ASPC 10-Q
ASPAC III Acquisition Corp. (ASPC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
| The | ||||
| The | ||||
| The |
Check whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.
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 (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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 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 | ☐ |
| ☒ | 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
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As
of May 9, 2025,
A SPAC III ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025
TABLE OF CONTENTS
i
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its initial public offering filed with the SEC on November 8, 2024 (the “Prospectus”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
ii
PART I – FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements.
A SPAC III ACQUISITION CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2025 AND DECEMBER 31, 2024
| As of March 31, 2025 | As of December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Cash | $ | $ | ||||||
| Due from related party | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Investments held in trust account | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Shares Subject to Redemption and Shareholders’ Equity | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Promissory note - related party | ||||||||
| Total current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 6) | ||||||||
| Class A ordinary shares, par value; | ||||||||
| Shareholders’ Equity: | ||||||||
| Preference shares, par value; | ||||||||
| Class A ordinary shares, par value; | ||||||||
| Class B ordinary shares, par value; | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings (accumulated deficit) | ( | ) | ||||||
| Total shareholders’ equity | ||||||||
| Total Liabilities, Shares Subject to Redemption and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
1
A SPAC III ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| General and administrative expenses | $ | $ | ||||||
| Loss from Operations | ( | ) | ||||||
| Other income: | ||||||||
| Interest income | ||||||||
| Income before tax expense | ||||||||
| Tax expense | ||||||||
| Net income | $ | $ | ||||||
| Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption | ||||||||
| Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | $ | $ | ||||||
| Basic and diluted weighted average shares outstanding, Class A and Class B ordinary shares not subject to redemption(1)(2) | ||||||||
| Basic and diluted net loss per share, Class A and Class B ordinary shares not subject to redemption | $ | ( | ) | $ | ||||
| (1) | |
| (2) | |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
2
A SPAC III ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’
EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
FOR THE THREE MONTHS ENDED MARCH 31, 2025
| Ordinary shares | Additional | Accumulated deficit | Total | |||||||||||||||||||||||||
| Class A | Class B | paid-in | (retained | shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | earnings) | equity | ||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||
| Subsequent measurement of ordinary shares subject to redemption (interest earned on trust account) | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
| Accretion of carrying value to redemption value | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2024
Class B ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | |||||||||||||||||
| Shares(1)(2) | Amount | capital | deficit | deficit | ||||||||||||||||
| Balance as of January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | — | |||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| (1) | Includes up to 206,250 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). As a result of the underwriter’s partial exercise of the over-allotment option on November 19, 2024, 81,250 shares of Class B ordinary share were forfeited for no consideration. |
| (2) | |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
3
A SPAC III ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
| For the Three Months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustment to reconcile net income to net cash used in operating activities: | — | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Investments held in Trust Account | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Due from related party | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Repayment of promissory note - related party | ( | ) | ||||||
| Net Cash Used in Financing Activities | ( | ) | ||||||
| Net Change in Cash | ( | ) | ||||||
| Cash, Beginning of the Period | ||||||||
| Cash, End of the Period | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Accretion of carrying value to redemption value of Class A redeemable ordinary shares | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
4
A SPAC III ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
A SPAC III Acquisition Corp. (the “Company”) is blank check company incorporated as a British Virgin Islands (“BVI”) business company on September 3, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). Although there is no restriction or limitation on what industry or geographic region the Company’s target operates in, it is the Company’s intention to pursue prospective targets that are in the Environmental, Sustainability and Governance (ESG) and material technology sector.
The Company has two wholly owned inactive subsidiaries, A SPAC III Mini Acquisition Corp., a BVI corporation, formed on January 24, 2025, and A SPAC III Mini Sub Acquisition Corp., a BVI corporation, formed on February 3, 2025.
As of March 31, 2025, the Company had not commenced any operations. All activities for the period from September 3, 2021 (inception) through March 31, 2025 relate to the Company’s formation and the Initial Public Offering (the “IPO”) described below, and subsequent to the IPO, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is A SPAC III (Holdings) Corp., a BVI company (the “Sponsor”).
The registration statement for the Company’s
IPO was declared effective on November 8, 2024. On November 12, 2024, the Company consummated its IPO of
The Company granted the underwriters a 45-day
option to purchase up to an additional
Total transaction costs amounted to $
In connection with the IPO and issuance and sales
of the Over-Allotment Option Units, the Company issued to Maxim Group LLC, (“Maxim”), the representative of underwriters,
an aggregate of
5
A total of $
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the IPO and the Private Placement Units, although substantially all of
the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company
will be able to complete a business combination successfully. The initial Business Combination must be with one or more target businesses
or assets having an aggregate fair market value of at least
The Company will provide the public shareholders
with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either
(i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer.
The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct a tender offer will
be made by the Company, solely in its 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 require the Company to seek shareholder approval under the law or stock exchange listing requirement.
The Company will provide the public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion
of the 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 the initial Business Combination, including interest (which interest shall
be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount
in the Trust Account is initially anticipated to be $
The Company accounted for its Class A ordinary
shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity”
(ASC 480). Ordinary shares subject to mandatory redemption (if any) will be classified as a liability instrument and will be measured
at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features 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)
will be classified as temporary equity. At all other times, ordinary shares will be classified as shareholder’s equity. In accordance
with ASC 480-10-S99, the Company classified the Class A ordinary shares subject to redemption outside of permanent equity as the redemption
provisions are not solely within the control of the Company. As of November 19, 2024, given that the
6
The Company will have only 12 months from the
closing of the IPO (or up to 18 months from the closing of the IPO if the Company extend the period of time to consummate a Business Combination
by the full amount of time) (the “Combination Period”) to complete the initial Business Combination. If the Company has not
completed the initial 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 not more than ten business days thereafter, redeem the public
shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
(which interest shall be net of taxes payable, and less up to $
The underwriters, the Sponsor, officers and directors have agreed to (i) to waive their redemption rights with respect to their Private Placement Shares (as defined in Note 4), Founder Shares (as defined in Note 5), Representative’s Shares (as defined in Note 6) and any public shares they may hold in connection with the completion of the initial Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Private Placement Shares, Founder Shares and Representative’s Shares if the Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the Combination Period). If the Company submits the initial Business Combination to the public shareholders for a vote, the underwriters, the Sponsor, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with the Company, to vote any Private Placement Shares, Founder Shares and Representative’s Shares held by them and any public shares purchased during or after the IPO in favor of the initial Business Combination.
The Company’s Sponsor has agreed that it
will be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a
prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in
the Trust Account to below (i) $
On December 31, 2024, the Company entered into
an agreement with HDEducation Group Limited, a Cayman Islands exempted company (“HD Group”) (the “HD Group Agreement”).
HD Group is headquartered in Anji County, China, and is a comprehensive service platform for students pursuing university education globally.
The Agreement is intended to express a mutual indication of interest, and remains subject, in all respect, to the execution of definitive
agreements. Pursuant to the terms of the Agreement, the aggregate consideration to be paid to existing shareholders of HD Group is $
On January 24, 2025, the Company entered into
an agreement with Bioserica International Limited, a British Virgin Islands business company (“Bioserica”) (the “Bioserica
Agreement”). Bioserica is in the business of researching and developing, manufacturing, marketing and sales of bio-based antimicrobial
materials. The Agreement is intended to express a mutual indication of interest, reflects additional terms negotiated, and remains subject,
in all respect, to the execution of definitive agreements. Pursuant to the terms of the Agreement, the aggregate consideration to be
paid to existing shareholders of Bioserica is $
7
Going Concern Consideration
As of March 31, 2025, the Company had $
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. The Company may need to obtain additional financing either to complete its Business Combination or because it becomes obligated to redeem a significant number of public shares upon consummation of its Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination. If the Company is unable to complete its Business Combination because it does not have sufficient funds available, it will may cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations.
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 if the Company is unable to complete a Business Combination by November 12, 2025 (assuming no extension), then the Company will cease all operations except for the purpose of liquidating. The date for liquidation and subsequent dissolution as well as liquidity concerns raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Risks and Uncertainties
Various social and political circumstances in the U.S. and around the world (including rising trade tensions between the U.S. and China, and other uncertainties regarding actual and potential shifts in the U.S. and foreign, trade, economic and other policies with other countries), may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide.
As a result of these circumstances and the ongoing Russia/Ukraine, Hamas/Israel conflicts and/or other future global conflicts, 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 potential future sanctions on the world economy and the specific impact on the Company’s financial position, results of operations or ability to consummate a Business Combination are not yet determinable. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
8
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial statements and Article 8 of Regulation S-X. They do not include all of the information and notes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto for the year ended December 31, 2024 included in the Company’s Form 10K as filed with the SEC on March 5, 2025. Certain information or footnote disclosures normally included in the unaudited condensed consolidated financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The interim results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected through December 31, 2025 or for any future periods.
Principles of consolidation
The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
Emerging Growth Company
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 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 auditor 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 statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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 unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those 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 $
9
Offering Costs Associated with Initial Public Offering
Offering costs were $
Investments Held in Trust Account
The Company’s portfolio of investments held in the Trust Account is comprised of investments in money market funds that invest in U.S. government securities. These securities are presented on the balance sheet at fair value at the end of each reporting period. Earnings on investments held in the Trust Account are included in interest earned on investments held in the Trust Account in the accompanying statements of operations. The estimated fair value of investments held in the Trust Account is determined using available market information.
As of March 31, 2025 and December 31, 2024, the
Company had $
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for Class A ordinary shares
subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption (if
any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary
shares that features 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) is classified as temporary equity. At all other times, ordinary shares
is classified as stockholders’ equity. The Class A ordinary shares features certain redemption rights that are considered to be
outside of the Company’s control and subject to the occurrence of uncertain future events. In accordance with the SEC and its guidance
on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a
company require ordinary shares subject to redemption to be classified outside of permanent equity. Given that the
Accordingly, as of March 31, 2025 and December 31, 2024, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of permanent shareholders’ equity on the Company’s balance sheet in the following table:
| Gross proceeds from IPO | $ | |||
| Subtract: | ||||
| Proceeds allocated to Public Rights | ( | ) | ||
| Allocation of offering costs related to redeemable shares | ( | ) | ||
| Add: | ||||
| Subsequent measurement of ordinary shares subject to redemption (interest earned on trust account) | ||||
| Accretion of carrying value to redemption value | ||||
| Class A ordinary shares subject to possible redemption – December 31, 2024 | $ | |||
| Add: | ||||
| Subsequent measurement of ordinary shares subject to redemption (interest earned on trust account) | ||||
| Accretion of carrying value to redemption value | ||||
| Class A ordinary shares subject to possible redemption – March 31, 2025 | $ |
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 $
10
Fair Value of Financial Instruments
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 unaudited condensed balance sheet, primarily due to its short-term nature.
The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
| ● | Level 1—Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2—Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. | |
| ● | Level 3—Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the British Virgin Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2025 and December 31, 2024, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. 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 is subject to tax examinations by major taxing authorities since inception. There is currently no taxation imposed by the Government of the British Virgin Islands. In accordance with British Virgin Islands income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed consolidated financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be a British Virgin Islands business company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the British Virgin Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net Income per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. The condensed statements of operations include a presentation of income per redeemable share and income per non-redeemable share following the two-class method of income per share. In order to determine the net income attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income allocable to both the redeemable shares and non-redeemable shares and the undistributed income is calculated using the total net loss less any dividends paid. The Company then allocated the undistributed income ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the common shares subject to possible redemption was considered to be dividends paid to the public shareholders.
The calculation of diluted loss per ordinary share does not consider the effect of the rights issued in connection with the IPO and the Private Units since the exercise of the units is contingent upon the occurrence of future events. As of March 31, 2025, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic earnings per share for the period presented.
11
The net income (loss) per share presented in the statement of operations is based on the following:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income | $ | $ | ||||||
| Subsequent measurement of ordinary shares subject to redemption (interest earned on trust account) | ( | ) | ||||||
| Accretion of ordinary shares to redemption value | ( | ) | ||||||
| Net loss including accretion of ordinary shares to redemption value | $ | ( | ) | $ | ||||
| For the three months ended March 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| 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 loss per ordinary share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
| Subsequent measurement of ordinary shares subject to redemption (interest earned trust account) | ||||||||||||||||
| Accretion of ordinary shares subject to possible redemption to redemption value | ||||||||||||||||
| Allocation of net income (loss) | ( | ) | ||||||||||||||
| Denominator: | ||||||||||||||||
| Basic and diluted weighted average shares outstanding | ||||||||||||||||
| Basic and diluted net income (loss) per ordinary share | $ | $ | ( | ) | $ | $ | ||||||||||
Rights Accounting
The Company accounts for rights as either equity-classified or liability-classified instruments based on an assessment of the right’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the rights are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the rights meet all of the requirements for equity classification under ASC 815, including whether the rights are indexed to the Company’s own ordinary shares and whether the right 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 right issuance and as of each subsequent quarterly period end date while the rights are outstanding.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted this guidance on January 1, 2025 and there was no significant impact.
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In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires the disclosure of additional segment information. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this guidance on January 1, 2025 (see Note 9).
The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.
Note 3 — Initial Public Offering
Pursuant to the IPO on November 12, 2024 and the
partial exercising of the over-allotment option on November 19, 2024, the Company sold
Note 4 — Private Placement
Simultaneously with the closing of the IPO, the
Sponsor purchased an aggregate of
There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Founder Shares, Private Placement Units, shares underlying the Private Placement Units (“Private Placement Shares”) or the rights included in the Private Placement Units (“Private Placement Rights”). The Private Placement Rights will expire worthless if the Company does not consummate a Business Combination within the allotted 12-month period (or up to 18 months from the completion of the IPO if the Company extends the period of time to consummate a Business Combination by two extensions of three months each).
With certain limitations, the Private Placement Units, Private Placement Shares, Private Placement Rights and the Class A ordinary shares underlying such rights will not be transferable, assignable or salable by the Sponsor until thirty (30) days after the completion of the Company’s initial Business Combination, except to permitted transferees.
Note 5 — Related Party Transactions
Founder Shares
On September 3, 2021, the Company’s Sponsor
paid $
13
The Sponsor has agreed not to transfer, assign
or sell any of its Founder Shares until the earlier to occur of: (A) six months after the completion of the initial Business Combination
or (B) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction
after the initial Business Combination that results in all of the Company’s public shareholders having the right to exchange their
ordinary shares for cash, securities or other property (the “Lock-up”). Notwithstanding the foregoing, if the last sale price
of the Company’s ordinary shares equals or exceeds $
Promissory Note — Related Party
The Sponsor has agreed to loan the Company up
to $
Working Capital Loans
In addition, in order to finance transaction costs
in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers
and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company
completes the initial Business Combination, the Company may repay the Working Capital Loans. In the event that the initial Business Combination
does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans
but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $
Extension Loan
The Company will have until 12 months from the
closing of the IPO to consummate an initial Business Combination. However, if the Company anticipates that it may not be able to consummate
the initial Business Combination within 12 months, it may extend the period of time to consummate a Business Combination up to two times,
each by an additional three months (for a total of up to 18 months to complete a Business Combination). Pursuant to the terms of the amended
and restated memorandum and articles of association and the trust agreement entered into between the Company and Continental Stock Transfer &
Trust Company on November 8, 2024, in order to extend the time available for the Company to consummate the initial Business Combination,
the Sponsor or its affiliates or designees, upon two days advance notice prior to the applicable deadline, must deposit into the Trust
Account $
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Note 6 — Commitments and Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement
Units, the Representatives Shares, and units that may be issued on conversion of Working Capital Loans (and in each case holders of their
component securities, as applicable) will be entitled to registration rights pursuant to a registration rights agreement to be signed
prior to or on the effective date of the IPO requiring the Company to register such securities for resale (in the case of the Founder
Shares, only after conversion to the Class A ordinary shares). The holders of these securities are entitled to make up to three demands,
excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination and
rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the
registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become
effective until termination of the applicable Lock-up period, which occurs (i) in the case of the Founder Shares, on the earlier of (A)
six months after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the
last sale price of Class A ordinary shares equals or exceeds $
Right of First Refusal
For a period beginning on the closing of the IPO and ending 12 months from the closing of a Business Combination, the Company has granted the underwriter a right of first refusal to act as sole underwriter, sole book-running manager and sole placement agent for any and all future private or public equity, equity-linked, convertible and debt offerings during such 12 months from the closing of a Business Combination of the Company, or any successor to or any subsidiary of the Company. For the sake of clarity, this right of refusal shall encompass the time period leading up to the closing of the Business Combination while the Company is still a special purpose acquisition company. Notwithstanding the foregoing, in event that a target company – in connection with a Business Combination – sources a private placement of public equity (a “PIPE”), the aforementioned right of refusal reference shall not apply in such a limited instance. In accordance with FINRA Rule 5110(g)(6)(A), such right of first refusal shall not have a duration of more than three years from the commencement of sales in the IPO.
Underwriter Agreement
The underwriter has a
The underwriter was paid $
The Representative Shares have been deemed compensation
by FINRA and are therefore subject to a lock-up for a period of
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Note 7 — Shareholders’ Equity
Preferred Shares — The Company
is authorized to issue a total of
Class A Ordinary Shares —
The Company is authorized to issue a total of
Class B Ordinary Shares —
The Company is authorized to issue a total of
The Class B ordinary shares will automatically
convert into Class A ordinary shares at the time of the initial Business Combination, or earlier at the option of the holder, on
a one-for-one basis, subject to adjustment pursuant to certain anti-dilution right, share splits, share capitalizations, reorganizations,
recapitalizations and the like, and subject to further adjustment as provided herein and in the Company’s amended and restated memorandum
and articles of association. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed
issued in excess of the amounts sold in the IPO and related to the closing of the initial Business Combination, the ratio at which the
Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the
issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or
deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will
equal, in the aggregate,
Prior to the initial Business Combination, only holders of the Founder Shares will have the right to vote on the election of directors. Holders of the public shares will not be entitled to vote on the election of directors during such time. These provisions of the Company’s amended and restated memorandum and articles of association may only be amended by a resolution passed by holders of at least a majority of the ordinary shares who are eligible to vote and attend and vote in a general meeting of the shareholders. With respect to any other matter submitted to a vote of the shareholders, including any vote in connection with the initial Business Combination, except as required by law, holders of the Founder Shares and holders of the public shares will vote together as a single class, with each share entitling the holder to one vote.
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Rights — As of March
31, 2025 and December 31, 2024, there were
If the Company is unable to complete an initial Business Combination within the required time period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless.
As soon as practicable upon the consummation of the initial Business Combination, the Company will direct registered holders of the rights to return their rights to the rights agent. Upon receipt of the rights, the rights agent will issue to the registered holder of such rights the number of full Class A ordinary shares to which it is entitled. The Company will notify registered holders of the rights to deliver their rights to the rights agent promptly upon consummation of such Business Combination and have been informed by the rights agent that the process of exchanging their rights for Class A ordinary shares should take no more than a matter of days. The foregoing exchange of rights is solely ministerial in nature and is not intended to provide the Company with any means of avoiding the Company’s obligation to issue the shares underlying the rights upon consummation of the initial Business Combination. Other than confirming that the rights delivered by a registered holder are valid, the Company will have no ability to avoid delivery of the shares underlying the rights. Nevertheless, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of an initial Business Combination.
The shares issuable upon conversion of the rights will be freely tradable (except to the extent held by affiliates of the Company’s). The Company will not issue fractional shares upon conversion of the rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of British Virgin Island’s law. As a result, you must hold rights in multiples of 10 in order to receive shares for all of the investors’ rights upon closing of a Business Combination. If the Company is unable to complete an initial Business Combination within the required time period and the Company liquidates 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 the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of an initial Business Combination. Accordingly, the rights may expire worthless.
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Note 8 — Fair Value Measurements
The following tables present information about the Company’s assets that are measured at fair value as of March 31, 2025 and December 31, 2024 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
| March 31, | Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Marketable securities held in Trust Account | $ | $ | ||||||||||||||
| December 31, | Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| 2024 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Marketable securities held in Trust Account | $ | $ | ||||||||||||||
Note 9 — Segment Information
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance. The Company has adopted the guidance in ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, in the accompanying unaudited condensed consolidated financial statements.
The Company’s chief operating decision maker has been identified
as the Chief Executive Officer, Chief Financial Officer and Chairman (“CODM”), who reviews the operating results for the Company
as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that
the Company only has
When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews key metrics, which include the following:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| General and administrative expenses | $ | $ | ||||||
| Interest earned on investments held in Trust Account | $ | $ | ||||||
The key measures of segment profit or loss reviewed by our CODM are general and administrative expenses and interest earned on investments held in Trust Account. The CODM reviews interest earned on investments in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investments with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses include insurance expenses, Nasdaq listing expenses, trust service expenses, auditing expenses, printing expenses, and regulatory filing fees, none of which are deemed to be significant segment expenses and are reviewed in aggregate to ensure alignment with budget and contractual obligations.
Note 10 — Subsequent Events
In accordance with ASC 855, “Subsequent Events”, the Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “ASPC”, “our”, “we,” “us” or the “Company” refer to A SPAC III Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to A SPAC III (Holdings) Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the interim condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Business Combination (as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek,” “should,” “could,” “would,” “plan,” “continue,” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering and in our other filings filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in the British Virgin Islands on September 3, 2021 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses. We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering (the “IPO”) and the private placement of the private placement units, the proceeds of the sale of our securities in connection with our initial business combination, our shares, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
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Recent Developments
On December 31, 2024, the Company entered the HD Group Agreement with HD Group. HD Group is headquartered in Anji County, China, and is a comprehensive service platform for students pursuing university education globally. The Agreement is intended to express a mutual indication of interest, and remains subject, in all respect, to the execution of definitive agreements. Pursuant to the terms of the Agreement, the aggregate consideration to be paid to existing shareholders of HD Group is $300,000,000, which will be paid entirely in stock, comprised of newly issued Class A ordinary shares and Class B ordinary shares of the Purchaser at a price of $10.00 per share.
On January 24, 2025, the Company entered into the Bioserica Agreement with Bioserica. Bioserica is in the business of researching and developing, manufacturing, marketing and sales of bio-based antimicrobial materials. The Agreement is intended to express a mutual indication of interest, reflects additional terms negotiated, and remains subject, in all respect, to the execution of definitive agreements. Pursuant to the terms of the Agreement, the aggregate consideration to be paid to existing shareholders of Bioserica is $200,000,000, which will be paid entirely in stock, comprised of newly issued Class A ordinary shares and Class B ordinary shares of the Purchaser at a price of $10.00 per share.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from September 3, 2021 (inception) through March 31, 2025 were organizational activities and those necessary to prepare, and consummate, for the Initial Public Offering, described below. We do not expect to generate any operating revenues until after the completion of our Business Combination.
We expect to generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We expect that we will incur 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 three months ended March 31, 2025, we had a net income of $413,202, which consisted of interest income of $647,080, partially offset by general and administrative expenses of $233,878. For the three months ended March 31, 2024, we did not incur any expenses, as such we had no net loss.
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Liquidity and Capital Resources
The Company’s liquidity needs prior to the closing of IPO were satisfied through a payment from the Sponsor of $25,000 (see Note 5) for the Founder Shares to cover certain offering costs and the loan under an unsecured promissory note from the Sponsor of up to $350,000 (see Note 5). As previously disclosed on a Current Report on Form 8-K dated November 8, 2024, on November 12, 2024, the Company consummated the IPO of 5,500,000 units (the “Units”). Each Unit consists of one Class A Ordinary Share (“Public Share”) and one right (“Public Right”) to receive one-tenth of one ordinary share upon the consummation of an initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $55,000,000. The Company granted the underwriters a 45-day option to purchase up to 825,000 additional Units to cover over-allotments (the “Over-Allotment Option”), if any. The underwriters notified their partial exercise of the Over-Allotment Option on November 15, 2024, and closed the Over-Allotment Option on November 19, 2024. The total aggregate issuance by us of 6,000,000 units (which includes the partial exercise of the Over-Allotment Option) at a price of $10.00 per Unit resulted in a total gross proceeds of $60,000,000.
As previously disclosed on a Current Report on Form 8-K dated November 8, 2024, on November 12, 2024, simultaneously with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with A SPAC III (Holdings) Corp., the Company’s sponsor, of 280,000 private placement units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,800,000. On November 19, 2024, simultaneously with the sale of the Over-Allotment Option Units, the Company consummated the private sale of an additional 5,000 private Units, generating gross proceeds of $50,000. The Private Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transactions did not involve a public offering. The Private Placement Units are identical to the units sold in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, and (ii) they (including the Class A ordinary shares issuable upon conversion of the private placement rights) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until the completion of our initial business combination.
Following the IPO and the sale of the Private Placement Units, including the sale of the Over-Allotment Option Units, a total of $60,000,000 was placed in a trust account established for the benefit of the Company’s public shareholders (the “Trust Account’), and the Company had $1,888,753 of cash held outside of the Trust Account, after payment of costs related to the Initial Public Offering, and available for working capital purposes. The Company incurred $1,600,217 in transaction costs, including $600,000 of underwriting fees, the fair value of the representative shares of $675,000, and $325,217 of other offering costs. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. Such working capital funds could be used in a variety of ways and could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our Business Combination or to indemnify any of our officers or directors as required by law if the funds available to us outside of the Trust Account were insufficient to cover such expenses. Our liquidity needs have been satisfied prior to completion of the IPO through receipt of $25,000 from the sale of the founder shares to our sponsor and up to $350,000 in loans from our sponsor under an unsecured promissory note. On January 24, 2025, the Company repaid the Promissory Note in full. The Promissory Note was terminated after the repayment. As March 31, 2025, no amount was outstanding under the promissory note with our Sponsor.
As of March 31, 2025, the Company had $1,119,610 of cash on hand and working capital of $982,030. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and consummate a Business Combination.
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In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of our Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,150,000 of such Working Capital Loans may be convertible into units at a price of $10.00 per unit at the option of the lender. Such units would be identical to the Private Placement Units issued to our sponsor. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our 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 complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
The Company has incurred and expects to continue to incur significant 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 12 months from the closing of the IPO (or up to 18 months from the closing of the IPO if we extend the period of time to consummate a business combination by the full amount of time), 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. As a result, management has determined that such additional condition also raises substantial doubt about the Company’s ability to continue as a going concern. The interim condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2025. 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.
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Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than described below.
Registration Rights
The holders of the Founder Shares, Private Placement Units, shares being issued to the underwriters of the IPO, and units that may be issued on conversion of Working Capital Loans (and in each case holders of their component securities, as applicable) will be entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. Notwithstanding the foregoing, the underwriter may not exercise its demand and “piggyback” registration rights after five (5) and seven (7) years, respectively, after the effective date of the IPO and may not exercise its demand rights on more than one occasion. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock-up period, which occurs (i) in the case of the Founder Shares, on the earlier of (A) six months after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after the initial business combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction after the completion of the initial business combination that results in all of the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property, and (ii) in the case of the private placement units, including the component securities therein, until the completion of the initial business combination. Notwithstanding the above, the shares to be issued to the underwriters in the IPO will be further subject to the limitations on registration requirements imposed by FINRA Rule 5110(g)(8). The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
Pursuant to the underwriting agreement entered into on November 8, 2024, we have agreed and have issued to Maxim Partners LLC and/or its designees (“Maxim”), 247,500 Class A ordinary shares (or 284,625 Class A ordinary shares if the over-allotment option is exercised in full) (the “Representative Shares”) at the closing of the IPO. As a result of the underwriter’s partial exercise of the over-allotment option on November 15, 2024, an additional 22,500 Representative Shares were issued to the underwriter. Maxim has agreed not to transfer, assign or sell any such Representative Shares until the completion of the initial Business Combination. In addition, the underwriter has agreed (and its permitted transferees will agree) (i) to waive its redemption rights with respect to such Representative 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 Representative Shares if the Company fails to complete its initial Business Combination within the Combination Period.
The underwriter was paid $600,000 for the underwriting commissions (including for the partial exercise of over-allotment option). Additionally, the Company issued to the underwriter an aggregate of 270,000 Class A ordinary shares including 22,500 shares as a result of partial exercise of the underwriters’ over-allotment option at the closing of the IPO, for no consideration, subject to the terms of the underwriting agreement. The underwriter has agreed not to transfer, assign or sell any such shares until the completion of the initial Business Combination.
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 commencement of sales in the IPO 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 IPO, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the effective date of the IPO except to any underwriter and selected dealer participating in the IPO and their officers, partners, registered persons or affiliates.
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Critical Accounting Policies and Estimates
The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting estimates. We have identified the following critical accounting policies:
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features 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) is classified as temporary equity. At all other times, ordinary shares is classified as stockholders’ equity. The Class A ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. In accordance with the SEC and its guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require ordinary shares subject to redemption to be classified outside of permanent equity. Given that the 6,000,000 Class A ordinary shares sold as part of the Company’s IPO were issued with other freestanding instruments (i.e., Public Units), the initial carrying value of Class A ordinary shares classified as temporary equity has been allocated to the proceeds determined in accordance with ASC 470-20. The Company’s Class A ordinary shares is subject to ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes in redemption value in additional paid-in capital (or accumulated deficit in the absence of additional paid-in capital) over an expected 12-month period, which is the initial period that the Company has to complete a Business Combination.
Net Income (Loss) per Share
The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture by the Sponsor.
Recent Accounting Standards
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires the disclosure of additional segment information. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this guidance on January 1, 2025 and there was no significant impact.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-09 on January 1, 2025 and there was no significant impact.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed consolidated financial statements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
As smaller reporting company, we are not required to make disclosures under this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed with the objective of ensuring 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. Disclosure controls are also designed with the objective 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.
Our management evaluated, with the participation of our management, including our principal executive officer and principal financial and accounting officer, the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. 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 1A. Risk Factors
As smaller reporting company we are not required to make disclosures under this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The registration statement (the “Registration Statement”) for our IPO was declared effective on November 8, 2024. As previously disclosed on a Current Report on Form 8-K dated November 8, 2024, on November 12, 2024, A SPAC III Acquisition Corp. (the “Company”) consummated the IPO of 5,500,000 units (the “Units”). Each Unit consists of one Class A ordinary share (“Public Share”) and one right (“Public Right”) to receive one-tenth of one Class A ordinary share upon the consummation of an initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $55,000,000.
As previously disclosed on a Current Report on Form 8-K dated November 8, 2024, on November 12, 2024, simultaneously with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with A SPAC III (Holdings) Corp., the Company’s sponsor, of 280,000 private placement units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,800,000. The Private Placement Units are identical to the units sold in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, and (ii) they (including the Class A ordinary shares issuable upon conversion of the private placement rights) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until the completion of our initial business combination.
On November 15, 2024, the underwriters notified the Company of its partial exercise of their over-allotment option. The closing of the issuance and sale of the additional Units (the “Over-Allotment Option Units”) occurred on November 19, 2024. The total aggregate issuance by the Company of 500,000 Over-Allotment Option Units at a price of $10.00 per unit generated total gross proceeds of $5,000,000. On November 19, 2024, simultaneously with the sale of the Over-Allotment Option Units, the Company consummated the private placement of an additional 5,000 Private Placement Units to the Sponsor generating gross proceeds of $50,000.
On November 19, 2024, an additional $5,000,000 ($10.00 per Unit) consisting of the net proceeds from the sale of the Over-Allotment Option Units, less the underwriters’ discount of $0.10 per Over-Allotment Option Unit ($50,000), and the gross proceeds from the sale of the additional private placement units ($50,000) was placed in the Trust Account, resulting in a total of $60,000,000 held in the Trust Account.
As of November 19, 2024, a total of $60,000,000 ($10.00 per unit) of the net proceeds from the IPO and the Private Placement were deposited in a trust account established for the benefit of the Company’s public shareholders (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee. The funds placed in the Trust Account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the proceeds from the IPO and the private placement will not be released from the Trust Account the earlier to occur of (i) the completion of the initial Business Combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association to (A) modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete the initial Business Combination within the Combination Period (defined below) or (B) with respect to any other provision relating to shareholders’ rights or pre-Business Combination activity and (iii) the redemption of all of the public shares if the Company is unable to complete the initial Business Combination within the Combination Period (defined below), subject to applicable law and as further described in the Prospectus. In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. The proceeds deposited in the Trust Account could become subject to the claims of the creditors, if any, which could have priority over the claims of the public shareholders.
Total transaction costs amounted to $1,600,217 consisting of $600,000 of cash underwriting commissions which was paid in cash at the closing date of the IPO and the sale of the Over-Allotment Option Units on November 12, 2024 and November 19, 2024, respectively, $675,000 fair value of the Representative Shares, and $325,217 of other offering costs.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
None
Item 5. Other Information
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| A SPAC III ACQUISITION CORP. | ||
| Date: May 9, 2025 | By: | /s/ Claudius Tsang |
| Name: | Claudius Tsang | |
| Title: | Chief Executive Officer, Chief Financial Officer and Chairman | |
| (Principal Executive Officer and Principal Financial and Accounting Officer) | ||
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