Item 1. Business
ITEM 1. BUSINESS
Introduction
BEST SPAC I Acquisition Corp. (the “Company”) is a blank
check company incorporated as a British Virgin Island (“BVI”) business company on December 13, 2024. The Company was incorporated
for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination
with one or more businesses (the “Business Combination”).
Initial Public Offering and Private Placement
On June 16, 2025, the Company consummated its initial public offering
(“IPO”) of 5,500,000 units (“Units”). Each Unit consists of one Class A ordinary share, no par value per share,
and one right to receive of one-tenth of one Class A ordinary share upon the completion of the initial Business Combination. The Units
were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $55,000,000.
Simultaneously with the consummation of the IPO and the sale of the
Units, the Company consummated the private placement (“Private Placement”) of 277,000 units (the “Private Placement
Units”) to BEST SPAC I (Holdings) Corp. (the “Sponsor”), at a price of $10.00 per Private Placement Unit, generating
total proceeds of $2,770,000. The Private Placement Units are identical to the Units sold in the IPO. Additionally, the Sponsor and holders
of our Founder Shares (as defined below) (the “initial shareholders”) agreed not to transfer, assign or sell any of the Private
Placement Units or underlying securities (except in limited circumstances) until after the completion of the Company’s initial business
combination. Such initial shareholders were granted certain demand and piggyback registration rights in connection with the purchase of
the Private Placement Units. The Private Placement Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended,
as the transactions did not involve a public offering.
The Company granted the underwriters
a 45-day option to purchase up to an additional 825,000 Units at the IPO price to cover over-allotments, if any, which expired unexercised
on July 27, 2025.
On July 30, 2025, the Sponsor
forfeited 206,250 Founder Shares for no consideration as the underwriters of the IPO did not exercise the over-allotment option.
In connection with the IPO, the Company issued to Maxim Group LLC and/or
its designees (“Maxim”), the representative of the underwriters in the IPO, an aggregate of 247,500 Class A ordinary shares
for no consideration (the “Representative Shares”).
A total of $55,000,000 was placed in the trust account established
for the benefit of our public shareholders and the underwriters of the IPO (the “Trust Account”) with Continental Stock Transfer
& Trust Company acting as trustee. 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 to occur of (i) the completion of the initial Business Combination, (ii) the redemption
of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum
and articles of association to (A) modify the substance or timing of the Company’s obligation to redeem 100% of the public shares
if the Company does not complete the initial Business Combination within the Combination Period (defined below) or (B) with respect to
any other material provision relating to shareholders’ rights or pre-Business Combination activity and (iii) the redemption of all
of the public shares if the Company is unable to complete the initial Business Combination within the Combination Period, subject to applicable
law and as further described in the Prospectus. The proceeds deposited in the Trust Account could become subject to the claims of the
creditors, if any, which could have priority over the claims of the public shareholders.
As of December 31, 2025, the Company had not commenced any operations.
All activities for the period from December 13, 2024 (inception) through December 31, 2025 were organizational activities and those necessary
to prepare for the IPO, and, following our IPO, searching for a Business Combination target and the negotiation with potential targets
for an initial Business Combination. The Company will not generate any operating revenue 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 on cash and cash equivalents
from the proceeds derived from the IPO.
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On August 6, 2025, the Company announced that holders of the Company’s
Units may elect to separately trade the Class A ordinary shares and rights included in its units commencing on or about August 7, 2025.
The Class A ordinary shares and rights are currently trading on The Nasdaq Capital Market (“Nasdaq”) under the symbols “BSAA”
and “BSAAR,” respectively. Public Units not separated will continue to trade on Nasdaq under the symbol “BSAAU”.
Merger Agreement
On September 25, 2025, the Company entered into a merger agreement
(as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) with (i) HDEducation
Group Limited, a Cayman Islands exempted company (“HDE”); (ii) High Distinction Group Limited, a Cayman Islands exempted company
and wholly-owned subsidiary of the Company (the “Purchaser”); and (iii) BEST SPAC I Mini Sub Acquisition Corp., a Cayman Islands
exempted company and wholly-owned subsidiary of the Company (the “Merger Sub”). Pursuant to the terms of the Merger Agreement,
upon the closing of the transactions contemplated in the Merger Agreement, among other things, (i) the Company will be merged with and
into the Purchaser, the separate corporate existence of the Company will cease and the Purchaser will continue as the surviving corporation
(the “Reincorporation Merger”) and the Merger Sub will become a wholly owned subsidiary of the Purchaser as a consequence
of the Reincorporation Merger; and (ii) within two business days following the Reincorporation Merger, the Merger Sub will merge with
and into HDE, the separate corporate existence of the Merger Sub will cease and HDE will continue as the surviving company under the laws
of the Cayman Islands and become a wholly owned subsidiary of the Purchaser (the “Acquisition Merger”). Pursuant to the terms
of the Merger Agreement, the aggregate consideration to be paid to existing shareholders and holders of equity awards of HDE is $300,000,000,
which will be paid entirely in stock, comprised of newly issued class A ordinary shares of the Purchaser (“Purchaser Class A Ordinary
Shares”) and class B ordinary shares of the Purchaser (“Purchaser Class B Ordinary Shares” and collectively with Purchaser
Class A Ordinary Shares, “Purchaser Ordinary Shares”) valued at $10.00 per share, plus such additional Purchaser Class A Ordinary
Shares as determined pursuant to the Merger Agreement. Such additional shares may be issued to any investor in exchange for cash, and
shall equal $300,000,000 divided by the amount of the pre-money valuation of HDE as agreed upon by the Company, HDE and the additional
investors, multiplied by the additional invested amount, then divided by $10.00. Certain shareholders and holders of equity awards of
HDE will have the right to receive an aggregate of up to an additional 2,000,000 Purchaser Ordinary Shares (subject to equitable adjustment),
which will vest from and after one month after the closing date until the date that is two years from the closing date, if the volume
weighted average price of the Purchaser Ordinary Shares over any twenty (20) trading days within any thirty (30) trading day period is
greater than or equal to $15.00.
The Merger Agreement contains
customary representations, warranties and covenants of the parties thereto. The consummation of the proposed transactions is subject
to certain conditions as further described in the Merger Agreement.
Concurrently with the execution of the Merger Agreement, HDE, the Purchaser,
the Company, the Sponsor, and certain shareholders of HDE (together with the Sponsor, the “Supporting Shareholders”) entered
into a voting and support agreement pursuant to which the Supporting Shareholders have agreed, among other things, to vote in favor of
the Reincorporation Merger or the Acquisition Merger, as the case may be, the adoption of the Merger Agreement and any other matters necessary
or reasonably requested by HDE, the Purchaser or the Company for consummation of the Reincorporation Merger, the Acquisition Merger and
the other transactions contemplated by the Merger Agreement. In addition, the Supporting Shareholders have agreed not to sell, assign,
encumber, pledge, hypothecate, dispose, loan or otherwise transfer the shares of the Company or HDE, as applicable, owned of record and
beneficially by such Supporting Shareholders or over which such Supporting Shareholders have voting power, prior to the earlier to occur
of (a) the Acquisition Merger becoming effective, (b) the termination of the Merger Agreement, and (c) written agreement of the Supporting
Shareholders and the Company and the Purchaser.
Competitive Strengths
We will seek to capitalize
on the experience and networks of the members of our management team: Mr. Xiangge Liu, Mr. Heyi Chen, Ms. Prescille Chu Cernosia, and
Mr. Huachen Zhang. Our team consists of seasoned and experienced professionals who have significant experience in both public and private
companies. Members of our management also have extensive experience in sourcing and evaluating potential investment targets as well as
deal negotiation, corporate finance, business operations and management. Our team has developed a proprietary network of relationships
with business leaders, investors and intermediaries that we believe can generate deal flow for us. We believe our team has the ability
to source attractive deals and find good investment opportunities from sources in their networks.
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Mr. Xiangge Liu, our Chief
Executive Officer, Chief Financial Officer and Chairman, has over 25 years of extensive experience in private equity, project finance
and advisory services. Mr. Huachen Zhang, our Independent Director, has expertise in the finance, investment management and business
strategy space, having served various leadership positions in finance firms. Mr. Heyi Chen, our Independent Director, is an experienced
leader in investment and asset management with almost two decades of experience in the finance sector. Ms. Prescille Chu Cernosia, our
Independent Director, has over 20 years of experience in fundraising and management roles, having served in senior leadership roles in
colleges and other businesses across North America and Asia.
We believe the experience and network of relationships of our management
team will give us distinct advantages in sourcing, structuring and consummating a business combination. Our management and director team
come from backgrounds ranging from over two decades of experience in finance, capital markets and entrepreneurship. We also believe that
our mixture of skills, including experience with business development, entrepreneurship, investment, finance and marketing, will provide
us access to proprietary deals and assist us in identifying and evaluating a target, manage risk and effect a successful business combination.
However, none of our management team is obligated to remain with the company after an acquisition transaction, and we cannot provide assurance
that the resignation or retention of our current management will be a term or condition in an acquisition transaction. Moreover, despite
the competitive advantages we believe we have, we remain subject to significant competition with respect to identifying and executing
an acquisition transaction.
Our management and director
team’s past performance is not an assurance that we will be able to identify an appropriate candidate for our initial business
combination or achieve success with respect to the business combination we intend to consummate.
Redemption rights for public shareholders upon consummation of
our initial business combination
We will provide our public
shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of
taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein.
The amount in the Trust Account is initially anticipated to be $10.00
per public share (subject to increase of up to an additional $0.20 per share in the event that the Sponsor elects to extend the period
of time to consummate a Business Combination, as described in more detail in the Prospectus). There will be no redemption rights upon
the completion of our initial business combination with respect to the Founder Shares, Private Placement Units, shares underlying the
Private Placement Units (“Private Placement Shares”) or the rights included in the Private Placement Units (“Private
Placement Rights”). Maxim, our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they
have agreed (and their permitted transferees will agree) to waive their redemption rights with respect to their Founder Shares, Private
Placement Shares and/or Representative Shares. However, if our initial shareholders or any of our officers, directors or affiliates acquires
public shares in or after the initial public offering, they will be entitled to receive liquidating distributions with respect to such
public shares if we fail to consummate our initial business combination within the required time period.
Redemption of public shares and liquidation if no initial business
combination
The Company initially has 12 months from the closing of the IPO (or
up to 18 months if the Company extends the date by which it has to complete a business combination) (the “Combination Period”)
to consummate an initial business combination. If we are unable to consummate our initial business combination within the time period
specified in our amended and restated memorandum and articles of association, we will: (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest
shall be net of taxes payable, and 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 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 Board of Directors, liquidate and dissolve, subject in each case to the Company’s
obligations under British Virgin Islands law to provide for claims of creditors and the requirements of other applicable law.
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Following the redemption
of public shares, we intend to enter “voluntary liquidation” which is the statutory process for formally closing and dissolving
a company under the laws of the British Virgin Islands. Given that we intend to enter voluntary liquidation following the redemption
of public shareholders from the trust account, we do not expect that the voluntary liquidation process will cause any delay to the payment
of redemption proceeds from our trust account. In connection with such a voluntary liquidation, the liquidator would give notice to creditors
inviting them to submit their claims for payment, by notifying known creditors (if any) who have not submitted claims and by placing
a public advertisement in at least one newspaper published in the British Virgin Islands newspaper and in at least one newspaper circulating
in the location where the company has its principal place of business, and taking any other steps he considers appropriate to identify
the company’s creditors, after which our remaining assets would be distributed. As soon as the affairs of the company are fully
wound-up, the liquidator must complete his statement of account and file notice with the Registrar that the liquidation is complete.
We would be dissolved once the Registrar issues a Certificate of Dissolution.
Our initial shareholder and Maxim have agreed to waive their redemption
rights with respect to their Founder Shares, Private Placement Shares, and Representative Shares if we fail to consummate our initial
business combination within the required time period.
However, if our initial shareholders, or any of our officers, directors
or affiliates acquire public shares in or after the initial public offering, they will be entitled to redemption rights with respect to
such public shares if we fail to consummate our initial business combination within the required time period. There will be no redemption
rights or liquidating distributions with respect to our Private Placement Units, which will expire worthless in the event we do not consummate
our initial business combination within the Combination Period. We will pay the costs of our liquidation from our remaining assets outside
of the trust account or interest earned on the funds held in the trust account. However, the liquidator may determine that he or she requires
additional time to evaluate creditors’ claims (particularly if there is uncertainty over the validity or extent of the claims of
any creditors). Also, a creditor or shareholder may file a petition with the BVI court which, if successful, may result in our liquidation
being subject to the supervision of that court. Such events might delay distribution of some or all of our remaining assets.
Additionally, in any liquidation
proceedings of the company under British Virgin Islands law, the funds held in our trust account may be included in our estate and subject
to the claims of third parties with priority over the claims of our shareholders. To the extent any such claims deplete the trust account
we may not be able to return to our public shareholders the liquidation amounts payable to them.
If we do not complete an
initial business combination and expend all of the net proceeds of our initial public offering, other than the proceeds deposited in
the trust account, and without taking into account interest, if any, earned on the trust account or any amount that may be deposited
into the trust account to extend the date by which the Company has to complete a business combination, the per-share redemption amount
received by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however,
become subject to the claims of our creditors, which would have higher priority than the claims of our public shareholders. The actual
per-share redemption amount received by shareholders may be less than $10.00, plus interest (net of taxes payable, and less up to $100,000
of interest to pay liquidation expenses).
Although we will seek to
have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which
we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust
account for the benefit of our public shareholders, such party may not execute such agreements or even if they execute such agreements,
they may not be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of
fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order
to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses
to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive
alternatives are reasonably available to us and will only enter into an agreement with a third party if management believes that such
third party’s engagement would be the best interests of the company under the circumstances. Examples of possible instances where
we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise
or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or in cases where
management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will
agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with
us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account or
any amount that may be deposited into the trust account to extend the date by which the Company has to complete a business combination,
our sponsor agreed that it will be liable to us, if and to the extent any claims by a vendor for services rendered or products sold to
us, or a prospective target business with which we have discussed entering into a business combination agreement, reduce the amounts
in the trust account to below $10.00 per share, 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 our indemnity of the underwriters of the IPO against certain liabilities,
including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party,
our sponsor will not be responsible to the extent of any liability for such third party claims. However, our sponsor may not be able
to satisfy those obligations. Other than as described above, none of our other officers or directors will indemnify us for claims by
third parties including, without limitation, claims by vendors and prospective target businesses. We have not independently verified
whether our sponsor has sufficient funds to satisfy his indemnity obligations and believe that our sponsor’s only assets are securities
of our company. We have not asked our sponsor to reserve for such obligations. We believe the likelihood of our sponsor having to indemnify
the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities
execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
4
In the event that the proceeds
in the trust account are reduced below the lesser of (i) $10.00 per public share or (ii) the actual amount per public share held in the
trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of
the trust assets; in each case less taxes payable and up to $100,000 of interest that may be released to the Company to pay liquidation
and dissolution expenses, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce
its indemnification obligations. It is possible that our independent directors in exercising their business judgment may choose not to
do so in any particular instance. Accordingly, due to claims of creditors, the actual value of the per-share redemption price may be
less than $10.00 per share.
We will seek to reduce the
possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors,
service providers, prospective target businesses or other entities with which we do business execute agreements with us waive any right,
title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims
under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities
Act. We will have access to funds not placed in the trust with which to pay any such potential claims. In the event that we liquidate
and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our
trust account could be liable for claims made by creditors.
If we are deemed insolvent
for the purposes of the Insolvency Act, 2003 of the British Virgin Islands, as amended (the “Insolvency Act”) (i.e. (i) we
fail to comply with the requirements of a statutory demand that has not been set aside under section 157 of the Insolvency Act; (ii)
execution or other process issued on a judgment, decree or order of a British Virgin Islands Court in favor of a creditor of the company
is returned wholly or partly unsatisfied; or (iii) either the value of the company’s liabilities exceeds its assets, or the company
is unable to pay its debts as they fall due), then there are very limited circumstances where prior payments made to shareholders or
other parties may be deemed to be a “voidable transaction” for the purposes of the Insolvency Act. A voidable transaction
would include, for these purposes, payments made as “unfair preferences” or “transactions at an undervalue”.
A liquidator appointed over an insolvent company who considers that a particular transaction or payment is a voidable transaction under
the Insolvency Act could apply to the British Virgin Islands Courts for an order setting aside that payment or transaction in whole or
in part.
Additionally, if we enter
insolvent liquidation under the Insolvency Act, the funds held in our trust account will likely be included in our estate and subject
to the claims of third parties with priority over the claims of our shareholders. To the extent any insolvency claims deplete the trust
account you may not be able to return to our public shareholders the liquidation amounts due them.
Our public shareholders will
be entitled to receive funds from the trust account only (i) in the event of a redemption of the public shares prior to any winding up
in the event we do not consummate our initial business combination within the Combination Period, (ii) if they redeem their shares in
connection with an initial business combination that we consummate or (iii) if they redeem their shares in connection with a shareholder
vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation
to redeem 100% of our public shares if we do not complete our initial business combination within the time period specified in our amended
and restated memorandum and articles of association, or (B) with respect to any other provision relating to shareholders’ rights
or pre-business combination activity. In no other circumstances shall a shareholder have any right or interest of any kind to or in the
trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting
in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable
pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above.
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Acquisition Strategy
Our efforts in identifying prospective target businesses will not be
limited to a particular industry or country, although we intend to focus on businesses in the consumer goods industry, an area where we
believe has an optimistic growth trajectory for the coming years. There is no restriction on the geographic location for our target search,
and it is our intent to pursue targets globally. Since our Sponsor and its affiliate(s) as well as certain of our current executive officers
and directors are located or have significant ties to China, we may acquire a target business that is based, from, expanded or has operations
in China.
We will seek to capitalize
on the strength of our management team. We believe that our board and management’s experiences, from evaluating assets through
investing, company building and strategic management, will enable us to identify and execute an initial business combination with an
attractive company or businesses within the consumer goods industry. We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our Sponsor, officers or directors, or completing the business combination through a joint venture
or other form of shared ownership with our Sponsor, officers or directors. In the event we seek to complete our initial business combination
with a target that is affiliated with our Sponsor, officers or directors, we, or a committee of independent directors, would obtain an
opinion from an independent firm that commonly renders valuation opinions, independent accounting firm or independent investment banking
firm that our initial business combination is fair to our company from a financial point of view. We are not required to obtain such
an opinion in any other context.
Investment Criteria
Consistent with our acquisition
strategy, we have identified the following criteria to evaluate prospective target businesses. We will primarily seek to acquire one
or more growth businesses with a total enterprise value of between $100,000,000 and $600,000,000. Although we may decide to enter into
our initial business combination with a target business that does not meet any of the criteria described below, it is our intention to
acquire companies that we believe:
● Has
a competitive advantage. We intend to look for companies whose products and services are defensible and afford a differentiation solution
to customers.
● Has
a strong management team that can create significant value for the target company. We are looking for proven management with a track
record of executing and growing platforms who can credibly operate within public markets.
● Is
ready to be public, and will benefit from access to capital market. We will look for public-ready target companies that can leverage
access to capital markets to fuel their growth and increase shareholder value.
These criteria are not intended
to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant,
on these general guidelines as well as other considerations, factors and criteria that our management or board of directors may deem
relevant. We may decide to enter into our initial business combination with a target business that does not meet the above criteria and
guidelines.
Initial Business Combination
Nasdaq rules require that our initial business combination must be
with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the balance in the trust
account (less any taxes payable on interest earned and less any interest earned thereon that is released to us for taxes) at the time
of our signing a definitive agreement in connection with our initial business combination. If our Board of Directors is not able to independently
determine the fair market value of the target business or businesses, or we seek to complete our initial business combination with a target
that is affiliated with our Sponsor, officers or directors, we will obtain an opinion from an independent investment banking firm or an
independent accounting firm or any other firm that commonly renders valuation opinions. We do not intend to purchase multiple businesses
in unrelated industries in conjunction with our initial business combination.
6
We have until the end of
the Combination Period to consummate an initial business combination. If we are unable to consummate an initial business combination
within such time period, we will, 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 earned on the funds held in the Trust Account (net of interest that may be used by us to pay our taxes payable
and less up to $100,000 of interest to pay for 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 liquidation
distributions, if any), subject to applicable law and as further described herein, and then seek to dissolve and liquidate. We expect
the pro rata redemption price to be approximately $10.00 per public share (regardless of whether or not the underwriters exercise their
over-allotment option) (subject to increase of up to an additional $0.20 per share in the event that our Sponsor elects to extend the
period of time to consummate a business combination by the full six months), without taking into account any interest earned on such
funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors which
may take priority over the claims of our public shareholders.
We anticipate structuring
our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such 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 sufficient for it not to be required to register as an investment company under the Investment Company
Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting
securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction
company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue
a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target.
In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number
of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding
shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses
are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will
be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the
80% of net assets test will be based on the aggregate value of all of the target businesses.
Facilities
We currently maintain our
executive offices at 701, 7/Floor United Building 17-19 Jubilee Street Hong Kong. We consider our current office space adequate for our
current operations.
Competition
In identifying, evaluating
and selecting an alternate target business, we may encounter intense competition from other entities having a business objective similar
to ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly
or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources
will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential
target businesses that we could complete a business combination with utilizing the net proceeds of the IPO, our ability to compete in
completing a business combination with certain sizable target businesses may be limited by our available financial resources. Furthermore,
the requirement that, so long as our securities are listed on Nasdaq, we acquire a target business or businesses having a fair market
value equal to at least 80% of the value of the trust account (less any taxes payable on interest earned and less any interest earned
thereon that is released to us for taxes) at the time of the agreement to enter into the business combination, our obligation to pay
cash in connection with our public shareholders who exercise their redemption rights, and our outstanding private placement units and
the potential future dilution they represent, may not be viewed favorably by certain target businesses. Any of these factors may place
us at a competitive disadvantage in successfully negotiating our initial business combination.
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Conflicts of Interest
Our directors and officers
are also not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating
management time among various business activities, including identifying potential business combinations and monitoring the related due
diligence. Furthermore, our sponsor and its affiliate(s), and each of our officers and directors presently have, and in the future any
of our sponsor and its affiliate(s), our directors and our officers may have additional, fiduciary or contractual obligations to other
entities pursuant to which such sponsor, affiliate(s), officer or director is or will be required to present acquisition opportunities
to such entity. Accordingly, subject to his or her fiduciary duties under British Virgin Islands law, if any of our officers or directors
becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual
obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to
such entity, and only present it to us if such entity rejects the opportunity. Although we have no formal policy in place for vetting
potential conflicts of interest, our Board of Directors will review any potential conflicts of interest on a case-by-case basis. Our
amended and restated memorandum and articles of association provides that, subject to his or her fiduciary duties under British Virgin
Islands law, we renounce our interest or expectancy in any corporate opportunity offered to any officer or director unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one
we are legally and contractually permitted to complete on a reasonable basis. In particular, our officers and directors, and affiliates
of our officers and directors, are currently sponsoring other blank check companies, and may look for an acquisition target in any location,
has a window in which it may complete its initial business combination that overlaps the corresponding window we have. As a result, the
fiduciary duties, conflicts of interest or contractual obligations of our officers or directors could materially affect our ability to
complete our initial business combination.
Emerging Growth Company Status and Other Information
We are an emerging growth
company as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (which we refer to herein as the JOBS Act). As such, we are eligible to 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,
or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our 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. If some investors find our securities less attractive as a result, there may be a
less active trading market for our securities and the prices of our securities may be more volatile.
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 an 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 statement 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.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the IPO, (b)
in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our shares of common stock that are held by non-affiliates exceeds $700 million as of the prior June
30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.
8
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds
$250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter.
Employees
We currently have one officer.
This individual is not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they
deem necessary to our affairs. The amount of time they will devote in any time period will vary based on whether a target business has
been selected for the business combination and the stage of the business combination process the company is in. We do not intend to have
any full time employees prior to the consummation of a business combination.
ITEM 1A. RISK FACTORS
As a smaller reporting company,
we are not required to include risk factors in this Annual Report.