IPO and Financing - The company completed its initial public offering on April 18, 2022, raising gross proceeds of $115 million from the sale of 11,500,000 units at $10.00 per unit[21]. - An additional $5 million was generated from the private sale of 5,000,000 Private Placement Warrants at $1.00 each[22]. - A total of $117.3 million from the IPO and private placement warrants was placed in a U.S.-based trust account, which can only be invested in U.S. government securities or money market funds[124]. - The company has $118,785,342 available for an initial business combination as of November 30, 2022, providing options for liquidity events, capital for growth, or debt reduction[44]. - The company intends to complete its initial business combination using cash from its initial public offering and may seek additional financing if necessary[45][47]. - The company may seek up to $1,500,000 in Working Capital Loans, convertible into warrants at $1.00 per warrant, to fund working capital deficiencies or transaction costs related to a Business Combination[135]. - The company received a loan of up to $300,000 from its sponsor for initial public offering expenses, with a balance of $83,954 paid off by June 22, 2022, leaving no outstanding balance as of November 30, 2022[200]. Business Combination Strategy - The company has a 15-month period from the IPO closing date to complete its initial business combination, extendable up to 21 months if necessary[23]. - The initial business combination must have an aggregate fair market value of at least 80% of the assets held in the trust account[30]. - The company may pursue initial business combinations with financially unstable or early-stage businesses, which carries inherent risks[53]. - The company intends to pursue a business combination using cash from the IPO proceeds, private placement warrants, shares, debt, or a combination thereof[126]. - The company may not have the resources to diversify operations post-business combination, focusing on a single industry[56]. - The company must complete one or more business combinations with an aggregate fair market value of at least 80% of the assets held in the trust account[51]. - The company may continue to seek a different target for the initial business combination until July 18, 2023, or January 18, 2024, if the period is extended[80]. Due Diligence and Target Selection - The company plans to conduct thorough due diligence on prospective target businesses, including financial reviews and management interviews[32]. - The target business must demonstrate a solid technological base and a motivated management team[29]. - The company expects to conduct thorough due diligence on prospective target businesses, including management meetings and financial reviews[54]. - The company may face limitations in identifying potential business combination targets due to the requirement for audited financial statements[100]. Financial Performance and Reporting - The company reported a net income of $817,089 for the period from December 6, 2021, to November 30, 2022, primarily from interest income on marketable securities[129]. - The company has not generated any operating revenues to date and does not expect to do so until after completing a business combination[128]. - As of November 30, 2022, cash used in operating activities was $664,685, with a net income of $817,089 influenced by interest earned on marketable securities of $1,483,349 and an unrealized gain of $1,993[132]. - The Trust Account held marketable securities totaling $118,785,342, which includes $1,485,342 of interest income and unrealized gains, primarily in U.S. Treasury Bills with a maturity of 185 days or less[133]. - The company is required to file periodic reports with the SEC, including annual and quarterly financial statements audited by independent accountants[98]. Shareholder Rights and Redemption - The company will provide public shareholders with the opportunity to redeem their Class A ordinary shares at a per-share price equal to the aggregate amount in the trust account divided by the number of outstanding public shares[65]. - The company may not redeem public shares unless net tangible assets are at least $5,000,001 upon consummation of the initial business combination[72]. - If shareholder approval is required, a public shareholder can seek redemption rights for no more than 15% of the shares sold in the initial public offering[74]. - The tender offer for redeeming shares will remain open for at least 20 business days[71]. - If public shareholders tender more shares than the company has offered to purchase, the tender offer will be withdrawn[71]. - If the initial business combination is not approved, public shareholders who elected to redeem their shares will not be entitled to redeem for the pro rata share of the trust account[79]. - Public shareholders will not have redemption rights for warrants, which will expire worthless if the business combination is not completed within the specified time[82]. Management and Governance - The management team has significant experience in sourcing and executing transactions in the Asia Pacific region, providing a competitive advantage[25]. - The board of directors consists of 8 members, with no requirement for an annual meeting until one year after the first fiscal year end following the Nasdaq listing[172]. - The audit committee includes independent directors Jay McCarthy, John Laurens, and Thorsten Neumann, with John Laurens serving as chair[174]. - The company has established a compensation committee, chaired by Andrew Porter, to oversee executive compensation and related policies[176]. - The majority of the board of directors is independent, with only four members not classified as independent directors[210]. - The company has a code of ethics to avoid conflicts of interest, with related party transactions reviewed and approved by the audit committee[206]. Risks and Challenges - The company faces intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[96]. - If additional funds are not raised by July 18, 2023, the company may cease operations except for liquidation purposes, raising substantial doubt about its ability to continue as a going concern[137]. - The company must maintain net tangible assets of at least $5,000,001 to avoid being subject to SEC's "penny stock" rules[85]. - The per-share redemption amount could be less than $10.20 due to potential creditor claims against the trust account[87]. Compensation and Expenses - The company has not paid any cash compensation to its officers, except for a monthly payment of $20,000 to Fat Ventures Pte. Ltd. for administrative support[184]. - No compensation will be paid to sponsors, officers, or directors prior to the completion of the initial business combination, except for reimbursement of out-of-pocket expenses[208]. - Monthly fees of $20,000 are paid to Fat Projects Pte. Ltd. for office space and administrative support, ceasing upon the completion of the initial business combination[198]. - A deferred underwriting discount of 3.5% on the gross proceeds of the IPO, totaling $4,025,000, will be payable upon completion of the initial Business Combination[140]. - Audit fees for the period from December 6, 2021, to November 30, 2022, amounted to approximately $72,800 for services related to the initial public offering and financial statement audits[214].
Aura FAT Projects Acquisition p(AFAR) - 2022 Q4 - Annual Report