UNAUDITED
NOTES TO FINANCIAL STATEMENTS
NOTE
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Golden
Star Acquisition Corporation (the “Company”) is a blank check company incorporated in the Cayman Islands on July 9,
2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization,
or similar business combination with one or more businesses (“Business Combination”).
Although
the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company
intends to focus on businesses that have a connection to the Asian market. The Company is an early stage and emerging growth company
and, as such, the Company is subject to all the risks associated with early stage and emerging growth companies.
The
Company’s Sponsor is G-Star Management Corporation, a British Virgin Islands incorporated company (the “Sponsor”).
At March 31, 2023, the Company had not yet commenced any operations. All activity through March 31, 2023 relates to the Company’s
formation and its initial public offering (the “IPO”). The Company will not generate any operating revenues until after the
completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income
from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year-end.
The
registration statement for the Company’s IPO was declared effective on May 1, 2023. On May 4, 2023, the Company consummated
the IPO of 6,000,000 units (“Units” and, with respect to the Ordinary Shares included in the Units being offered, the “Public
Shares”) at $10.00 per Unit, generating gross proceeds of $60,000,000 which is described in Note 3. On the closing date, the underwriter
purchased an additional 900,000 Units at $10.00 per Unit pursuant to the exercise of the over-allotment option, generating additional
gross proceeds to the Company of $9,000,000. Simultaneously with the closing of the IPO, the Company consummated the Private Placement
of an aggregate of 307,000 units to the Sponsor at a purchase price of $10.00 per Private Placement Unit (the “Private Units”),
generating gross proceeds to the Company in the amount of $3,070,000 (See Note 4).
Offering
costs amounted to $3,752,890 consisting of $1,380,000 of underwriting fees, $1,725,000 of deferred underwriting commissions (which are
held in the Trust Account as defined below), and $647,890 of other offering costs. As described in Note 6, the $1,725,000 of deferred
underwriting commissions is contingent upon the consummation of a Business Combination, subject to the terms of the underwriting agreement.
The
Trust Account
As
of May 4, 2023, a total of $70,337,518 of the net proceeds from the IPO and the Private Placement transaction completed with the
Sponsor, was deposited in a trust account (the “Trust Account”) established for the benefit of the Company’s public shareholders with Wilmington Trust,
National Association, acting as trustee. The amount of funds currently held in the Trust Account in excess of $69,690,000 will be transferred
to the Company’s cash account for use as its working capital.
The
funds held in the Trust Account will be invested only in United States government treasury bills, bonds or notes having a maturity of
180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company
Act of 1940, as amended (the “Investment Company Act”), and that invest solely in United States government treasuries. Except with respect to interest earned on the funds held in the Trust
Account that may be released to the Company to pay income or other tax obligations, the proceeds will not be released from the
Trust Account until the earlier of the completion of a Business Combination or the Company’s liquidation.
Going
Concern Consideration
Prior to the completion
of the IPO, as of March 31, 2023, the Company had working capital deficit of $325,562 excluding deferred offering costs, which indicated
a lack of liquidity it needed to sustain operations for a reasonable period of time, which was considered to be one year from the issuance
date of the financial statements. After the completion of the IPO, the management has reevaluated the Company’s liquidity and financial
condition. As of May 4, 2023, the Company had working
capital of $343,708,
which excludes $69,690,000
of cash held in the Trust Account subject to
possible redemption and the liability for deferred underwriting commissions of $1,725,000.
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. These conditions raise substantial doubt about
the Company’s ability to continue as a going concern one year from the issuance date of the financial statements. Prior to consummation
of a Business Combination, the Company has the ability to secure additional funding from the Sponsor. There is no assurance that the
Company’s plans to consummate a Business Combination will be successful within 9 months (or 21 months, as applicable). The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The accompanying financial statements are presented
in U.S. Dollars and conformity with accounting principles generally accepted in the United States of America (“GAAP”) and
pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).
The accompanying unaudited financial statements
as of March 31, 2023, and for the three months period ended March 31, 2023 have been prepared in accordance with U.S. GAAP for interim
financial information and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal accruals)
considered for a fair presentation have been included. Operating results for the three months period ended March 31, 2023 are not necessary
indicative of the results that may be expected for the period ending December 31, 2023, or any future period.
Emerging
Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The preparation of financial statements in conformity with GAAP requires 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 financial statements and the reported amounts of expenses during the reporting period. Accordingly, the actual results could differ significantly from those estimates.
Cash in Escrow
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 not have any cash equivalents as of March 31, 2023 and December 31, 2022. The Company had cash held in escrow of $181,573 and $37,423 as of March 31, 2023 and December 31, 2022, respectively.
Deferred
Offering Costs
Deferred offering costs consist of underwriting,
legal, accounting, and other expenses incurred through the balance sheet date that are directly related to the IPO and that will be charged
to shareholder’s equity upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred costs, as well
as additional expenses incurred, will be charged to operations.
Income
Taxes
The
Company complies with the accounting and reporting requirements Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“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
only 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 May 4, 2023, and no amounts were 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 may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations
may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with
foreign tax laws. 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 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, the Company’s
tax provision was zero for the periods presented.
On
August 16, 2022, the U.S. Government enacted legislation commonly referred to as the Inflation Reduction Act. The main provisions
of the Inflation Reduction Act (the “IR Act”) that we anticipate may impact us is a 1% excise tax on share repurchases. Any
redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or
otherwise, may be subject to the excise tax because there is possibility that the Company may acquire a U.S. domestic corporation or
engage in a transaction in which a domestic corporation becomes parent or affiliate to the Company and the Company may become a “covered
corporation” as a listed company in Nasdaq. The management team has evaluated the IR Act as of March 31, 2023 and does not
believe it would have a material effect on the Company, and will continue to evaluate its impact.
Net
Loss 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. For the three months ended as of March 31, 2023 and 2022, weighted average shares were reduced
for the effect of an aggregate of 225,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised
by the underwriters.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account held in escrow.
The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such
account.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value
Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to
their short-term nature.
Recently
Issued 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 the Company’s financial statements.
NOTE
3. INITIAL PUBLIC OFFERING
On May 4, 2023, the Company sold 6,900,000 Units (including the issuance of 900,000 Units as a result of the underwriter’s full exercise of the over-allotment) at a price of $10.00 per Unit, generating gross proceeds of $69,000,000 related to the IPO. Each Unit consists of one Ordinary Share and one right to receive two-tenths (2/10) of an Ordinary Share upon the consummation of an Initial Business Combination. Each five rights entitle the holder thereof to receive one Ordinary Share at the closing of a Business Combination. No fractional shares will be issued.
NOTE
4. PRIVATE PLACEMENT
Concurrently
with the closing of the IPO, the Sponsor purchased an aggregate of 307,000 Private Units at a price of $10.00 per Private Unit for an
aggregate purchase price of $3,070,000 in a Private Placement. The Private Units are identical to the Public Units except with respect
to certain registration rights and transfer restrictions. The proceeds from the Private Units were added to the proceeds from the IPO
to be held in the Trust Account. 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 Units and all underlying securities will expire worthless.
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
On
September 17, 2021, the Company issued 2,875,000 founder shares to the Sponsor (“Founder Shares”) for $25,000. On December 14,
2022, the Sponsor surrendered shares for no consideration. All share amounts and related information have been retroactively
restated to reflect the share surrender (see Note 7). As a result of such share surrender, the Sponsor of the Company held 1,725,000
Founder Shares as of March 31, 2023 and December 31, 2022, which included an aggregate of up to 225,000 Ordinary Shares subject to forfeiture to the
extent that the underwriters’ overallotment was not exercised in full or in part.
On
May 4, 2023, since the underwriters exercised the over-allotment in full, no Founder Shares are subject to forfeiture.
Promissory
Note — Sponsor
On
August 11, 2021, the Company issued an unsecured promissory note to the Sponsor which was later amended on January 12,
2022 and January 4, 2023. Pursuant to the promissory note and its amendments (the “Promissory Note”), the Company
may borrow up to an aggregate principal amount of $,
which is non-interest bearing and payable on the earlier of (i) December 31, 2023 or (ii) the consummation of the IPO. As of March 31, 2023 and December 31, 2022, the Company had borrowed
an aggregate amount of $
and $, respectively, evidenced by the Promissory Note. On April 6, 2023, the Company transferred all of the cash
balance of $181,573
in the escrow account to the Sponsor, which was deemed to be a partial repayment of the principal owed under the Promissory
Note. As of May 4, 2023, the remaining balance was fully repaid upon the consummation of the IPO.
Due
to Sponsor
As
of March 31, 2023, the net balance due to Sponsor was $4,000 after off-setting amounts paid by Sponsor against the $ balance due from Sponsor
carried from prior year. On May 4, 2023, the net balance due to Sponsor was fully repaid upon the consummation of the IPO.
NOTE
6. COMMITMENTS AND CONTINGENCIES
Risks
and Uncertainties
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 the Company’s financial position, results of its 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.
In
February 2022, the Russian Federation and Belarus commenced a military action with the Republic of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further,
the impact of this action and related sanctions on the world economy is not determinable as of the date of this financial statement.
The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of
the date of this financial statement. The management will continuously evaluate the effect to the Company.
Registration
Rights
The
holders of the Founder Shares and Private Placement Units 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. The holders of these securities are entitled to make up to
three demands, excluding short form demands, that the Company register 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. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting
Agreement
The
Company engaged Ladenburg Thalmann & Co. Inc. as its underwriter. The Company granted the underwriter a 45-day option to purchase
up to 900,000 additional Units to cover over-allotments at $10.00 per Unit, less the underwriting discounts and commissions. On May 4,
2023, the underwriters exercised the over-allotment in full.
On
May 4, 2023, the Company paid a cash underwriting commission of 2.0% of the gross proceeds of the IPO, or $1,380,000.
The
underwriters are entitled to a deferred underwriting commission of 2.5% of the gross proceeds of the IPO, or $1,725,000, which will be
paid from the funds held in the Trust Account upon completion of the Company’s initial Business Combination subject to the terms
of the underwriting agreement.
Professional
Fees
The
Company has paid professional fees of $50,000
to its legal counsel for the services relating to the IPO as of March 31, 2023, and $150,000
at the closing of the public offering. Commencing on May 15, 2023, the legal counsel also charges a monthly fee of $5,000 for the post IPO professional
services.
Administrative
Services Agreement
The Company entered into an administrative services agreement, having
a term commencing on May 1, 2023, through the earlier of the Company’s consummation of a Business Combination or its liquidation,
which agrees to pay to the Sponsor a total of $10,000 per month for office space, and secretarial and administrative services
provided by Sponsor to members of the Company’s management team.
NOTE
7. SHAREHOLDER’S EQUITY
Ordinary
Shares — The Company is authorized to issue 50,000,000
ordinary shares, with a par value of $0.001
per share. Holders of the ordinary shares are
entitled to one vote for each ordinary share. At March 31, 2023 and December 31, 2022, there was 1,725,000
ordinary shares issued and outstanding, respectively,
of which 225,000, respectively, are subject to forfeiture to the extent that the underwriters’ over-allotment option
is not exercised in full, so that the Sponsor will own 20% of the issued and outstanding shares after the IPO.
As
of May 4, 2023, there were 2,032,000 Ordinary Shares issued and outstanding, including 307,000 shares issued from the Private Placement, and excluding 6,900,000 Ordinary Shares subject to possible
redemption.
NOTE
9. SUBSEQUENT EVENTS
The Company has evaluated all events or
transactions that occurred up to June 9, 2023, the date the financial statements were issued. Other than described in the Note 1,
Note 3, Note 4, and Note 5 to Note 7, which were related to the consummation of the IPO, the Private Placement, payment of offering
costs, and the repayment of Promissory Note, etc., the Company has identified the following subsequent event that would have
required adjustment or disclosure in the financial statements:
On June 8, 2023, the Sponsor paid $155,500 on
behalf of the Company for professional fees and D&O insurance premiums.