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Item 1A. Risk Factors

2024-08-19 compared with 2024-05-15 · 38 added, 34 removed, 12 unchanged (86% of the section changed)

6 unchanged sentences

Except as disclosed below, there have been no material changes to the risk factors described in Part I, Item 1A, “Risk Factors,” included in our 2023 Annual Report.

If we were deemed to be an investment company for purposes of the Investment Company Act of 1940, as amended (the “Investment Company Act”), we may be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate the Company.

To avoid that result, we may liquidate the securities held in the trust account.

There is currently uncertainty concerning the applicability of the Investment Company Act to a special purpose acquisition company (“SPAC”) and we may be subject to a claim that we have been operating as an unregistered investment company.

Whether a SPAC is an investment company as defined in the Investment Company Act is a question of facts and circumstances according to the adopting release to the 2024 SPAC Rules, which added, “Given the individualized nature of this analysis, and because, depending on the facts and circumstances, a SPAC could be an investment company at any stage of its operations such that a specific duration limitation may not be appropriate, we have decided not to adopt proposed Rule 3a-10.”

If we are deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate.

If we are required to liquidate, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock and warrants following such a transaction, and our warrants would expire worthless.

The funds in the trust account have, since our initial public offering, been held 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 money market funds meeting certain conditions under Rule 2a-7

under the Investment Company Act which invest only in direct U.S.

government treasury obligations.

However, to mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), we may liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in an interest bearing bank demand deposit account, which may earn less interest than we otherwise would have if the Trust Account had remained invested in U.S.

government securities or money market funds.

This may mean that the amount of funds available for redemption would not increase, thereby reducing the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.

In addition, the longer that the funds in the trust account are held in short-term U.S.

government securities or in money market funds invested exclusively in such securities, there is a greater risk that we may be considered an unregistered investment company, in which case we may be required to liquidate.

federal excise tax may be imposed on us in connection with our redemptions of shares in connection with an initial business combination or other stockholder vote pursuant to which stockholders would have a right to submit their shares for redemption (a “Redemption Event”).

Pursuant to the Inflation Reduction Act of 2022 (the “IR Act”), which commenced in 2023, a 1% U.S.

federal excise tax is imposed on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations.

The excise tax is imposed on the repurchasing corporation and not on its stockholders.

The amount of the excise tax is equal to 1% of the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

Department of the Treasury (the “Treasury Department”) has authority to promulgate regulations and provide other guidance regarding the excise tax.

Internal Revenue Service guidance, liquidating distributions made by publicly traded domestic corporations are exempt from the excise tax.

In addition, any redemptions that occur in the same taxable year as a liquidation is completed will also be exempt from such tax.

As disclosed in our 2023 Annual Report, for fiscal year 2023, it was determined that the IR Act tax provisions have an impact to the Company’s fiscal 2023 income tax provision as there were redemptions by the public stockholders relating to the stockholder vote at the Special Meeting in November 2023.

As a result, the Company recorded $359,957 excise tax liability as of December 31, 2023.

In connection with the Redemption Event resulting from the stockholder vote at the special meeting of the Company’s stockholders held on May 14, 2024, 1,581,733 shares of common stock of the Company were tendered for redemption.

These redemptions and any other future redemption or repurchase may be subject to the excise tax.

The extent to which we would be subject to the excise tax in connection with a Redemption Event would depend on a number of factors, including:

(i) the fair market value of the redemptions and repurchases in connection with the Redemption Event, (ii) the nature and amount of any “PIPE” or other equity issuances in connection with an initial business combination (or otherwise issued not in connection with the Redemption Event but issued within the same taxable year of an initial business combination), (iii) if we fail to timely consummate an initial business combination and liquidate in a taxable year following a Redemption Event and (iv) the content of any proposed or final regulations and other guidance from the Treasury Department.

In addition, because the excise tax would be payable by us and not by the redeeming holders, the mechanics of any required payment of the excise tax remains to be determined.

Any excise tax payable by us in connection with a Redemption Event may cause a reduction in the cash available to us to complete an initial business combination and could affect our ability to complete an initial business combination;

however, we will not use the funds held in the trust account and any additional amounts deposited into the trust account, as well as interest earned thereon, to pay the excise tax.

The Company will continue to monitor for updates to the Company’s business along with guidance issued with respect to the IR Act to determine whether any adjustments are needed to the Company’s tax provision in future periods.

As a result of the stockholder redemptions in connection with the May Special Meeting, Kuk Hyoun Hwang, through his ownership and control over the Sponsor and affiliated entities, currently possesses beneficial ownership of and controlling voting power with respect to, a majority of our outstanding common stock, which will limit public stockholders’ influence on corporate matters.

Additionally, Mr.

Hwang has agreed to vote in favor of the initial business combination with OSR Holdings Co., Ltd., regardless of how public stockholders vote.

As a result of the stockholder redemptions in connection with the May Special Meeting, Mr.

Hwang is entitled to vote an aggregate of approximately 50.4% of our common stock, which represents a majority of outstanding shares of common stock.

Hwang has the ability to control our affairs through the election and removal of the entire Board and all other matters requiring stockholder approval, including a future business combination, merger or consolidation, or a sale of all or substantially all of our assets.

This concentrated control limits the influence of our public stockholder on corporate matters and could discourage others from initiating any such potential merger, consolidation or sale or other change-of-control

transaction that may otherwise be beneficial to our stockholders.

Furthermore, this concentrated control will limit the practical effect of stockholders’ participation in corporate matters, through stockholder votes and otherwise.

In addition, Mr.

Hwang has agreed to vote his shares in favor of the initial business combination with OSR Holdings Co., Ltd.

These shares are sufficient to approve the initial business combination and all other proposals being presented at the relevant meeting.

Accordingly, when we present the initial business to our stockholders for a vote, we expect to be able to obtain the necessary stockholder approval for such business combination and other proposals, even if our public stockholders vote against the business combination and such proposals.

If we seek stockholder approval of our initial business combination, our Sponsor, officers and directors and Chardan have agreed to vote in favor of such initial business combination, regardless of how our other public stockholders vote.

Pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and placement shares, as well as any public shares purchased during or after our IPO (including in open market and privately negotiated transactions), in favor of our initial business combination.

In addition, Chardan has agreed to vote all equity participation shares as well as any public shares purchased during or after our IPO (including in open market and privately negotiated transactions) in favor of our initial business combination.

Our initial stockholders, officers, directors and Chardan own shares representing approximately 53.3% of our outstanding shares of common stock.

As a result, we will not need the affirmative vote of any shares of common stock held by public stockholders in order to approve an initial business combination.

We are currently not in compliance with the Nasdaq continued listing requirements.

If we are unable to regain compliance with Nasdaq’s listing requirements, our securities could be delisted, which could affect our securities’ market price and liquidity.

On February 15, 2024, we received a written notice (the “Notice”) from the Nasdaq Listing Qualifications Department indicating that we were not in compliance with Nasdaq Listing Rule 5550(a)(3), which requires us to have at least 300 public holders for continued listing on the Nasdaq Capital Market (the “Minimum Public Holders Rule”).

The Notice is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of our securities on the Nasdaq Capital Market.

We submitted a plan to regain compliance with the Minimum Public Holders Rule to Nasdaq on April 1, 2024.

On April 17, 2024, we received written notice that the staff of Nasdaq determined, based on its review of our compliance plan, to grant an extension of time to regain compliance with the Minimum Public Holders Requirement.

The terms of the extension are as follows:

on or before August 13, 2024, we must file with Nasdaq documentation from its transfer agent, or an independent source, demonstrating that its common stock has a minimum of 300 public holders.

In the event we do not satisfy the terms, the Nasdaq staff will provide written notification that our securities will be delisted.

At that time, we may appeal the determination to a Listing Qualifications Panel.

We are a “controlled company” within the meaning of the Nasdaq rules and, as a result, we qualify for exemptions from certain corporate governance requirements.

As a result of the stockholder redemptions in connection with the May Special Meeting, our current Chief Executive Officer and member of our Board of Directors, Mr.

Kuk Hyoun Hwang, is entitled to vote an aggregate of approximately 50.4% of our common stock, which represents a majority of our outstanding shares of common stock.

As a result, we are considered a “controlled company” within the meaning of the Nasdaq corporate governance standards.

Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:

we have a board that includes a majority of “independent directors,” as defined under the rules of the Nasdaq;

we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules.

However, if we determine in the future to utilize some or all of these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors