UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-41256
BLUE WORLD ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
Cayman Islands | | N/A |
(State or other jurisdiction of
incorporation or organization) | | (IRS Employer
Identification No.) |
244 Fifth Avenue, Suite B-88
New York, NY 10001
(Address of principal executive offices and zip
code)
(646) 998-9582
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class | | Trading Symbol(s) | | Name of each exchange
on which registered |
Units, consisting of one Class A Ordinary Share, $0.0001 par value, one-half of one redeemable Warrant, each whole warrant to acquire one Class A Ordinary Share, and one Right to acquire one-tenth of one Class A Ordinary Share | | BWAQU | | The Nasdaq Stock Market LLC |
Class A Ordinary Shares, par value $0.0001 per share | | BWAQ | | The Nasdaq Stock Market LLC |
Redeemable Warrants, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 per share | | BWAQW | | The Nasdaq Stock Market LLC |
Rights, each whole right to acquire one-tenth of one Class A Ordinary Share | | BWAQR | | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g)
of the Act: None.
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | Emerging growth company | ☒ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. Yes ☐ No ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether
any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
As of September 28, 2023, there were 4,302,246
Class A ordinary shares, par value $0.0001 per share, and 2,300,000 Class B ordinary shares, par value $0.0001 per share issued and outstanding.
BLUE WORLD ACQUISITION CORPORATION
TABLE
OF CONTENTS
CERTAIN TERMS
References to “Blue
World,” the “Company,” “our Company,” “our,” “us” or “we” refer to Blue
World Acquisition Corporation, a blank check company incorporated on July 19, 2021 as a Cayman Islands exempted corporation and formed
for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination
with one or more businesses, which we refer to throughout this Annual Report on Form 10-K as our “initial business combination.”
References to our “Sponsor” refer to Blue World Holdings Limited. References to “equity-linked securities” are
to any securities of the Company which are convertible into, or exchangeable or exercisable for, equity securities of the Company, including
any securities issued by the Company which are pledged to secure any obligation of any holder to purchase equity securities of the Company.
References to the “SEC” are to the U.S. Securities and Exchange Commission. References to our “initial public offering”
refer to our initial public offering, which closed on February 2, 2022 (the “Closing Date”). References to “public shares”
are to shares of our Class A ordinary shares sold as part of the units in our initial public offering. References to “public shareholders”
are to the holders of our public shares.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements in this
Annual Report on Form 10-K (this “Report” or “Annual Report”) may constitute “forward looking statements”
for purposes of the federal securities laws. Our forward looking statements include, but are not limited to, statements regarding our
or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future and the statements under “Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position,
business strategy and the plans and objectives of management for future operations. In addition, any statements that refer to projections,
forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward looking statements.
The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,”, “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify forward looking statements, but
the absence of these words does not mean that a statement is not forward looking. Forward looking statements in this Annual Report on
Form 10-K may include, for example, statements about:
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our ability to select an appropriate target business or businesses; |
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our ability to complete our initial business combination; |
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our expectations around the performance of the prospective target business or businesses; |
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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
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our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
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our potential ability to obtain additional financing to complete our initial business combination; |
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our pool of prospective target businesses; |
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the ability of our officers and directors to generate a number of potential acquisition opportunities; |
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our public securities’ potential liquidity and trading; |
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the lack of a market for our securities; |
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the use of proceeds not held in the trust account described below or available to us from interest income on the trust account balance; |
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the trust account not being subject to claims of third parties; |
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our financial performance; or |
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the other risk and uncertainties discussed in “Item 1A. Risk Factors,” elsewhere in this Annual Report on Form 10-K and in our other filings with the SEC. |
The forward looking statements
contained in this Annual Report on Form 10-K are based on our current expectations and beliefs concerning future developments and their
potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These
forward looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may
cause actual results or performance to be materially different from those expressed or implied by these forward looking statements. These
risks and uncertainties include, but are not limited to, those factors described under “Part I, Item 1A. Risk Factors.” Should
one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward looking statements. We undertake no obligation to update or revise any forward
looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities
laws.
PART I
Item 1. Business Overview.
We are a blank check exempted
company incorporated in the Cayman Islands on July 19, 2021 with limited liability (meaning our public shareholders have no liability,
as shareholders of the Company, for the liabilities of the Company over and above the amount paid for their shares) to serve as a vehicle
to effect a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination
with one or more target businesses (the “Business Combination”). Our efforts to identify a prospective target business will
not be limited to a particular industry or geographic location. We intend to utilize cash derived from the proceeds of our initial public
offering (the “IPO”), our securities, debt or a combination of cash, securities and debt, in effecting a Business Combination.
We have not selected any target business for our initial Business Combination.
Our efforts to identify a
prospective target business were primarily in the marine leisure, cruise, marine infrastructure and engineering, general hospitality,
travel and tourism, marine services, logistics and supply chain, offshore energy solutions and related industry segments. We are not limited
to a particular region for purposes of consummating an initial Business Combination, however, we may focus on targets that, regardless
of geographic location of operations or corporate offices, have viable synergies with the Asia Pacific and the U.S. markets for the above
industry segments, either physically or virtually. Though our sponsor, Blue World Holdings Limited (the “Sponsor”), is a Hong
Kong company, a majority of our management are located outside of China (including Hong Kong and Macau), and we will not undertake our
initial Business Combination with any entity that conducts a majority of its business or is headquartered in China (including Hong Kong
and Macau).
Even though a majority of
our management are located outside China, our Sponsor and some of our officers and directors have signature ties to China. Specifically,
our Sponsor is a Hong Kong company located in Hong Kong. Our Chief Executive Officer, Mr. Liang Shi, and our Chief Financial Officer,
Mr. Tianyong Yan, who are both directors, are located in China. Mr. Zhenyu Li, one of our independent directors, though located outside
China, is a Chinese citizen. Except as mentioned above, the other officer and two directors are all non-Chinese citizens located outside
China. As a result, because of such significant ties to China, it may make us a less attractive partner to a non-China-based target company,
which may therefore limit the pool of acquisition candidates available to us.
We
may also be subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations. The PRC government
initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including
cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, adopting
new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. In particular, on
February 17, 2023, the Chinese Securities Regulatory Commission (the “CSRC”) issued the Trial Administrative Measures of
Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and relevant supporting guidelines
(collectively, the “New Administrative Rules Regarding Overseas Listings”), which came into effect on March 31, 2023. According
to the New Administrative Rules Regarding Overseas Listings, among other things, a domestic company in the PRC that seeks to offer and
list securities in overseas markets shall fulfill the filing procedure with the CSRC as per requirement of the Trial Measures. On February
24, 2023, the CSRC promulgated the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering
and Listing by Domestic Companies (the “Confidentiality and Archives Administration Provisions”), which also became effective
on March 31, 2023. The Confidentiality and Archives Administration Provisions set out rules, requirements and procedures relating to
provision of documents, materials and accounting archives for securities companies, securities service providers, overseas regulators
and other entities and individuals in connection with overseas offering and listing, including without limitation to, domestic companies
that carry out overseas offering and listing (either in direct or indirect means) and the securities companies and securities service
providers (either incorporated domestically or overseas) that undertake relevant businesses shall not leak any state secret and working
secret of government agencies, or harm national security and public interest, and a domestic company shall first obtain approval from
competent authorities according to law, and file with the secrecy administrative department at the same level, if it plans to, either
directly or through its overseas listed entity, publicly disclose or provide any documents and materials that contain state secrets or
working secrets of government agencies. Since the New Administrative Rules Regarding Overseas Listings and the Confidentiality and Archives
Administration Provisions are newly promulgated, and the interpretation and implementation thereof involves uncertainties, we cannot
assure that we will be able to complete the relevant filings in a timely manner or fulfil all the regulatory requirements thereunder
if we are required to complete such filings, and it is highly uncertain how or new laws or regulations or detailed implementations and
interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have
on our capability to complete a Business Combination within a prescribed time period, accept foreign investments, and post-combination
entity’s ability to conduct its business or list on an U.S. exchange or other foreign exchange. See “Part I – Item
1. – Permission Required from the PRC Authorities for a Business Combination and Relevant PRC Regulations” starting
on page 7 of this Annual Report.
Though
we are not a PRC operating entity, however, we cannot assure you that our conclusion will not be revoked by the Chinese government or
there is any change in the PRC laws, regulations or rules in the future would lead different outcome, due to the ties our management
and Sponsor have with China. The governing PRC laws and regulations are sometimes vague and uncertain and can change quickly with
little advance notice, which may result in a material change in our search for a target business and/or the value of our securities,
or cause the value of our securities after we complete our Business Combination to significantly decline or be worthless, or substantially
limit or completely hinder the post-combined company’s ability to offer or continue to offer securities to investors. See “Part
I – Item 1A. Risk Factors” on page 10 of this Annual Report. The Chinese government may intervene or influence the operations
of the PRC operating entities at any time and may exert more control over offerings conducted overseas, which could result in a material
change in our operations and/or the value of our securities. In addition, any actions by the Chinese government to exert more oversight
and control over offerings that are conducted overseas could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Changes in China’s
economic, political or social conditions, as well as possible interventions and influences of any government policies and actions; as
well as uncertainties with respect to the PRC legal system could have a material adverse effect on our operation and the value of our
securities. For instance, (i) as the date of this Annual Report, we are not required to obtain any permission from China authorities
nor received any objection or restriction from Chinese authorities to list our securities in U.S. exchanges, however, we cannot guarantee
that PRC authorities may initiate any change in its law, rules or regulations, or governmental policies that would require permission
or scrutiny from relevant PRC authorities for our listing; or any law, regulation, rules and policies will become effective and enforceable
while are listing on Nasdaq and seeking a target for the initial Business Combination that could substantially affect our operation and
the value of our securities may depreciate quickly even become worthless. See “Part I – Item 1.— Permission Required
from the PRC Authorities for a Business Combination and Relevant PRC Regulations” on page 7; and (ii) prior to the consummation
of our initial Business Combination, our operation involves searching and identifying suitable targets, conducting due diligence on targets,
negotiating and consummating our initial Business Combination. Though we will not undertake our initial Business Combination with any
entity that conducts a majority of its business or is headquartered in China (including Hong Kong and Macau), we are subject to risks
and uncertainties about future actions of the PRC government or law enforcement to refrain our activities or operation due to the significant
ties to China of our Sponsor, officers and directors, which would likely result in a material change in our search for a target business
and/or the value of our securities, significantly limit or completely hinder our ability to offer or continue to offer our securities
to investors, and cause the value of our securities significantly decline or become worthless. See “Part I – Item 1A. Risk
Factors” on page 10 of this Annual Report.
Initial Public Offering and Private Placement
On August 5, 2021, Blue World
Holdings Limited (the “Sponsor”) acquired 2,300,000 Class B ordinary shares, par value $0.0001 per share (the “Class
B Ordinary Shares”), for an aggregate purchase price of $25,000 (“Founder Shares”).
On February 2, 2022, we consummated
the IPO of 9,200,000 units (the “Public Units”), which included 1,200,000 Public Units issued upon the full exercise of the
underwriter’s over-allotment option. Each Public Unit consists of one Class A Ordinary Share, $0.0001 par value per share (the “Class
A Ordinary Share”), one-half of one redeemable warrant (the “Warrants”), each whole Warrant entitling the holder thereof
to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, and one right (the “Right”), each one Right
entitling the holder thereof to exchange for one-tenth of one Class A Ordinary Share upon the completion of the initial Business Combination.
The Public Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $92.0 million.
On February 2, 2022, simultaneously
with the consummation of the IPO, we completed the private sale (the “Private Placement”) of 424,480 units (the “Private
Units”) including 378,480 Private Units to the Sponsor and 46,000 Private Units to Maxim Group LLC (“Maxim”), the sole
underwriter of the IPO, respectively, at a purchase price of $10.00 per Private Unit, generating gross proceeds to us of approximately
$4.2 million.
The proceeds of $92.9 million
($10.10 per Public Unit) in the aggregate from the IPO and the Private Placement, were placed in a trust account (the “Trust Account”)
established for the benefit of our public shareholders and the underwriter of the IPO with Continental Stock Transfer & Trust Company
(“Continental”) acting as trustee.
Our management has broad
discretion with respect to the specific application of the proceeds of the IPO and the Private Placement that are held out of the Trust
Account, although substantially all the net proceeds are intended to be applied generally towards consummating a business combination
and working capital.
We presently have no revenue
and have had losses since inception from incurring formation and operating costs. We have relied upon the sale of our securities and loans
from the Sponsor and other parties to fund our operations.
On March 11, 2022, we announced
that holders of the Company’s Public Units may elect to separately trade the Class A Ordinary Shares, Warrants, and Rights included
in its Public Units, commencing on or about March 16, 2022.
The Class A Ordinary Shares,
Warrants, and Rights are trading on the Nasdaq Global Market (“Nasdaq”) under the symbols “BWAQ,” “BWAQW,”
and “BWAQR,” respectively. Public Units not separated will continue to trade on Nasdaq under the symbol “BWAQU”.
Holders of Public Units will need to have their brokers contact the Company’s transfer agent, Continental, in order to separate
the holders’ Public Units into Class A Ordinary Shares, Warrants, and Rights.
Proposed Transactions with TOYO Solar
On August 10, 2023, Blue
World entered into the Agreement and Plan of Merger (as the same may be amended, restated or supplemented, the “Business Combination
Agreement”) with TOYO Co., Ltd, a Cayman Islands exempted company (“PubCo”), TOYOone Limited, a Cayman Islands exempted
company (“Merger Sub”), TOPTOYO INVESTMENT PTE. LTD., a Singapore private company limited by shares (“SinCo”),
Vietnam Sunergy Cell Company Limited, a Vietnamese company, (the “TOYO Solar”, together with PubCo, Merger Sub and SinCo,
the “Group Companies”, or each individually, a “Group Company”), Vietnam Sunergy Joint Stock Company, a Vietnam
joint stock company (“VSUN”), and Fuji Solar Co., Ltd, a Japanese company (“Fuji Solar”, together with VSUN, the
“Shareholders”, or individually, a “Shareholder”).
TOYO Solar, originating from
the Bloomberg NEF Tier 1 listed solar module producer, VSUN, operates out of Phu Tho Province, Vietnam. TOYO Solar’s core operations
involve the manufacturing and sales of solar cells.
Pursuant to the Business
Combination Agreement, (a) the Group Companies, VSUN and Fuji Solar shall consummate a series of transactions involving the Group Companies,
including (A) PubCo acquiring one hundred percent (100%) of the issued and paid-up share capital of SinCo from Fuji Solar in exchange
for one (1) ordinary share of PubCo, par value US$0.0001 per share (the “PubCo Ordinary Shares” and such transaction, the
“Share Exchange”), and (B) SinCo acquiring one hundred percent (100%) of the issued and outstanding shares of capital stock
of TOYO Solar from VSUN at an aggregate consideration of no less than US$50,000,000 (the “SinCo Acquisition,” and together
with the Share Exchange, the “Pre-Merger Reorganization”), as a result of which (i) SinCo shall become a wholly-owned subsidiary
of PubCo, (ii) TOYO Solar shall become a wholly-owned subsidiary of SinCo; and (iii) immediately prior to the closing of the SinCo Acquisition,
Fuji Solar (the “Seller”) shall hold an aggregate of 41,000,000 PubCo Ordinary Shares, representing all issued and outstanding
share capital of PubCo, and (b) following the consummation of the Pre-Merger Reorganization, Blue World shall merge with and into Merger
Sub, with Merger Sub continuing as the surviving company (the “Merger”), as a result of which, among other things, all of
the issued and outstanding securities of Blue World immediately prior to the filing of the plan of merger with respect to the Merger (the
“Plan of Merger”) to the Registrar of Companies of the Cayman Islands, or such later time as may be specified in the Plan
of Merger (the “Merger Effective Time”) shall no longer be outstanding and shall automatically be cancelled, in exchange for
the right of the holders thereof to receive substantially equivalent securities of PubCo, in each case, upon the terms and subject to
the conditions set forth in the Business Combination Agreement and in accordance with the provisions of the Companies Act (Revised) of
the Cayman Islands and other applicable laws. The Merger, the Pre-Merger Reorganization and each of the other transactions contemplated
by the Business Combination Agreement or any of the other relevant transactional documents are collectively referred to as “Transactions.”
In connection with the execution
of the Business Combination Agreement, certain additional agreements were entered into or to be entered into pursuant to the Business
Combination Agreement, including, among others, the Sponsor Support Agreement, Shareholder Lock-Up and Support Agreement, the Sponsor
Lock-Up Agreement the Warrant Assumption Agreement.
Extensions, Related Redemptions and Extension
Notes
Blue World initially had
until February 2, 2023 to consummate an initial business combination. Pursuant to Blue World’s then effective Amended and Restated
Memorandum and Articles of Association, if Blue World anticipates that it may not be able to consummate an initial business combination
by February 2, 2023, it may elect to extend the period to consummate a business combination up to three times, each by an additional three-month extension,
for a total of up to nine months to November 2, 2023, by depositing $920,000 into the Trust Account for each extension. On February
2, 2023, $920,000 was deposited into the Trust Account to extend the period of time to consummate an initial Business Combination for
additional three months till May 2, 2023. The extension payment was sourced from the loans provided by the Sponsor as evidenced by an
unsecured promissory note in the principal amount of $920,000 issued to the Sponsor.
May 2023 Extension Meeting
On May 2, 2023, Blue World
held an extraordinary general meeting (the “May 2023 Meeting”) at which its shareholders
approved the adoption of the Second Amended and Restated Memorandum and Articles of Association of Blue World, which provides that Blue
World has until May 2, 2023 to complete an initial Business Combination, and may elect to extend the period to consummate an initial Business
Combination up to nine times, each by an additional one-month extension, for a total of up to nine months to February 2, 2024 by depositing
$0.0295 per public share into the Trust Account for each monthly extension. In connection with the May 2023 Meeting, 2,612,769 Class A
Ordinary Shares were rendered for redemption, and approximately $27.41 million was released from the Trust Account to pay such redeeming
shareholders.
As a result of May 2023 Meeting,
upon the shareholders’ approval, on May 2, 2023, Blue World and Continental entered into the amendment to the Investment Management
Trust Agreement originally dated January 31, 2022 (the “Trust Agreement”). On May 2,
2023, the Sponsor deposited $194,324 into the Trust Account to extend the period that Blue World must
complete an initial Business Combination from May 2, 2023 to June 2, 2023, which was evidenced by an unsecure promissory note issued by
Blue World to the Sponsor. On June 2, 2023, the Sponsor deposited $194,324 into the Trust Account to extend the period that Blue
World must complete an initial Business Combination from June 2, 2023 to July 2, 2023, which was
evidenced by an unsecure promissory note issued by Blue World to the Sponsor.
June 2023 Extension Meeting
On June 30, 2023, Blue World
held an extraordinary general meeting (the “June 2023 Meeting”) at which the
Blue World shareholders approved the adoption of the Third Amended and Restated Memorandum and Articles of Association of Bule World,
which provides that Blue World has until July 2, 2023 to complete a business combination, and may elect to extend the period to consummate
a business combination up to nine times, each by an additional one-month extension, for a total of up to nine months to April 2,
2024, by depositing $60,000 each month to the Trust Account. As a result of June 30 Meeting, upon the shareholders’ approval, on
June 30, 2023, Blue World and Continental entered into the amendment to the Trust Agreement. In connection with the June 2023 Meeting,
2,749,465 Class A Ordinary Shares were rendered for redemption, and approximately $29.31 million was released from the Trust Account to
pay such redeeming shareholders.
On
June 30, 2023, $60,000 was deposited into the Trust Account to extend the period that Blue World must
complete an initial Business Combination from July 2, 2023 to August 2, 2023. On July 31, 2023, another $60,000 was deposited into the
Trust Account for Public Shareholders, which enabled Blue World to extend the period of
time it has to consummate its initial business combination by one month from August 2, 2023 to September 2, 2023. On September 1, 2023,
another $60,000 was deposited into the Trust Account for Public Shareholders, which enabled Blue World to
extend the period of time it has to consummate its initial business combination by one month from September 2, 2023 to October 2, 2023.
On September 27, 2023, another $60,000 was deposited into the Trust Account for Public Shareholders, which enabled Blue World
to extend the period of time it has to consummate its initial business combination by one month
from October 2, 2023 to November 2, 2023.
As of the
date of this Annual Report, an aggregate of $1,548,648 had been deposited into the Trust Account for the extensions (the “Extension
Payments”), for all of which Blue World issued 7 unsecure promissory notes to the Sponsor, respectively (the “Extension Notes”).
At the June 2023 Meeting,
among the other proposals, the shareholders of Blue World also approved the release of the funds held in the escrow account (the “Escrow
Account”) pursuant to the D&O Reserve Fund Escrow Agreement, dated January 31, 2022 (the “D&O Indemnity Escrow Agreement”),
by and between Blue World and Continental Stock Transfer & Trust Company, as escrow agent, on July 2, 2023 or such a later date immediately
following the purchase of an alternative D&O insurance. Upon the approval, Blue World secured an alternative D&O insurance, effective
on July 1, 2023. On July 4, 2023, a total of $500,000 funds held in the Escrow Account was released to Blue World, a portion of which
was used to purchase the alternative D&O insurance.
Outstanding Promissory Notes and Working Capital
Loans
As of the date of this Annual
Report, we have outstanding loans from the Sponsor in the aggregated amount of $520,000 for working capital purpose, which include (i)
an unsecured promissory note dated November 30, 2022 in the amount of $400,000 to the Sponsor (the “November 2022 Note”),
and (ii) an unsecured promissory note dated July 31, 2023 in the amount of $120,000 to the Sponsor (the “July 2023 Note,”
together with the November 2022 Note, collectively, the “Sponsor Notes”).
Effecting a Business Combination
We will either (1) seek shareholder
approval of our initial Business Combination at a meeting called for such purpose at which public shareholders may seek to redeem their
public shares, regardless of whether they vote for or against the proposed Business Combination, into their pro rata share of the aggregate
amount then on deposit in the Trust Account (net of taxes payable) or (2) provide our public shareholders with the opportunity to sell
their public shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their
pro rata share of the aggregate amount then on deposit in the Trust Account (net of taxes payable), in each case subject to the limitations
described herein. Notwithstanding the foregoing, our initial shareholders, including the Sponsor, officers and directors and Maxim have
agreed not to redeem the founder shares, private shares, the representative shares held by them into their pro rata share of the aggregate
amount then on deposit in the Trust Account. The decision as to whether we will seek shareholder approval of our proposed Business Combination
or allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on
a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek
shareholder approval. If we so choose and we are legally permitted to do so, we will have the flexibility to avoid a shareholder vote
and allow our shareholders to sell their shares pursuant to the tender offer rules of the Securities and Exchange Commission, or SEC.
In that case, we will file tender offer documents with the SEC which will contain substantially the same financial and other information
about the initial Business Combination as is required under the SEC’s proxy rules. We will consummate our initial Business Combination
only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek shareholder approval, a majority
of the issued and outstanding ordinary shares voted are voted in favor of the Business Combination.
We shall not undertake our
initial Business Combination with any entity that conducts a majority of its business or is headquartered in China (including Hong Kong
and Macau). TOYO Solar operates in Vietnam and does not conduct a majority of its business nor is headquartered in China (including Hong
Kong and Macau)
We currently have until November
2, 2023 to consummate our initial Business Combination. However, if we anticipate that we may not be able to consummate our initial Business
Combination by November 2, 2023, we may, but are not obligated to, extend the period of time to consummate a Business Combination by an
additional one month each time (for a total of up to April 2, 2024 to complete a Business Combination). Pursuant to the terms of our amended
and restated memorandum and articles of association and the Trust Agreement, in order to extend the time available for us to consummate
our initial Business Combination, our sponsor or their affiliates or designees, upon five days advance notice prior to the applicable
deadline, must deposit into the Trust Account for each one-month extension, $60,000, on or prior to the date of the applicable deadline.
Our public shareholders will not be afforded an opportunity to vote on the extensions as described above or redeem their shares in connection
with such extensions. The sponsor will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit
that will not be repaid in the event that we are unable to close a Business Combination unless there are funds available outside the Trust
Account to do so. Such extension notes would either be paid upon consummation of our initial Business Combination, or, at the lender’s
discretion, converted upon consummation of our Business Combination into additional private units at a price of $10.00 per unit. Our shareholders
have approved the issuance of the private units upon conversion of such extension notes, to the extent the holder wishes to so convert
such extension notes at the time of the consummation of our initial Business Combination. In the event that we receive notice from our
Sponsor five days prior to the applicable deadline of their intent to effect an extension, we intend to issue a press release announcing
such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the
applicable deadline announcing whether or not the funds had been timely deposited. Our Sponsor and its affiliates or designees are not
obligated to fund the Trust Account to extend the time for us to complete our initial Business Combination. To the extent that some, but
not all, of our founders, decide to extend the period of time to consummate our initial Business Combination, such sponsor (or its affiliates
or designees) may deposit the entire amount required. If we are unable to consummate our initial Business Combination within such time
period, we will, as promptly as possible but not more than ten business days thereafter, redeem 100% of our outstanding public shares
for a pro rata portion of the funds held in the Trust Account, including a pro rata portion of any interest earned on the funds held in
the Trust Account and not previously released to us or necessary to pay our taxes, and then seek to liquidate and dissolve. However, we
may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public shareholders.
In the event of our liquidation and subsequent dissolution, the public warrants and public rights will expire and will be worthless.
If we are unable to consummate
our initial Business Combination within this time period, we will liquidate the Trust Account, distribute the proceeds held therein to
our public shareholders and wind up the company. If we are forced to liquidate, we anticipate that we would distribute to our public shareholders
the amount in the Trust Account calculated as of the date that is two days prior to the distribution date (including any accrued
interest). Prior to such distribution, we would be required to assess all claims that may be potentially brought against us by our creditors
for amounts they are actually owed and make provision for such amounts, as creditors take priority over our public shareholders with respect
to amounts that are owed to them. We cannot assure you that we will properly assess all claims that may be potentially brought against
us. As such, our shareholders could potentially be liable for any claims of creditors to the extent of distributions received by them
as an unlawful payment in the event we enter an insolvent liquidation.
Pursuant to the Nasdaq listing
rules, our initial Business Combination must be with a target business or businesses whose collective fair market value is at least equal
to 80% of the balance in the Trust Account (excluding any deferred underwriting discounts and commissions and taxes payable on the income
earned on the Trust Account) at the time of the execution of a definitive agreement for such Business Combination, although this may entail
simultaneous acquisitions of several target businesses. The fair market value of the target will be determined by our board of directors
based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow
and/or book value). Our board of directors will have broad discretion in choosing the standard used to establish the fair market value
of any prospective target business. The target business or businesses that we acquire may have a collective fair market value substantially
in excess of 80% of the Trust Account balance. We will not be required to comply with the 80% fair market value requirement if we are
delisted from Nasdaq.
We are not required to obtain
an opinion from an unaffiliated third party that the target business we select has a fair market value in excess of at least 80% of the
balance of the Trust Account unless our board of directors cannot make such determination on its own. We are also not required to obtain
an opinion from an unaffiliated third party indicating that the price we are paying is fair to our shareholders from a financial point
of view unless the target is affiliated with our officers, directors, initial shareholders or their affiliates.
We currently anticipate structuring
our initial Business Combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however,
structure our initial Business Combination where we merge directly with the target business or where we acquire 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 could 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 issued and 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,
only the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value
test.
Permission Required from the PRC Authorities
for a Business Combination and Relevant PRC Regulations
We
are a blank check company incorporated in Cayman Islands with no operations or subsidiaries in China. Currently our company does not
own or control any equity interest in any PRC company or operate any business in China. The China Securities Regulatory Commission (the
“CSRC”) has not issued any definitive rule or interpretation concerning whether listing of our securities are subject to
the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), and we believe
that we are not required to obtain any licenses or approvals, under applicable PRC laws and regulations, for our listing on Nasdaq and
seeking a target for the initial Business Combination. Further, according to the Measures for Cybersecurity Review, which was promulgated
on December 28, 2021 and became effective on February 15, 2022, online platform operators holding more than one million users/users’
individual information shall be subject to cybersecurity review before listing abroad. As we are a blank check company and are not involved
in the collection of personal data of at least 1 million users or implicate cybersecurity and we will not undertake our initial business
combination with any entity that conducts a majority of its business or is headquartered in China (including Hong Kong and Macau), we
do not believe that we are or the post-combination entity will be a “network platform operator(s)”, or subject to the cybersecurity
review of the Cyberspace Administration of China (the “CAC”). As of the date hereof, we have not received any inquiry, notice,
warning, sanction or any regulatory objection to our listing from any relevant PRC authorities.
Further,
we do not consider ourselves a China-based issuer, in particular,
as specified in the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Trial
Measures, and five supporting guidelines promulgated by the CSRC on February 17, 2023, which became effective on March 31, 2023. According
to the Trial Administration Measures, an issuer is a “domestic [Chinese] company” if the issuer meets both of the
following conditions and thus, subject to the requirements for domestic [Chinese] companies seeking to offer or list securities overseas,
both directly and indirectly, thereunder: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities
of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer’s audited
consolidated financial statements for the same period; and (ii) its major operational activities are carried out in China or its main
places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese
citizens or are domiciled in China. We are a blank check company incorporated in Cayman Islands with no operation of our own except searching
for a non-China-based target for our initial Business Combination. Furthermore, we do not own or control any equity interest in any PRC
company or operate any business in China, and during the fiscal year ended June 30, 2023, we do not have 50% or more of our total assets,
net assets, revenues or profits located or generated in China.
As
of the date of this report, no transfers, dividends, or distributions have been made by us. We have not adopted or maintained any other
cash management policies and procedures and need to comply with applicable law or regulations with respect to transfer of funds, dividends
and distributions, if any. Given that we are not a China-based issuer
or expect to be a China-based issuer upon the consummation of our initial Business Combination, we are not subject to or will become subject
to the foreign exchange control rules of the PRC.
However, applicable laws,
regulations, or interpretations of PRC may change, and the relevant PRC government agencies could reach a different conclusion. There
is also possibility that we may not be able to obtain or maintain such approval or that we inadvertently concluded that such approval
was not required. If prior approval was required while we inadvertently concluded that such approval was not required or if applicable
laws and regulations or the interpretation of such were modified to require us to obtain the approval in the future, we may face regulatory
actions or other sanctions from relevant Chinese regulatory authorities. These authorities may take actions that could have a material
adverse effect upon our business, financial condition, results of operations, reputation and prospects, as well as the trading price of
our securities. In addition, any changes in PRC law, regulations, or interpretations may severely affect our operations. Further, if we
are required by the Trial Measures to file with the CSRC, we cannot assure you that we will be able to complete such filings in a timely
manner, or even at all. The CSRC or other Chinese regulatory agencies may also take actions requiring us, or making it advisable for us,
be subject to other severe consequences, which would materially affect the interest of the investors. To that extent, we may not be able
to conduct the process of searching for a potential target company. Any failure of us to fully comply with new regulatory requirements
may significantly limit or completely hinder our ability to continue to offer the securities, causing significant disruption to our business
operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause
the securities to significantly decline in value or become worthless.
Recent PCAOB Developments
We are a blank check company
incorporated in Cayman Islands with our office located in the United States. We have no operations or subsidiaries in China and will not
undertake our initial business combination with any entity that conducts a majority of its business or is headquartered in China (including
Hong Kong and Macau). Our auditor, Marcum Asia CPAs LLP (formerly Marcum Bernstein & Pinchuk LLP) (“Marcum Asia”), headquartered
in New York City, is an independent registered public accounting firm registered with the United States Public Company Accounting Oversight
Board (“PCAOB”) and is subject to laws in the United States pursuant to which PCAOB conducts regular inspections to assess
Marcum Asia’s compliance with applicable professional standards. The PCAOB currently has access to inspect the working papers of
our auditor. Our auditor is not headquartered in mainland China or Hong Kong and was not identified in any report as a firm subject to
the PCAOB’s determination.
We
are not allowed to pursue a business combination with a China-based target, however,
we may be subject to Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023 (the “HFCAA”)
and related regulations if we pursue an opportunity with a foreign company. On June 22, 2021, the U.S. Senate passed the Accelerating
Holding Foreign Companies Accountable Act (“AHFCAA”), which, if signed into law, would amend the HFCAA and require the SEC
to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for
two consecutive years instead of three consecutive years. On December 29, 2022, the Consolidated Appropriations Act was signed into law
by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to the AHFCAA, which reduces
the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two years.
If our securities are unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability
to sell or purchase our securities when you wish to do so, and the risk and uncertainty associated with a potential delisting would have
a negative impact on the price of our securities. For instance, the HFCAA would restrict our ability to consummate a business combination
with a target business unless that business met certain standards of the PCAOB and would require delisting of a company from U.S. national
securities exchanges if the PCAOB is unable to inspect its public accounting firm for two consecutive years. The HFCAA also requires public
companies to disclose, among other things, whether they are owned or controlled by a foreign government, specifically, those based in
China. We may not be able to consummate a business combination with a favored target business due to these laws.
The documentation we may
be required to submit to the SEC proving certain beneficial ownership requirements and establishing that we are not owned or controlled
by a foreign government in the event that we use a foreign public accounting firm not subject to inspection by the PCAOB or where the
PCAOB is unable to completely inspect or investigate our accounting practices or financial statements because of a position taken by an
authority in the foreign jurisdiction could be onerous and time consuming to prepare. The HFCAA mandates the SEC to identify issuers of
SEC-registered securities whose audited financial reports are prepared by an accounting firm that the PCAOB is unable to inspect due to
restrictions imposed by an authority in the foreign jurisdiction where the audits are performed. If such identified issuer’s auditor
cannot be inspected by the PCAOB for two consecutive years, the trading of such issuer’s securities on any U.S. national securities
exchanges, as well as any over-the-counter trading in the U.S., will be prohibited.
On March 24, 2021, the SEC
adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. An identified
issuer will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process
to be subsequently established by the SEC.
On November 5, 2021, the
SEC approved the PCAOB’s Rule 6100, Board Determinations Under the HFCAA. Rule 6100 provides a framework for the PCAOB to use when
determining, as contemplated under the HFCAA, whether it is unable to inspect or investigate completely registered public accounting firms
located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On December 2, 2021, the
SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants
that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located
in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in
foreign jurisdictions.
Future developments in respect
of increased U.S. regulatory access to audit information are uncertain, as the legislative developments are subject to the legislative
process and the regulatory developments are subject to the rule-making process and other administrative procedures.
Other developments in U.S.
laws and regulatory environment, including but not limited to executive orders such as Executive Order (E.O.) 13959, “Addressing
the Threat from Securities Investments That Finance Communist Chinese Military Companies,” may further restrict our ability to complete
a business combination with certain China-based businesses.
Enforceability of Civil Liability
Our Chief Executive Officer
and one Chief Financial Officer, who are both directors, are located in China. Our Chief Operating Officer and one director are located
in Singapore. We have one director located in the United States and another one director located in Canada. Our Sponsor is a company incorporated
in Hong Kong. Further, there is uncertainty if any officers and directors of the post-combination entity will be located outside the Unites
States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights,
to effect service of process upon those officers and directors (prior to or after the Business Combination) located outside the United
States, to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on them under United States
securities laws.
In particular, the PRC does not have treaties providing for the reciprocal
recognition and enforcement of judgments of courts with the United States and many other countries and regions, and you may have to incur
substantial costs and contribute significant time to enforce civil liabilities and criminal penalties in reliance on legal remedies under
PRC laws. Therefore, recognition and enforcement in the PRC of judgment of United States courts in relation to any matter not subject
to a binding arbitration provision may be difficult or impossible.
There is also substantial
doubt as to the enforceability in Canada against him in original actions or in actions for enforcement of judgments of U.S. courts, of
liabilities based solely upon the civil liability provisions of the U.S. federal securities laws. Additionally, a judgment of a U.S. court
predicated solely upon civil liability under such laws would probably be enforceable in Canada if the United States court in which the
judgment was obtained has a basis for jurisdiction in the matter that was recognized by a Canadian court for such purposes; however, there
is substantial doubt whether an original action could be brought successfully in Canada predicated solely upon such civil liabilities.
In addition, it is possible
that the courts in Singapore may not (i) recognize and enforce judgments of courts in the United States, based upon the civil liability
provisions of the securities laws of the United States or any state or territory of the United States (ii) enter judgments in original
actions brought in the Singapore courts based solely on the civil liability provisions of these securities laws. An in personam final
and conclusive judgment in the federal or state courts of the United States under which a fixed or ascertainable sum of money is payable
may generally be enforced as a debt in the Singapore courts under the common law as long as it is established that the Singapore courts
have jurisdiction over the judgment debtor. Additionally, the court where the judgment was obtained must have had international jurisdiction
over the party sought to be bound in the local proceedings. However, the Singapore courts are unlikely to enforce a foreign judgment if
(a) the foreign judgment is inconsistent with a prior local judgment that is binding on the same parties; (b) the enforcement of the foreign
judgment would contravene the public policy of Singapore; (c) the proceedings in which the foreign judgment was obtained were contrary
to principles of natural justice; (d) the foreign judgment was obtained by fraud or (e) the enforcement of the foreign judgment amounts
to the direct or indirect enforcement of a foreign penal, revenue or other public law.
In particular, the Singapore
courts may potentially not allow the enforcement of any foreign judgment for a sum payable in respect of taxes, fines, penalties or other
similar charges, including the judgments of courts in the United States based upon the civil liability provisions of the securities
laws of the United States or any state or territory of the United States. In respect of civil liability provisions of the United
States federal and state securities law which permit punitive damages against us and our directors or executive officers, we are unaware
of any decision by the Singapore courts which has considered the specific issue of whether a judgment of a United States court based on
such civil liability provisions of the securities laws of the United States or any state or territory of the United States is
enforceable in Singapore.
Facilities
Our executive offices are
located at 244 Fifth Avenue, Suite B-88, New York, NY 10001 and our telephone number is (646) 998-9582. The cost for this space is provided
to us by our Sponsor, as part of the $10,000 per month payment we make to it for office space and related services. We consider our current
office space adequate for our current operations.
Employees
We currently have three officers.
These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time
as they deem necessary to our affairs until we have completed our initial Business Combination. The amount of time they will devote in
any time period will vary based on whether a target business has been selected for our initial Business Combination and the stage of the
initial Business Combination process we are in. We do not intend to have any full time employees prior to the completion of our initial
Business Combination.
Item 1A. Risk Factors.
As a smaller reporting company,
we are not required to include risk factors in this Annual Report. However, in addition to any risk factors disclosed in our registration
statement on Form S-1 (File No.: 333-261585), which became effective on January 31, 2022, in our last Annual Report on Form 10-K, initially
filed on September 16, 2022, and as amended on April 7, 2023 and May 11, 2023.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
We do not own any real estate
or other physical properties materially important to our operations. We maintain our principal executive offices are located at 244
Fifth Avenue, Suite B-88, New York, NY 10001 , and our telephone number is (646) 998-9582.
Item 3. Legal Proceedings.
We are
not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal
proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse
effect on our business, financial condition or results of operations.
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market Information.
Our Public Units, Class A
Ordinary Shares, Warrants, and Rights are each traded on The Nasdaq Global Market (“Nasdaq”) under the symbols “BWAQU,”
“BWAQ” “BWAQW,” and “BWAQR,” respectively.
Holders
As
of the date hereof, we had 3 holders of record of our units, 3 holders of record of our separately traded Class A Ordinary Shares, 3
holders of our Class B Ordinary Shares, 1 holder of record of our separately traded Warrants, and 1 holder of record of our separately
traded Rights. The number of record holders was determined from the records of our transfer agent.
Dividends
We have not paid any cash
dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general
financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our
initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors
is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future. Further, if we incur any
indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants
we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity
Compensation Plans
None.
Recent Sales of Unregistered Securities; Use
of Proceeds from Registered Offerings
On August 5, 2021, the Sponsor
acquired 2,300,000 Class B Ordinary Shares for an aggregate purchase price of $25,000. The issuance of such Founder Shares to the
Sponsor was made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act.
On February 2, 2022, we consummated
the IPO of 9,200,000 Public Units at a price of $10.00 per Public Unit, generating gross proceeds of $92,000,000. Maxim acted as the sole
underwriter of the IPO. The securities sold in the IPO were sold pursuant to a registration statement on Form S-1 (File No.: 333-261585).
The registration statement became effective on January 31, 2022.
Substantially concurrently
with the closing of the IPO, we completed the Private Placement of 424,480 Private Units including 378,480 Private Units to the Sponsor
and 46,000 Private Units to Maxim, respectively, at a purchase price of $10.00 per Private Unit,, generating gross proceeds to the Company
of $4,244,800 . The Private Units are identical to the Public Units sold in the IPO, except that the holders of the Private Units have
agreed not to transfer, assign or sell any of the Private Units and the underlying securities (except to certain permitted transferees)
until the completion of the Company’s initial Business Combination. The issuance of the Private Units was made pursuant to the exemption
from registration under Section 4(a)(2) of the Securities Act.
Substantially concurrently
with the closing of the IPO, we also issued 40,000 shares of Class A Ordinary Shares (the “Representative Shares”) to Maxim
as part of representative compensation. The Representative Shares are identical to the public shares except that Maxim has agreed not
to transfer, assign or sell any such Representative Shares until the completion of the Company’s initial Business Combination. The
issuance of the Representative Shares was made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act.
A total of $92,920,000, comprised
of $92,000,000 of the proceeds from the IPO (which amount includes $3,220,000 of the underwriter’s deferred underwriting fee pursuant
to the Underwriting Agreement), and $920,000 of the proceeds from the sale of the Private Units, were placed in a U.S.-based Trust Account
maintained by Continental Stock, acting as trustee. We paid a total of $1,840,000 in underwriting discounts and commissions and $551,390
for other offering cost.
Purchases of Equity Securities by the Issuer
and Affiliated Purchasers
None.
Item 6. Reserved.
Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations.
Forward-Looking Statements
References to the “Company”,
“us”, “our”, or “we” refer to Blue World Acquisition Corporation. The following discussion and analysis
of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes
herein.
The following discussion
and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data”
of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking
statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors,
including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors”
and elsewhere in this Annual Report on Form 10-K.
Overview
We are a blank check exempted company incorporated
in the Cayman Islands on July 19, 2021 with limited liability (meaning our public shareholders have no liability, as shareholders of the
Company, for the liabilities of the Company over and above the amount paid for their shares) to serve as a vehicle to effect a merger,
share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more target
businesses (the “Business Combination”). Our efforts to identify a prospective target business will not be limited to a particular
industry or geographic location. We intend to utilize cash derived from the proceeds of our initial public offering (the “IPO”),
our securities, debt or a combination of cash, securities and debt, in effecting a business combination.
We presently have no revenue, have had losses
since inception from incurring formation and operating costs and have had no operations other than identifying and evaluating suitable
acquisition transaction candidates. We have relied upon the working capital available to us following the consummation of the IPO and
the Private Placement (as defined below) to fund our operations, as well as the funds loaned by the Sponsor (as defined below), our officers,
directors or their affiliates.
On February 2, 2022, we consummated the IPO of
9,200,000 units (the “Units”), which included 1,200,000 Units issued upon the full exercise of the underwriter’s over-allotment
option. Each Unit consists of one Class A ordinary share, $0.0001 par value per share (the “Class A Ordinary Share”), one-half
of one redeemable warrant (the “Warrants”), each whole Warrant entitling the holder thereof to purchase one Class A Ordinary
Share at an exercise price of $11.50 per share, and one right (the “Right”), each one Right entitling the holder thereof to
exchange for one-tenth of one Class A Ordinary Share upon the completion of our initial Business Combination. The Units were sold at an
offering price of $10.00 per Unit, generating gross proceeds of $92,000,000.
On February 2, 2022, simultaneously with the consummation
of the IPO, we completed the private sale (the “Private Placement”) of 424,480 units (the “Private Units”) including
378,480 Private Units to our sponsor, Blue World Holdings Limited (the “Sponsor”), and 46,000 Private Units to Maxim Group
LLC (“Maxim”), the sole underwriter of the IPO, respectively, at a purchase price of $10.00 per Private Unit, generating gross
proceeds to us of $4,244,800.
The proceeds of $ 92,920,000 ($10.10 per Unit)
in the aggregate from the IPO and the Private Placement, were placed in a trust account (the “Trust Account”) established
for the benefit of our public shareholders and the underwriter of the IPO with Continental Stock Transfer & Trust Company acting as
trustee.
Our management has broad discretion with respect
to the specific application of the net proceeds of IPO and the Private Placements, although substantially all of the net proceeds are
intended to be applied generally towards consummating a Business Combination.
Recent Development
We initially had until February 2, 2023 to consummate
our initial Business Combination. Upon the notice of the Sponsor, we extended the period of time to consummate a Business Combination
for additional three months till May 2, 2023 (the “First Extension”) and deposited $920,000 into the Trust Account in connection
with this First Extension sourced from the loans provided by the Sponsor as evidenced by the Extension Note (as defined below). However,
if we anticipate that we may not be able to consummate our initial Business Combination by May 2, 2023, we may, but are not obligated
to, further extend the period of time to consummate a Business Combination another two times by an additional three months each time by
depositing $920,000 into the Trust Account for each extension and may have until November 2, 2023 to consummate our initial Business Combination.
On May 2, 2023, the Company held a special meeting
of shareholders (the “May 2023 Meeting”) at which the shareholders approved the adoption of the second amended and restated
memorandum and articles of association of the Company, which provides that the Company has until May 2, 2023 to complete a Business Combination,
and may elect to extend the period to consummate a Business Combination up to nine times, each by an additional one-month extension (the
“Monthly Extension”), for a total of up to nine months to February 2, 2024 by depositing $0.0295 per public share into the
Trust Account for each Monthly Extension. As a result of the May 2023 Meeting, upon the shareholders’ approval, on May 2, 2023,
the Company and Continental Stock Transfer & Trust Company, as the trustee of the Trust Account, entered into the amendment to the
Investment Management Trust Agreement dated January 31, 2022. In connection with the May 2023 Meeting, 2,612,769 Class A Ordinary Shares
were rendered for redemption and approximately $27.4 million was released from the Trust Account to pay such redeeming stockholders.
On May 2, 2023, a total of $194,324 was deposited
into the Trust Account for the public shareholders, representing $0.0295 per remaining public share, which enables the Company to extend
the period of time it has to consummate its initial business combination by one month from May 2, 2023 to June 2, 2023.
On June 2, 2023, a total of $194,324 was deposited
into the Trust Account for the public shareholders, representing $0.0295 per remaining public share, which enables the Company to extend
the period of time it has to consummate its initial business combination by one month from June 2, 2023 to July 2, 2023.
On June 30, 2023, the Company held an extraordinary
general meeting (the “June 2023 Meeting”), where the shareholders of the Company approved the adoption of the Third Amended
and Restated Memorandum and Articles of Association of Bule World, which provides that the Company has until July 2, 2023 to complete
a business combination, and may elect to extend the period to consummate a Business Combination up to nine times, each by an additional
one-month extension, for a total of up to nine months to April 2, 2024, by depositing $60,000 each month to the Trust Account.
As a result of June 2023 Meeting, upon the shareholders’ approval, on June 30, 2023, the Company and Continental Stock Transfer
& Trust Company, as the trustee of the Trust Account entered into the amendment to the Trust Agreement. In connection with the June
2023 Meeting, 2,749,465 Class A Ordinary Shares were rendered for redemption, and approximately $29.3 million was released from the Trust
Account to pay such redeeming shareholders.
On June 30, 2023, a total of $60,000 of the Monthly
Extension Payment was deposited into the Trust Account for the public shareholders, which enables the Company to extend the period of
time it has to consummate its initial business combination by one month from July 2, 2023 to August 2, 2023.
On July 31, 2023, a total of $60,000 of the Monthly
Extension Payment was deposited into the Trust Account for the public shareholders, which enables the Company to extend the period of
time it has to consummate its initial business combination by one month from August 2, 2023 to September 2, 2023.
On September 1, 2023, a total of $60,000 of the
Monthly Extension Payment was deposited into the Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial business combination by one month from September 2, 2023 to October 2, 2023.
On September 27, 2023, a
total of $60,000 of the Monthly Extension Payment was deposited into the Trust Account for the public shareholders, which enables the
Company to extend the period of time it has to consummate its initial business combination by one month from October 2, 2023 to November
2, 2023.
At the June 2023 Meeting,
among the other proposals, the shareholders of the Company also approved the release of the funds held in the Escrow Account pursuant
to the D&O Indemnity Escrow Agreement, by and between the Company and Continental Stock Transfer & Trust Company, as escrow agent,
on July 2, 2023 or such a later date immediately following the purchase of an alternative D&O insurance. Upon the approval of the
shareholders of the Company to release the funds held in the Escrow Account pursuant to the D&O Indemnity Escrow Agreement, the Company
secured an alternative D&O insurance, effective on July 1, 2023. On July 4, 2023, a total of $500,000 funds held in the Escrow Account
was released to Blue World, a portion of which was used to purchase the alternative D&O insurance.
Merger Agreement
On August 10, 2023, the
Company entered into an Agreement and Plan of Merger (as the same may be amended, restated or supplemented, the “Merger Agreement”)
with TOYO Co., Ltd, a Cayman Islands exempted company (“PubCo”), TOYOone Limited, a Cayman Islands exempted company (“Merger
Sub”), TOPTOYO INVESTMENT PTE. LTD., a Singapore private company limited by shares (“SinCo”), Vietnam Sunergy Cell Company
Limited, a Vietnamese company, (the “Company”, together with PubCo, Merger Sub and SinCo, the “Group Companies”,
or each individually, a “Group Company”), Vietnam Sunergy Joint Stock Company, a Vietnam joint stock company (“VSUN”),
and Fuji Solar Co., Ltd, a Japanese company (“Fuji Solar”, together with VSUN, the “Shareholders”, or individually,
a “Shareholder”).
Pursuant to the Merger
Agreement, (a) the Group Companies, VSUN and Fuji Solar shall consummate a series of transactions involving the Group Companies, including
(A) PubCo acquiring one hundred percent (100%) of the issued and paid-up share capital of SinCo from Fuji Solar in exchange for one (1)
ordinary share of PubCo, par value US$0.0001 per share (the “PubCo Ordinary Shares” and such transaction, the “Share
Exchange”), and (B) SinCo acquiring one hundred percent (100%) of the issued and outstanding shares of capital stock of the Company
from VSUN at an aggregate consideration of no less than US$50,000,000 (the “SinCo Acquisition,” and together with the Share
Exchange, the “Pre-Merger Reorganization”), as a result of which (i) SinCo shall become a wholly-owned subsidiary of PubCo,
(ii) the Company shall become a wholly-owned subsidiary of SinCo; and (iii) immediately prior to the closing of the SinCo Acquisition,
Fuji Solar (the “Seller”) shall hold an aggregate of 41,000,000 PubCo Ordinary Shares, representing all issued and outstanding
share capital of PubCo, and (b) following the consummation of the Pre-Merger Reorganization, BWAQ shall merge with and into Merger Sub,
with Merger Sub continuing as the surviving company (the “Merger”), as a result of which, among other things, all of the issued
and outstanding securities of BWAQ immediately prior to the filing of the plan of merger with respect to the Merger (the “Plan of
Merger”) to the Registrar of Companies of the Cayman Islands, or such later time as may be specified in the Plan of Merger (the
“Merger Effective Time”) shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of
the holders thereof to receive substantially equivalent securities of PubCo, in each case, upon the terms and subject to the conditions
set forth in the Merger Agreement and in accordance with the provisions of the Companies Act (Revised) of the Cayman Islands and other
applicable laws.
Results of Operations
We have neither engaged in any operations nor
generated any operating revenues to date. Our only activities from inception through June 30, 2023 were organizational activities and
those necessary to prepare for the IPO, described below. We do not expect to generate any operating revenues until after the completion
of our initial Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities
held after the IPO. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting,
accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business
Combination.
For the year ended June 30,
2023, we had a net income of $2,181,905, which mainly consisted of dividend earned on investment held in the Trust Account of $3,169,667
and interest income of $9 offset by formation and operations costs of $987,771.
For the period from July 19, 2021 (inception)
through June 30, 2022, we had a net loss of $246,892, which consists of formation and operating costs of $230,926 and share-based compensation
expense of $150,379, offset by dividend earned on marketable securities held in the Trust Account of $134,401 and interest income of $12.
Liquidity and Capital Resources
As of June 30, 2023, we had cash
outside the Trust Account of $746 available for working capital needs. All remaining cash is held in the Trust Account and is generally
unavailable for our use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem
the ordinary shares. As of June 30, 2023, none of the amount on deposit in the Trust Account was available to be withdrawn as described
above.
For
the year ended June 30, 2023, net cash used in operating activities was $778,975 resulted from non-cash dividend earned on investment
held in Trust Account of $3,169,667 and increase in prepaid expenses of $1,916, and offset by net income of $2,181,905, increase in accounts
payable and accrued expenses of $167,199, and increase in due to related parties of $43,504.
For the
period from July 19, 2021 (inception) through June 30, 2022, net cash used in operating activities was $182,126 resulted from net
loss of $246,892, non-cash dividend earned on investment held in Trust Account of $134,401, and increase in prepaid expenses of $33,946,
and offset by share-based compensation expense of $150,379, increase in accounts payable and accrued expenses of $62,734, and increase
in due to related parties of $20,000.
For the year ended June
30, 2023, net cash provided by investing activities was $26,037,507 resulted from the withdrawals of investment held in Trust Account
of $1,368,648 offset by the purchases of investment held in Trust Account of $27,406,155.
For the period from July
19, 2021 (inception) through June 30, 2022, net cash used in investing activities was $92,920,000 resulted from the purchases of investment
held in Trust Account.
For the year ended June
30, 2023, net cash used in financing activities was $25,534,070 resulted from the redemption of Class A Ordinary Shares of $27,406,155
offset by the proceeds from issuance of promissory notes to a related party of $1,872,085.
For the period from July
19, 2021 (inception) through June 30, 2022, net cash provided by financing activities was $93,378,410 resulted from proceeds from sale
of Public Units through the IPO, net of underwriters’ discount of $90,160,000, proceeds from sale of Private Units of $4,244,800,
proceeds from issuance of promissory notes to a related party of $287,547, offset by repayments of promissory note to a related party
of $287,547, payments of offering costs of $526,390 and deposits made to an Escrow Account of $500,000.
Promissory Notes - Related Party
On November 30, 2022, the Company issued an unsecured
promissory note (the “Sponsor Note 1”) in the principal amount of $400,000 to the Sponsor. The proceeds of the Sponsor Note
1 was used as general working capital purposes.
On January 31, 2023, the Company issued an unsecured
promissory note (the “Extension Note 1”) in the principal amount of $920,000 to the Sponsor. The proceeds of the Extension
Note 1 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination by three months from February 2, 2023 to May 2, 2023.
On May 2, 2023, the Company issued an unsecured
promissory note (the “Extension Note 2”) in the principal amount of $194,324 to the Sponsor. The proceeds of the Extension
Note 2 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination from May 2, 2023 to June 2, 2023.
On June 2, 2023, the Company issued an unsecured
promissory note (the “Extension Note 3”) in the principal amount of $194,324 to the Sponsor. The proceeds of the Extension
Note 3 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination from June 2, 2023 to July 2, 2023.
On June 30, 2023, the Company issued an unsecured
promissory note (the “Extension Note 4”) in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension
Note 4 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination from July 2, 2023 to August 2, 2023.
On July 31, 2023, the Company issued an unsecured
promissory note (the “Extension Note 5”) in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension
Note 5 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination from August 2, 2023 to September 2, 2023.
On July 31, 2023, the Company issued an unsecured
promissory note (the “Sponsor Note 2,” together with the Sponsor Note 1, collectively, the “Sponsor Notes”) in
the principal amount of $120,000 to the Sponsor. The proceeds of the Sponsor Note 2, which may be drawn down from time to time until the
Company consummates its initial business combination, will be used as general working capital purposes. As of June 30, 2023, the
Company has drawn down $103,437 prior to the issuance of the Sponsor Note 2 on July 31, 2023.
On September 1, 2023, the
Company issued an unsecured promissory note (the “Extension Note 6”) in the principal amount of $60,000 to the Sponsor. The
proceeds of the Extension Note 6 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company
to extend the period of time it has to consummate its initial Business Combination from September 2, 2023 to October 2, 2023.
On September 28, 2023, the Company issued an unsecured promissory note
(the “Extension Note 7,” together with Extension Note 1, 2, 3, 4, 5 and 6, collectively, the “Extension Notes”)
in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension Note 7 was deposited into the Company’s Trust Account
for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial Business Combination
from October 2, 2023 to November 2, 2023.
The Extension Notes together with the Sponsor
Notes (collectively refer herein as “Promissory Notes”) issued to the Sponsor have the same payment and conversion term as
discussed below.
The Promissory Notes bear no interest and are
payable in full upon the earlier to occur of (i) the consummation of the Business Combination or (ii) the date of expiry of the term of
the Company (the “Maturity Date”). The following shall constitute an event of default: (i) a failure to pay the principal
within five business days of the Maturity Date; (ii) the commencement of a voluntary or involuntary bankruptcy action, (iii) the breach
of the Company’s obligations thereunder; (iv) any cross defaults; (v) an enforcement proceedings against the Company; and (vi) any
unlawfulness and invalidity in connection with the performance of the obligations thereunder, in which case the Promissory Notes may be
accelerated.
The payee of the Promissory Notes, the Sponsor,
has the right, but not the obligation, to convert the Promissory Notes, in whole or in part, respectively, into private units (the “Conversion
Units”) of the Company, each consisting of one Class A Ordinary Share, one-half of one warrant, and one right to receive one-tenth
(1/10) of one Class A Ordinary Share upon the consummation of a Business Combination, as described in the prospectus of the Company (File
Number 333-261585), by providing the Company with written notice of the intention to convert at least two business days prior to the closing
of the Business Combination. The number of Conversion Units to be received by the Sponsor in connection with such conversion shall be
an amount determined by dividing (x) the sum of the outstanding principal amount payable to such Payee by (y) $10.00.
Until consummation of the Business
Combination, we will be using the funds not held in the Trust Account, and any additional funding that may be loaned to us by the Sponsor,
for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses,
traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material
agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the
Business Combination.
If our estimates of the costs
of undertaking in-depth due diligence and negotiating Business Combination are less than the actual amount necessary to do so, we may
have insufficient funds available to operate our business prior to the Business Combination and will need to raise additional capital.
In this event, our officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we consummate
an initial Business Combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us upon consummation
of the Business Combination, or, at the lender’s discretion, such loans may be convertible into units of the post Business Combination
entity at a price of $10.00 per unit.
Moreover, we may need to obtain
additional financing either to consummate our initial Business Combination or because we become obligated to redeem a significant number
of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur
debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only consummate such
financing simultaneously with the consummation of our initial Business Combination. Following our initial Business Combination, if cash
on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
As of June 30, 2023 and 2022, the Company had
borrowings of $1,872,085 and $0 under the Promissory Notes, respectively.
Due to Related Parties
From time to time, Mr. Liang
Shi, the Company’s Director, Chief Executive Officer, Secretary and Chairman, would incur travel costs to search for targets. As
of June 30, 2023, due to Mr. Liang Shi amounted to $3,504.
Administrative Services Agreement
The Company is obligated,
commencing from the effective date of the Initial Public Offering to pay the Sponsor, a monthly fee of $10,000 for general and administrative
services. This agreement was signed by the Company and the Sponsor on January 31, 2022 and it will terminate upon completion of the Company’s
Business Combination or the liquidation of the Trust Account to public shareholders. The Company has recognized operating costs under
the Administrative Services Agreement in the amount of $120,000 and $50,000 for the year ended June 30, 2023 and for the period from July
19, 2021 (inception) through June 30, 2022, respectively. As of June 30, 2023 and 2022, the Company had $60,000 and $20,000, respectively,
accrued under the Administrative Services Agreement due to the Sponsor.
Off-Balance Sheet Financing Arraignments
We have no obligations, assets or liabilities
that would be considered off-balance sheet arrangements as of June 30, 2023. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
As of June 30, 2023, we do not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities.
We are obligated to pay Maxim a deferred underwriters’
discount equal to 3.5% of the gross proceeds of the IPO and the underwriter’s full exercise of the over-allotment. The deferred
underwriter’s discount of $3,220,000 will become payable to Maxim from the amounts held in the Trust Account solely in the event
that we complete a Business Combination.
The founder shares, the Class A Ordinary Shares
included in the Private Units, and any Class A Ordinary Shares that may be issued upon conversion of working capital loans (and any underlying
securities) will be entitled to registration rights pursuant to a registration and shareholder rights agreement entered into in connection
with the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register
such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements
filed subsequent to our completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing
of any such registration statements.
Critical
Accounting Policies, Judgments and Estimates
Use of estimates
In preparing the financial statements in conformity
with U.S. GAAP, management makes 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 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, Actual results may differ from these estimates.
Investments held in Trust Account
As of June 30, 2023, the assets held in the Trust
Account were held in money market funds, which are invested in U.S. Treasury securities.
We classify our U.S. Treasury and equivalent securities
as held-to-maturity in accordance with ASC Topic 320 “Investments — Debt and Equity Securities.” Held-to-maturity securities
are those securities which we have the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at
amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.
Convertible Promissory Note
We account for our convertible
promissory notes as debt (liability) on the balance sheet based on an assessment of the embedded conversion feature (see Note 5 —
Related Party Transactions) and applicable authoritative guidance in 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”). The assessment considers the
derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.
Class A ordinary shares subject to possible
redemption
We account for our ordinary shares subject to
possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary
shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable
ordinary shares (including 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 our control) are classified as temporary equity. At all other
times, ordinary shares are classified as shareholders’ equity.
Warrants
We account for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity” (“ASC 480”), and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”).
The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to our own ordinary shares and whether the warrant holders could potentially require “net cash settlement”
in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of
professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants
are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.
As our warrants meet all of the criteria for equity classification, so we will classify each warrant as its own equity.
Fair Value
of Financial Instruments
The fair value of our assets and liabilities,
which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying
amounts represented in the balance sheet, primarily due to its short-term nature.
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). Our financial instruments are classified as either Level 1, Level 2 or
Level 3. 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. |
Income
Taxes
Income taxes are determined in accordance with
the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax basis.
Deferred tax assets and liabilities are measured
using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
ASC 740 prescribes a comprehensive model
for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected
to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more
likely than not the position will be sustained upon examination by the tax authorities. Our management determined that the Cayman Islands
is our major tax jurisdiction. We recognize accrued interest and penalties related to unrecognized tax benefits, if any, as income tax
expense.
We are considered to be an exempted Cayman Islands
company, and are presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
Net Income
(Loss) per Share
We have two classes of shares, which are referred
to as redeemable ordinary shares and non-redeemable ordinary shares. Earnings and losses are shared pro rata between the two classes of
shares.
Recent
Accounting Pronouncements
In August 2020, the FASB issued a new standard
(ASU 2020-06) to reduce the complexity of accounting for convertible debt and other equity-linked instruments. For certain convertible
debt instruments with a cash conversion feature, the changes are a trade-off between simplifications in the accounting model (no separation
of an “equity” component to impute a market interest rate, and simpler analysis of embedded equity features) and a potentially
adverse impact to diluted earnings per share by requiring the use of the if-converted method. The new standard will also impact other
financial instruments commonly issued by both public and private companies. For example, the separation model for beneficial conversion
features is eliminated simplifying the analysis for issuers of convertible debt and convertible preferred stock. Also, certain specific
requirements to achieve equity classification and/or qualify for the derivative scope exception for contracts indexed to an entity’s
own equity are removed, enabling more freestanding instruments and embedded features to avoid mark-to-market accounting. The new standard
is effective for companies that are SEC filers (except for smaller reporting companies) for fiscal years beginning after December 15,
2021 and interim periods within that year, and two years later for other companies. Companies can early adopt the standard at the
start of a fiscal year beginning after December 15, 2020. The standard can either be adopted on a modified retrospective or a full
retrospective basis. The adoption of ASU 2020-06 on July 1, 2022 did not have a material effect on our financial statements.
Management does not believe that any other recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As of June 30, 2023, we were
not subject to any market or interest rate risk. Following the consummation of our IPO, the net proceeds of our IPO, including amounts
in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain
money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be
no associated material exposure to interest rate risk.
Item 8. Financial Statements and Supplementary Data.
This information appears
following Item 15 of this Form 10-K and is incorporated herein by reference.
Item 9. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Disclosure controls and procedures
are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15
and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures as of June 30, 2023. Based upon their evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e)
under the Exchange Act) were effective.
Disclosure controls and procedures
are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized,
and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal financial officer or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal
Control over Financial Reporting
As required by SEC rules
and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance
with GAAP. Our internal control over financial reporting includes those policies and procedures that:
| (1) | pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of our company, |
| (2) | provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,
and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and |
| (3) | provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could
have a material effect on the financial statements. |
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of
our internal control over financial reporting at June 30, 2023. In making these assessments, management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based
on our assessments and those criteria, management determined that we maintained effective internal control over financial reporting as
of June 30, 2022.
This Annual Report on Form
10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to our status
as an emerging growth company under the JOBS Act.
Changes in Internal Control Over Financial Reporting
There have been no changes
in our internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections.
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Officers,
Directors and Director Nominees
Our officers and directors
are as follows:
Name |
|
Age |
|
Position |
Liang Shi |
|
45 |
|
Director, Chief Executive Officer, Secretary and Chairman |
Tianyong Yan |
|
45 |
|
Chief Financial Officer and Director |
Weixiong (Jeff) Cheong |
|
42 |
|
Chief Operating Officer |
Alfred “Trey” Hickey |
|
60 |
|
Independent Director |
Buhdy Sin Swee Bok |
|
51 |
|
Independent Director |
Zhenyu Li |
|
29 |
|
Independent Director |
Mr. Liang Shi is our Chief
Executive Officer, Chairman of the board of directors, and Secretary. Mr. Shi has over 14 years’ experience in investment
management leadership. Since January 2017, Mr. Shi has served as a Partner at Zenin, an investment fund focusing on growth capital
investments in emerging sectors in China, where he oversees the fund’s daily business operations. Zenin provides extensive strategic
and operational assistance to its highly selective investment portfolio of companies. From March 2007 to December 2016, Mr. Shi
served as the China President at Barron Partners Fund, where he was in charge of managing the fund’s investment portfolio in Asia
and completed over 50 investments for the fund. From February 2006 to February 2007, Mr. Shi worked as a senior consultant
at IBM Global Services (formerly PWC consulting). Mr. Shi received his Bachelor’s degree in Finance from Shanghai Jiaotong
University in 2001. We believe Mr. Shi qualifies as our executive director and Chairman of the board because of his asset management
experience and past successful investments.
Mr. Tianyong Yan is our Chief
Financial Officer and director. Mr. Yan has over 20 years of corporate finance experience. Since January 2016, Mr. Yan
has served as a general manager at Shanghai Green Storm Asset Management Ltd., a company focusing on asset management. From August 2010
to July 2011, Mr. Yan served as a Vice President of finance at Standard Chartered Bank (China), where he focused on financial
reporting and other finance related projects such as markets, planning, commodities and derivatives. From August 2011 to July 2014,
Mr. Yan served as a Vice President of finance at JP Morgan China, where he led tax planning practices over the greater China JP Morgan
business including, but not limited to, commodity related financing, commercial banking and derivatives. Mr. Yan received his MBA
degree from University of Virginia in 2010 and his Bachelor’s degree in Finance from Shanghai Jiao Tong University in 2001. Mr. Yan
is a China CPA and chartered CFA. We believe Mr. Yan qualifies as our executive director because of his extensive corporate finance experience.
Mr. Weixiong (Jeff) Cheong is our
Chief Operating Officer. Mr. Cheong has over 15 years of experience in private and public capital markets. Since July 2022, Mr. Cheong
has served as the chief operating officer of Prime Number Acquisition I Corp., a Delaware special acquisition corporation company (Nasdaq:
PNAC). Since November 2015, Mr. Cheong has served as a director at Fortune Asia Long Short Fund, an investment fund. Since November 2011,
Mr. Cheong has served as a director at Longfor Pte Ltd., a real estate developer in Singapore. Since August 2009, Mr. Cheong has served
as the chief executive officer at Sinjia Land Ltd. (SGX: 5HH), a property development and hospitality management company. From April 2014
to May 2020, Mr. Cheong served as the chairman at CapAllianz Holdings Ltd (former name CWX Global Ltd) (SGX: 594), a company focusing
on investment and oil exploration business. Mr. Cheong received a Master’s degree of business administration at Singapore Management
University in June 2017. He also has passed the exam of Capital Markets and Financial Advisory Services (“CMFAS”) in Module
1 (December 2003), Module 4A (Rules and Regulations for Advising on Corporate Finance, June 2005), Module 5 (Rules And Regulations for
Financial Advisory Services, January 2004), Module 6 (January 2004), and Module 8 (Collective Investment Schemes, February 2004). Mr.
Cheong completed the program of Executive Skills for Board Members in Challenging Times in 2011 and obtained SMU-SID Executive Certificates
in Directorship in 2012 at Singapore Management University.
Mr. Alfred “Trey” Hickey
serves as our independent director. Mr. Hickey has more than 20 years of experience at leading tourism companies, specializing
in the cruise industry. Since 2020, Mr. Hickey has served as the Managing Partner at Global Distribution Solutions Pte. Ltd., the
parent company of Discover River Cruises, a boutique river cruise company operating in Europe’s Danube and Rhine Rivers. From February 2000
to June 2020, Mr. Hickey managed approximately $4 billion in international sales as Senior Vice President at Princess Cruises,
Cunard Line, Seabourn and Carnival PLC. Mr. Hickey also served as Carnival Corp’s Chief Representative Officer in China,
President of Carnival Corp Japan, and served on the boards of Carnival Corp Taiwan, the Pacific Asia Travel Association and the Asia Cruise
Association. Mr. Hickey received a Bachelor’s degree in Economics from Warnborough University in 1987, a Bachelor’s degree
in Economics from University of Rhode Island in 1988, and a Bachelor’s degree in Asian Studies from Seinan Gakuin University in
1988. We believe Mr. Hickey qualifies as our independent director because of his management experience and knowledge in the cruise
industry.
Mr. Buhdy Sin Swee Bok serves
as our independent director. Over the past 25 years Mr. Bok has assumed various leadership positions in the travel and tourism
industry with a wide range of sectors including cruise, airlines and attractions in Asia. Since September 2018, Mr. Bok
has served as the Managing Director at Mount Faber Leisure Group Pte. Ltd., a reputable attraction company in Singapore, managing its
overall operations. From October 2017 to September 2018, Mr. Bok served as the Chief Commercial Officer of NokScoot
Airlines, a Thailand-based airline, where he oversaw the company’s commercial operations including sales and marketing, revenue
and yield management, reservations, and operation of overseas offices. From May 2017 to September 2017, Mr. Bok
served as the President of Carnival Asia at Carnival Corporation & PLC, overseeing the group’s operations in Asia.
From October 2015 to April 2017, Mr. Bok served as the President of Costa Group Asia at Costa Crociere S.p.A., a wholly
owned subsidiary of Carnival Corp & PLC, in charge of the Italian-brand’s operations in Asia Pacific and China. Mr. Bok
received a Bachelor’s degree in Accountancy from Singapore Nanyang Technological University in 1996, a Bachelor’s degree in
Law from the University of London in 1999, and an MBA degree from Duke University’s Fuqua School of Business in 2003. We believe
Mr. Bok qualifies as our independent director because of his management experience and knowledge in the travel industry.
Mr. Zhenyu Li serves as our independent
director. Mr. Li has over 20 years of experience in telecom communication technology industry. Mr. Li has been a self-employed investor
actively investing in technologies, media and telecom since July 2017. From March 2016 to July 2017, Mr. Li served as a general manager
of Le Canada Ltd. From August 2007 to March 2016, Mr. Li served as the Chief Executive Officer at Sinotel Technologies Ltd, a company
providing a wide range of wireless telecommunication applications and solutions. From May 2003 to August 2007, Mr. Li served as the Chief
Technology Officer at Sinotel Technologies Ltd, in charge of technology and product designing. From December 2001 to May 2003, Mr. Li
served as a technology director at the Beijing office of RTI International, a US company specialized in the research, development and
service of CDMA technologies for commercial clients worldwide. Mr. Li received a Bachelor’s degree in Automation from Tianjin University
of Technology and Education in 1996.
Number and Terms of Office of Officers and Directors
Our board of directors consists
of five members. Prior to our initial Business Combination, holders of our Founder Shares will have the right to appoint all of our directors
and remove members of the board of directors for any reason, and holders of our public shares will not have the right to vote on the appointment
of directors during such time. These provisions of our amended and restated memorandum and articles of association may only be amended
by a special resolution passed by a majority of at least two thirds of shareholders attending and voting in a general meeting. Our board
of directors is divided into three classes, with only one class of directors being elected in each year, and with each class (except for
those directors appointed prior to our first annual meeting of shareholders) serving a three-year term: Class I, with a term expiring
at the 2023 annual general meeting — Mr. Buhdy Sin Swee Bok; Class II, with a term expiring at the 2024 annual general meeting —
Messrs. Alfred J. Hickey and Zhenyu Li; and Class III, with a term expiring at the 2025 annual general meeting — Messrs. Liang Shi
and Tianyong Yan. Prior to the completion of an initial business combination, any vacancies on our board of directors may be filled by
the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors or by a majority of the
holders of our founder shares. After completion of the business combination, subject to any other special rights applicable to the shareholders,
any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the
meeting of our board of directors or by a majority of the holders of our ordinary shares.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of
directors will be authorized to appoint persons to the offices as set forth in our amended and restated memorandum and articles of association
as it deems appropriate. Our amended and restated memorandum and articles of association provides that our officers may consist of a Chairman,
a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant
Secretaries, a Treasurer and such other offices as may be determined by the board of directors.
Committees of the Board of Directors
Our board of directors currently
has two standing committees: an audit committee and a compensation committee. Because we are a “controlled company” under
applicable Nasdaq rules, we do not have a nominating and governance committee. Subject to phase-in rules and a limited exception,
the rules of NASDAQ and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely
of independent directors, and the rules of NASDAQ require that the compensation committee of a listed company be comprised solely
of independent directors.
Audit Committee
Messrs. Zhenyu Li, Alfred
“Trey” Hickey and Buhdy Sin Swee Bok currently serve as members of our audit committee. Under Nasdaq listing standards and
applicable SEC rules, we are required to have three members of the audit committee, all of whom must be independent, subject to the certain
phase-in provisions. Our board of directors has determined that each of Messrs. Zhenyu Li, Alfred “Trey” Hickey and Buhdy
Sin Swee Bok meet the independent director standard under Nasdaq listing standards and under Rule 10A-3(b)(1) of the Exchange
Act.
Mr. Buhdy Sin Swee Bok
serves as the Chairman of the audit committee. Each member of the audit committee meets the financial literacy requirements of Nasdaq,
and our board of directors has determined that Mr. Buhdy Sin Swee Bok qualifies as an “audit committee financial expert”
as defined in applicable SEC rules.
The audit committee’s
duties, which are specified in our Audit Committee Charter, include, but are not limited to:
| ● | reviewing
and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether
the audited financial statements should be included in our Form 10-K; |
|
● |
discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
| ● | discussing
with management major risk assessment and risk management policies; |
| ● | monitoring
the independence of the independent auditor; |
| ● | verifying
the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible
for reviewing the audit as required by law; |
| ● | reviewing
and approving all related-party transactions; |
| ● | inquiring
and discussing with management our compliance with applicable laws and regulations; |
| ● | pre-approving
all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services
to be performed; |
| ● | appointing
or replacing the independent auditor; |
| ● | determining
the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the
independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
| ● | establishing
procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or
reports which raise material issues regarding our financial statements or accounting policies; and |
| ● | approving
reimbursement of expenses incurred by our management team in identifying potential target businesses. |
The audit committee is governed
by a charter that complies with the rules of Nasdaq.
Compensation Committee
We have established a compensation
committee of the board of directors, which consists of Messrs. Zhenyu Li, Alfred “Trey” Hickey and Buhdy Sin Swee Bok,
each of whom is an independent director under Nasdaq’s listing standards. Mr. Alfred “Trey” Hickey is the Chairperson
of the compensation committee. The compensation committee’s duties, which are specified in our Compensation Committee Charter, include,
but are not limited to:
|
● |
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s based on such evaluation; |
|
● |
reviewing and approving the compensation of all of our other executive officers; |
|
● |
reviewing our executive compensation policies and plans; |
|
● |
implementing and administering our incentive compensation equity-based remuneration plans; |
|
● |
assisting management in complying with our proxy statement and annual report disclosure requirements; |
|
● |
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
|
● |
if required, producing a report on executive compensation to be included in our annual proxy statement; and |
|
● |
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Notwithstanding the foregoing,
as indicated above, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing
shareholders, including our directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate,
the consummation of a business combination. Accordingly, it is likely that prior to the consummation of an initial business combination,
the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into
in connection with such initial business combination.
Director Nominations
We do not have a standing
nominating committee. In accordance with Rule 5605(e)(2) of the NASDAQ Rules, a majority of the independent directors may recommend
a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily
carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.
As there is no standing nominating committee, we do not have a nominating committee charter in place.
The board of directors will
also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees
to stand for election at the next annual general meeting of shareholders (or, if applicable, a special meeting of shareholders). Our shareholders
that wish to nominate a director for election to our board of directors should follow the procedures set forth in our amended and restated
memorandum and articles of association.
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge
of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders.
Code of Ethics
We have adopted a code of
ethics and business conduct (the “Code of Ethics”) applicable to our directors, officers and employees. You are able
to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a
copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or
waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Item 11. Executive Compensation.
None of our officers or directors
has received any cash compensation for services rendered to us, except that (i) the Sponsor has transferred our independent directors,
Alfred “Trey” Hickey and Buhdy Sin Swee Bok, each 10,000 Founder Shares upon the closing of the IPO; and (ii) subject
to the consent of the target entity, we have agreed to issue each of Alfred “Trey” Hickey and Buhdy Sin Swee Bok 20,000 Class A
Ordinary Shares and Zhenyu Li 30,000 Class A Ordinary Shares in connection with our Business Combination, respectively, and in the event
that we cannot obtain consent from the target company for such issuance, our Sponsor has agreed to transfer each of Alfred “Trey”
Hickey and Buhdy Sin Swee Bok 20,000 Founder Shares and Zhenyu Li 30,000 Founder Shares upon the closing of the Business Combination,
respectively; provided that in either case the independent directors remain with us until the closing of a Business Combination. Other
than as set forth elsewhere, no compensation of any kind, including finder’s and consulting fees, will be paid to our founders,
existing officers, directors and advisors, or any of their respective affiliates, for services rendered prior to or in connection with
the completion of our initial Business Combination although we may consider cash or other compensation to officers or advisors we may
hire subsequent to the IPO to be paid either prior to or in connection with our initial Business Combination. In addition, our officers,
directors and advisors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection
with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review on a quarterly basis all payments that were made to our founders, officers, directors or advisors, or
our or their affiliates, including the extension loan and extension convertible notes.
After the completion of our
initial Business Combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the tender offer materials
or proxy solicitation materials furnished to our shareholders in connection with a proposed business combination. We have not established
any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely
the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination
business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined,
or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors
or by a majority of the independent directors on our board of directors.
Following a Business Combination,
to the extent we deem it necessary, we may seek to recruit additional managers to supplement the incumbent management team of the target
business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the
requisite skills, knowledge or experience necessary to enhance the incumbent management.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Shareholder Matters.
The following table sets
forth information regarding the beneficial ownership of our ordinary as of the date hereof by:
|
● |
each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares; |
|
|
|
|
● |
each of our officers and directors; and |
|
|
|
|
● |
all of our officers and directors as a group. |
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially
owned by them.
The beneficial ownership
of our ordinary shares is based on an aggregate of 11,964,480 ordinary shares issued and outstanding as of the date hereof, consisting
of (i) 4,302,246 Class A Ordinary Shares, (ii)2,300,000 Class B Ordinary Shares and (iii) the record of beneficial ownership as indicated
in the statements filed with the SEC pursuant section 13(d) or 13(g) as of the date of this proxy statement. On all matters to be voted
upon, except for the election or removal of directors of the board prior to the initial Business Combination, holders of the Class A Ordinary
Shares and Class B Ordinary Shares vote together as a single class. Currently, all of the Class B Ordinary Shares are convertible into
Class A Ordinary Shares on a one-for-one basis..
|
|
Number of
Ordinary Shares |
|
|
Percentage of Outstanding |
|
Name and Address of Beneficial Owner (1) |
|
Beneficially Owned (2) |
|
|
Ordinary Shares |
|
Officers and Directors |
|
|
|
|
|
|
Liang Shi |
|
|
— |
|
|
|
— |
|
Tianyong Yan |
|
|
— |
|
|
|
— |
|
Weixiong (Jeff) Cheong |
|
|
— |
|
|
|
— |
|
Alfred “Trey” Hickey |
|
|
10,000 |
|
|
|
* |
|
Buhdy Sin Swee Bok |
|
|
10,000 |
|
|
|
* |
|
Zhenyu Li |
|
|
— |
|
|
|
— |
|
All officers and directors as a group (6 individuals) |
|
|
20,000 |
|
|
|
* |
|
5% Holders |
|
|
|
|
|
|
|
|
Blue World Holdings Limited(2) (3) |
|
|
2,658,480 |
|
|
|
40.27 |
% |
Hudson Bay Capital Management LP(4) |
|
|
875,000 |
|
|
|
13.25 |
% |
Sander Gerber(4) |
|
|
875,000 |
|
|
|
13.25 |
% |
Shaolin Capital Management LLC(5) |
|
|
694,413 |
|
|
|
10.52 |
% |
Saba Capital Management, L.P.(6) |
|
|
845,025 |
|
|
|
12.80 |
% |
Saba Capital Management GP, LLC(6) |
|
|
845,025 |
|
|
|
12.80 |
% |
Boaz R. Weinstein(6) |
|
|
845,025 |
|
|
|
12.80 |
% |
Glazer Capital, LLC(7) |
|
|
866,787 |
|
|
|
13.13 |
% |
Paul J. Glazer(7) |
|
|
866,787 |
|
|
|
13.13 |
% |
(1) |
Unless otherwise noted, the business address of each of the following is c/o Blue World Acquisition Corporation, 244 Fifth Avenue, Suite B-88, New York, NY 10001. |
(2) |
Shares include Founder Shares, or Class B Ordinary Shares, that will automatically convert into Class A Ordinary Shares concurrently with or immediately following the consummation of our initial Business Combination on a one-for-one basis, subject to certain adjustment. |
(3) |
Blue World Holdings Limited, a Hong Kong private company limited by shares, is the record holder of the insider shares reported herein. Our Sponsor is governed by a board of managers consisting of five members, Liang Shi, Fubin Shi, Hongyang Wang, Jianyong Xie, and Cunli Cheng. Each member has one vote, and the approval of a majority of the board is required to approve an action of our Sponsor. Under the so-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting or dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. Based upon the foregoing analysis, no director of our Sponsor exercises voting or dispositive control over any of the securities held by our Sponsor, even those in which he or she directly holds a pecuniary interest. Accordingly, none of them will be deemed to have or share beneficial ownership of such shares. |
(4) |
According to a Schedule 13G filed on February 7, 2023, on behalf of Hudson Bay Capital Management LP and Sander Gerber. The business address of each of these shareholders is 28 Havemeyer Place, 2nd Floor, Greenwich, CT 06830. |
(5) |
According to a Schedule 13G filed on February 14, 2023, on behalf of Shaolin Capital Management LLC. The business address of each of these shareholders is 230 NW 24th Street, Suite 603, Miami, FL 33127. |
(6) |
According to a Schedule 13G filed on February 14, 2023, on behalf of Saba Capital Management, L.P., Saba Capital Management GP, LLC, and Mr. Boaz R. Weinstein. The business address of each of these shareholders is 405 Lexington Avenue, 58th Floor, New York, New York 10174. |
(7) |
According to a Schedule 13G filed on February 14, 2023, on behalf of Glazer Capital, LLC and Paul J. Glazer. The business address of each of these shareholders is 250 West 55th Street, Suite 30A, New York, New York 10019. |
Item 13.
Certain Relationships and Related Transactions, and Director
Independence.
Founder Shares
On August 5, 2021, the Sponsor
acquired 2,300,000 Founder Shares for an aggregate purchase price of $25,000.
As of June 30, 2023, there
were 2,300,000 Founder Shares issued and outstanding. The aggregate capital contribution was $25,000, or approximately $0.01 per share.
Simultaneously with the effectiveness
of the registration statement and closing of the IPO (including the full exercise of over-allotment option), the Sponsor transferred 10,000
Founder Shares to each of Messrs. Alfred “Trey” Hickey and Buhdy Sin Swee Bok at the same price originally paid by the Sponsor
for such shares, pursuant to a certain securities transfer agreement (the “Securities Transfer Agreement”) dated January 31,
2022 among the Company, the transferees and the Sponsor.
Private Units
On February 2, 2022, simultaneously
with the consummation of the IPO, the Company completed the Private Placement of 424,480 Private Units including 378,480 Private Units
to the Sponsor and 46,000 Private Units to Maxim, respectively, at a purchase price of $10.00 per Private Unit.
Promissory Note — Related Party
On August 5, 2021, the Sponsor
has agreed to loan the Company up to an aggregate amount of $500,000 to be used, in part, for transaction costs incurred in connection
with the IPO (the “Promissory Note”). For the period from July 19, 2021 (inception) through February 2, 2022, the date of
the completion of the IPO, the Sponsor loaned the Company in the amount of $287,547. On February 7, 2022, the related party promissory
note was repaid in full.
In order to meet the Company’s
working capital needs following the consummation of the Initial Public Offering, the Sponsor, officers and directors or their affiliates
may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their
sole discretion (the “Working Capital Loans”). Each loan would be evidenced by a promissory note. The notes would either
be paid upon consummation of the Company initial Business Combination, without interest, or, at the lender’s discretion, the notes
may be converted upon consummation of the Company’s Business Combination into private units at a price of $10.00 per unit. If
the Company does not complete a Business Combination, the loans would be repaid out of funds not held in the Trust Account, and only to
the extent available.
On November 30, 2022, the
Company issued an unsecured promissory note (the “Sponsor Note 1”) in the principal amount of $400,000 to the Sponsor. The
proceeds of the Sponsor Note 1 was used as general working capital purposes.
On January 31, 2023, the
Company issued an unsecured promissory note (the “Extension Note 1”) in the principal amount of $920,000 to the Sponsor. The
proceeds of the Extension Note 1 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company
to extend the period of time it has to consummate its initial Business Combination by three months from February 2, 2023 to May 2, 2023.
On May 2, 2023, the Company
issued an unsecured promissory note (the “Extension Note 2”) in the principal amount of $194,324 to the Sponsor. The proceeds
of the Extension Note 2 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to
extend the period of time it has to consummate its initial Business Combination from May 2, 2023 to June 2, 2023.
On June 2, 2023, the Company
issued an unsecured promissory note (the “Extension Note 3”) in the principal amount of $194,324 to the Sponsor. The proceeds
of the Extension Note 3 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to
extend the period of time it has to consummate its initial Business Combination from June 2, 2023 to July 2, 2023.
On June 30, 2023, the Company
issued an unsecured promissory note (the “Extension Note 4” together with Extension Note 1, 2, and 3, collectively, the “Extension
Notes”) in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension Note 4 was deposited into the Company’s
Trust Account for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial Business
Combination from July 2, 2023 to August 2, 2023.
On July 31, 2023, the Company issued an unsecured promissory note (the
“Extension Note 5”) in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension Note 5 was deposited
into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period of time it has to consummate
its initial Business Combination from August 2, 2023 to September 2, 2023.
On July 31, 2023, the Company
issued an unsecured promissory note (the “Sponsor Note 2,” together with the Sponsor Note 1, collectively, the “Sponsor
Notes”) in the principal amount of $120,000 to the Sponsor. The proceeds of the Sponsor Note 2, which may be drawn down from time
to time until the Company consummates its initial business combination, will be used as general working capital purposes. As of June
30, 2023, the Company has drawn down $103,437 prior to the issuance of the Sponsor Note 2 on July 31, 2023.
On September 1, 2023, the
Company issued an unsecured promissory note (the “Extension Note 6”) in the principal amount of $60,000 to the Sponsor. The
proceeds of the Extension Note 6 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company
to extend the period of time it has to consummate its initial Business Combination from September 2, 2023 to October 2, 2023.
On September 28, 2023, the Company issued an unsecured promissory note
(the “Extension Note 7,” together with Extension Note 1, 2, 3, 4, 5 and 6, collectively, the “Extension Notes”)
in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension Note 7 was deposited into the Company’s Trust Account
for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial Business Combination
from October 2, 2023 to November 2, 2023.
The Extension Notes together
with the Sponsor Notes (collectively refer herein as “Promissory Notes”) issued to the Sponsor have the same payment and conversion
term as discussed below.
The Promissory Notes bear
no interest and is payable in full upon the earlier to occur of (i) the consummation of the Business Combination or (ii) the date of expiry
of the term of the Company (the “Maturity Date”). The following shall constitute an event of default: (i) a failure to pay
the principal within five business days of the Maturity Date; (ii) the commencement of a voluntary or involuntary bankruptcy action, (iii)
the breach of the Company’s obligations thereunder; (iv) any cross defaults; (v) an enforcement proceedings against the Company;
and (vi) any unlawfulness and invalidity in connection with the performance of the obligations thereunder, in which case the Promissory
Notes may be accelerated.
The payee of the Promissory
Notes, the Sponsor, has the right, but not the obligation, to convert the Promissory Notes, in whole or in part, respectively, into private
units (the “Conversion Units”) of the Company, each consisting of one Class A Ordinary Share, one-half of one warrant, and
one right to receive one-tenth (1/10) of one Class A Ordinary Share upon the consummation of a Business Combination, as described in the
prospectus of the Company (File Number 333-261585), by providing the Company with written notice of the intention to convert at least
two business days prior to the closing of the Business Combination. The number of Conversion Units to be received by the Sponsor in connection
with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to such Payee by
(y) $10.00.
As of June 30, 2023, the
Company had borrowings of $1,872,085 under the Promissory Notes.
Due to Related Parties
From time to time, Mr. Liang
Shi, the Company’s Director, Chief Executive Officer, Secretary and Chairman, would incur travel costs to search for targets. As
of June 30, 2023, due to Mr. Liang Shi amounted to $3,504.
Administrative Services Agreement
The Company is obligated,
commencing from the effective date of the IPO to pay the Sponsor, a monthly fee of $10,000 for general and administrative services pursuant
to a certain administrative services agreement (the “Administrative Services Agreement”). This Administrative Services Agreement
was signed by the Company and the Sponsor on January 31, 2022 and it will terminate upon completion of the Company’s Business Combination
or the liquidation of the Trust Account to public shareholders. The Company has recognized operating costs under the Administrative Services
Agreement in the amount of $120,000 and $50,000 for the year ended June 30, 2023 and for the period from July 19, 2021 (inception) through
June 30, 2022, respectively. As of June 30, 2023 and 2022, the Company had $60,000 and $20,000 accrued under the Administrative Services
Agreement due to the Sponsor, respectively.
Policy for Approval of Related Party Transactions
We have not yet adopted a
formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were
not reviewed, approved or ratified in accordance with any such policy.
We have adopted a code of
ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board
of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our code of ethics,
conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee
of indebtedness) involving the company.
In addition, our audit committee,
pursuant to a written charter will be responsible for reviewing and approving related party transactions to the extent that we enter into
such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present
will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute
a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a
related party transaction. We have adopted the audit committee charter. We also require each of our directors and executive officers to
complete a directors’ and officers’ questionnaire that elicits information about related party transactions.
These procedures are intended
to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the
part of a director, employee or officer.
To further minimize conflicts
of interest, we have agreed not to consummate an initial Business Combination with an entity that is affiliated with any of our founders
unless we, or a committee of independent directors, have obtained an opinion from an independent investment banking firm which is a member
of FINRA, or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire, or an
independent accounting firm that our initial business combination is fair to our company from a financial point of view. Furthermore,
other than the $10,000 per month fee, no finder’s fees, reimbursements or cash payments will be made to our founders, existing officers,
directors or advisors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial
business combination although we may consider cash or other compensation to officers or advisors we may hire subsequent to the IPO to
be paid either prior to or in connection with our initial Business Combination. In addition, the following payments will be made to our
founders or their affiliates, none of which will be made from the proceeds of the IPO held in the Trust Account prior to the completion
of our initial Business Combination:
| ● | payment
of $10,000 per month to our Sponsor, for use of office, utilities, personnel and related services, subject to deferral as described herein; |
| ● | reimbursement
of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as identifying and investigating
possible business targets and Business Combinations; |
| ● | repayment at the closing of our initial Business Combination of loans
which may be made by our founders or an affiliate of our founders to finance transaction costs in connection with an intended initial
business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto.
Such loans may be convertible into working capital units, at a price of $10.00 per unit at the option of the lender. Such working capital
units are identical to the Private Units sold in the Private Placement; and |
| ● | repayment
at the closing of our initial Business Combination of loans which have been made by our Sponsor, its affiliates or designees in connection
with our extensions of the time periods to complete an initial Business Combination , which may be convertible into working capital units,
at a price of $10.00 per unit, such working capital units are identical to the Private Units sold in the Private Placement. |
Our audit committee will
review on a quarterly basis all payments that were made to our founders or their affiliates, including the extension loan and extension
convertible notes.
Director Independence
Nasdaq listing standards
require that a majority of our board of directors be independent. An “independent director” is defined generally as
a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the
opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying
out the responsibilities of a director. Our board of directors has determined that each of Messrs. Zhenyu Li, Alfred “Trey” Hickey
and Buhdy Sin Swee Bok are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our
independent directors will have regularly scheduled meetings at which only independent directors are present.
Item 14.
Principal Accounting Fees and Services.
The following is a summary
of fees paid or to be paid to Marcum Asia CPAs LLP (formerly Marcum Bernstein & Pinchuk LLP) (“MarcumAsia”), for services
rendered.
Audit Fees. Audit
fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that
are normally provided by MarcumAsia in connection with regulatory filings. The aggregate fees billed by MarcumAsia for professional services
rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective
periods and other required filings with the SEC for the years ended June 30, 2023 and 2022 totaled $82,400 and $15,450, respectively.
The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.
Audit-Related Fees. Audit-related
services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of
our financial statements and are not reported under “Audit Fees.” We did not pay MarcumAsia for professional services rendered
for audit related fees for the period ended June 30, 2023.
Tax Fees. We did not
pay MarcumAsia for tax planning and tax advice for the years ended June 30, 2023 and 2022.
All Other Fees. We
did not pay MarcumAsia for other services for the years ended June 30, 2023 and 2022.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
1. The following documents are filed as part of
this Annual Report:
Financial Statements: See
“Item 8. Financial Statements and Supplementary Data” herein and “Index to Financial Statements” and financial
statements incorporated by reference therein commencing below.
2. Exhibits: The following exhibits are filed
as part of, or incorporated by reference into, this Annual Report on Form 10-K.
Exhibit
Number |
|
Description |
2.1 |
|
Agreement
and Plan of Merger, dated as of August 10, 2023, by and among Blue World Acquisition Corporation, TOYO Co., Ltd, TOYOone Limited,
TOPTOYO INVESTMENT PTE. LTD., Vietnam Sunergy Cell Company Limited, Vietnam Sunergy Joint Stock Company and Fuji Solar Co., Ltd.
(incorporated herein by reference to Exhibit 2.1 to Form 8-K as filed with the Securities and Exchange Commission on August 10, 2023) |
|
|
|
3.1* |
|
Amended
and Restated Memorandum and Articles of Association, dated January 28, 2022. (incorporated herein by reference to Exhibit 3.1 to
Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
3.2* |
|
Amended
and Restated Memorandum and Articles of Associate, dated May 2, 2023. (incorporated herein by reference to Exhibit 3.1 to Form 8-K
as filed with the Securities and Exchange Commission on May 3, 2023) |
|
|
|
3.3* |
|
Amended
and Restated Memorandum and Articles of Associate, dated June 30, 2023. (incorporated herein by reference to Exhibit 3.1 to Form
8-K as filed with the Securities and Exchange Commission on July 3, 2023) |
|
|
|
4.1* |
|
Specimen
Unit Certificate. (incorporated herein by reference to Exhibit 4.1 to Form S-1 as filed with the Securities and Exchange Commission
on January 19, 2022) |
|
|
|
4.2* |
|
Specimen
Ordinary Share Certificate. (incorporated herein by reference to Exhibit 4.2 to Form S-1 as filed with the Securities and Exchange
Commission on January 19, 2022) |
|
|
|
4.3* |
|
Specimen
Warrant Certificate. (incorporated herein by reference to Exhibit 4.3 to Form S-1 as filed with the Securities and Exchange Commission
on January 19, 2022) |
|
|
|
4.4* |
|
Specimen
Right Certificate (incorporated herein by reference to Exhibit 4.4 to Form S-1 as filed with the Securities and Exchange Commission
on January 19, 2022) |
|
|
|
4.5* |
|
Warrant
Agreement, dated January 31, 2022, between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent. (incorporated
herein by reference to Exhibit 4.1 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
10.2* |
|
Investment Management Trust Agreement, dated January 31, 2022, between the Registrant and Continental Stock Transfer & Trust Company, as trustee. (incorporated herein by reference to Exhibit 10.2 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.3* |
|
Escrow Agreement between the Registrant, dated January 31, 2022, Continental Stock Transfer & Trust Company and certain shareholders. (incorporated herein by reference to Exhibit 10.3 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.4* |
|
Registration Rights Agreement, dated January 31, 2022, among the Registrant and certain security holders. (incorporated herein by reference to Exhibit 10.4 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.5* |
|
Private Units Purchase Agreement, dated January 31, 2022, between the Registrant and the Sponsor. (incorporated herein by reference to Exhibit 10.5 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.6* |
|
Private Units Purchase Agreement, dated January 31, 2022, between the Registrant and the Representative. (incorporated herein by reference to Exhibit 10.6 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.7* |
|
Securities Transfer Agreement, dated January 31, 2022, among the Registrant, the Sponsor, and certain directors of the Registrant. (incorporated herein by reference to Exhibit 10.7 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.8*+ |
|
D&O Reserve Fund Escrow Agreement, dated January 31, 2022, between the Registrant and Continental Stock Transfer & Trust Company. (incorporated herein by reference to Exhibit 10.8 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.9* |
|
Administrative Service Agreement, dated January 31, 2022, between the Registrant and the Sponsor. (incorporated herein by reference to Exhibit 10.9 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2022) |
|
|
|
10.10* |
|
Promissory Note, dated November 30, 2022, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on December 5, 2022) |
|
|
|
10.11* |
|
Extension Promissory Note, dated January 31, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on February 3, 2023) |
|
|
|
10.12* |
|
Extension Promissory Note, dated May 2, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.2 to Form 8-K as filed with the Securities and Exchange Commission on May 3, 2023) |
|
|
|
10.13* |
|
Amendment to the Investment Management Trust Agreement dated May 2, 2023, between the Company and Continental Stock Transfer & Trust Company. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on May 3, 2023) |
|
|
|
10.14* |
|
Extension Promissory Note, dated June 2, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on June 2, 2023) |
|
|
|
10.15* |
|
Amendment to the Investment Management Trust Agreement dated June 30, 2023, between the Company and Continental Stock Transfer & Trust Company. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on July 3, 2023) |
|
|
|
10.16* |
|
Extension Promissory Note, dated June 30, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.2 to Form 8-K as filed with the Securities and Exchange Commission on July 3, 2023) |
|
|
|
10.17* |
|
Extension Promissory Note, dated July 31, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on August 2, 2023) |
10.18* |
|
Promissory Note, dated July 31, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.2 to Form 8-K as filed with the Securities and Exchange Commission on August 2, 2023) |
|
|
|
10.19* |
|
Sponsor Support Agreement, dated as of August 10, 2023, by and among Blue World Acquisition Corporation, Blue World Holdings Limited and TOYO Co., Ltd. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on August 10, 2023) |
|
|
|
10.20* |
|
Shareholder Lock-Up and Support Agreement, dated as of August 10, 2023, by and among Blue World Acquisition Corporation, TOYO Co., Ltd, and Fuji Solar Co., Ltd. (incorporated herein by reference to Exhibit 10.2 to Form 8-K as filed with the Securities and Exchange Commission on August 10, 2023) |
|
|
|
10.21* |
|
Extension
Promissory Note, dated September 1, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated
herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on September 5, 2023) |
|
|
|
10.22 |
|
Extension Promissory Note, dated September 28, 2023, issued by Blue World Acquisition Corporation to Blue World Holdings Limited. (incorporated herein by reference to Exhibit 10.1 to Form 8-K as filed with the Securities and Exchange Commission on September 28, 2023) |
|
|
|
99.1* |
|
Audit Committee Charter. (incorporated herein by reference to Exhibit 99.1 to Form S-1 as filed with the Securities and Exchange Commission on January 19, 2022) |
|
|
|
99.2* |
|
Compensation Committee Charter. (incorporated herein by reference to Exhibit 99.2 to Form S-1 as filed with the Securities and Exchange Commission on January 19, 2022) |
+ |
Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request. |
Item 16. Form 10-K Summary.
None.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
BLUE WORLD ACQUISITION CORPORATION |
|
|
Date: September 28, 2023 |
|
|
By: |
/s/ Liang Shi |
|
|
Liang Shi |
|
|
Chief Executive Officer, Chairman and Secretary |
|
|
(Principal Executive Officer) |
|
|
|
|
By: |
/s/ Tianyong Yan |
|
|
Tianyong Yan |
|
|
Chief Financial Officer |
|
|
(Principal Financial Officer and
Accounting Officer) |
Pursuant to the requirements
of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Name |
|
Position |
|
Date |
|
|
|
|
|
/s/ Liang Shi |
|
Chief Executive Officer, Chairman and Secretary |
|
September 28, 2023 |
Liang Shi |
|
(Principle Executive Officer) |
|
|
|
|
|
|
|
/s/ Tianyong Yan |
|
Chief Financial Officer |
|
September 28, 2023 |
Tianyong Yan |
|
(Principal Accounting and Financial Officer) |
|
|
|
|
|
|
|
/s/ Weixiong (Jeff) Cheong |
|
Chief Operating Officer |
|
September 28, 2023 |
Weixiong (Jeff) Cheong |
|
|
|
|
|
|
|
|
|
/s/ Buhdy Sin Swee Bok |
|
Director |
|
September 28, 2023 |
Buhdy Sin Swee Bok |
|
|
|
|
|
|
|
|
|
/s/ Alfred “Trey” Hickey |
|
Director |
|
September 28, 2023 |
Alfred “Trey” Hickey |
|
|
|
|
|
|
|
|
|
/s/ Zhenyu Li |
|
Director |
|
September 28, 2023 |
Zhenyu Li |
|
|
|
|
BLUE WORLD ACQUISITION CORPORATION
INDEX TO FINANCIAL STATEMENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Blue
World Acquisition Corporation
Opinion on the Financial Statements
We have audited the accompanying balance sheets of
Blue World Acquisition Corporation (the “Company”) as of June 30, 2023 and 2022, the related statements of operations, change
in shareholders’ deficit and cash flows for the year ended June 30, 2023 and for the period from July 19, 2021 (Inception) through
June 30, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and 2022, and the results
of its operations and its cash flows for the year ended June 30, 2023 and for the period from July 19, 2021 (Inception) through June 30,
2022 in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the company’s
liquidation date is less than one year from the date of the financial statements is issued. This condition raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal
control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Marcum Asia CPAs llp
Marcum Asia CPAs llp
We have served as the Company’s auditor since 2021.
New York, NY
September 28, 2023
Firm ID#: 5395
NEW YORK OFFICE • 7 Penn Plaza • Suite 830
• New York, New York • 10001
Phone 646.442.4845 • Fax 646.349.5200 • www.marcumasia.com
BLUE WORLD ACQUISITION CORPORATION
BALANCE SHEETS
| |
June 30, 2023 | | |
June 30, 2022 | |
Assets | |
| | |
| |
Current assets: | |
| | |
| |
Cash | |
$ | 746 | | |
$ | 276,284 | |
Prepaid expenses | |
| 35,862 | | |
| 33,946 | |
Total Current Assets | |
| 36,608 | | |
| 310,230 | |
| |
| | | |
| | |
Investment held in Trust Account | |
| 70,186,561 | | |
| 93,054,401 | |
Cash held in Escrow Account | |
| 500,000 | | |
| 500,000 | |
Total Assets | |
$ | 70,723,169 | | |
$ | 93,864,631 | |
| |
| | | |
| | |
Liabilities, Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 229,933 | | |
$ | 62,734 | |
Due to related parties | |
| 63,504 | | |
| 20,000 | |
Promissory notes - related party | |
| 1,872,085 | | |
| - | |
Total Current Liabilities | |
| 2,165,522 | | |
| 82,734 | |
Deferred underwriting discounts and commissions | |
| 3,220,000 | | |
| 3,220,000 | |
Total Liabilities | |
| 5,385,522 | | |
| 3,302,734 | |
| |
| | | |
| | |
Commitments and Contingencies (Note 7) | |
| | | |
| | |
| |
| | | |
| | |
Class A ordinary shares subject to possible redemption, 6,587,231 shares and 9,200,000 shares at redemption value of $10.65 and $10.11 per share as of June 30, 2023 and 2022, respectively | |
| 70,186,561 | | |
| 93,054,401 | |
| |
| | | |
| | |
Shareholders’ Deficit: | |
| | | |
| | |
Preference shares, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding | |
| - | | |
| - | |
Class A ordinary shares, $0.0001 par value, 470,000,000 shares authorized, 464,480 shares issued and outstanding (excluding 6,587,231 shares and 9,200,000 shares subject to possible redemption as of June 30, 2023 and 2022, respectively) | |
| 46 | | |
| 46 | |
Class B ordinary shares, $0.0001 par value, 20,000,000 shares authorized, 2,300,000 shares issued and outstanding | |
| 230 | | |
| 230 | |
Additional paid-in capital | |
| - | | |
| - | |
Accumulated deficit | |
| (4,849,190 | ) | |
| (2,492,780 | ) |
Total Shareholders’ Deficit | |
| (4,848,914 | ) | |
| (2,492,504 | ) |
Total Liabilities, Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | |
$ | 70,723,169 | | |
$ | 93,864,631 | |
The accompanying notes are an integral part of these financial statements.
BLUE WORLD ACQUISITION CORPORATION
STATEMENTS OF OPERATIONS
| |
| | |
For the Period from July 19, 2021 | |
| |
For the Year Ended | | |
(inception) through | |
| |
June 30, 2023 | | |
June 30, 2022 | |
Formation and operating costs | |
$ | 987,771 | | |
$ | 230,926 | |
Share-based compensation expense | |
| - | | |
| 150,379 | |
Loss from operations | |
| (987,771 | ) | |
| (381,305 | ) |
| |
| | | |
| | |
Other income: | |
| | | |
| | |
Dividend earned on investment held in Trust Account | |
| 3,169,667 | | |
| 134,401 | |
Interest income | |
| 9 | | |
| 12 | |
Total other income | |
| 3,169,676 | | |
| 134,413 | |
| |
| | | |
| | |
Net income (loss) | |
$ | 2,181,905 | | |
$ | (246,892 | ) |
| |
| | | |
| | |
Basic and diluted weighted average redeemable Class A ordinary shares outstanding | |
| 8,771,677 | | |
| 3,950,432 | |
Basic and diluted net income per redeemable Class A ordinary shares | |
$ | 0.19 | | |
$ | (0.04 | ) |
Basic and diluted weighted average non-redeemable Class A and Class B ordinary shares outstanding | |
| 2,764,480 | | |
| 2,328,264 | |
Basic and diluted net income (loss) per non-redeemable Class A and Class B ordinary share | |
$ | 0.19 | | |
$ | (0.04 | ) |
The accompanying notes are an integral part of these financial statements.
BLUE WORLD ACQUISITION CORPORATION
STATEMENTS OF CHANGES IN SHAREHOLDERS’
DEFICIT
| |
Ordinary Shares | | |
Additional | | |
| | |
Total | |
| |
Class A | | |
Class B | | |
Paid-in | | |
Accumulated | | |
Shareholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance as of July 19, 2021 (inception) | |
| - | | |
$ | - | | |
| - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Founder shares issued to initial shareholder | |
| - | | |
| - | | |
| 2,300,000 | | |
| 230 | | |
| 24,770 | | |
| - | | |
| 25,000 | |
Fair value of public rights and warrants, net of allocated offering costs | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8,255,323 | | |
| - | | |
| 8,255,323 | |
Sale of private placement units | |
| 424,480 | | |
| 42 | | |
| - | | |
| - | | |
| 4,244,758 | | |
| - | | |
| 4,244,800 | |
Issuance of representative shares | |
| 40,000 | | |
| 4 | | |
| - | | |
| - | | |
| 308,254 | | |
| - | | |
| 308,258 | |
Share-based compensation expense | |
| - | | |
| - | | |
| - | | |
| - | | |
| 150,379 | | |
| - | | |
| 150,379 | |
Remeasurement of Class A ordinary shares subject to possible redemption | |
| - | | |
| - | | |
| - | | |
| - | | |
| (12,983,484 | ) | |
| (2,245,888 | ) | |
| (15,229,372 | ) |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (246,892 | ) | |
| (246,892 | ) |
Balance as of June 30, 2022 | |
| 464,480 | | |
| 46 | | |
| 2,300,000 | | |
| 230 | | |
| - | | |
| (2,492,780 | ) | |
| (2,492,504 | ) |
Remeasurement of Class A ordinary shares subject to possible redemption | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (4,538,315 | ) | |
| (4,538,315 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,181,905 | | |
| 2,181,905 | |
Balance as of June 30, 2023 | |
| 464,480 | | |
$ | 46 | | |
| 2,300,000 | | |
$ | 230 | | |
$ | - | | |
$ | (4,849,190 | ) | |
$ | (4,848,914 | ) |
The accompanying notes are an integral part of these financial statements.
BLUE WORLD ACQUISITION CORPORATION
STATEMENTS OF CASH FLOWS
| |
| | |
For the Period from July 19, 2021 | |
| |
For the Year Ended | | |
(inception) through | |
| |
June 30, 2023 | | |
June 30, 2022 | |
Cash Flows from Operating Activities: | |
| | |
| |
Net income (loss) | |
$ | 2,181,905 | | |
$ | (246,892 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Share-based compensation expense | |
| — | | |
| 150,379 | |
Dividend earned on investment held in Trust Account | |
| (3,169,667 | ) | |
| (134,401 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| (1,916 | ) | |
| (33,946 | ) |
Accounts payable and accrued expenses | |
| 167,199 | | |
| 62,734 | |
Due to related parties | |
| 43,504 | | |
| 20,000 | |
Net Cash Used in Operating Activities | |
| (778,975 | ) | |
| (182,126 | ) |
| |
| | | |
| | |
Cash Flows from Investing Activities: | |
| | | |
| | |
Purchases of investment held in Trust Account | |
| (1,368,648 | ) | |
| (92,920,000 | ) |
Withdrawals of investment held in Trust Account | |
| 27,406,155 | | |
| — | |
Net Cash Provided by (Used in) Investing Activities | |
| 26,037,507 | | |
| (92,920,000 | ) |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Redemption of Class A ordinary shares | |
| (27,406,155 | ) | |
| — | |
Proceeds from sale of public units through public offerings, net of underwriters’ discount | |
| — | | |
| 90,160,000 | |
Proceeds from sale of private placement units | |
| — | | |
| 4,244,800 | |
Proceeds from issuance of promissory notes to related party | |
| 1,872,085 | | |
| 287,547 | |
Repayment of promissory note to related party | |
| — | | |
| (287,547 | ) |
Payment of offering costs | |
| — | | |
| (526,390 | ) |
Deposits made to Escrow Account | |
| — | | |
| (500,000 | ) |
Net Cash (Used in) Provided by Financing Activities | |
| (25,534,070 | ) | |
| 93,378,410 | |
| |
| | | |
| | |
Net Change in Cash | |
| (275,538 | ) | |
| 276,284 | |
| |
| | | |
| | |
Cash, beginning of year | |
| 276,284 | | |
| — | |
Cash, end of year | |
$ | 746 | | |
$ | 276,284 | |
| |
| | | |
| | |
Supplemental Disclosure of Cash Flow Information: | |
| | | |
| | |
Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | |
$ | — | | |
$ | 25,000 | |
Deferred underwriter’s discount | |
$ | — | | |
$ | 3,220,000 | |
Issuance of representative shares | |
$ | — | | |
$ | 308,258 | |
Remeasurement of Class A ordinary shares subject to possible redemption | |
$ | 4,538,315 | | |
$ | 15,229,372 | |
The accompanying notes are an integral part of these financial statements.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION, BUSINESS OPERATIONS, AND GOING
CONCERN
Blue World Acquisition Corporation (the “Company”)
is a blank check exempted company incorporated on July 19, 2021, under the laws of the Cayman Islands for the purpose of entering
into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with
one or more businesses or entities (“Business Combination”). 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 is subject to all risks associated with emerging growth companies (See Note 2). The Company’s efforts to identify
a prospective target business will primarily in the marine leisure, cruise, marine infrastructure and engineering, general hospitality, travel
and tourism, marine services, logistics and supply chain, offshore energy solutions and related industry segments. The Company is not
limited to a particular region for purposes of consummating an initial Business Combination, however, the Company may focus on targets
that, regardless of geographic location of operations or corporate offices, have viable synergies with the Asia Pacific and the U.S. markets
for the above industry segments, either physically or virtually. The Company will not undertake its initial Business Combination with
any entity that conducts a majority of its business or is headquartered in China (including Hong Kong and Macau).
As of June 30, 2023, the Company had not commenced
any operations. For the period from July 19, 2021 (inception) through June 30, 2023, the Company’s efforts have been limited
to organizational activities as well as activities related to its initial public offering (the “Initial Public Offering”)
as described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the
earliest. The Company will generate non-operating income in the form of dividend/interest income from the proceeds derived from the Initial
Public Offering. The Company has selected June 30 as its fiscal year end.
The registration statement for the Company’s
Initial Public Offering became effective on January 31, 2022. On February 2, 2022, the Company consummated the Initial Public Offering
of 9,200,000 units (including 1,200,000 units issued upon the full exercise of the over-allotment option, the “Public Units”).
Each Public Unit consists of one Class A ordinary share, $0.0001 par value per share (the “Class A Ordinary Shares”), one-half
of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one
Class A Ordinary Share at an exercise price of $11.50 per share, and one right (the “Public Rights”), each one Public Right
entitling the holder thereof to exchange for one-tenth of one Class A Ordinary Share upon the completion of the Company’s initial
Business Combination. The Public Units were sold at an offering price of $10.00 per Public Unit, generating gross proceeds of $92,000,000
on February 2, 2022.
Simultaneously with the closing of the Initial
Public Offering, the Company completed the private sale of 424,480 units (the “Private Units”) including 378,480 Private Units
to the Company’s sponsor, Blue World Holdings Limited (the “Sponsor”), and 46,000 Private Units to Maxim Group LLC (or
its designees) (“Maxim”), the representative of the several underwriters (the “Representative”), respectively.
Each Private Unit consists of one Class A Ordinary Share, one-half of one redeemable warrant (the “Private Warrants”), each
whole Private Warrant entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, and
one right (the “Private Rights”), each one Private Right entitling the holder thereof to exchange for one-tenth of one Class
A Ordinary Share upon the completion of the Company’s initial Business Combination. The Private Units were sold at a purchase price
of $10.00 per Private Unit, generating gross proceeds to the Company of $4,244,800. The Private Units are identical to the Public Units
sold in the Initial Public Offering, except that the holders of the Private Units have agreed not to transfer, assign or sell any of the
Private Units and the underlying securities (except to certain permitted transferees) until the completion of the Company’s initial
Business Combination.
The Company also issued 40,000 shares of Class
A Ordinary Shares (the “Representative Shares”) to Maxim as part of representative compensation. The Representative Shares
are identical to the Class A Ordinary Shares sold as part of the Public Units, except that Maxim has agreed not to transfer, assign or
sell any such Representative Shares until the completion of the Company’s initial Business Combination. In addition, Maxim has agreed
(i) to waive its redemption rights with respect to such shares in connection with the completion of the Company’s initial Business
Combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if the Company
fails to complete its initial Business Combination within the prescribed time period. The Representative Shares have been deemed compensation
by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness
of the registration statement pursuant to FINRA Rule 5110 (e)(1). Pursuant to FINRA Rule 5110(e)(1), these securities will not
be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities
by any person for a period of 180 days immediately following the effective date of the registration statement of which this prospectus
forms a part, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following
the effective date of the registration statement except to any underwriter and selected dealer participating in the offering and their
officers, partners, registered persons or affiliates.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Transaction costs amounted to $5,919,648, consisting
of $1,840,000 of underwriting discounts and commissions, $3,220,000 of deferred underwriting commissions, $551,390 of other offering costs
and $308,258 fair value of the Representative Shares issued to Maxim.
Following the closing of the Initial Public Offering
and the issuance and the sale of Private Units on February 2, 2022, $92,920,000 ($10.10 per Public Unit) from the net proceeds of the
sale of the Public Units in the Initial Public Offering and the sale of Private Units was placed in a trust account (the “Trust
Account”) maintained by Continental Stock Transfer & Trust Company, LLC as a trustee and invested the proceeds in U.S.
government treasury bills, bonds or notes having a maturity of 185 days or less, or in money market funds meeting the applicable
conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in United States
government treasuries, so that we are not deemed to be an investment company under the Investment Company Act. The proceeds held in the
Trust Account will not be released until the earlier of: (1) the completion of the Company’s initial Business Combination within
the required time period and (2) its redemption of 100% of the outstanding public shares if the Company has not completed a Business
Combination in the required time period. Therefore, unless and until the Company’s initial Business Combination is consummated,
the proceeds held in the Trust Account will not be available for the Company’s use for any expenses related to the Initial Public
Offering or expenses which the Company may incur related to the investigation and selection of a target business and the negotiation of
an agreement in connection with its initial Business Combination.
The Company will provide its public shareholders
with the opportunity to redeem all or a portion of their public shares upon the completion of an initial Business Combination at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation
of its initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the
Company to pay its taxes, divided by the number of then outstanding public shares, subject to certain limitations. The amount in the Trust
Account is initially anticipated to be $10.10 per public share. The per-share amount the Company will distribute to investors who
properly redeem their shares will not be reduced by deferred underwriting commissions the Company will pay to the underwriters (as discussed
in Note 6). The ordinary shares subject to redemption is being recorded at a redemption value and classified as temporary equity
upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.”
The Company will proceed with a Business Combination
if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks
shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a shareholder vote
is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant
to its Amended and Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the Securities
and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be
included in a proxy statement with the SEC prior to completing a Business Combination.
The Company’s founders and Maxim (the “Initial
Shareholders”) have agreed (a) to vote their Founder Shares (as defined below), the Class A Ordinary Shares included in
the Private Units (the “Private Shares”), the Representative Shares and any Class A Ordinary Shares included in the Public
Units (the “Public Shares”) purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not
to propose, or vote in favor of, an amendment to the Company’s Amended and Restated Memorandum and Articles of Association that
would stop the public shareholders from redeeming or selling their shares to the Company in connection with a Business Combination or
affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete
a Business Combination within the Combination Period (as defined below) unless the Company provides dissenting public shareholders with
the opportunity to redeem their Public Shares into the right to receive cash from the Trust Account in connection with any such vote;
(c) not to redeem any Founder Shares, Private Share, and Representative Shares (as well as any Public Shares purchased during or
after the Initial Public Offering) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve
a Business Combination (or sell any shares in a tender offer in connection with a Business Combination) or a vote to amend the provisions
of the Amended and Restated Memorandum and Articles of Association relating to shareholders’ rights of pre-Business Combination
activity and (d) that the Founder Shares, Private Shares, and Representative Shares shall not participate in any liquidating distributions
upon winding up if a Business Combination is not consummated. However, the initial shareholders will be entitled to liquidating distributions
from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to
complete its Business Combination.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The Company initially had until February 2, 2023
to complete an initial Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination
by February 2, 2023, the Company may, but is not obligated to, extend the period of time to consummate a Business Combination three times
by an additional three months each time (for a total of up to November 2, 2023 to complete a Business Combination). In order to extend
the time available for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into
the Trust Account $920,000 ($0.10 per share in either case), on or prior to the applicable deadline. On February 2, 2023, $920,000 was
deposited into the Trust Account to extend the period of time it has to consummate its initial business combination for additional three
months from February 2, 2023 to May 2, 2023.
On May 2, 2023, the Company held an extraordinary
general meeting (the “May 2023 Meeting”) at which its shareholders approved the adoption of the Second Amended and Restated
Memorandum and Articles of Association of the Company, which provides that the Company has until May 2, 2023 to complete an initial Business
Combination, and may elect to extend the period to consummate an initial Business Combination up to nine times, each by an additional
one-month extension, for a total of up to nine months to February 2, 2024 by depositing $0.0295 per public share into the Trust Account
for each monthly extension. As a result of May 2023 Meeting, on May 2, 2023, a total of $194,324 was deposited into the Trust Account
for the public shareholders, representing $0.0295 per remaining public share, which enables the Company to extend the period of time it
has to consummate its initial business combination by one month from May 2, 2023 to June 2, 2023.
On June 2, 2023, a total of $194,324 was deposited
into the Trust Account for the public shareholders, representing $0.0295 per remaining public share, which enables the Company to extend
the period of time it has to consummate its initial business combination by one month from June 2, 2023 to July 2, 2023.
On June 30, 2023, the Company held an extraordinary
general meeting (the “June 2023 Meeting”), where the shareholders of the Company approved the adoption of the Third Amended
and Restated Memorandum and Articles of Association of the Company, which provides that the Company has until July 2, 2023 to complete
a Business Combination, and may elect to extend the period to consummate a Business Combination up to nine times, each by an additional
one-month extension, for a total of up to nine months to April 2, 2024, by depositing $60,000 each month to the Trust Account.
On June 30, 2023, a total of $60,000 of the Monthly
Extension Payment was deposited into the Trust Account for the public shareholders, which enables the Company to extend the period of
time it has to consummate its initial business combination by one month from July 2, 2023 to August 2, 2023.
On July 31, 2023, a total of $60,000 of the Monthly
Extension Payment was deposited into the Trust Account for the public shareholders, which enables the Company to extend the period of
time it has to consummate its initial business combination by one month from August 2, 2023 to September 2, 2023.
On September 1, 2023, a total of $60,000 of the
Monthly Extension Payment was deposited into the Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial business combination by one month from September 2, 2023 to October 2, 2023.
On September 27, 2023, a total of $60,000 of the
Monthly Extension Payment was deposited into the Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial business combination by one month from October 2, 2023 to November 2, 2023 (the “Combination
Period”).
If the Company is unable to complete a Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but no 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 interest earned (net
of less up to $50,000 of interest to pay dissolution expenses and taxes payable), 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 remaining shareholders and the Company’s
board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case
to its obligations under Cayman Island law to provide for claims of creditors and the requirements of other applicable law.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The Sponsor has agreed that it will 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 entered into a written letter of intent, confidentiality or similar agreement or business combination
agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per Public Share and (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 $10.10 per share
due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a
third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether
or not such waiver is enforceable) nor will it apply 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. However, the Company has not asked the Sponsor
to reserve for such indemnification obligations, nor have its independently verified whether the Sponsor has sufficient funds to satisfy
its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot
assure that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the
Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Redemptions
On May 2, 2023, the Company held an
extraordinary general meeting (the “May 2023 Meeting”) at which its shareholders approved the adoption of the Second
Amended and Restated Memorandum and Articles of Association of the Company, which provides that the Company has until May 2, 2023 to complete
an initial Business Combination, and may elect to extend the period to consummate an initial Business Combination up to nine times, each
by an additional one-month extension, for a total of up to nine months to February 2, 2024 by depositing $0.0295 per public share into
the Trust Account for each monthly extension. In connection with the May 2023 Meeting, 2,612,769 Class A Ordinary Shares were rendered
for redemption, and approximately $27.4 million was released from the Trust Account to pay such redeeming shareholders in May 2023.
On June 30, 2023, the Company held an
extraordinary general meeting (the “June 2023 Meeting”) at which the Company’s shareholders approved the adoption of
the Third Amended and Restated Memorandum and Articles of Association of the Company, which provides that the Company has until July 2,
2023 to complete a business combination, and may elect to extend the period to consummate a Business Combination up to nine times, each
by an additional one-month extension, for a total of up to nine months to April 2, 2024, by depositing $60,000 each month
to the Trust Account. As a result of June 30 Meeting, upon the shareholders’ approval, on June 30, 2023, the Company and Continental
entered into the amendment to the Trust Agreement. In connection with the June 2023 Meeting, 2,749,465 Class A Ordinary Shares were rendered
for redemption, and approximately $29.3 million was released from the Trust Account to pay such redeeming shareholders in July 2023.
Merger Agreement
On August 10, 2023, the
Company entered into an Agreement and Plan of Merger (as the same may be amended, restated or supplemented, the “Merger Agreement”)
with TOYO Co., Ltd, a Cayman Islands exempted company (“PubCo”), TOYOone Limited, a Cayman Islands exempted company (“Merger
Sub”), TOPTOYO INVESTMENT PTE. LTD., a Singapore private company limited by shares (“SinCo”), Vietnam Sunergy Cell Company
Limited, a Vietnamese company, (the “Company”, together with PubCo, Merger Sub and SinCo, the “Group Companies”,
or each individually, a “Group Company”), Vietnam Sunergy Joint Stock Company, a Vietnam joint stock company (“VSUN”),
and Fuji Solar Co., Ltd, a Japanese company (“Fuji Solar”, together with VSUN, the “Shareholders”, or individually,
a “Shareholder”).
Pursuant to the Merger
Agreement, (a) the Group Companies, VSUN and Fuji Solar shall consummate a series of transactions involving the Group Companies, including
(A) PubCo acquiring one hundred percent (100%) of the issued and paid-up share capital of SinCo from Fuji Solar in exchange for one (1)
ordinary share of PubCo, par value US$0.0001 per share (the “PubCo Ordinary Shares” and such transaction, the “Share
Exchange”), and (B) SinCo acquiring one hundred percent (100%) of the issued and outstanding shares of capital stock of the Company
from VSUN at an aggregate consideration of no less than US$50,000,000 (the “SinCo Acquisition,” and together with the Share
Exchange, the “Pre-Merger Reorganization”), as a result of which (i) SinCo shall become a wholly-owned subsidiary of PubCo,
(ii) the Company shall become a wholly-owned subsidiary of SinCo; and (iii) immediately prior to the closing of the SinCo Acquisition,
Fuji Solar (the “Seller”) shall hold an aggregate of 41,000,000 PubCo Ordinary Shares, representing all issued and outstanding
share capital of PubCo, and (b) following the consummation of the Pre-Merger Reorganization, BWAQ shall merge with and into Merger Sub,
with Merger Sub continuing as the surviving company (the “Merger”), as a result of which, among other things, all of the issued
and outstanding securities of BWAQ immediately prior to the filing of the plan of merger with respect to the Merger (the “Plan of
Merger”) to the Registrar of Companies of the Cayman Islands, or such later time as may be specified in the Plan of Merger (the
“Merger Effective Time”) shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of
the holders thereof to receive substantially equivalent securities of PubCo, in each case, upon the terms and subject to the conditions
set forth in the Merger Agreement and in accordance with the provisions of the Companies Act (Revised) of the Cayman Islands and other
applicable laws.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Liquidity and Going Concern
As of June 30, 2023, the Company had cash of $746
and a working deficit of $2,128,914. The Company has incurred and expects to continue to incur significant professional costs to remain
as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a Business Combination. In connection
with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting
Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going
Concern,” management has determined that these conditions raise substantial doubt about the Company’s ability to continue
as a going concern. The management’s plan in addressing this uncertainty is through the Working Capital Loans, as defined below
(see Note 5). In addition, if the Company is unable to complete a Business Combination within the Combination Period by November 2, 2023,
unless further extended, the Company’s board of directors would proceed to commence a voluntary liquidation and thereby a formal
dissolution of the Company. There is no assurance that the Company’s plans to consummate a Business Combination will be successful
within the Combination Period. As a result, management has determined that such additional condition also raise substantial doubt about
the Company’s ability to continue as a going concern. The financial statement does not include any adjustments that might result
from the outcome of this uncertainty.
Risks and Uncertainties
As a result of the military action commenced in
February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability
to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business
Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent
on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility,
or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this
action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations
and/or ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
NOTE 2 — SIGNIFICANT ACCOUNTING
POLICIES
These accompanying financial statements have been
prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”)
and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
● | Emerging growth company status |
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by 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 independent registered public accounting firm 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.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
In preparing these financial statements in conformity
with U.S. GAAP, management makes 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 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, actual results may differ from these estimates.
● | Cash and cash equivalents |
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $746 and $276,284 in cash
as of June 30, 2023 and 2022, respectively. The Company did not have any cash equivalents as of June 30, 2023 and 2022.
● | Investment held in Trust Account |
As of June 30, 2023 and 2022, the assets held
in the Trust Account include $70,186,561 and $93,054,401, respectively, of investments held in money market funds, which are invested
in U.S. Treasury securities and characterized as Level 1 investments within the fair value hierarchy under ASC 820 (as defined below).
For the years ended June 30, 2023 and 2022, dividend earned and held in the Trust Account amounted to $3,169,667 and $134,401, respectively.
The Company classifies its U.S. Treasury and equivalent
securities as held-to-maturity in accordance with ASC Topic 320 “Investments — Debt and Equity Securities.” Held-to-maturity
securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities
are recorded at amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.
● | Cash held in Escrow Account |
The Company has entered into a certain escrow
agreement with Continental Stock Transfer & Trust Company who acts as the escrow agent pursuant to which the Company agreed to deposit
the aggregated amount of $1,000,000 ($500,000 payable upon the closing of Initial Public Offering and $500,000 payable one business day
prior to the entry of a definitive agreement in connection with an initial Business Combination) into the escrow account until the earlier
of (i) one year of the closing of an initial Business Combination; (ii) one year of the Company’s liquidation or windup in accordance
with the Company’s Amended and Restated Memorandum and Articles of Association; and (iii) such date as may be approved by the Company’s
shareholders in accordance with the amended and restated memorandum and articles of association (such arrangement is referred as “indemnity
escrow”). The escrow fund will be released by the escrow agent under joint instruction by the Company and its claim manager Andros
Risk Services LLC, who would act pursuant to the claim coverage guidelines provided thereof, which, among others, include indemnification
for (i) loss from any claims first made against the Company’s directors, officers and risk manager for a Wrongful Act (as defined
in escrow agreement) during the period from the effectiveness of the Company’s registration statement on January 31, 2022 until
the earlier of (A) the closing of an initial Business Combination and (B) the Company’s liquidation or windup (the “Coverage
Period”), loss or inquiry costs from any investigations of or Inquiry (as defined in escrow agreement) received by the Company’s
directors, officers and risk manager during the Coverage Period; (ii) loss of the Company, the Sponsor, or the Company’s successor
to indemnify its directors officers and risk manager for item (i) above; (iii) loss from any Securities Claim (as defined in the escrow
agreement) first made against the Company during the Coverage Period for a wrongful act and its costs, charges, or expenses in seeking
dismissal of any Derivative Suit (as defined in escrow agreement), subject to certain conditions, and other certain coverage guidelines
against the Company; and (iv) any costs incurred by the Company in connection with Security Holder Demand Investigation (as defined in
the as defined in the escrow agreement) for a wrongful act and Books and Records Demand (as defined in the indemnity escrow) first received
by the Company during the Coverage Period
As of June 30, 2023 and 2022, the Company had
$500,000 in cash held in the Escrow Account.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
● | Net income (loss) per ordinary share |
The Company complies with accounting and disclosure
requirements of FASB ASC 260, Earnings Per Share. The Company has two classes of shares, which are referred to as redeemable shares and
non-redeemable shares. Earnings and losses are shared pro rata between the two classes of shares. In order to determine the net loss attributable
to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both
the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed income (loss) is calculated using the total net
income (loss) less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average
number of shares outstanding between the redeemable and non-redeemable ordinary shares. The table below presents a reconciliation of the
numerator and denominator used to compute basic and diluted net income (loss) per share for each class of ordinary shares:
| |
For the Year Ended | | |
For the Period from July 19, 2021 (inception) through | |
| |
June 30, 2023 | | |
June 30, 2022 | |
| |
| Redeemable Class A Ordinary Shares | | |
| Non-Redeemable Class A and Class B Ordinary Shares | | |
| Redeemable Class A Ordinary Shares | | |
| Non-Redeemable Class A and Class B Ordinary Shares | |
Basic and diluted net income (loss) per share: | |
| | | |
| | | |
| | | |
| | |
Numerators: | |
| | | |
| | | |
| | | |
| | |
Allocation of net income (loss) | |
$ | 1,659,042 | | |
$ | 522,863 | | |
$ | (155,340 | ) | |
$ | (91,552 | ) |
Denominators: | |
| | | |
| | | |
| | | |
| | |
Weighted-average shares outstanding | |
| 8,771,677 | | |
| 2,764,480 | | |
| 3,950,432 | | |
| 2,328,264 | |
Basic and diluted net income (loss) per share | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | (0.04 | ) | |
$ | (0.04 | ) |
● | Class A ordinary shares subject to possible redemption |
The Company accounts for its ordinary shares subject to possible redemption
in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory
redemption (if any) are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including
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. At all other times, ordinary shares
are classified as shareholders’ equity. The Company’s Class A Ordinary Shares feature certain redemption rights that
are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, 6,587,231
and 9,200,000 Class A Ordinary Shares subject to possible redemption are presented at redemption value as temporary equity, outside
of the shareholders’ equity section of the Company’s balance sheets as of June 30, 2023 and 2022, respectively.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of Class A Ordinary Shares to equal the redemption value at the end of each
reporting period. Increases or decreases in the carrying amount of redeemable Class A Ordinary Shares are affected by charges against
additional paid in capital and accumulated deficit.
As of June 30, 2023 and 2022, the amount of Class A
Ordinary Shares reflected on the balance sheet are reconciled in the following table:
Gross proceeds | |
$ | 92,000,000 | |
Less: | |
| | |
Proceeds allocated to Public Warrants and Public Rights | |
| (8,841,200 | ) |
Offering costs of Public Shares | |
| (5,333,771 | ) |
Plus: | |
| | |
Initial measurement adjustment on redeemable ordinary shares | |
| 14,174,971 | |
Re-measurement adjustment on redeemable ordinary shares | |
| 1,054,401 | |
Class A ordinary shares subject to possible redemption, June 30, 2022 | |
| 93,054,401 | |
Less: | |
| | |
Redemptions of Class A ordinary shares | |
| (27,406,155 | ) |
Plus: | |
| | |
Re-measurement adjustment on redeemable ordinary shares | |
| 4,538,315 | |
Class A ordinary shares subject to possible redemption, June 30, 2023 | |
$ | 70,186,561 | |
● | Share-based compensation expense |
The Company accounts for share-based compensation
expense in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”). Under ASC 718, share-based
compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite
service period. To the extent a share-based award is subject to a performance condition, the amount of expense recorded in a given period,
if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event
is deemed probable to occur. Forfeitures are recognized as incurred (see Note 5 for more discussion about the details). For the year ended
June 30, 2023, the Company did not recognize any share-based compensation expense. The Company has recognized share-based compensation
expense in the amount of $150,379 for the period from July 19, 2021 (inception) through June 30, 2022.
The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”)
and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants
meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s
own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.
The Company determined that upon further review of the warrant agreements, the Company concluded that its warrants qualify for equity
accounting treatment.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
● | Convertible
Promissory Note |
The Company accounts for
its convertible promissory notes as debt (liability) on the balance sheet based on an assessment of the embedded conversion feature (see
Note 5 — Related Party Transactions) and applicable authoritative guidance in 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”). The assessment
considers the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.
Income taxes are determined in accordance with
the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax basis.
Deferred tax assets and liabilities are measured
using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
ASC 740 prescribes a comprehensive model
for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected
to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more
likely than not the position will be sustained upon examination by the tax authorities. The Company’s management determined that
the Cayman Islands is the Company’s 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 and no amounts accrued for interest and penalties
as of June 30, 2023 and 2022. 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’s tax provision is zero for
the year ended June 30, 2023 and for the period from July 19, 2021 (inception) through June 30, 2022.
The Company is considered to be an exempted Cayman
Islands company, and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
● | Concentration of Credit Risk |
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Depository Insurance Coverage of $250,000. As of June 30, 2023 and 2022, the Company has not experienced losses on these accounts
and management believes the Company is not exposed to significant risks on such accounts.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
● | Fair value of financial instrument |
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates
the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
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). The Company’s financial instruments are classified as either Level
1, Level 2 or Level 3. 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. |
● | Recent accounting pronouncements |
In August 2020, the FASB issued a new standard
(ASU 2020-06) to reduce the complexity of accounting for convertible debt and other equity-linked instruments. For certain convertible
debt instruments with a cash conversion feature, the changes are a trade-off between simplifications in the accounting model (no separation
of an “equity” component to impute a market interest rate, and simpler analysis of embedded equity features) and a potentially
adverse impact to diluted earnings per share by requiring the use of the if-converted method. The new standard will also impact other
financial instruments commonly issued by both public and private companies. For example, the separation model for beneficial conversion
features is eliminated simplifying the analysis for issuers of convertible debt and convertible preferred stock. Also, certain specific
requirements to achieve equity classification and/or qualify for the derivative scope exception for contracts indexed to an entity’s
own equity are removed, enabling more freestanding instruments and embedded features to avoid mark-to-market accounting. The new standard
is effective for companies that are SEC filers (except for smaller reporting companies) for fiscal years beginning after December 15,
2021 and interim periods within that year, and two years later for other companies. Companies can early adopt the standard at the
start of a fiscal year beginning after December 15, 2020. The standard can either be adopted on a modified retrospective or a full
retrospective basis. The adoption of ASU 2020-06 on July 1, 2022 did not have a material effect on the Company’s financial statements.
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.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
NOTE 3 — INITIAL PUBLIC OFFERING
On February 2, 2022, the Company consummated the
Initial Public Offering of 9,200,000 Public Units (including 1,200,000 Public Units issued upon the full exercise of the over-allotment
option). Each Public Unit consists of one Class A Ordinary Share, one-half of one redeemable Public Warrants, each whole Public Warrant
entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, and one Public Right, each
one Public Right entitling the holder thereof to exchange for one-tenth of one Class A Ordinary Share upon the completion of the Company’s
initial Business Combination. The Public Units were sold at an offering price of $10.00 per unit, generating gross proceeds of $92,000,000
on February 2, 2022.
NOTE 4 — PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Company completed the private sale of 424,480 Private Units, including 378,480 Private Units to the Sponsor, and
46,000 Private Units to Maxim, the representative of the several underwriters, respectively. Each Private Unit consists of one Class A
Ordinary Share, one-half of one Private Warrant, and one Private Right. The Private Units were sold at a purchase price of $10.00 per
Private Unit, generating gross proceeds to the Company of $4,244,800. The Private Units are identical to the Public Units sold in the
Initial Public Offering, except that the holders of the Private Units have agreed not to transfer, assign or sell any of the Private Units
and the underlying securities (except to certain permitted transferees) until the completion of the Company’s initial Business Combination.
NOTE 5 — RELATED PARTY TRANSACTIONS
Founder Shares
On August 5, 2021, the Sponsor acquired 2,300,000
Class B ordinary shares, par value $0.0001 per share, (“Founder Shares”) for an aggregate purchase price of $25,000.
As of June 30, 2023 and 2022, there were 2,300,000
Founder Shares issued and outstanding. The aggregate capital contribution was $25,000, or approximately $0.01 per share.
Simultaneously with the effectiveness of the registration
statement and closing of the Initial Public Offering (including the full exercise of over-allotment option), the Sponsor transferred 10,000
Founder Shares to each of Messrs. Alfred “Trey” Hickey and Buhdy Sin Swee Bok at the same price originally paid by the Sponsor
for such shares, pursuant to a certain securities transfer agreement (the “Securities Transfer Agreement”) dated January 31,
2022 among the Company, the transferees and the Sponsor. The transfer was considered to be part of the transferees’ compensation
to become the Company’s independent directors.
The transfer of the Founders Shares to the Company’s
independent directors, as described above, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC
718”). Under ASC 718, share-based compensation associated with equity-classified awards is measured at fair value upon the grant
date. The Company used a Finnerty put model that values the Founder Shares granted to the directors. The key inputs into the Finnerty
put model were (i) risk- free interest rate of 1.33%, (ii) volatility of 8.50%, (iii) estimated term of 2.37 years. According to the Finnerty
put model, the fair value of the 20,000 shares transferred to the Company’s independent directors was approximately $150,379 or
$7.519 per share.
Due to Related Parties
From time to time, Mr. Liang Shi, the Company’s
Director, Chief Executive Officer, Secretary and Chairman, would incur travel costs to search for targets. As of June 30, 2023, due to
Mr. Liang Shi amounted to $3,504.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Promissory Notes — Related
Party
On August 5, 2021, the Sponsor has agreed
to loan the Company up to an aggregate amount of $500,000 to be used, in part, for transaction costs incurred in connection with the Initial
Public Offering. For the period from July 19, 2021 (inception) through February 2, 2022, the date of the completion of the Initial Public
Offering, the Sponsor loaned the Company in the amount of $287,547. On February 7, 2022, the related party promissory note was repaid
in full.
On November 30, 2022, the Company issued an unsecured
promissory note (the “Sponsor Note 1”) in the principal amount of $400,000 to the Sponsor. The proceeds of the Sponsor Note
1 was used as general working capital purposes.
On January 31, 2023, the Company issued an unsecured
promissory note (the “Extension Note 1”) in the principal amount of $920,000 to the Sponsor. The proceeds of the Extension
Note 1 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination by three months from February 2, 2023 to May 2, 2023.
On May 2, 2023, the Company issued an unsecured
promissory note (the “Extension Note 2”) in the principal amount of $194,324 to the Sponsor. The proceeds of the Extension
Note 2 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination from May 2, 2023 to June 2, 2023.
On June 2, 2023, the Company issued an unsecured
promissory note (the “Extension Note 3”) in the principal amount of $194,324 to the Sponsor. The proceeds of the Extension
Note 3 was deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period
of time it has to consummate its initial Business Combination from June 2, 2023 to July 2, 2023.
On June 30, 2023, the Company issued an unsecured
promissory note (the “Extension Note 4” together with Extension Note 1, 2, and 3, collectively, the “Extension Notes”)
in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension Note 4 was deposited into the Company’s Trust Account
for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial Business Combination
from July 2, 2023 to August 2, 2023.
On July 31, 2023, the Company issued an unsecured
promissory note (the “Sponsor Note 2,” together with the Sponsor Note 1, collectively, the “Sponsor Notes”) in
the principal amount of $120,000 to the Sponsor. The proceeds of the Sponsor Note 2, which may be drawn down from time to time until the
Company consummates its initial business combination, will be used as general working capital purposes. As of June 30, 2023, the
Company has drawn down $103,437 prior to the issuance of the Sponsor Note 2 on July 31, 2023.
The Extension Notes together with the Sponsor
Notes (collectively refer herein as “Promissory Notes”) issued to the Sponsor have the same payment and conversion term as
discussed below.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The Promissory Notes bear no interest and is payable
in full upon the earlier to occur of (i) the consummation of the Business Combination or (ii) the date of expiry of the term of the Company
(the “Maturity Date”). The following shall constitute an event of default: (i) a failure to pay the principal within five
business days of the Maturity Date; (ii) the commencement of a voluntary or involuntary bankruptcy action, (iii) the breach of the Company’s
obligations thereunder; (iv) any cross defaults; (v) an enforcement proceedings against the Company; and (vi) any unlawfulness and invalidity
in connection with the performance of the obligations thereunder, in which case the Promissory Notes may be accelerated.
The payee of the Promissory Notes, the Sponsor,
has the right, but not the obligation, to convert the Promissory Notes, in whole or in part, respectively, into private units (the “Conversion
Units”) of the Company, each consisting of one Class A Ordinary Share, one-half of one warrant, and one right to receive one-tenth
(1/10) of one Class A Ordinary Share upon the consummation of a Business Combination, as described in the prospectus of the Company (File
Number 333-261585), by providing the Company with written notice of the intention to convert at least two business days prior to the closing
of the Business Combination. The number of Conversion Units to be received by the Sponsor in connection with such conversion shall be
an amount determined by dividing (x) the sum of the outstanding principal amount payable to such Payee by (y) $10.00.
In order to meet the Company’s working capital needs following
the consummation of the Initial Public Offering, the Sponsor, officers and directors or their affiliates may, but are not obligated to,
loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion (the “Working
Capital Loans”). Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of the
Company initial Business Combination, without interest, or, at the lender’s discretion, may be converted upon consummation of the
Company’s Business Combination into private units at a price of $10.00 per unit. If the Company does not complete a Business
Combination, the loans would be repaid out of funds not held in the Trust Account, and only to the extent available. The Company’s
shareholders have approved the issuance of the units and underlying securities upon conversion of such notes, to the extent the holder
wishes to so convert them at the time of the consummation of its initial Business Combination. If the Company does not complete a Business
Combination, the loans will not be repaid.
As of June 30, 2023 and 2022, the Company had
borrowings of $1,872,085 and $0 under the Promissory Notes, respectively.
Administrative Services Agreement
The Company is obligated, commencing from the
effective date of the Initial Public Offering to pay the Sponsor, a monthly fee of $10,000 for general and administrative services. This
agreement was signed by the Company and the Sponsor on January 31, 2022 and it will terminate upon completion of the Company’s Business
Combination or the liquidation of the Trust Account to public shareholders. The Company has recognized operating costs under the Administrative
Services Agreement in the amount of $120,000 and $50,000 for the year ended June 30, 2023 and for the period from July 19, 2021 (inception)
through June 30, 2022, respectively. As of June 30, 2023 and 2022, the Company had $60,000 and $20,000, respectively, accrued under the
Administrative Services Agreement due to the Sponsor.
NOTE 6 — SHAREHOLDERS’ EQUITY
Preference Shares — The Company
is authorized to issue 10,000,000 preference shares with a par value of $0.0001 per share. As of June 30, 2023 and 2022, there were no
preference shares issued or outstanding.
Class A Ordinary Shares — The
Company is authorized to issue 470,000,000 Class A Ordinary Shares with a par value of $0.0001 per share. As of June 30, 2023 and
2022, there were 464,480 Class A Ordinary Shares issued and outstanding, excluding 6,587,231 shares and 9,200,000 shares, respectively,
subject to possible redemption.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
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. On August 5, 2021,
the Company issued 2,300,000 Class B ordinary shares. Of the 2,300,000 Class B ordinary shares outstanding, an aggregate of
up to 300,000 shares are subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriter’s
over-allotment option is not exercised in full or in part, so that the initial shareholders will collectively own 20% of the Company’s
issued and outstanding ordinary shares after the Initial Public Offering (assuming they do not purchase any units in the Initial Public
Offering and excluding the Class A Ordinary Shares underlying the Private Units). If the Company increases or decreases the size
of the Initial Public Offering, it will effect a share dividend or a share contribution back to capital or other appropriate mechanism,
as applicable, with respect to Class B ordinary shares immediately prior to the consummation of the offering in such amount as to
maintain the ownership of the initial shareholders at 20% of the issued and outstanding ordinary shares of the Company upon the consummation
of the Initial Public Offering (assuming they do not purchase Units in the Initial Public Offering and excluding the Private Shares).
As a result of the underwriters’ election to fully exercise their over-allotment option on February 2, 2022, no Class B ordinary
shares are currently subject to forfeiture.
Rights
As of June 30, 2023 and 2022, there were 9,200,000
Public Rights and 424,480 Private Rights outstanding. Except in cases where the Company is not the surviving company in a Business
Combination, each holder of a Public Right will automatically receive one-tenth (1/10) of one Class A Ordinary Share upon consummation
of a Business Combination, even if the holder of a Public Right redeemed all Class A Ordinary Shares held by him, her or it in connection
with a Business Combination or an amendment to the Company’s Amended and Restated Memorandum and Articles of Association with respect
to its pre-business combination activities. In the event the Company will not be the surviving company upon completion of the initial
Business Combination, each registered holder of a right will be required to affirmatively redeem his, her or its rights in order to receive
the kind and amount of securities or properties of the surviving company that the one-tenth (1/10) of one Class A Ordinary Share underlying
each right is entitled to upon consummation of the Business Combination. No additional consideration will be required to be paid by a
holder of Public Rights in order to receive his, her or its additional ordinary shares upon consummation of a Business Combination. The
shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company). If the Company
enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement
will provide for the holders of Public Rights to receive the same per share consideration the holders of Class A Ordinary Shares will
receive in the transaction on an as-converted into ordinary shares basis.
The Company will not issue fractional shares in
connection with an exchange of Public Rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed
in accordance with the applicable provisions of the Companies Act and any other applicable. As a result, the holders of the Public Rights
must hold rights in multiples of 10 in order to receive shares for all of the holders’ rights upon closing of a Business Combination.
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 Rights will not receive any of such funds with respect to their Public Rights, nor will they receive
any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Rights, and the Public
Rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the Public
Rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights.
Accordingly, the rights may expire worthless.
Redeemable Warrants
As of June 30, 2023 and 2022, there were 4,600,000
Public Warrants and 212,240 Private Warrants outstanding. Each whole redeemable warrant entitles the registered holder to purchase
one Class A Ordinary Shares at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the
later of the thirty (30) days after the completion of an initial Business Combination and one (1) year from the consummation of the
Initial Public Offering. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares.
However, except as set forth below, no warrants will be exercisable for cash unless the Company has an effective and current registration
statement covering the Class A Ordinary Shares issuable upon exercise of the warrants and a current prospectus relating to such Class A
Ordinary Shares. Notwithstanding the foregoing, if a registration statement covering the Class A Ordinary Shares issuable upon exercise
of the warrants is not effective within 90 days from the consummation of the Company’s initial Business Combination, warrant
holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed
to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption from registration provided
by Section 3(a)(9) of the Securities Act provided that such exemption is available. If an exemption from registration is not
available, holders will not be able to exercise their warrants on a cashless basis. The warrants will expire five years from the
consummation of the Initial Public Offering at 5:00 p.m., Eastern Standard Time.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The Company may call the warrants for redemption
(excluding the private warrants), in whole and not in part, at a price of $0.01 per warrant:
|
● |
at any time while the warrants are exercisable, |
|
● |
upon not less than 30 days’ prior written notice of redemption to each warrant holder, |
|
● |
if, and only if, the reported last sale price of the Class A Ordinary Shares equals or exceeds $16.50 per share (as adjusted for share dividends, share splits, share aggregation, extraordinary dividends, reorganizations, recapitalizations and the like), for any 20 trading days within any 30-trading day period commencing after the warrant become exercisable and ending one the third trading day prior to the date on which notice of redemption is given to warrant holders (the “Force-Call Provision”), and |
|
● |
if, and only if, there is a current registration statement in effect with respect to the Class A Ordinary Shares underlying such warrants at the time of redemption and for the entire 30-days trading period referred to above and continuing each day thereafter until the date of redemption. |
The right to exercise will be forfeited unless
the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder
of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such
warrant.
The redemption criteria for the Company’s
warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price
and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price
declines as a result of the Company’s redemption call, the redemption will not cause the share price to drop below the exercise
price of the warrants.
If the Company call the warrants for redemption
as described above, its management will have the option to require all holders that wish to exercise warrants to do so on a “cashless
basis.” In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of Class A
Ordinary Shares equal to the quotient obtained by dividing (x) the product of the number of Class A Ordinary Shares underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined
below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class Ordinary
Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to
the holders of warrants.
Whether the Company will exercise its option to
require all holders to exercise their warrants on a “cashless basis” will depend on a variety of factors including the price
of its Class A Ordinary Shares at the time the warrants are called for redemption, its cash needs at such time and concerns regarding
dilutive share issuances.
In addition, if the Company (a) issues additional
Class A Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business
Combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to
be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Company’s initial
shareholders or their affiliates, without taking into account any Class B ordinary shares issued prior to the offering and held by
the initial shareholders or their affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (b) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for
the funding of its initial Business Combination on the date of the consummation of its initial Business Combination (net of redemptions),
and (c) the volume weighted average trading price of the Company’s Class A Ordinary Shares during the 20 trading
day period starting on the trading day prior to the date of the consummation of the Company’s initial Business Combination
(such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the
nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the Newly Issued Price, and the $16.50 per
share redemption trigger price described below under “Redemption of warrants” will be adjusted (to the nearest cent) to be
equal to 180% of the greater of (i) the Market Value or (ii) the Newly Issued Price.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The warrants may be exercised upon surrender of
the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse
side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or
official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do not have the rights or
privileges of holders of Class A Ordinary Shares and any voting rights until they exercise their warrants and receive Class A
Ordinary Shares. After the issuance of Class A Ordinary Shares upon exercise of the warrants, each holder will be entitled to one
vote for each share held of record on all matters to be voted on by shareholders.
The Private Warrants have terms and provisions
that are identical to those of the Public Warrants being sold as part of the Public Units in the Initial Public Offering except that the
Private Warrants will be entitled to registration rights. The Private Warrants (including the Class A Ordinary Shares issuable upon exercise
of the Private Warrants) will not be transferable, assignable or saleable until the completion of the Company’s initial Business
Combination except to permitted transferees, subject to certain exceptions.
NOTE 7 — COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares issued and outstanding
on the date of the Company’s prospectus, as well as the holders of the Private Units (and all underlying securities) and any
securities its initial shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to
the Company, will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Initial
Public Offering. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing
three months prior to the date on which these ordinary shares are to be released from escrow. The holders of a majority of the Private
Units (and underlying securities) and securities issued in payment of Working Capital Loans (or underlying securities) or extension
loans can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the
holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation
of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Representative will be entitled to a deferred
fee of 3.5% of the gross proceeds of the Initial Public Offering, or $3,220,000 upon consummation of the Company’s initial Business
Combination.
Representative Shares
The Company issued 40,000 Representative Shares
to Maxim as part of Representative compensation. The Representative Shares are identical to the Public Shares except that Maxim has agreed
not to transfer, assign or sell any such Representative Shares until the completion of the Company’s initial Business Combination.
In addition, Maxim has agreed (i) to waive its redemption rights with respect to such shares in connection with the completion of
the Company’s initial Business Combination and (ii) to waive its rights to liquidating distributions from the Trust Account
with respect to such shares if the Company fails to complete its initial Business Combination within the Combination Period.
The Representative Shares have been deemed compensation
by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the
registration statement of which this prospectus forms a part pursuant to FINRA Rule 5110 (e)(1). Pursuant to FINRA Rule 5110(e)(1),
these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic
disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration
statement of which this prospectus forms a part, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of
180 days immediately following January 31, 2022, the effective date of the Company’s registration statement except to any underwriter
and selected dealer participating in the offering and their officers, partners, registered persons or affiliates.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Right of First Refusal
Subject to certain conditions, the Company granted
Maxim, for a period of 12 months after the date of the consummation of its Business Combination, a right of first refusal to act
as book running manager with at least 50% of the economics; for any and all future public and private equity and debt offerings. In accordance
with FINRA Rule 5110(g)(6), such right of first refusal shall not have a duration of more than three years from the commencement
of sales of the offering.
NOTE 8 — FAIR VALUE MEASUREMENTS
As of June 30, 2023 and 2022, investment securities
in the Company’s Trust Account consisted of a treasury securities fund in the amount of $70,186,561 and $93,054,401, respectively,
which was held as money market funds. The following table presents information about the Company’s assets and liabilities that
were measured at fair value on a recurring basis as of June 30, 2023 and 2022, and indicates the fair value hierarchy of the valuation
techniques the Company utilized to determine such fair value.
June 30, 2023 | |
Carrying Value | | |
Quoted Prices in Active Markets (Level 1) | | |
Significant Other Observable Inputs (Level 2) | | |
Significant Other Unobservable Inputs (Level 3) | |
Assets: | |
| | |
| | |
| | |
| |
Investments held in Trust Account – Money Market Funds | |
$ | 70,186,561 | | |
$ | 70,186,561 | | |
$ | - | | |
$ | - | |
Total | |
$ | 70,186,561 | | |
$ | 70,186,561 | | |
$ | - | | |
$ | - | |
June 30, 2022 | |
Carrying Value | | |
Quoted Prices in Active Markets (Level 1) | | |
Significant Other Observable Inputs (Level 2) | | |
Significant Other Unobservable Inputs (Level 3) | |
Assets: | |
| | |
| | |
| | |
| |
Investments held in Trust Account – Money Market Funds | |
$ | 93,054,401 | | |
$ | 93,054,401 | | |
$ | - | | |
$ | - | |
Total | |
$ | 93,054,401 | | |
$ | 93,054,401 | | |
$ | - | | |
$ | - | |
The following table presents information about
the Company’s equity instrument that are measured at fair value on a non-recurring basis at February 2, 2022, and indicates
the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| |
Level | | |
February 2, 2022 | |
Equity instrument: | |
| | |
| |
Representative shares | |
| 3 | | |
$ | 308,258 | |
The Company used a Finnerty put model that values
the Representative Shares granted to Maxim Group LLC. The key inputs into the Finnerty put model were (i) risk- free interest rate of
0.94%, (ii) volatility of 8.50%, (iii) estimated term of 1.45 years. According to the Finnerty put model, the fair value of the 40,000
Representative Shares was approximately $308,258 or $7.706 per share.
BLUE WORLD
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
NOTE 9 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that these financial statements were issued. Except as discussed below, the
Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.
Escrow Account
At the June 2023 Meeting,
among the other proposals, the shareholders of the Company also approved the release of the funds held in the Escrow Account pursuant
to the D&O Reserve Fund Escrow Agreement, dated January 31, 2022 (the “D&O Indemnity Escrow Agreement”), by and between
the Company and Continental Stock Transfer & Trust Company, as escrow agent, on July 2, 2023 or such a later date immediately following
the purchase of an alternative D&O insurance. Upon the approval, the Company secured an alternative D&O insurance, effective on
July 1, 2023. On July 4, 2023, a total of $500,000 funds held in the Escrow Account was released to the Company, a portion of which was
used to purchase the alternative D&O insurance.
Extension Notes
On
July 31, 2023, the Company issued an unsecured promissory note (the “Extension Note 5”) in the principal amount of $60,000
to the Sponsor. The proceeds of the Extension Note 5 was deposited into the Company’s Trust Account for the public shareholders,
which enables the Company to extend the period of time it has to consummate its initial Business Combination from August 2, 2023 to September
2, 2023.
On
September 1, 2023, the Company issued an unsecured promissory note (the “Extension Note 6”) in the principal amount of $60,000
to the Sponsor. The proceeds of the Extension Note 6 was deposited into the Company’s Trust Account for the public shareholders,
which enables the Company to extend the period of time it has to consummate its initial Business Combination from September 2, 2023 to
October 2, 2023.
On September 28, 2023, the Company issued an unsecured promissory note
(the “Extension Note 7”) in the principal amount of $60,000 to the Sponsor. The proceeds of the Extension Note 7 was deposited
into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period of time it has to consummate
its initial Business Combination from October 2, 2023 to November 2, 2023.
Redemptions
On June 30, 2023, the Company held the
June 2023 Meeting at which the Company’s shareholders approved the adoption of the Third Amended and Restated Memorandum
and Articles of Association of the Company, which provides that the Company has until July 2, 2023 to complete a Business Combination,
and may elect to extend the period to consummate a Business Combination up to nine times, each by an additional one-month extension,
for a total of up to nine months to April 2, 2024, by depositing $60,000 each month to the Trust Account. As a result of June
30 Meeting, upon the shareholders’ approval, on June 30, 2023, the Company and Continental Stock Transfer & Trust Company entered
into the amendment to the Trust Agreement. In connection with the June 2023 Meeting, 2,749,465 Class A Ordinary Shares were rendered for
redemption, and approximately $29.3 million was released from the Trust Account to pay such redeeming shareholders in July 2023.
Merger Agreement
On August 10, 2023, the
Company entered into an Agreement and Plan of Merger (as the same may be amended, restated or supplemented, the “Merger Agreement”)
with TOYO Co., Ltd, a Cayman Islands exempted company (“PubCo”), TOYOone Limited, a Cayman Islands exempted company (“Merger
Sub”), TOPTOYO INVESTMENT PTE. LTD., a Singapore private company limited by shares (“SinCo”), Vietnam Sunergy Cell Company
Limited, a Vietnamese company, (the “Company”, together with PubCo, Merger Sub and SinCo, the “Group Companies”,
or each individually, a “Group Company”), Vietnam Sunergy Joint Stock Company, a Vietnam joint stock company (“VSUN”),
and Fuji Solar Co., Ltd, a Japanese company (“Fuji Solar”, together with VSUN, the “Shareholders”, or individually,
a “Shareholder”).
Pursuant to the Merger
Agreement, (a) the Group Companies, VSUN and Fuji Solar shall consummate a series of transactions involving the Group Companies, including
(A) PubCo acquiring one hundred percent (100%) of the issued and paid-up share capital of SinCo from Fuji Solar in exchange for one (1)
ordinary share of PubCo, par value US$0.0001 per share (the “PubCo Ordinary Shares” and such transaction, the “Share
Exchange”), and (B) SinCo acquiring one hundred percent (100%) of the issued and outstanding shares of capital stock of the Company
from VSUN at an aggregate consideration of no less than US$50,000,000 (the “SinCo Acquisition,” and together with the Share
Exchange, the “Pre-Merger Reorganization”), as a result of which (i) SinCo shall become a wholly-owned subsidiary of PubCo,
(ii) the Company shall become a wholly-owned subsidiary of SinCo; and (iii) immediately prior to the closing of the SinCo Acquisition,
Fuji Solar (the “Seller”) shall hold an aggregate of 41,000,000 PubCo Ordinary Shares, representing all issued and outstanding
share capital of PubCo, and (b) following the consummation of the Pre-Merger Reorganization, BWAQ shall merge with and into Merger Sub,
with Merger Sub continuing as the surviving company (the “Merger”), as a result of which, among other things, all of the issued
and outstanding securities of BWAQ immediately prior to the filing of the plan of merger with respect to the Merger (the “Plan of
Merger”) to the Registrar of Companies of the Cayman Islands, or such later time as may be specified in the Plan of Merger (the
“Merger Effective Time”) shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of
the holders thereof to receive substantially equivalent securities of PubCo, in each case, upon the terms and subject to the conditions
set forth in the Merger Agreement and in accordance with the provisions of the Companies Act (Revised) of the Cayman Islands and other
applicable laws.
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Pursuant to our amended and restated memorandum
and articles of association, our authorized share capital consists of 470,000,000 Class A ordinary shares of par value $0.0001 each,
20,000,000 Class B ordinary shares of $0.0001 par value each, and 10,000,000 preference shares of $0.0001 par value each. The following
description summarizes the material terms of our share capital. Because it is only a summary, it may not contain all the information that
is important to you.
Each unit consists of one Class A ordinary share,
one-half of one redeemable warrant, and one right. Each whole redeemable warrant entitles the holder thereof to purchase one Class
A ordinary share. Each redeemable warrant has an exercise price $11.50 per share and shall expire on the five-year anniversary of
the consummation of the initial business combination. Pursuant to the warrant agreement, a warrant holder may exercise his, her or its
warrants only for a whole number of Class A ordinary shares. This means that only a whole warrant may be exercised at any given time by
a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly,
unless you purchase at least two units, you will not be able to receive or trade a whole warrant. Each right entitles the holder thereof
to receive one-tenth (1/10) of an ordinary share upon consummation of our initial business combination. In addition, we will not
issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share
or otherwise addressed in accordance with the applicable provisions of Cayman Islands Law. As a result, you must hold rights in multiples
of 10 in order to receive shares for all of your rights upon closing of a business combination.
The Class A ordinary shares, warrants, and rights
began to trade separately on March 16, 2022, prior to which we have filed an audited balance sheet reflecting our receipt of the gross
proceeds of We have filed a Current Report on Form 8-K which included an audited balance sheet promptly upon the consummation
of our initial public offering (the “IPO”).
As of the date of the Company’s annual report
on Form 10-K for the fiscal year ended June 30, 2023, 6,602,246 ordinary shares are outstanding, consisting of:
Ordinary shareholders of record are entitled to
one vote for each share held on all matters to be voted on by shareholders. Holders of the Class A ordinary shares and holders of the
Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders, except as required
by law. Unless specified in our amended and restated memorandum and articles of association, or as required by applicable provisions of
the Companies Act or applicable share exchange rules, the affirmative vote of a majority of our issued and outstanding ordinary shares
that are voted at a shareholder meeting (in person or by proxy) is required to approve any such matter voted on by our shareholders. Approval
of certain actions will require a special resolution under Cayman Islands law and pursuant to our amended and restated memorandum and
articles of association; such actions include amending our amended and restated memorandum and articles of association and approving a
statutory merger or consolidation with another company.
Our board of directors are divided into three
classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year.
There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares
voted for the election of directors can elect all of the directors. Our shareholders are entitled to receive ratable dividends when, as
and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated memorandum of
association authorizes the issuance of up to 470,000,000 Class A ordinary shares, if we were to enter into a business combination,
we may (depending on the terms of such a business combination) be required to increase the number of Class A ordinary shares which
we are authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder approval
in connection with our 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 as of two business days prior to the consummation
of our initial business combination including interest earned on the funds held in the trust account and not previously released to us
to pay our taxes, 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 approximately $10.10 per public share. The per-share amount we will distribute to
investors who properly redeem their shares will not be reduced by deferred underwriting discounts and commissions we will pay to the underwriters.
Our founders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect
to any founder shares, private shares and any public shares held by them in connection with the completion of our business combination.
Unlike many blank check companies that hold shareholder
votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public
shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a shareholder vote is
not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended
and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender
offer documents with the SEC prior to completing our initial business combination. Our amended and restated memorandum and articles of
association will require these tender offer documents to contain substantially the same financial and other information about the initial
business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, shareholder approval of
the transaction is required by law, or we decide to obtain shareholder approval for business or other legal reasons, we will, like many
blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to
the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if a majority of the outstanding
ordinary shares voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in
person or by proxy of shares of issued and outstanding ordinary shares of the company representing a majority of all ordinary shares of
the company entitled to vote at such meeting. However, the participation of our founders or their affiliates in privately-negotiated transactions
(as described in this prospectus), if any, could result in the approval of our business combination even if a majority of our public shareholders
vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our
outstanding ordinary shares voted, non-votes will have no effect on the approval of our business combination once a quorum is obtained.
We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if
required, at which a vote shall be taken to approve our business combination. These quorum and voting thresholds, and the voting agreements
of our initial shareholders, may make it more likely that we will consummate our initial business combination.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
our amended and restated memorandum and articles of association provides 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 Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares of ordinary
share sold in this offering, which we refer to as the Excess Shares. However, we would not be restricting our shareholders’ ability
to vote all of their shares (including Excess Shares) for or against our business combination. Our shareholders’ inability to redeem
the Excess Shares will reduce their influence over our ability to complete our business combination, and such shareholders could suffer
a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such shareholders will not receive
redemption distributions with respect to the Excess Shares if we complete the business combination. And, as a result, such shareholders
will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares
in open market transactions, potentially at a loss.
If we seek shareholder approval in connection with
our business combination, our founders have agreed to vote their founder shares and private shares as well as any public shares purchased
during or after the IPO in favor of our initial business combination. As a result, in addition to our founder shares and private shares,
we would need 1,677,018, or 43.70%%, of the 3,837,766 public shares sold in this offering to be voted in favor of an initial business
combination (assuming all outstanding shares are voted in favor of the business combination in order to have our initial business combination
approved) or no additional public shares sold in this offering are needed to be voted in favor of a transaction (assuming only a quorum
is present at such meeting held to vote on our initial business combination) in order to have our initial business combination approved
(assuming the over-allotment option is not exercised). Additionally, each public shareholder may elect to redeem its public shares
irrespective of whether it votes for or against the proposed transaction (subject to the limitation described in the preceding paragraph).
Pursuant to our amended and restated memorandum and
articles of association, if we are unable to complete our business combination by April 2, 2024, if extended, from the effective date,
we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than
ten business days thereafter subject to lawfully available funds therefor, 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 us to pay our taxes (less up to 50,000 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), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject
in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
Our initial shareholders have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder
shares and private shares held by them if we fail to complete our business combination with the prescribed time period. However, if our
initial shareholders acquire public shares after the IPO, they will be entitled to liquidating distributions from the trust account with
respect to such public shares if we fail to complete our business combination within the prescribed time period. As of the date of this
Annual Report for the fiscal year ended June 30, 2023, an aggregate of $1,548,648 had been deposited into the Trust Account for the extensions
of the timeline to complete a business combination.
In the event of a liquidation, dissolution or
winding up of the company after a business combination, our shareholders are entitled to share ratably in all assets remaining available
for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference
over the ordinary share. Our shareholders have no pre-emptive or other subscription rights. There are no sinking fund provisions
applicable to the ordinary share, except that we will provide our public shareholders with the opportunity to redeem their public shares
for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion of our initial
business combination, subject to the limitations described herein.
The founder shares will automatically convert
into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, or earlier
at the option of the holder thereof, on a one-for-one basis (subject to adjustments for share splits, share dividends, recapitalization,
reorganization, or the like). In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed
issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion of all founder
shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares (excluding
the representative shares) outstanding upon the completion of this offering, plus the total number of Class A ordinary shares issued,
or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the
Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares
or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in
the initial business combination and any private units issued to our sponsor upon conversion of working capital loans; provided that such
conversion of founder shares will never occur on a less than one for one basis.
Under Cayman Islands law, we must keep a register
of members and there will be entered therein:
For these purposes, “voting rights”
means rights conferred on shareholders in respect of their shares to vote at general meetings of the company on all or substantially all
matters. A voting right is conditional where the voting right arises only in certain circumstances.
Under Cayman Islands law, the register of members
of our company is prima facie evidence of the matters set out therein (i.e., the register of members will raise a presumption of fact
on the matters referred to above unless rebutted) and a member registered in the register of members will be deemed as a matter of Cayman
Islands law to have legal title to the shares as set against its name in the register of members. Upon the closing of this public offering,
the register of members will be immediately updated to reflect the issue of shares by us. Once our register of members has been updated,
the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name. However,
there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the
register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of
members maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal
position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then
the validity of such shares may be subject to re-examination by a Cayman Islands court.
No warrants are currently outstanding. Each whole
redeemable warrant entitles the registered holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment
as discussed below, at any time commencing on the later of the 30 days after the completion of an initial business combination and 12 months
from the closing of this offering. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number
of shares. However, except as set forth below, no warrants will be exercisable for cash unless we have an effective and current registration
statement covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such Class
A ordinary shares. Notwithstanding the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise
of the warrants is not effective within 90 days from the consummation of our initial business combination, warrant holders may, until
such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration
statement, exercise warrants on a cashless basis pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities
Act provided that such exemption is available. If an exemption from registration is not available, holders will not be able to exercise
their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the
warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class
A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair
market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average
reported last sale price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which
the notice of redemption is sent to the holders of warrants. The warrants will expire on the fifth anniversary of our completion of an
initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The private warrants, as well as any warrants
underlying additional units we issue to our sponsor, officers, directors, initial shareholders or their affiliates in payment of working
capital loans and extension loans, if any, made to us, will be identical to the warrants underlying the units being offered by this prospectus.
We may call the warrants for redemption, in whole
and not in part, at a price of $0.01 per warrant:
The right to exercise will be forfeited unless
the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder
of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such
warrant.
The redemption criteria for our warrants have
been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide
a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines
as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.
If we call the warrants for redemption as described
above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”
In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of Class A ordinary shares
equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied
by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market
value. The “fair market value” shall mean the average reported last sale price of the Class A ordinary shares for the 10 trading
days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
The warrants will be issued in registered form
under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder (i) to cure any ambiguity or correct any mistake, including
to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth
in this prospectus, or to cure, correct or supplement any defective provision, or (ii) to add or change any other provisions with respect
to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and
that the parties deem to not adversely affect the interests of the registered holders of the warrants. The warrant agreement requires
the approval, by written consent or vote, of the holders of at least 50% of the then outstanding public warrants in order to make any
change that adversely affects the interests of the registered holders.
The exercise price and number of Class A ordinary
shares issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of share dividends, share
splits, share aggregation, extraordinary dividends, recapitalization, reorganization and the like. However, except as described below,
the warrants will not be adjusted for issuances of Class A ordinary shares at a price below their respective exercise prices.
In addition, if (x) we issue additional Class
A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business
combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to
be determined in good faith by our board of directors and, in the case of any such issuance to our initial shareholders or their affiliates,
without taking into account any Class B ordinary shares issued prior to the offering and held by the initial shareholders or their affiliates,
as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent
more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the
date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of
our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the date of the consummation of our
initial business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants
will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the Newly Issued Price, and
the $16.50 per share redemption trigger price described below under “Redemption of warrants” will be adjusted (to the nearest
cent) to be equal to 180% of the greater of (i) the Market Value or (ii) the Newly Issued Price.
The warrants may be exercised upon surrender of
the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse
side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or
official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges
of holders of Class A ordinary shares and any voting rights until they exercise their warrants and receive Class A ordinary shares. After
the issuance of Class A ordinary shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of
record on all matters to be voted on by shareholders.
Warrant holders may elect to be subject to a restriction
on the exercise of their warrants such that an electing warrant holder would not be able to exercise their warrants to the extent that,
after giving effect to such exercise, such holder, to the warrant agent’s actual knowledge, would beneficially own in excess of
9.8% of the ordinary shares issued and outstanding.
No fractional shares will be issued upon exercise
of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon
exercise, round up or down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. Therefore,
you must separate your units in multiples of two to not have any fractional warrants cancelled.
We have agreed that, subject to applicable law,
any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced
in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit
to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies
to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts
of the United States of America are the sole and exclusive forum.
Except in cases where we are not the surviving
company in a business combination, each holder of a right will automatically receive one-tenth (1/10) of one Class A ordinary
share upon consummation of our initial business combination, even if the holder of a public right redeemed all ordinary shares held by
him, her or it in connection with the initial business combination or an amendment to our amended and restated memorandum and articles
of association with respect to our pre-business combination activities. In the event we will not be the surviving company upon completion
of our initial business combination, each registered holder of a right will be required to affirmatively redeem his, her or its rights
in order to receive the kind and amount of securities or properties of the surviving entity that each one-tenth (1/10) of a share
of Class A ordinary shares underlying each right is entitled to upon consummation of the business combination. No additional consideration
will be required to be paid by a holder of rights in order to receive his, her or its additional ordinary shares upon consummation of
an initial business combination. The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by
affiliates of ours). If we enter into a definitive agreement for a business combination in which we will not be the surviving entity,
the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary
shares will receive in the transaction on an as-converted into ordinary shares basis.
We will not issue fractional shares in connection
with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance
with the applicable provisions of the Companies Act and any other applicable law. As a result, you must hold rights in multiples of 10
in order to receive shares for all of your rights upon closing of a business combination. If we are unable to complete an initial business
combination within the required time period and we liquidate the funds held in the trust account, holders of rights will not receive any
of such funds with respect to their rights, nor will they receive any distribution from our assets held outside of the trust account with
respect to such rights, and the rights will expire worthless. Additionally, in no event will we be required to net cash settle the rights.
Accordingly, the rights may expire worthless.
The Company shall reserve such amount of its profits
or share premium in order to pay up the par value of each share issuable in respect of the rights.
We have not paid any cash dividends on our ordinary
shares to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends
in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent
to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion
of our board of directors at such time and we will only pay such dividend out of our profits or share premium (subject to solvency requirements)
as permitted under Cayman Islands law. If we increase the size of the offering, in which case we will effect a capitalization immediately
prior to the consummation of the offering in such amount as to maintain the ownership of founder shares by our sponsor or its assignee
prior to this offering at 20% of the issued and outstanding ordinary shares upon the consummation of this offering (excluding the sale
of the private shares and assuming our founders do not purchase public shares in this offering). Further, if we incur any indebtedness,
our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
The transfer agent for our Class A ordinary
shares, warrant agent for our warrant, and rights agent for our rights is Continental Stock Transfer & Trust Company, LLC, 6201
15th Avenue, Brooklyn, NY 11219.
Our units, and the Class A ordinary shares, warrants,
and rights are trading separately, listed on Nasdaq under the symbols “BWAQU,” “BWAQ,” “BWAQW,” and
“BWAQR,” respectively. Although, after giving effect to the IPO, we meet on a pro forma basis the minimum initial listing
standards of Nasdaq, which generally only requires that we meet certain requirements relating to shareholders’ equity, market capitalization,
aggregate market value of publicly held shares and distribution requirements, we cannot assure you that our securities will continue to
be listed on Nasdaq as we might not meet certain continued listing standards.
The Parties, intending to be legally bound hereby,
have caused this Note to be duly executed by the undersigned as of the day and year first above written.
In connection with the Annual
Report on Form 10-K of Blue World Acquisition Corporation (the “Company”), as filed with the Securities and Exchange Commission
on the date hereof (the “Report”), I, Liang Shi, Chief Executive Officer of the Company, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
In connection with the Annual
Report on Form 10-K of Blue World Acquisition Corporation (the “Company”), as filed with the Securities and Exchange Commission
on the date hereof (the “Report”), I, Tianyong Yan, Chief Financial Officer of the Company, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: