TG VENTURE ACQUISITION CORP. Caution Regarding Forward-Looking Information
The following discussion and analysis of our financial condition and result of operations should be read in conjunction with our audited financial statements and the related notes to those financial statements included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections entitled "Risk Factors" and "Forward-Looking Statements" appearing elsewhere in this Annual Report on Form 10-K.
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We
have based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements 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. Such statements include, but are not limited to, possible business
combinations and the financing thereof, and related matters, as well as all
other statements other than statements of historical fact included in this Form
10-K. Factors that might cause or contribute to such a discrepancy include, but
are not limited to, those described in our other
The following section reflects management's views on the financial condition as
of
Overview
We are a newly organized blank check company incorporated on
While our efforts to identify a target business may span many industries and
regions worldwide, we intend to focus our search for prospects within the space
technology, financial technology, technology, media and telecom ("TMT")
industries and related sectors. We have not selected any specific business
combination target and we have not, nor has anyone on our behalf, initiated any
substantive discussions, directly or indirectly, with any business combination
target. Though our sponsor is a
The issuance of additional shares in connection with an initial business combination to the owners of the target or other investors:
? may significantly dilute the equity interest of current shareholders,
which dilution would increase if the anti-dilution provisions in the
Class B common stock resulted in the issuance of Class A common stock on a
greater than one-to-one basis upon conversion of the Class B common stock;
? may subordinate the rights of holders of our common stock if preferred
stock is issued with rights senior to those afforded our common stock;
? could cause a change in control if a substantial number of shares of our
common stock is issued, which may affect, among other things, our ability
to use our net operating loss carry forwards, if any, and could result in
the resignation or removal of our present officers and directors;
? may have the effect of delaying or preventing a change of control of us by
diluting the stock ownership or voting rights of a person seeking to
obtain control of us; and
? may adversely affect prevailing market prices for our Class A common stock
and/or warrants.
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Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
? default and foreclosure on our assets if our operating revenues after an
initial business combination are insufficient to repay our debt
obligations;
? acceleration of our obligations to repay the indebtedness even if we make
all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or
reserves without a waiver or renegotiation of that covenant;
? our immediate payment of all principal and accrued interest, if any, if
the debt security is payable on demand;
? our inability to obtain necessary additional financing if the debt
security contains covenants restricting our ability to obtain such
financing while the debt security is outstanding;
? our inability to pay dividends on our common stock;
? using a substantial portion of our cash flow to pay principal and interest
on our debt, which will reduce the funds available for dividends on our
common stock if declared, our ability to pay expenses, make capital
expenditures and acquisitions, and fund other general corporate purposes;
? limitations on our flexibility in planning for and reacting to changes in
our business and in the industry in which we operate;
? increased vulnerability to adverse changes in general economic, industry
and competitive conditions and adverse changes in government regulation;
? limitations on our ability to borrow additional amounts for expenses,
capital expenditures, acquisitions, debt service requirements, and
execution of our strategy; and
? other purposes and other disadvantages compared to our competitors who
have less debt.
Our sponsor is
Simultaneously with the consummation of the IPO, the Company consummated the
private placement of 5,500,000 Warrants (the "Private Placement Warrants") at a
price of
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Upon the closing of the Initial Public Offering and the Private Placement, an
amount of
We have 18 months from the closing of the IPO, until
On
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Pursuant to the Business Combination Agreement, subject to the terms and
conditions set forth therein, (i) Merger Sub 1 will merge with and into Flexi
(the "Initial Merger"), whereby the separate existence of Merger Sub 1 will
cease and Flexi will be the surviving entity of the Initial Merger and become a
wholly owned subsidiary of
As a result of the Mergers, among other things, (i) each outstanding Flexi
Ordinary Share will be cancelled in exchange for the right to receive such
number of PubCo Ordinary Shares that is equal to the Company Exchange Ratio,
(ii) each outstanding SPAC Unit will be automatically detached and the holder
thereof will be deemed to hold one share of SPAC Class A Common Stock and one
SPAC Warrant, (iii) each outstanding share of SPAC Class B Common Stock will
automatically convert into SPAC Class A Common Stock, (iv) each outstanding
share of SPAC Class A Common Stock will be cancelled in exchange for the right
to receive such number of PubCo Ordinary Shares that is equal to the SPAC
Exchange Ratio, and (v) each outstanding SPAC Warrant will be assumed by
Under the Business Combination Agreement, the parties' obligations to consummate
the Transactions are subject to a number of customary conditions for special
purpose acquisition companies, including, among others, the following: (i) the
approval of the Mergers and the other shareholder proposals required to approve
the Transactions by the Company's and Flexi's shareholders, (ii) all specified
approvals or consents (including governmental and regulatory approvals) have
been obtained and all waiting, notice, or review periods have expired or been
terminated, as applicable, (iii) the effectiveness of the F-4 Registration
Statement, (iv)
In addition to these customary closing conditions, the Company must also hold
net tangible assets of at least
The transaction is expected to be completed in the second quarter of 2023,
subject to regulatory approvals and other customary closing conditions. After
closing,
Liquidity, Capital Resources, and Going Concern
On
Simultaneously with the consummation of the IPO, the Company consummated the
private placement of 5,500,000 Warrants (the "Private Placement Warrants") at a
price of
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As of
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 capital stock 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.
As of
Our sponsor has committed that they are willing and able to provide the Company
with any additional funds it needs to carry out its operations. In order to
finance transaction costs in connection with an intended initial Business
Combination, the Sponsor, an affiliate of the Sponsor or certain of the
Company's officers and directors have committed to loan the Company funds as may
be required (the "Working Capital Loans"). If the Company completes an initial
Business Combination, the Company would repay such loaned amounts out of the
proceeds of the Trust Account released to the Company. Otherwise, such loans
would be repaid only out of funds held outside the Trust Account. 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 such
loaned amounts, but no proceeds from the Trust Account would be used to repay
such loaned amounts. Up to
The Company expects to incur significant costs in pursuit of its acquisition plans. Based on the foregoing, management believes that we will not have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the 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 the Company's
business plan is dependent on the completion of the Business Combination, the
Company's existing cash and working capital as of
24 Risks and Uncertainties
In
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of our operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Inflation Reduction Act of 2022
On
Any redemption or other repurchase that occurs after
Results of Operations
As of
For the year ended
For the period from
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.
Administrative Services Agreement
We entered into an administrative services agreement on
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement that was signed prior to the effective date of the Registration Statement, requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A common stock). 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.
Underwriting Agreement
On
Advisory Services Agreement
On
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Critical Accounting Policies and Significant Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Deferred Offering Costs
We comply with the requirements of ASC 340-10-S99-1. Deferred offering costs
consist of legal, accounting, underwriting fees and other costs incurred through
the balance sheet date that are directly related to the Public Offering.
Offering costs are allocated to the separable financial instruments to be issued
in the IPO based on a relative fair value basis, compared to total proceeds
received. Upon closing of the IPO on
Share Based Compensation
The Company complies with ASC 718 Compensation- Stock Compensation, regarding
interests in founder shares acquired by directors and advisors of the Company as
compensation. The interests in the founder shares vested upon the Company
completing the initial public offering and compensation expense has been
recorded accordingly at that date based upon the initial grant date fair value.
The determination of the fair value of the share-based compensation awards
represents a significant estimate within the financial statements. The fair
value is based upon a
The interest in the founder shares was issued on
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 "Distinguishing Liabilities from Equity." Common stock subject to mandatory redemption (if any) is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including shares of common stock 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) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. Our Common stock features certain redemption rights that are considered to be outside of the Company's control and is subject to the occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of the Company's balance sheet.
We recognize changes in redemption value immediately as they occur and adjusts
the carrying value of redeemable common stock to equal the redemption value at
the end of each reporting period. Increases or decreases in the carrying amount
of redeemable common stock are affected by charges against additional paid in
capital and accumulated deficit. There was no change to redemption value at
Net Loss Per Common Share
The Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding common stock subject to forfeiture. Earnings and losses are shared pro rata between the two classes of shares. The Company has not considered the effect of the Private Placement to purchase an aggregate of 5,500,000 of our Class A common stock in the calculation of diluted loss per share, since their exercise is contingent upon future events. As a result, diluted net loss per common stock is the same as basic net loss per common stock.
26 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 FASB ASC 480, "Distinguishing Liabilities from Equity" ("ASC 480") and 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 common 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 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 additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. We account for our outstanding warrants as equity-classified instruments.
Off-Balance Sheet Arrangements
As of
Inflation
We do not believe that inflation had a material impact on our business or operating results during the period presented.
Emerging Growth Company Status
We are 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 approval of any golden parachute payments not previously approved.
Further, Section102 (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. We have 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, we, 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 our 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.
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