NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
1 — Description of Organization and Business Operations
Evergreen
Corporation (the “Company”) was incorporated in Cayman Islands on October 21, 2021. The Company was formed for the purpose
of effecting a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with
one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector for purposes
of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject
to all of the risks associated with early stage and emerging growth companies.
As
of February 28, 2023, the Company had not commenced any operations. All activity for the period from October 21, 2021 (inception) through
February 28, 2023 relates to the Company’s formation and initial public offering (“Initial Public Offering”), which
is described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination,
at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial
Public Offering. The Company has selected November 30 as its fiscal year end.
The
registration statement for the Company’s Initial Public Offering was declared effective on February 8, 2022. On February 11, 2022,
the Company consummated the Initial Public Offering of 10,000,000 units (“Units” and, with respect to the ordinary shares
included in the Units being offered, the “Public Shares”), generating gross proceeds of $100,000,000 which is described in
Note 3.
The
Initial Public Offering transaction costs amounted to $8,557,887 consisting of $1,800,000 of underwriting fees paid in cash, $4,025,000
of deferred underwriting fees payable (which are held in a trust account with Continental Stock Transfer & Trust Company acting as
trustee (the “Trust Account”)), $1,725,000 funded to the trust account and $1,007,887 of costs related to the Initial Public
Offering. Cash of $1,519,359 was held outside of the Trust Account on February 11, 2022 and was available for working capital purposes.
As described in Note 6, the $4,025,000 deferred underwriting fees are contingent upon the consummation of the Business Combination.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an
aggregate of 480,000 units (the “Private Placement Units”) to Evergreen LLC (the “Sponsor”) at a purchase price
of $10.00 per Private Placement Unit, generating gross proceeds to the Company in the amount of $4,800,000.
On
February 11, 2022, the underwriters purchased an additional 1,500,000 Option Units pursuant to the exercise of the over-allotment option.
The Option Units were sold at an offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $15,000,000.
Also, in connection with the full exercise of the over-allotment option, the Sponsor purchased an additional 52,500 Option Private Placement
Units at a purchase price of $10.00 per unit.
Following
the closing of the Initial Public Offering on February 11, 2022, an amount of $116,725,000 ($10.15 per Unit) from the net proceeds of
the sale of the Units in the Initial Public Offering and the Private Placement was placed in a trust account (“Trust Account”)
which may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of
1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company
that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act,
as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust
Account, as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering and the sale of Private Placement Warrants, 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 with one or more operating businesses
or assets with a fair market value equal to at least 80% of the value of the net assets held in the Trust Account (as defined below)
(excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account). 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 a controlling interest in the target business sufficient for it not to be required to
register as an investment company under the Investment Company Act. Upon the closing of the Initial Public Offering, management has
agreed that an amount equal to at least $10.15 per Unit sold in the Initial Public Offering, including proceeds of the Private
Placement Warrants, will be held in the Trust Account and invested only in U.S. government securities, within the meaning set forth
in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that
holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company
Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of
the funds held in the Trust Account, as described below.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
1 — Description of Organization and Business Operations (Continued)
The
Company will provide the holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem
all or a portion of their Public Shares either (i) in connection with a shareholders meeting called to approve the Business Combination
or (ii) by means of a tender offer in connection with the Business Combination. The decision as to whether the Company will seek shareholder
approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will be entitled to
redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.15 per Public
Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion
of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption will be recorded at a
redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Accounting
Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity”.
The
Company will not redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 (so that it does
not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to the Business Combination. If the Company seeks shareholder approval of the Business Combination,
the Company will proceed with a Business Combination if a majority of the outstanding shares voted are voted in favor of the Business
Combination, or such other vote as required by law or stock exchange rule. If a shareholder vote is not required by applicable law or
stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company
will, pursuant to its second amended and restated certificate of incorporation (the “Certificate of Incorporation”), conduct
the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender
offer documents with the SEC prior to completing a Business Combination.
If,
however, shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company
decides to obtain shareholder approval for business or other 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. If the Company seeks shareholder approval in connection
with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased
during or after the Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to
redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding
the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Certificate of Incorporation will provide that a Public Shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more
than an aggregate of 20% of the Public Shares, without the prior consent of the Company.
The
holders of the Founder Shares have agreed (a) to waive their redemption rights with respect to the Founder Shares and Public Shares held
by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation
(i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination
or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined
below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-business combination activity, unless
the Company provides the Public Shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
1 — Description of Organization and Business Operations (Continued)
If
the Company has not completed a Business Combination within 12 months (or 15 months, or 18 months, as applicable from the closing of
the Initial Public Offering (the “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 the Public Shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the
funds held in the Trust Account and not previously released to pay taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights
as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors,
dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s
warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The
holders of the Founders Shares have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails
to complete a Business Combination within the Combination Period. However, if the holders of Founder Shares acquire Public Shares in
or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the
Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to
their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination
within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will
be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value
of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.15 per Public Share or (ii) such
lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15
per Public Share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn
to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account
and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an
executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability
for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account
due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered
accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the
Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
1 — Description of Organization and Business Operations (Continued)
Going
Concern and Management’s Plan
The
Company expects to incur significant costs in pursuit of its acquisition plans and will not generate any operating revenues until after
the completion of its initial business combination. In addition, the Company expects to have negative cash flows from operations as it
pursues an initial business combination target. In connection with the Company’s assessment of going concern considerations in
accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s
Ability to Continue as a Going Concern” the Company does not currently have adequate liquidity to sustain operations, which consist
solely of pursuing a Business Combination.
The
Company may raise additional capital through loans or additional investments from the Sponsor or its shareholders, officers, directors,
or third parties. The Company’s officers and directors and the Sponsor may, but are not obligated to (except as described above),
loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s
working capital needs. Based on the foregoing, the Company believes it will have sufficient cash to meet its needs through the earlier
of consummation of a Business Combination or the deadline to complete a Business Combination pursuant to the Company’s Amended
and Restated Certificate of Incorporation (unless otherwise amended by shareholders).
While
the Company expects to have sufficient access to additional sources of capital if necessary, there is no current commitment on the part
of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately
be available. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period
of time within one year after the date that the financial statements are issued. There is no assurance that the Company’s plans
to raise additional capital (to the extent ultimately necessary) or to consummate a Business Combination will be successful or successful
within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As
is customary for a special purpose acquisition company, if the Company is not able to consummate a Business Combination during the Combination
Period, it will cease all operations and redeem the Public Shares. Management plans to continue its efforts to consummate a Business
Combination during the Combination Period.
Note
2 — Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it
has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or
revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
2 — Summary of Significant Accounting Policies (Continued)
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and 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 financial statements, 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
significantly from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash
equivalents are carried at cost, which approximates fair value. The Company had $131,284 and $301,228 in cash as of February 23, 2023
and November 30, 2022, respectively. The Company had no cash equivalents as of February 23, 2023 or November 30, 2022.
Marketable
Securities Held in Trust Account
At
February 28, 2023 and November 30, 2022, substantially all of the assets held in the Trust Account were held in money market.
Income
Taxes
The
Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset
and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined the United States is the Company’s
only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income
tax expense. There were no unrecognized tax benefits as of February 28, 2023 and no amounts accrued for interest and penalties. The Company
is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its
position. The Company is subject to income tax examinations by major taxing authorities since inception.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
2 — Summary of Significant Accounting Policies (Continued)
Class
A Ordinary Shares Subject to Possible Redemption
All
of the Class A ordinary shares sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for
the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer
in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate
of incorporation. In accordance with ASC 480, conditionally redeemable Class A ordinary shares (including Class A ordinary shares that
feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within the Company’s control) are classified as temporary equity. Ordinary liquidation events, which involve
the income and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although
the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public
shares in an amount that would cause its net tangible assets (shareholders’ equity) to be less than $5,000,001. However, the threshold
in its charter would not change the nature of the underlying shares as redeemable and thus public shares would be required to be disclosed
outside of permanent equity. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value
of redeemable ordinary shares to equal the redemption value ($10.15 per share) at the end of each reporting period. Such changes are
reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit.
As
of February 28, 2023 and November 30, 2022, 11,500,000
Class A Ordinary Shares outstanding are subject to possible redemption.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $250,000. On February 28, 2023, the Company had not experienced
losses on this account and management believes the Company is not exposed to significant risks on such account.
Net
Income (Loss) Per Share
Net
income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding for the period. The
calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the Initial Public
Offering and warrants issued as components of the Private Placement Units (the “Placement Warrants”) since the exercise of
the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The
Company’s statements of operations includes a presentation income per share for ordinary shares subject to possible redemption
in a manner similar to the two-class method of income per share. Net income per ordinary share, basic and diluted, for redeemable Class
A ordinary shares is calculated by dividing the net income allocable to Class A ordinary shares subject to possible redemption, by the
weighted average number of redeemable Class A ordinary shares outstanding since original issuance. Net income per shares, basic and diluted,
for non-redeemable Class A and Class B ordinary shares is calculated by dividing net income allocable to non-redeemable ordinary shares,
by the weighted average number of non-redeemable ordinary shares outstanding for the periods. Non-redeemable Class B ordinary shares
include the founder shares as these ordinary shares do not have any redemption features and do not participate in the income earned on
the Trust Account.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
2 — Summary of Significant Accounting Policies (Continued)
Schedule
of Net Loss Per Share
| | |
Three Months Ended February 28, 2023 | | |
Three Months Ended February 28, 2022 | |
| Class A ordinary shares | |
| | | |
| | |
| Numerator: net income (loss) allocable to redeemable Class A ordinary shares | |
$ | 829,040 | | |
$ | (23,124 | ) |
| | |
| | | |
| | |
| Denominator: weighted average number of Class A ordinary shares | |
| 12,032,500 | | |
| 2,272,806 | |
| Basic and diluted net income (loss) per redeemable Class A ordinary share | |
$ | 0.07 | | |
$ | (0.01 | ) |
| | |
| | | |
| | |
| Class B ordinary shares | |
| | | |
| | |
| Numerator: net income (loss) allocable to Class B ordinary shares | |
$ | 198,088 | | |
$ | (29,596 | ) |
| Numerator: net income (loss) allocable to ordinary shares | |
$ | 198,088 | | |
$ | (29,596 | ) |
| | |
| | | |
| | |
| Denominator: weighted average number of Class B ordinary shares | |
| 2,875,000 | | |
| 2,875,000 | |
| Denominator: weighted average number of ordinary shares | |
| 2,875,000 | | |
| 2,875,000 | |
| Basic and diluted net income (loss) per Class B ordinary share | |
$ | 0.07 | | |
$ | (0.01 | ) |
| Basic and diluted net income (loss) per ordinary share | |
$ | 0.07 | | |
$ | (0.01 | ) |
Offering
Costs Associated with the Initial Public Offering
The
Company complies with the requirements of the Financial Accounting Standards Board ASC 340-10-S99-1 and SEC Staff Accounting Bulletin
(“SAB”) Topic 5A, “Expenses of Offering.” Offering costs of $4,532,887 consist principally of costs incurred
in connection with formation of the Company and preparation for the Initial Public Offering. These costs, together with the underwriter
discount of $4,025,000, were charged to additional paid-in capital upon completion of the Initial Public Offering.
Fair
Value of Financial Instruments
The
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.
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 free-standing 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. The Company adopted as of inception of the Company. Management does not believe
that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect
on the Company’s financial statements.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
3 —Initial Public Offering
Pursuant
to the Initial Public Offering, the Company sold 11,500,000 Units at a purchase price of $10.00 per Unit generating gross proceeds to
the Company in the amount of $115,000,000. Each Unit consists of one ordinary share and one redeemable warrant (“Public Warrant”).
Each Public Warrant entitles the holder purchase one ordinary share at an exercise price of $11.50 per whole share.
Note
4 — Private Placement
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an
aggregate of 532,500 units (the “Private Placement Units”) to Evergreen LLC (the “Sponsor”) at a purchase price
of $10.00 per Private Placement Unit, generating gross proceeds to the Company in the amount of $5,325,000 on February 11, 2022.
A
portion of the proceeds from the Private Placement Units was added to the proceeds from the Initial Public Offering held in the Trust
Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private
Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable
law) and the Private Placement Units will be worthless.
The
Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not
be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain exceptions.
Note
5 — Related Party Transactions
Founder
Shares
On
November 22, 2021, the Sponsor purchased of the Company’s Class B ordinary shares (the “Founder Shares”)
in exchange for $. The Founder Shares include an aggregate of up to shares subject to forfeiture to the extent that the
underwriters’ over-allotment is not exercised in full or in part, so that the number of Founder Shares will equal, on an as-converted
basis, approximately 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. The Founder
Shares are no longer subject to forfeiture due to full exercise of the over-allotment by the underwriter.
.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
5 — Related Party Transactions (Continued)
Promissory
Note — Related Party
On
November 22, 2021, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which
the Company may borrow up to an aggregate principal amount of $. The Promissory Note is non-interest bearing and payable on the
earlier of (i) December 31, 2022, or (ii) the consummation of the Initial Public Offering.
During
the year ended November 30, 2022, deferred offering costs paid for by the Promissory Note amounted to $. On February 14, 2022,
the outstanding balance owed under the Promissory Note (being $) was repaid in full.
Related
Party 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”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of
a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon completion
of a Business Combination into units at a price of $10.00 per unit. Such units would be identical to the Private Placement Units. 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. As of February
28, 2023 and November 30, 2022, there were no amounts outstanding under any Working Capital Loans.
Extension
Loan
On
February 7, 2023, EVGR issued an unsecured promissory note to its Sponsor, in the amount of US$1,150,000, which amount was deposited
into the trust account to extend the available time to complete a business combination to May 11, 2023. None of the funds held in trust
will be released from the trust account, other than interest income to pay any tax obligations, until the earlier of the completion of
an initial business combination within the required time period or our entry into liquidation if EVGR has not consummated a business
combination by May 11, 2023 (or August 11, 2023, if further extended).
Administrative
Support Agreement
Commencing
on the date the Units are first listed on the Nasdaq, the Company has agreed to pay the Sponsor a total of $ per month for office
space, utilities and secretarial and administrative support for up to 18 months. Upon completion of the Initial Business Combination
or the Company’s liquidation, the Company will cease paying these monthly fees. As of February 28, 2023 and November 30, 2022,
$ and $, respectively, had been paid and none had been accrued and not yet been paid to the Sponsor under the Administrative
Support Agreement.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
6 — Commitments and Contingencies
Registration
Rights
The
holders of the Founder Shares, Private Placement Units and warrants that may be issued upon conversion of Working Capital Loans (and
any ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital
Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement
to be signed prior to or on the effective date of Initial Public Offering requiring the Company to register such securities for resale
(in the case of the Founder Shares, only after conversion to Class A ordinary shares). The holders of these securities will be entitled
to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders
have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a
Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities
Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or
cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriters
Agreement
The
Company granted the underwriters a 45-day option from the date of Initial Public Offering to purchase up to 1,500,000 additional Units
to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions.
The
underwriters were entitled to a cash underwriting discount of $0.20 per Unit, or $2,000,000 in the aggregate (or $2,300,000 in the aggregate
if the underwriters’ over-allotment option was exercised in full), payable upon the closing of the Initial Public Offering. The
underwriters agreed to reimburse us for expenses incurred by us in connection with the offering in an amount equal to $500,000, payable
to us at the closing of the offering. In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit, or $3,500,000
in the aggregate (or $4,025,000 in the aggregate if the underwriters’ over-allotment option was exercised in full). The deferred
fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes
a Business Combination, subject to the terms of the underwriting agreement.
On
February 11, 2022, the underwriters purchased an additional 1,500,000 Option Units pursuant to the full exercise of the over-allotment
option. The Option Units were sold at an offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $15,000,000.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Note
7 – Shareholders’ Equity
Preference
Shares — The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share with such
designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of February
28, 2023 and November 30, 2022, there were no preference shares issued or outstanding.
Class
A Ordinary Shares — Our memorandum and articles of association authorize the Company to issue 479,000,000 Class A ordinary
shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each
share. As of February 28, 2023 and November 30, 2022, there were 532,500 Class A ordinary shares issued and outstanding (excluding 11,500,000
shares subject to possible redemption).
Class
B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per
share. Holders of the Company’s Class B ordinary shares are entitled to one vote for each share. As of February 28, 2023 and November
30, 2022 there were 2,875,000 Class B ordinary shares issued and outstanding, such that the Initial Shareholders would maintain ownership
of at least 20% of the issued and outstanding shares after the Proposed Public Offering.
Only
holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders
of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a
vote of our shareholders except as otherwise required by law. In connection with our initial business combination, we may enter into
a shareholders agreement or other arrangements with the shareholders of the target or other investors to provide for voting or other
corporate governance arrangements that differ from those in effect upon completion of our initial public offering.
The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination, or earlier at
the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked
securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of
a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless
the holders of a majority of the then-outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance
or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal,
in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion
of Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with a
Business Combination (net of the number of Class A ordinary shares redeemed in connection with a Business Combination), excluding any
shares or equity-linked securities issued or issuable to any seller of an interest in the target to us in a Business Combination.
Warrants
— Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation
of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years
after the completion of a Business Combination or earlier upon redemption or liquidation.
The
Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary
shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is
available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is
available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares
to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under
the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.
The
Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination,
the Company will use its commercially reasonable efforts to file, and within 60 business days following a Business Combination to have
declared effective, a registration statement covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants
and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed. Notwithstanding
the above, if the Class A ordinary shares is at the time of any exercise of a warrant not listed on a national securities exchange such
that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at
its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in
effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available.
EVERGREEN
CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
February
28, 2023
Redemption
of Warrants When the Price per Share of Class A Ordinary shares Equals or Exceeds $18.00 — Once the warrants become exercisable,
the Company may redeem the outstanding Public Warrants:
| |
● |
in whole and not in part; |
| |
|
|
| |
● |
at a price of $0.01 per
Public Warrant; |
| |
|
|
| |
● |
upon a minimum of 30 days’
prior written notice of redemption, or the 30-day redemption period to each warrant holder; and |
| |
|
|
| |
● |
if, and only if, the last
reported sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends,
reorganization, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading
day prior to the date on which the Company sends the notice of redemption to warrant holders. |
If
and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register
or qualify the underlying securities for sale under all applicable state securities laws.
If
the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that
wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise
price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including
in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except
as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally,
in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination
within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive
any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held
outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
The
Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering.
Note
8 – Subsequent Events
In
accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure
of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or
transactions that occurred up to the date the unaudited financial statements were available to issue. Based upon this review, the Company
did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
