Ace Business Acquisition (ACBA) - 2023 Q2 - Quarterly Report

Financial Performance - The net loss for the six months ended June 30, 2023, was $1,602,040, compared to a net loss of$1,455,863 for the same period in 2022, indicating a year-over-year increase in losses [71]. - The basic and diluted net loss per share for the three months ended June 30, 2023, was $(0.17), compared to$(0.42) for the same period in 2022 [73]. - For the three months ended June 30, 2023, the basic and diluted net loss per share was $0.10, compared to a net loss per share of$(0.08) for the same period in 2022 [75]. - The allocation of net loss for the three months ended June 30, 2023, was $(189,781), an increase from$(118,148) in the same period of 2022 [74]. - The company incurred $30,000 in administrative service fees for both the three months ended June 30, 2023, and 2022 [83]. Shareholder Information - As of June 30, 2023, the company had 2,335,547 ordinary shares subject to possible redemption, down from 4,600,000 ordinary shares as of December 31, 2022 [57]. - The total ordinary shares issued as of June 30, 2023, was 6,054,000, with 1,454,000 shares classified as equity [99]. - The company sold 4,600,000 public units at a price of$10.00 per unit during its initial public offering [78]. - The share price increased from $10.62 on December 31, 2022, to$11.21 on June 30, 2023, reflecting an increase of approximately 5.6% [106]. Financial Position - The company did not have any cash equivalents as of June 30, 2023, and December 31, 2022 [51]. - The company had a balance due to related parties of $1,679,213 as of June 30, 2023, compared to$893,814 as of December 31, 2022 [82]. - The company issued unsecured promissory notes totaling $2,183,642 as of June 30, 2023, to extend the time available to complete a business combination [86]. - The fair value of the company's financial instruments approximates the carrying amounts represented in the unaudited condensed consolidated balance sheet as of June 30, 2023 [63]. - As of June 30, 2023, the fair value of U.S. Treasury Securities held in the Trust Account was$26,265,732, down from $48,982,188 as of December 31, 2022, indicating a decrease of approximately 46.6$17,477, a decrease of approximately 42.5% from $30,000 as of December 31, 2022 [106][107]. Tax and Compliance - The company recognized zero income tax provision for the periods ended June 30, 2023, and 2022, as it is considered an exempted British Virgin Islands Company [67]. - The company has not recognized any unrecognized tax benefits or accrued amounts for interest and penalties as of June 30, 2023 [66]. Business Operations - The company has made a policy election to recognize changes in redemption value in accumulated deficit immediately [58]. - The company accounts for its Public Warrants as equity and Private Warrants as liabilities, with changes in estimated fair value recognized as non-cash gains or losses [55]. - The underwriters are entitled to a deferred fee of 4.0$1,840,000, upon the closing of the Business Combination [112]. - The Company established the initial fair value for the private warrants at $1,258,560 on April 9, 2021, using a Black-Scholes model [104]. - The Company has invested the net proceeds from the Initial Public Offering in U.S. government treasury bills, notes, or bonds with a maturity of 180 days or less, minimizing exposure to interest rate risk [143]. Risk Factors - The risk-free interest rate rose significantly from 1.18% as of December 31, 2022, to 4.12% as of June 30, 2023 [106]. - Management is evaluating the impact of the COVID-19 pandemic, which could negatively affect the Company's future financial position and operations [110]. - The fair value measurement for Private Warrants is categorized as Level 3, requiring significant judgment due to the lack of observable market inputs [109].