extension Combination Period.
The representative shares have been deemed compensation
by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the registration
statement of which this prospectus forms a part pursuant to Rule 5110(g)(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(g)(1), these
securities were not sold during the Initial Public Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject
of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any
person for a period of 180 days immediately following the effective date of the registration statement of which this prospectus forms
a part or commencement of sales of the public offering, except to any underwriter and selected dealer participating in the Initial Public
Offering and their bona fide officers or partners, provided that all securities so transferred remain subject to the lockup restriction
above for the remainder of the time period.
Promissory Note - Moolec
On July 8, 2022, the Sponsor issued a promissory
note to Moolec, pursuant to which, Moolec agreed to loan to the Sponsor up to an aggregate principal amount of $350,000 to deposit into
the Company’s Trust Account in connection with the extension of the Company’s termination date from July 12, 2022 to January
12, 2023. The promissory note bears interest at 20.0% per annum and is repayable in full upon the earlier of (i) the consummation of the
Initial Business Combination of the Company, (ii) the date of the termination of the Business Combination Agreement and (ii) January 12,
2023. $78,000 was outstanding as of September 30, 2022.
Note 8 — Warrants
Public Warrants
The Public Warrants will become exercisable 30
days after the completion of a Business Combination. However, no warrants will be exercisable for cash unless the Company has an effective
and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus
relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock
issuable upon exercise of the public warrants is not effective within a specified period following the consummation of our initial business
combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall
have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided
by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay
the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x)
the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of
the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value”
for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading
day prior to the date of exercise. The warrants will expire on the fifth anniversary of our completion of an initial business combination,
at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The warrants will expire five years after the completion
of a Business Combination or earlier upon redemption or liquidation.
The Company may call the Public Warrants for redemption:
| ● | in whole and not in part; |
|
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at a price of $0.01 per warrant; |
|
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upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
|
● |
if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and |
|
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if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. |
If the Company calls the Public Warrants for redemption,
management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis”,
as described in the warrant agreement. In such event, each holder would pay the exercise price by surrendering the warrants for that number
of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined
below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price
of the shares of common stock for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption
is sent to the holders of warrants.
In addition, if (x) the Company issues additional
shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial business
combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective
issue price to be determined in good faith by our board of directors, and in the case of any such issuance to our sponsor, initial stockholders
or their affiliates, without taking into account any founders’ shares held by them prior to such issuance), (y) the aggregate gross
proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of
the initial business combination on the date of the consummation of the initial business combination (net of redemptions), and (z) the
Market Value is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of
the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of common stock or equity-linked
securities.
Private Warrants
The Private Warrants are identical to the Public
Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Warrants, so long as they are held by
the Sponsor or their permitted transferees, (i) will not be redeemable by the Company, (ii) may be exercised for cash or on a cashless
basis, as described in the Initial Public Offering, in each case so long as they are held by the initial purchasers or any of their permitted
transferees. If the Private Warrants are held by holders other than the initial purchasers or any of their permitted transferees, the
Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units
being sold in this offering.
Note 9 — Stockholders’ Deficit
Preferred Stock —
The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 and with such designations,
voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September
30, 2022 and December 31, 2021, there were no preferred stock issued or outstanding.
Common Stock —
The Company is authorized to issue 99,000,000 shares of common stock with a par value of $0.0001 per share. Holders
are entitled to one vote for each share of common stock. On January 11, 2021, the Company effected a stock dividend of 0.2 shares
for each share outstanding, resulting in there being an aggregate of 3,450,000 Founder Shares outstanding. All shares and associated
amounts have been retroactively restated to reflect the stock dividend. At September 30, 2022 and December 31, 2021, there were 3,570,000
and 3,570,000 shares of common stock issued and outstanding, excluding 2,767,210 and 13,800,000 shares subject to possible redemption
at September 30, 2022 and December 31, 2021, respectively.
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. The Company did
not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.