UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from to
Commission
File Number:
(Exact name of registrant as specified in its charter)
| N/A | ||
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The Stock Market LLC | ||||
| The Stock Market LLC | ||||
| The Stock Market LLC |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | 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 13, 2024, there were ordinary shares of the Company issued and outstanding.
Aimei Health Technology Co., Ltd.
Form 10-Q
For the Quarterly Period Ended March 31, 2024
Contents
| Part I | Financial Information | 1 |
| Item 1 | Financial Statements | 1 |
| Unaudited Balance Sheets | 1 | |
| Unaudited Statement of Operations | 2 | |
| Unaudited Statement of Changes in Stockholders’ Deficit | 3 | |
| Unaudited Statement of Cash Flows | 4 | |
| Notes to Unaudited Financial Statements | 5 | |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
| Item 3 | Quantitative and Qualitative Disclosures about Market Risk | 17 |
| Item 4 | Controls and Procedures | 17 |
| Part II | Other Information | 18 |
| Item 1 | Legal Proceedings | 18 |
| Item 1A | Risk Factors | 18 |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 18 |
| Item 3 | Defaults Upon Senior Securities | 18 |
| Item 4 | Mine Safety Disclosures | 19 |
| Item 5 | Other Information | 19 |
| Item 6 | Exhibits | 19 |
| Signature | 20 |
| i |
AIMEI HEALTH TECHNOLOGY CO., LTD.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AIMEI HEALTH TECHNOLOGY CO., LTD.
UNAUDITED BALANCE SHEETS
| March 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Due from a related company | ||||||||
| Total current assets | ||||||||
| Cash and marketable securities held in Trust Account | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accrued expenses | $ | $ | ||||||
| Total current liabilities | ||||||||
| Deferred underwriting compensation | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies | ||||||||
| Ordinary shares, subject to possible redemption. and shares issued and outstanding at redemption value of $ and $ as of March 31, 2024 and December 31, 2023, respectively | ||||||||
| Stockholders’ deficit: | ||||||||
| Ordinary shares, $ par value; shares authorized; and shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively (excluding and shares subject to possible redemption, respectively) | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
See accompanying notes to unaudited financial statements.
| 1 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
UNAUDITED STATEMENT OF OPERATIONS
| Three months ended | ||||
| March 31, 2024 | ||||
| Formation and operating costs | $ | ( | ) | |
| Other income: | ||||
| Interest earned on investments held in trust | ||||
| Total other income | ||||
| NET INCOME | $ | |||
| Basic and diluted weighted average shares outstanding, ordinary shares subject to possible redemption | ||||
| Basic and diluted net income per ordinary shares subject to possible redemption | $ | |||
| Basic and diluted weighted average shares outstanding, ordinary shares not subject to possible redemption | ||||
| Basic and diluted net income per share, ordinary shares not subject to possible redemption | $ | |||
See accompanying notes to unaudited financial statements.
| 2 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
| Three Months Ended March 31, 2024 | ||||||||||||||||||||
| Ordinary shares | Additional | Total | ||||||||||||||||||
| No.
of shares | Amount | Paid-In Capital | Accumulated | Stockholders’ Deficit | ||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Remeasurement of common stock subject to possible redemption | - | ( | ) | ( | ) | |||||||||||||||
| Net income | - | |||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
See accompanying notes to unaudited financial statements.
| 3 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
UNAUDITED STATEMENT OF CASH FLOWS
| Three Months Ended | ||||
| March 31, 2024 | ||||
| Cash flows from operating activities: | ||||
| Net income | $ | |||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||
| Interest earned on investments held in trust | ( | ) | ||
| Change in operating assets and liabilities: | ||||
| Increase in prepayment | ( | ) | ||
| Increase in amount due from related company | ( | ) | ||
| Increase in accrued expenses | ||||
| Net cash used in operating activities | ( | ) | ||
| NET CHANGE IN CASH | ( | ) | ||
| CASH, BEGINNING OF PERIOD | ||||
| CASH, END OF PERIOD | $ | |||
| Non-cash investing and financing activities | ||||
| Remeasurement of common stock subject to possible redemption | $ | |||
See accompanying notes to unaudited financial statements.
| 4 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND
Aimei
Health Technology Co., Ltd. (the “Company”) is a blank check company incorporated in the Cayman Islands on
As of March 31, 2024, the Company had not yet commenced any operations. All activities through March 31, 2024 related to the Company’s formation and the Initial Public Offering (as defined below). Since the Initial Public Offering, the Company’s activity has been limited to the evaluation of business combination candidates. The Company will not generate any operating revenue until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash in bank and investments held in the Trust Account (as defined below) from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The
Company’s sponsor is Aimei Investment Ltd, a Cayman Islands exempted company (the “Sponsor”). The registration statement
for the Company’s Initial Public Offering was declared effective on November 30, 2023. On December 6, 2023, the Company consummated
its Initial Public Offering of units (the “Units” and, with respect to the ordinary shares included in the Units
being offered, the “Public Shares”), at $ per Unit, which includes full exercise of the underwriters’ over-allotment
option of Units, generating gross proceeds of $
Simultaneously
with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of units
(the “Private Units”) to the Sponsor at a price of $ per Unit, generating total gross proceeds of $
Following
the closing of the Initial Public Offering on December 6, 2023, an amount of $
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of its initial Business Combination either (i) in connection with a shareholder meeting called to approve the initial Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the Company may seek shareholder approval of a Business Combination at a meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of how they vote for the Business Combination. If a vote is held to approve such an initial Business Combination, the Company will consummate such initial business combination only if the Company has the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company.
| 5 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
The shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $ per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s rights.
If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its amended and restated memorandum and articles of association, conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which regulate issuer tender offers, and file tender offer documents with the U.S. Securities and Exchange Commission (the “SEC”) prior to completing its initial Business Combination which contain substantially the same financial and other information about the initial business combination as is required under the SEC’s proxy rules.
The Sponsor has agreed (i) to vote any shares owned by them in favor of any proposed business combination, (ii) not to redeem any shares in connection with a shareholder vote to approve a proposed initial business combination or any amendment to the Company’s charter prior to the consummation of its initial business combination and (iii) not to sell any shares to us in a tender offer in connection with any proposed business combination. However, the Sponsor will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination.
The
Company will have until 12 months from the closing of the Initial Public Offering (or up to 24 months from the closing of the Initial
Public Offering if the Company extends the period of time to consummate a Business Combination by up to 12 additional months through
12 one-month extensions of time, as further provided in the Company’s amended and restated memorandum and articles of association)
to consummate a Business Combination (the “Combination Period”).
The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the offering price per Unit ($).
The 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 amounts in the Trust Account to below $ per share (whether or not the underwriters’ over-allotment option is exercised in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under its indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company. The Company has not asked the Sponsor to reserve for such obligations and therefore believe the Sponsor will be unlikely to satisfy its indemnification obligations if it is required to do so. However, the Company believes the likelihood of the Sponsor having to indemnify the Trust Account is limited because the Company will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
| 6 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Liquidity and Capital Resources
As
of March 31, 2024, the Company had $
The
Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through (i) the payment of $
Over the period of time to complete a business combination, the Company will be using the funds held outside of the Trust Account 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.
Going Concern Consideration
In connection with the Company’s assessment of going concern considerations in accordance with 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 unsuccessful in consummating an initial business combination within the prescribed period of time from the closing of the Initial Public Offering, the requirement that the Company cease all operations, redeem the Public Shares and thereafter liquidate and dissolve raises substantial doubt about the ability to continue as a going concern. The unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty. The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (“U.S. GAAP”), which contemplate continuation of the Company as a going concern.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
● Basis of presentation
These accompanying unaudited financial statements have been prepared in accordance with 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 financial statements as of March 31, 2024 should be read in conjunction with the Company’s financial statements and notes thereto for the period from inception through December 31, 2023, included in the Company’s Annual Report on Form 10K. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. 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 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, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future periods.
● 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.
| 7 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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 unaudited 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.
● Use of estimates
The preparation of unaudited financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed as of the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, 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 did
● Cash and marketable securities held in Trust Account
As
of March 31, 2024 and December 31, 2023, substantially all of the assets held in the Trust Account were held in U.S. Treasury Securities
Money Market Funds. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities
are presented on the unaudited balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change
in fair value of investments held in Trust Account are included in investment income earned on investments held in Trust in the accompanying
unaudited statement of operations. The estimated fair value of investments held in Trust Account are determined using available market
information. As of March 31, 2024 and December 31, 2023, the estimated fair value of investments held in Trust Account was $
All
of the
ordinary shares sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the
redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer
in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated
certificate of incorporation. In accordance with Accounting Standards Codification (“ASC”) 480, conditionally redeemable
ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or
subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as
temporary equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity
instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its
charter provides that currently, the Company will not redeem its Public Shares in an amount that would cause its net tangible assets
(stockholders’ equity) to be less than $
| 8 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
● Income taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. 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 Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023 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 considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently
not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, there was
Net income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding for the period. The calculation of diluted loss per share does not consider the effect of the rights issued in connection with the Initial Public Offering and rights issued as components of the Private Units (the “Private Rights”) since the issuance of shares underlying the rights is contingent upon the occurrence of future events. As a result, diluted loss per share is the same as basic loss per share for the periods.
| For
the Three Months Ended March 31, 2024 | ||||
| Net income | $ | |||
| For
the Three Months Ended | ||||||||
| March 31, 2024 | ||||||||
| Redeemable | Non-Redeemable | |||||||
| Ordinary Shares | Ordinary Shares | |||||||
| Basic and diluted net income per share: | ||||||||
| Numerators: | ||||||||
| Allocation of net income including carrying value to redemption value | $ | $ | ||||||
| Allocation of net income | $ | $ | ||||||
| Denominators: | ||||||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net income per share | $ | $ | ||||||
| 9 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
● Concentration of credit risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $
● Fair value of financial instruments
The Fair value is defined as the price that would be received for the sale of an asset or paid for the transfer of liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
Level 1 — defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value:
| March 31, | Quoted
Prices In Active Markets | Significant Observable | Significant Unobservable Inputs | |||||||||||||
| Description | 2024 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| Money market funds invested in U.S. Treasury | $ | $ | $ | $ | ||||||||||||
| December 31, | Quoted
Prices In Active Markets | Significant Observable | Significant Unobservable | |||||||||||||
| Description | 2023 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| Money market funds invested in U.S. Treasury | $ | $ | $ | $ | ||||||||||||
| 10 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
● Related parties
Parties, which can be a corporation or individual, are considered to be related if either the Company or the other party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or significant influence.
● Recent issued accounting standards
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited financial statements.
NOTE 3 – INITIAL PUBLIC OFFERING
On
December 6, 2023, the Company consummated its Initial Public Offering of Units (including the issuance of Units as
a result of the underwriters’ full exercise of their over-allotment option), at $ per Unit, generating gross proceeds of $
As
of December 31, 2023, the Company incurred offering costs of approximately $
NOTE 4 – PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of Private Units at a price of $ per
Private Unit ($
The proceeds from the sale of the Private Units will be added to the net proceeds from the Offering held in the Trust Account. The Private Units are identical to the Units sold in the Initial Public Offering except that Private Units (including the Private Rights) will not be transferable, assignable or salable until the completion of the Company’s initial Business Combination except to permitted transferees. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Rights will expire worthless.
NOTE 5 – RELATED PARTY TRANSACTIONS
Founder Shares
Prior
to the Initial Public Offering, the Company issued an aggregate of ordinary shares of $ par value each to Han Huang. On May
11, 2023, Han Huang transferred those ordinary shares to the Sponsor and on May 15, 2023, the Sponsor resolved to sub-divide the ordinary
shares of $ par value each into ordinary shares of $ par value each and as such the Sponsor held ordinary shares
of $ each. On May 15, 2023, the directors resolved to repurchase ordinary shares from the Sponsor, the repurchase resulting
in the Sponsor holding ordinary shares. On May 25, 2023, founder shares were issued to the Sponsor (up to
of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised) pursuant
to a securities subscription agreement and the ordinary shares previously held by the Sponsor were repurchased by the company,
the shares have been retroactively adjusted. On October 20, 2023, the Company capitalized an amount equal to $ standing to the credit
of the share premium account and appropriated such sum and applied it on behalf of the Sponsor towards paying up in full (as to the full
par value of $ per founder share)
| 11 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Subject to certain limited exceptions, the initial shareholders have agreed not to transfer, assign or sell their founder shares until six months after the date of the consummation of the Company’s initial Business Combination or earlier if, subsequent to initial Business Combination, the Company consummate a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Promissory Note – Related Party
On
May 1, 2023, the Sponsor issued an unsecured promissory note (the “Note”) to
the Company, pursuant to which the Company may borrow up to an aggregate principal amount of $
Related Party Loans
In
order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor,
or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender’s discretion, up to $
Administrative Services Arrangement
An
affiliate of the Sponsor has agreed, commencing from the date that the Company’s securities are first listed on Nasdaq,
through the earlier of the Company’s consummation of a Business Combination and its liquidation, to make available to the
Company certain general and administrative services, including office space, utilities and administrative services, as the Company
may require from time to time. The Company has agreed to pay to the affiliate of the Sponsor, $
| 12 |
AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 6 – STOCKHOLDERS’ DEFICIT
Ordinary Shares
The
Company is authorized to issue ordinary shares with a par value of $ per share. Holders of the Company’s ordinary
shares are entitled to one vote for each share. On May 1, 2023, The Company entered into a subscription agreement for founder shares
with the Sponsor which is recorded as subscription receivable. The subscription agreement was amended and restated on May 24, 2023. Prior
to the Initial Public Offering, the Company issued an aggregate of ordinary shares of $ par value each to Han Huang. On May
11, 2023, Han Huang transferred those ordinary shares to the Sponsor and on May 15, 2023, the Sponsor resolved to sub-divide the ordinary
shares of $ par value each into ordinary shares of $ par value each and as such the Sponsor held ordinary shares
of $ each. On May 15, 2023, the directors resolved to repurchase ordinary shares from the Sponsor, the repurchase resulting
in the Sponsor holding ordinary shares. On May 25, 2023, founder shares were issued to the Sponsor pursuant to a
securities subscription agreement for an aggregate purchase price of $
As of March 31, 2024 and December 31, 2023, as a result of the closing of the Initial Public Offering and full exercise of the underwriters’ over-allotment option, there were ordinary shares issued and outstanding, excluding ordinary shares subject to possible redemption.
Rights
Each holder of a right will receive one-fifth (1/5) of one ordinary share upon consummation of a Business Combination, even if the holder of such right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued upon exchange of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of a Business Combination as the consideration related thereto has been included in the unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary share will receive in the transaction on an as- converted into ordinary share basis and each holder of a right will be required to affirmatively convert its rights in order to receive 1/5th of one share underlying each right (without paying additional consideration). The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company).
Additionally, in no event will the Company be required to net cash settle the rights. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of 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. Accordingly, the rights may expire worthless.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the insider shares, as well as the holders of the Private Units (and underlying securities) and any securities issued in payment of Working Capital Loans made to the Company, will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of a majority of these securities are entitled to make up to three demands that the Company register such securities at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
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AIMEI HEALTH TECHNOLOGY CO., LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
The initial shareholders and their permitted transferees can demand that the Company register the founder shares, the Private Units and the underlying Private Shares, and the units issuable upon conversion of working capital loans and the underlying ordinary shares and rights, pursuant to an agreement to be signed prior to or on the effective date requiring the Company to register such securities for resale. The holders of such securities are entitled to demand that the Company register these securities at any time after consummation of an initial business combination. Notwithstanding anything to the contrary, any holder that is affiliated with an underwriter participating in the Initial Public Offering may only make a demand on one occasion and only during the five-year period beginning on the effective date of the registration statement. In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination; provided that any holder that is affiliated with an underwriter participating in the Initial Public Offering may participate in a “piggy-back” registration only during the seven-year period beginning on the effective date of the registration statement.
Representative Shares
The Company issued representative shares to the representative (and/or its designees) as part of representative compensation as the underwriters exercised their over-allotment option in full. 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 Initial Public Offering 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 date of the commencement of sales in the Initial Public Offering, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the date of the commencement of sales in the Initial Public Offering except to any underwriter and selected dealer participating in the offering and their officers, partners, registered persons or affiliates.
Underwriter Agreement
The underwriters purchased additional Units to cover over-allotments.
The
underwriters were entitled to a cash underwriting discount of: (i) two percent (
Right of First Refusal
For a period beginning on the closing of the Initial Public Offering and ending 12 months from the closing of a Business Combination, the Company has granted Spartan Capital Securities, LLC, a right of first refusal to act as the sole investment banker, sole book running manager and/or sole placement agent for any and all future private or public equity, equity-linked, convertible and debt offerings during such period. 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 Initial Public Offering.
NOTE 8 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date, the Company has evaluated all events or transactions that occurred after the balance sheet date. Other than as described in these unaudited financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited 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 “we,” “us” or the “Company” refer to Aimei Health Technology Co., Ltd. References to our “management” or our “management team” refer to our officers and directors, and references to our “Sponsor” refer to Aimei Investment Ltd., a Cayman Islands exempted company with limited liability. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited 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 Securities Act of 1933, as amended 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 Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy, and the plans and objectives of management for future operations, 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, or 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 our final prospectus for our initial public offering (“IPO”) filed with the U.S. Securities and Exchange Commission (the “SEC”). Our 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, we disclaim 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 newly incorporated as a Cayman Islands exempted company with limited liability for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this report as our initial business combination. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. We do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction with our company.
Results of Operations
We have neither engaged in any operations nor generated any revenue to date. Our only activities from inception to March 31, 2024 were organizational activities, those necessary to prepare for and conduct the IPO, and those required to identify and evaluate a target company for a business combination. We will not generate any operating revenue until after the completion of our initial business combination, at the earliest. We have generated and will continue to generate non-operating income in the form of interest income on cash in bank and investments held in a trust account established for the benefit of our public shareholders (the “Trust Account”), from the proceeds derived from the IPO. We 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.
For the three months ended March 31, 2024, we had a net income of $755,500, which consisted of dividend income earned on investments held in the Trust Account of $909,132 offset by formation and operational costs of $153,632.
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Liquidity and Capital Resources
As of March 31, 2024, we had $413,747 in our operating bank account, $70,798,980 in our Trust Account, and working capital of approximately $402,244.
Our liquidity needs prior to the consummation of the IPO were satisfied through the payment of $25,000 from the Sponsor to cover certain offering costs on our behalf in exchange for issuance of founder shares, and the borrowing of approximately $210,151 from the Sponsor under an unsecured promissory note (see “Note 5—Related Party Transactions” in the notes to our unaudited financial statements). We have repaid the unsecured promissory note in full on December 7, 2023. Subsequent to the consummation of the IPO, our liquidity has been satisfied through the net proceeds from the consummation of the IPO and the Private Placement (as defined below) held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors, may, but are not obligated to, provide the Company Working Capital Loans (as defined in “Note 5—Related Party Transactions” in the notes to our unaudited financial statements). As of March 31, 2024, there were no amounts outstanding under the Working Capital Loans.
Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity to meet our anticipated cash needs 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. However, we cannot provide any assurance that new financing will be available. Over the time period prior to our initial business combination, we will be using the funds held outside of the Trust Account 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.
Going Concern Consideration
In connection with our assessment of going concern considerations in accordance with 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 we are unsuccessful in consummating an initial business combination within the prescribed period of time from the closing of our IPO, the requirement that we cease all operations, redeem the public shares, and thereafter liquidate and dissolve, raises substantial doubt about the ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate the continuation of our Company as a going concern.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets, or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2024. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities. The underwriter is entitled to a deferred fee of one percent (1.0%) of the gross proceeds of the IPO upon closing of a business combination, or $690,000. The deferred fee will be paid in cash upon the closing of the business combination from the amounts held in the Trust Account (as defined below), subject to the terms of the underwriting agreement.
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Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. As of March 31, 2024, there was no critical accounting policies or estimates.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our audited financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to provide this information.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of March 31, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of March 31, 2024, our disclosure controls and procedures were not effective.
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
No changes occurred 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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AIMEI HEALTH TECHNOLOGY CO., LTD.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, we are not required to provide the information required by this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following “Use of Proceeds” information relates to the registration statement on Form S-1 (File Number 333-272230), as amended (the “Registration Statement”) for our IPO, which was declared effective by the SEC on November 30, 2023. On December 6, 2023, we consummated our IPO of 6,000,000 units (the “Units”). Each Unit consists of one ordinary share, $0.0001 par value (“Ordinary Share”), and one right (“Right”) to receive one-fifth (1/5) 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 $60,000,000. Pursuant to that certain underwriting agreement, dated December 1, 2023, we granted Spartan Capital Securities, LLC, the representative of the underwriters, a 45-day option to purchase up to an additional 900,000 Units solely to cover over-allotments, if any (the “Over-Allotment Option”). Simultaneously with the consummation of the IPO, the underwriters exercised the Over-Allotment Option in full, generating total proceeds of $9,000,000.
Simultaneously with the closing of the IPO on December 6, 2023, we consummated the private placement (“Private Placement”) with Aimei Investment Ltd. of 332,000 units (the “Private Units”), generating total proceeds of $3,320,000. The Private Units are identical to the Units sold as part of the public Units in this offering. Additionally, Aimei Investment Ltd. agreed not to transfer, assign, or sell any of the Private Units or underlying securities (except in limited circumstances, as described in the Registration Statement) until the completion of our initial business combination. Aimei Investment Ltd. was granted certain demand and piggyback registration rights in connection with the purchase of the Private Units.
On December 6, 2023, a total of $69,690,000 of the net proceeds from the sale of Units in the IPO and the Private Placement, were placed in the Trust Account, located in the U.S. and held as cash items or may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to our shareholders.
We paid a total of $1,380,000 in underwriting discounts (excluding deferred underwriting discount of $690,000) and $550,000 for other costs and expenses related to the IPO.
Additionally, the underwriters are entitled to $690,000, equal to 1.0% of the gross proceeds of this offering, payable to the underwriters as deferred underwriting discounts at the closing of our initial business combination from the funds to be placed in the Trust Account. Such funds will be released to the underwriters only upon consummation of an initial business combination, as described in the Registration Statement. If the business combination is not consummated, such deferred discounts will be forfeited by the underwriters. The underwriters will not be entitled to any interest accrued on the deferred underwriting discount.
Item 3. Defaults Upon Senior Securities
Not applicable.
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Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None
Item 6. Exhibits
The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.
| * | In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 13, 2024
| Aimei Health Technology Co., Ltd. | ||
| By: | /s/ Junheng Xie | |
| Name: | Junheng Xie | |
| Title: | Chief Executive Officer and Director | |
| (Principal Executive Officer) | ||
| By: | /s/ Heung Ming Wong | |
| Name: | Heung Ming Wong | |
| Title: | Chief Financial Officer and Director | |
| (Principal Accounting and Financial Officer) |
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