NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note 1 — Organization
and Business Operations
TG
Venture Acquisition Corp. (the “Company”) is a blank check company incorporated as a Delaware corporation on February 8,
2021, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”).
As
of December 31, 2022, the Company had not commenced any operations. All activity for the period from February 8, 2021 (inception) through
December 31, 2022 relates to the Company’s formation and the initial public offering described below. The Company will not generate
any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering (the “IPO”).
The
Company’s sponsor is Tsangs Group Holdings Limited (the “Sponsor”). The registration statement for the Company’s
IPO was declared effective on November 2, 2021 (the “Effective Date”). On November 5, 2021, the Company consummated the IPO
of 11,500,000 units (the “Units” and, with respect to the Common stock included in the Units being offered, the
“Public Shares” and the warrants included in the Units being offered, the “Public Warrants”) at $10.00 per
Unit, including the full exercise of the underwriters’ over-allotment of 1,500,000 Units, generating gross proceeds to
the Company of $115,000,000, which is discussed in Note 3.
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 $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $5,500,000,
which is described in Note 4.
Transaction
costs amounted to $3,040,822 consisting of $1,150,000 of underwriting commissions, $575,000 of fair value of the Units
issued to ThinkEquity LLC (“ThinkEquity”), the representative of the underwriters (see Note 6), $579,110 of fair value
of the Founder Shares (as defined in Note 5) sold to advisors in excess of proceeds (see Note 5), and $736,712 of other offering
costs, and was all charged to stockholders’ equity.
While
the Company’s management has broad discretion with respect to the specific application of the cash held outside of the Trust Account
(as hereinafter defined), substantially all of the net proceeds from the Initial Public Offering and the sale of the Private Placement
Warrants, which are placed in the Trust Account, are intended to be applied generally toward completing a Business Combination. The Company’s
Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the value
of the assets held in the Trust Account (excluding the taxes payable on the interest earned on the Trust Account) at the time of the
signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business
Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company
will be able to successfully effect a Business Combination.
Following
the closing of the IPO on November 5, 2021, $117,300,000 ($10.20 per Unit) from the net proceeds of the sale of Units in the IPO
and a portion of the proceeds of the sale of the Private Placement Warrants were deposited into a trust account (the “Trust Account”)
located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and are invested only in U.S. government
securities with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment
Company Act which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held
in the Trust Account that may be released to the Company to pay its franchise and income tax obligations (less up to $100,000 of
interest to pay dissolution expenses), the proceeds from the IPO and the sale of the Private Placement Warrants will not be released
from the Trust Account until the earliest of: (a) the completion of the initial Business Combination; (b) the redemption of any Public
Shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation:
(i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination
or certain amendments to the Company’s charter prior thereto or to redeem 100% of the Public Shares if the Company does not complete
the initial Business Combination within 18 months from the closing of this offering May 5, 2023; or (ii) with respect to any other provision
relating to stockholders’ rights or pre-Business Combination activity; and (c) the redemption of 100% of the Public Shares if the
Company is unable to complete the initial Business Combination within the required time frame (subject to the requirements of applicable
law).
Public
stockholders have the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior
to voting on the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its franchise and income taxes, divided by the number of then outstanding Public Shares, subject to the limitations
described herein. The amount in the Trust Account is initially anticipated to be $10.20 per public share.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
The
Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately
prior to or upon the consummation of such Business Combination, and, if the Company seeks public stockholder approval, a majority of
the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange
listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant
to its amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities
and Exchange Commission (the “SEC”) and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company
decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy
solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection
with a Business Combination, the Sponsor has agreed to vote its Founder Shares and any Public Shares purchased during or after the Initial
Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public
Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
The
Company has 18 months from the closing of the IPO until May 5, 2023 to complete the initial Business Combination (the “Combination
Period”). If the Company is unable to complete the initial Business Combination within the Combination Period, the Company will:
(i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but no more than ten business
days thereafter subject to lawfully available funds therefor, redeem the Public Shares, at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not
previously released to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the Company’s remaining stockholders and the board of directors, dissolve
and liquidate, subject in the case of clauses (ii) and (iii) above to the Company’s obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with
respect to the warrants, which will expire worthless if the Company fails to complete the initial Business Combination within the Combination
Period.
The
initial stockholders, Sponsor, executive officers and directors have entered into a letter agreement with the Company, pursuant to which
they have agreed to (i) to waive their redemption rights with respect to their Founder Shares if we are forced to liquidate; (ii) to
waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve
an amendment to the Company’s amended and restated certificate of incorporation: (A) to modify the substance or timing of the Company’s
obligation to allow redemption in connection with the Company’s initial Business Combination or certain amendments to the charter
prior thereto or to redeem 100% of the Company’s Public Shares if the Company does not complete the initial Business Combination
within the Combined Period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business
Combination activity; and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder
Shares if the Company fails to complete the initial Business Combination within the Combination Period, although they will be entitled
to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the
initial Business Combination within the Combination Period; (iv) the Founder Shares are shares of the Company’s Class B common
stock that will automatically convert into shares of the Company’s Class A common stock at the time of the initial Business Combination,
on a one-for-one basis, subject to adjustment as described herein, and (v) are entitled to registration rights. If the Company submits
the initial Business Combination to the public stockholders for a vote, the initial stockholders, officers and directors have agreed
pursuant to the letter agreement to vote any shares held by them and any Public Shares purchased during or after this offering (including
in open market and privately negotiated transactions) in favor of the initial Business Combination.
The
Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products
sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality
or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20
per Public Share; and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust
Account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability
will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies
held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity
of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company has
not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor
has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company.
Therefore, the Company cannot assent that the Sponsor would be able to satisfy those obligations. None of the Company’s officers
or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Proposed
Business Combination
On
December 5, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”)
by and among (i) The Flexi Group Limited, a business company with limited liability incorporated under the laws of the British Virgin
Islands (the “Flexi”), (ii) The Flexi Group Holdings, Ltd., a business company with limited liability incorporated
under the laws of the British Virgin Islands and a direct wholly owned subsidiary of Flexi (“PubCo” and, together
with Flexi, the “Flexi Group”), (iii) The Flexi Merger Co. Ltd., a business company with limited liability
incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of PubCo (“Merger Sub 1”),
and (iv) Flexi Merger Co. LLC, a Delaware limited liability company and a direct wholly owned subsidiary of PubCo (“Merger
Sub 2” and, Merger Sub 2, PubCo and Merger Sub 1, each, individually, an “Acquisition Entity”).
Capitalized
terms used in this section, but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.
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 PubCo, and (ii) following confirmation of the effective
filing of the documents required to implement the Initial Merger, Merger Sub 2 will merge with and into TGVC (the “SPAC Merger”
and together with the Initial Merger, the “Mergers”), the separate existence of Merger Sub 2 will cease and
the Company will be the surviving entity of the SPAC Merger and a direct wholly owned subsidiary of PubCo.
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 PubCo and converted into a warrant to purchase PubCo Ordinary
Shares (each, an “Assumed SPAC Warrant”).
Earnout
The
Business Combination Agreement, subject to the terms and conditions set forth therein, provides that Flexi shareholders as of the Initial
Merger will have the right to receive up to an aggregate of 2,900,000 additional PubCo Ordinary Shares based on the total annual revenues
of PubCo in each of the two fiscal years following the Closing Date.
Representations,
Warranties and Covenants
The
Business Combination Agreement contains customary representations and warranties of the parties, which will not survive the Closing.
Many of the representations and warranties are qualified by materiality or Company Material Adverse Effect (with respect to Flexi) or
SPAC Material Adverse Effect (with respect to the Company). “Material Adverse Effect” as used in the Business Combination
Agreement means with respect to Flexi or the Company, as applicable, any event, state of facts, development, change, circumstance, occurrence
or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (i) the
business, assets and liabilities, results of operations or financial condition of the applicable party and its subsidiaries, taken as
a whole or (ii) the ability of such party or any of its subsidiaries to consummate the Transactions, in each case subject to certain
customary exceptions. Certain of the representations are subject to specified exceptions and qualifications contained in the Business
Combination Agreement or in information provided pursuant to certain disclosure schedules to the Business Combination Agreement.
The
Business Combination Agreement also contains pre-closing covenants of the parties, including obligations of the parties to operate their
respective businesses in the ordinary course consistent with past practice, and to refrain from taking certain specified actions without
the prior written consent of the other applicable parties, in each case, subject to certain exceptions and qualifications. Additionally,
the parties have agreed not to solicit, negotiate or enter into competing transactions, as further provided in the Business Combination
Agreement. The covenants do not survive the Closing (other than those that are to be performed after the Closing).
As
promptly as practicable after the execution of the Business Combination Agreement, the Company and PubCo have agreed to prepare and file
with the SEC, a Registration Statement on Form F-4 (as amended, the “F-4 Registration Statement”) in connection with the
registration under the Securities Act of 1933, as amended (the “Securities Act”), of the offer and issuance of the PubCo
Ordinary Shares and Assumed SPAC Warrants to be issued pursuant to the Business Combination Agreement The F-4 Registration Statement
will contain a proxy statement/prospectus for the purpose of (i) the Company soliciting proxies from its shareholders to approve the
Business Combination Agreement, the Transactions and related matters (the “the Company Shareholder Approval”) at a special
meeting of the Company shareholders (the “Shareholder Meeting”), (ii) providing the Company’s shareholders an opportunity,
in accordance with its organizational documents and initial public offering prospectus, to redeem their shares of SPAC Class A Common
Stock (collectively, the “Redemptions”), and (iii) PubCo’s offering and issuance of the PubCo Ordinary Shares and Assumed
Warrants in connection with the Transactions.
PubCo
agreed to take all action within its power so that effective at the Closing, the board of directors of PubCo will consist of no less
than five individuals, two of whom may be designated by the Sponsor, and a majority of whom shall be independent directors in accordance
with Nasdaq requirements, and which shall comply with all diversity requirements under applicable Law.
In
addition, prior to Closing, PubCo agreed to amend and restate its Memorandum of Association and Articles of Association (the “PubCo
Governing Documents”). The PubCo Governing Documents will include customary provisions for a memorandum of association and
articles of association of a British Virgin Islands publicly traded company that is traded on Nasdaq.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Conditions
to the Parties’ Obligations to Consummate the Mergers
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) PubCo’s initial
listing application with Nasdaq shall have been conditionally approved and, immediately following the Closing, PubCo shall satisfy any
applicable initial and continuing listing requirements of Nasdaq and PubCo shall not have received any notice of non-compliance therewith,
and (v) the PubCo Ordinary Shares and Assumed SPAC Warrants having been approved for listing on Nasdaq, subject to round lot holder requirements.
In
addition to these customary closing conditions, the Company must also hold net tangible assets of at least $5,000,001 immediately prior
to Closing, net of Redemptions and liabilities (including the Company’s transaction expenses).
The
obligations of the Company to consummate the Transactions are also subject to, among other things (i) the representations and warranties
of Flexi and of each Acquisition Entity being true and correct, subject to the materiality standards contained in the Business Combination
Agreement, (ii) material compliance by Flexi and each Acquisition Entity with its pre-closing covenants, and (iii) the absence of a Company
Material Adverse Effect.
In
addition, the obligations of Flexi to consummate the Transactions are also subject to, among other things (i) the representations and
warranties of the Company being true and correct, subject to the materiality standards contained in the Business Combination Agreement,
(ii) material compliance by the Company with its pre-closing covenants, and (iii) the absence of a SPAC Material Adverse Effect.
Termination
Rights
The
Business Combination Agreement contains certain termination rights, including, among others, the following: (i) upon the mutual written
consent of the Company and Flexi, (ii) if the consummation of the Transactions is prohibited by governmental order, (iii) if the Closing
has not occurred on or before May 5, 2023, (iv) in connection with a breach of a representation, warranty, covenant or other agreement
by Flexi or the Company which is not capable of being cured or is not cured within 30 days after receipt of notice of such breach, (v)
by either the Company or Flexi if the board of directors of the other party publicly changes its recommendation with respect to the Business
Combination Agreement and Transactions and related shareholder approvals under certain circumstances detailed in the Business Combination
Agreement, (vi) by either the Company or Flexi if the Shareholder Meeting is held and the Company Shareholder Approval is not received,
(vii) by the Company if the requisite Company Audited Financial Statements and PCAOB-compliant unaudited financials of Flexi for the
first, second and third quarters of 2022 (to the extent required in accordance with the Business Combination Agreement) have not been
delivered by January 4, 2023, with respect to the first and second quarters, and January 16, 2023, with respect to the third quarter,
or (viii) by the Company if Flexi does not receive the written consent of its shareholders to the Business Combination Agreement and
related approvals within five business days after the F-4 Registration Statement has become effective.
None
of the parties to the Business Combination Agreement are required to pay a termination fee or reimburse any other party for its expenses
as a result of a termination of the Business Combination Agreement. However, each party will remain liable for willful and material breaches
of the Business Combination Agreement prior to termination.
Trust
Account Waiver
Flexi
and each Acquisition Entity agreed that it and its affiliates will not have any right, title, interest or claim of any kind in or to
any monies in the Company’s trust account held for its public shareholders, and agreed not to, and waived any right to, make any
claim against the trust account (including any distributions therefrom).
The
Business Combination Agreement is filed as Exhibit 2.1 to this Annual Report on Form 10-K and the foregoing description thereof is qualified
in its entirety by reference to the full text of the Business Combination Agreement. The Business Combination Agreement provides investors
with information regarding its terms and is not intended to provide any other factual information about the parties. In particular, the
assertions embodied in the representations and warranties contained in the Business Combination Agreement were made as of the execution
date of the Business Combination Agreement only and are qualified by information in confidential disclosure schedules provided by the
parties to each other in connection with the signing of the Business Combination Agreement. These disclosure schedules contain information
that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the Business Combination Agreement.
Moreover, certain representations and warranties in the Business Combination Agreement may have been used for the purpose of allocating
risk between the parties rather than establishing matters of fact. Accordingly, you should not rely on the representations and warranties
in the Business Combination Agreement as characterizations of the actual statements of fact about the parties.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Shareholder
Support Agreement
Contemporaneously
with the execution of the Business Combination Agreement, PubCo, Flexi and certain Flexi shareholders entered into a Shareholder Support
Agreement, pursuant to which, among other things, certain Flexi shareholders agreed (i) to vote their Flexi shares in favor of the Business
Combination Agreement (including by execution of a written consent), the Mergers and the other Transactions, (ii) to waive any rights
to seek appraisal or rights of dissent in connection with the Business Combination Agreement, the Mergers and the transactions contemplated
thereby; and (iii) to consent to the termination of all shareholder agreements with Flexi (with certain exceptions), effective at Closing,
subject to the terms and conditions contemplated by the Shareholder Support Agreement. Flexi shareholders party to the Shareholder Support
Agreement collectively have a sufficient number of votes to approve the Business Combination Agreement, the Mergers and the other Transactions.
The
Shareholder Support Agreement and all of its provisions will terminate and be of no further force or effect upon the earlier of the Closing
and termination of the Business Combination Agreement pursuant to its terms. Upon such termination of the Shareholder Support Agreement,
all obligations of the parties under the Shareholder Support Agreement will terminate; provided, however, that
such termination will not relieve any party thereto from liability arising in respect of any breach of the Shareholder Support Agreement
prior to such termination.
Sponsor
Support Agreement
Contemporaneously
with the execution of the Business Combination Agreement, the Company entered into a Sponsor Support Agreement with the Sponsor, PubCo,
Flexi, and certain members of the Company’s board of directors and management team (the “Holders”), pursuant
to which, among other things, the Sponsor and the Holders agreed to vote their the Company shares in favor of the Business Combination
Agreement (including by execution of a written consent), the Mergers and the other Transactions, subject to the terms and conditions
contemplated by the Sponsor Support Agreement.
The
Sponsor Support Agreement and all of its provisions will terminate and be of no further force or effect upon the earlier to occur of
Closing and termination of the Business Combination Agreement pursuant to its terms.
Lock-Up
Agreement
Concurrently
with the execution of the Business Combination Agreement, the Company and PubCo entered into separate Lock-Up Agreements (each a “Lock-Up
Agreement”) with Sponsor, certain members of the Company’s board of directors and management team, and certain Flexi
shareholders, pursuant to which 95% of the PubCo Ordinary Shares to be received by such shareholders will be locked-up and subject to
transfer restrictions for a period of time following the Closing, as described below, subject to certain exceptions. That portion of
the securities held by such shareholders will be locked-up until the earliest of: (i) the six month anniversary of the date of the Closing,
(ii) subsequent to the Business Combination, if the last sale price of PubCo Ordinary Shares equals or exceeds $12.00 per share (adjusted
for stock splits, stock dividends, reorganizations, recapitalizations and the like), for any 20 trading days within any 30-trading day
period commencing at least 150 days after the date of the Business Combination, and (iii) the date after the Closing on which PubCo completes
a liquidation, merger, capital stock exchange, reorganization or other similar transaction which results in all of PubCo’s shareholders
having the right to exchange their equity holdings in PubCo for cash, securities or other property.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Registration
Rights Agreement
Concurrently
with the execution of the Business Combination Agreement, PubCo entered into a Registration Rights Agreement (the “Registration
Rights Agreement”) with Sponsor and certain Flexi shareholders pursuant to which, among other things, PubCo agreed to provide Sponsor
and such shareholders with certain rights relating to the registration for resale under the Securities Act of the PubCo Ordinary Shares
and Assumed Warrants that they received in the Mergers.
Forms
of the foregoing agreements related to the Business Combination Transaction are filed as exhibits to this Annual Report, and the foregoing
description thereof is qualified in its entirety by reference to the full text of the respective agreement.
The
transaction is expected to be completed in the second quarter of 2023, subject to regulatory approvals and other customary closing conditions.
After closing, The Flexi Group’s ordinary shares are expected to trade on the Nasdaq Stock Market LLC under ticker symbol FLXG.
Liquidity,
Capital Resources, and Going Concern
The
Company’s liquidity needs prior to the consummation of the Initial Public Offering had been satisfied through a payment from the
Sponsor of $25,000 (see Note 5) for the Founder Shares and the loan under an unsecured promissory note from the Sponsor of up to
$400,000 (see Note 5) which was fully repaid on December 31, 2021. Subsequent to the consummation of the Initial Public Offering,
the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the
Private Placement held outside of the Trust Account. As of December 31, 2022, the Company had $147,020 in its operating bank account
and working capital deficit of $894,841.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate
of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital
Loans, as defined below (see Note 5). As of December 31, 2022 and 2021, there were no amounts outstanding under any Working Capital Loans.
The
Company expects to incur significant costs in pursuit of its acquisition plans. Based on the foregoing, management believes that the Company
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, the Company 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.
On March
16, 2023, the Sponsor issued a promissory note allowing the Company to borrow up to $3,000,000 under an unsecured promissory note to be
used to defray expenses in connection with the proposed Business Combination. The promissory note is payable on the date on which the
Company consummates its initial Business Combination. $350,000 in previously advanced fund from the Sponsor is included as part of the
principal of the promissory note and is therefore not available for further use by the Company (see Notes 5 and 10).
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 December 31, 2022 are not sufficient to complete its planned
activities for a reasonable period of time, and the date for mandatory liquidation and dissolution raises substantial doubt about the
Company’s ability to continue as a going concern through May 5, 2023, the scheduled liquidation date of the Company if it does not
complete a Business Combination prior to such date. These
conditions also raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one
year after the date that these financial statements are issued. Management plans to address this
uncertainty through a Business Combination as discussed above. There is no assurance that the Company’s plans to consummate a Business
Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Risks
and Uncertainties
In
February 2022, the Russian Federation and Belarus commenced a military action with the country 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 are not determinable as of the date of these financial statements.
The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of
the date of these financial statements.
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus and war
could have a negative effect on the Company’s financial position, results of its operations and 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
August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for,
among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and
certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed
on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally
1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise
tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value
of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the
Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the
abuse or avoidance of the excise tax.
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. Whether and to what extent the Company would be subject to the excise tax in connection with a Business
Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions
and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii)
the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued
not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content
of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the
redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction
in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note 2 — Significant
Accounting Policies
Basis of Presentation
The
accompanying financial statement is presented in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) and pursuant to the rules and regulations of the SEC.
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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company’s financial statement with another public company which
is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Use of Estimates
The
preparation of the financial statements in conformity with US 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.
Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in
formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results
could differ significantly from those estimates. The significant accounting estimate reflected in the Company’s financial statements
includes, but is not limited to, valuation of Founder Shares.
Cash and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had cash of $147,020 and $664,626 as of December 31, 2022 and 2021, respectively. The Company did not have any cash equivalents
as of December 31, 2022 and 2021.
Investments
Held in Trust Account
As
of December 31, 2022, substantially all of assets held in the Trust Account were held in money market funds which are invested primarily
in U.S. Treasury securities.
As
of December 31, 2021, the assets held in the Trust Account consist of United States Treasury Bills. The Company classifies its United
States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments—Debt and Equity Securities.”
Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity
treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.
During
the year ended December 31, 2022 and the period from February 8, 2021 (inception) through December 31, 2021, the Company did not withdraw
any of the interest income from the Trust Account to pay its tax obligations, however, may in the future periods as permitted under the
Trust Agreement.
A
decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment
that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for
the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability
and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment
is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the
severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the
general market condition in the geographic area or industry in which the investee operates.
Premiums
and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest
method. Such amortization and accretion are included in the “interest income” line item in the statements of operations.
Interest income is recognized when earned.
Deferred
Offering Costs
The
Company complies with the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 340-10-S99-1, “Other Assets and Deferred Costs”. Deferred offering costs consists 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 November 5, 2021, offering costs associated with the Class A common stock and the
warrants were charged to stockholders’ equity. Upon the IPO on November 5, 2021 offering costs amounted to $3,040,822, all of which
was allocated to stockholders’ equity.
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 Monte Carlo valuation that considers the probability of an initial public offering, business combination and other risk
factors.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term
nature.
Fair
Value Measurements
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). 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. |
Class A Common Stock Subject
to Possible Redemption
The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified
as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features
redemption rights that is 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. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s
control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented
at redemption value as temporary equity, outside of the stockholders’(deficit) equity section of the Company’s balance sheets.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject
to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting
period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, the Company
recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to
the extent available) and accumulated deficit. There was $1,009,040 increase in the redemption value at December 31, 2022 since the interest
earned to date from marketable securities held in Trust Account exceed the franchise taxes incurred and provision for income taxes to
date. The dissolution expense of $100,000 is not included in the redemption value of the shares subject to redemption since it is only
taken into account in the event of the Company’s liquidation.
At
December 31, 2022 and 2021, the Class A common stock subject to possible redemption reflected in the balance sheets is reconciled in
the following table:
Schedule of reconciliation | |
| | |
Gross proceeds | |
$ | 115,000,000 | |
Less: | |
| | |
Proceeds allocated to Public
Warrants | |
| (6,275,456 | ) |
Issuance cost of redeemable
Class A common stock | |
| (3,040,822 | ) |
Plus: | |
| | |
Remeasurement adjustment
on redeemable common stock | |
| 12,066,278 | |
Class
A common stock subject to possible redemption, December 31, 2021 | |
| 117,300,000 | |
Plus: | |
| | |
Remeasurement adjustment
on redeemable common stock | |
| 1,009,040 | |
Class
A common stock subject to possible redemption, December 31, 2022 | |
$ | 118,309,040 | |
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Derivative
Financial Instruments
The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Derivative instruments
are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported
in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based
on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Warrants
The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in 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.
If
the stock subject to mandatory redemptions provisions represents the only shares in the reporting entity, it must report instruments
in the liabilities section of its statements of financial position. The stock subject must then describe them as shares subject to mandatory
redemption, so as to distinguish the instruments from other financial statement liabilities. The Company concludes that the Company’s
warrants defined in Note 7 do not exhibit any of the above characteristics and, therefore, are outside the scope of ASC 480.
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. The Company accounts for the 11,500,000 Public Warrants (Note 3) and 5,500,000 Private Placement
Warrants (Note 4) as equity-classified instruments.
Net Loss per Common Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss share
is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The Company
has two classes of shares, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro
rata between the two classes of shares. The Company had not considered the effect of the Private Placement to purchase an aggregate of
5,500,000 of 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. The table below presents a reconciliation
of the numerator and denominator used to compute basic and diluted net loss per share for each class of common stock.
Reconciliation
of Net Loss per Common Stock
Basic
and diluted net loss per share for Class A
common stock and for Class B common stock is calculated as follows:
Schedule of Earnings Per Share, Basic and Diluted | |
| | | |
| | |
| |
For the
Year Ended December 31, 2022 | |
For the
Period from February 8, 2021 (Inception) to December 31, 2021 |
Net
loss per share for Class A common stock: | |
| | | |
| | |
Allocation
of net loss to Class A common stock | |
$ | (686,038 | ) | |
$ | (526,069 | ) |
| |
| | | |
| | |
Basic and diluted weighted
average shares, Class A common stock | |
| 11,557,500 | | |
| 2,014,610 | |
Basic and diluted net loss
per share | |
$ | (0.06 | ) | |
$ | (0.26 | ) |
| |
| | | |
| | |
Net
loss per share for Class B common stock: | |
| | | |
| | |
Allocation of net loss
to Class B common stock | |
$ | (171,496 | ) | |
$ | (547,098 | ) |
| |
| | | |
| | |
Basic and diluted weighted
average shares, Class B common stock | |
| 2,889,149 | | |
| 2,095,139 | |
Basic and diluted net loss
per share | |
$ | (0.06 | ) | |
$ | (0.26 | ) |
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Income
Taxes
The
Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax
assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities
and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition.
The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of December 31, 2022 and 2021. 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income tax examinations
by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus
of income among various tax jurisdictions and compliance with federal and state 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
provision for income taxes for the year ended December 31, 2022 and for the period from February 8,2021 (inception) through December
31, 2021 were $268,239 and $0, respectively.
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 Deposit Insurance Corporation coverage of $250,000. At December 31, 2022 and 2021, the Company
had not experienced losses on this account.
Recent Accounting Standards
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements.
Note 3 — Initial Public
Offering
On
November 5, 2021, the Company sold 11,500,000 Units, including the full exercise of the underwriters’ over-allotment option to
purchase 1,500,000 Units, at a purchase price of $10.00 per Unit. Each unit consists of one Public Share, an aggregate of 11,500,000
Public Shares, and one redeemable Public Warrant, an aggregate of 11,500,000 Public Warrants. Each Public Warrant entitles the holder
to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 7).
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note 4 — Private Placement
Simultaneously
with the closing of the IPO, the Sponsor purchased an aggregate of 5,500,000 Private Placement Warrants at a price of $1.00 per warrant
in a private placement, for an aggregate purchase price of $5,500,000. Each Private Placement Warrant entitles the holder thereof to
purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustments (see Note 7), and
will expire worthless if the Company does not complete the initial Business Combination.
The
Private Placement Warrants are identical to the Public Warrants except that they will not be transferable, assignable or saleable until
30 days after the Business Combination except to certain permitted transferees.
Note 5 — Related Party
Transactions
Founder
Shares
In
2021, the Sponsor and other founders (the “Initial Stockholder”) paid $ in exchange for shares
of Common stock (the “Founder Shares”). The number of Founder Shares outstanding was determined based on the expectation
that the total size of the IPO would be a maximum of 11,500,000 Units if the underwriter’s over-allotment option was
exercised in full, and therefore that such Founder Shares represent 20% of the outstanding shares after the IPO.
Two
of the initial stockholders, TriPoint Capital Management, LLC (“TriPoint”), a Delaware limited liability company, and HFI
Limited (“HFI”), a Cayman Islands company, serve in an advisory capacity to the Sponsor with the Company being a primary
beneficiary, and their participation in the purchase of Founder Shares is considered as part of their compensation as advisors. Accordingly,
upon consummation of the IPO on November 5, 2021, the Company recorded the excess fair value above the purchase price of the 300,000 Founder
Shares purchased by TriPoint and HFI as an offering cost of $579,110, which were charged to stockholders’ equity.
On
November 2, 2021, the Sponsor entered into an Agreement with the .
The
Initial Stockholders have agreed not to transfer, assign, or sell any of their Founder Shares until the earlier to occur of: (A) nine
months after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last
sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial
Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or
other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common
stock for cash, securities or other property, except with respect to permitted transferees.
Promissory
Note — Related Party
The
Sponsor issued a promissory note allowing the Company to borrow up to $400,000 under an unsecured promissory note to be used for
a portion of the expenses of the IPO. The Company had borrowed $227,690 under the promissory note. At December 31, 2021, the Company
fully repaid the outstanding promissory note. At December 31, 2022, the Company did not have any outstanding promissory notes.
On March
16, 2023, the Sponsor issued a promissory note allowing the Company to borrow up to $3,000,000 under an unsecured promissory note to be
used to defray expenses in connection with the proposed Business Combination. The promissory note is payable on the date on which the
Company consummates its initial Business Combination. $350,000 in previously advanced fund from the Sponsor is included as part of the
principal of the promissory note and is therefore not available for further use by the Company (see Note 10).
Due
to Related Parties
As
of December 31, 2022 and 2021, there were $106,215 and $875, respectively, outstanding under due to related parties including the monthly
administrative service fee.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Working
Capital Loans
The
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 $3,000,000 of such loans may be convertible into Private Placement Warrants of the post Business Combination entity, at a price
of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor.
As of December 31, 2022 and 2021, the Company had no borrowings under the Working Capital Loans.
Administrative
Service Fee
The
Company entered into an administrative services agreement on November 2, 2021, pursuant to which the Company will pay an affiliate of
the Sponsor, $445 per month for office space, utilities and secretarial and administrative support. Upon completion of the initial Business
Combination or the Company’s liquidation, the Company will cease paying these monthly fees. Total expense under the administrative
services agreement during the year ended December 31, 2022 and for the period from February 8, 2021 (inception) through December 31,
2021, were $5,340 and $875, respectively.
Note 6 — Commitments
and Contingencies
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) will be entitled to registration rights pursuant to a
registration rights agreement to be signed prior to or on the Effective Date of the registration statement of which this prospectus forms
a part, requiring the Company 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 will be entitled to make up to three demands, excluding short form demands, that
the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to the Company’s completion of the initial Business Combination.
Underwriting
Agreement
On
November 5, 2021, the Company paid a cash underwriting discount of 1.0% per Unit, or $1,150,000. In addition, the underwriting agreement
provides the option to purchase up to 1,500,000 additional Units to cover any over-allotments, if any, at the Proposed Public
Offering price of $10.00 less the underwriting discount of 1%. The over-allotment was exercised in full upon the IPO on November
5, 2021.
Representative
Units
Simultaneous
with the closing of the IPO, the Company issued to ThinkEquity, as part of representative compensation upon the consummation of the IPO,
57,500 Representative Units (the “Representative Units”). The Representative Units consist of one share of Class A common
stock and one redeemable warrant to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment.
The Representative Units are identical to the Units except, and so long as the Representative Units are held by ThinkEquity (and/or its
designees) or its permitted transferees, they (i) may not (including the Class A common s tock
issuable upon exercise of the warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until
30 days after the completion of the initial Business Combination, (ii) may be exercised by the holders on a cashless basis, (iii) will
be entitled to registration rights and (iv) will not be exercisable more than five years from the Effective Date of the registration statement
of which this prospectus forms a part in accordance with FINRA Rule 5110(f)(2)(G)(i). ThinkEquity has agreed (i) to waive its redemption
rights with respect to the warrants underlying the Representative Units in connection with the completion of the initial Business Combination
and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such warrants if the Company fails to
complete the initial Business Combination within 18 months from the closing of the IPO.
Advisory Services Agreement
On December
23, 2022, the Company entered into an agreement with ThinkEquity to provide financial advisory services in connection with the proposed
Business Combination with The Flexi Group Ltd. The Company shall pay ThinkEquity an advisory fee for the Advisory Services in an amount
equal to greater of either (i) 4.0% of the net funds from the Company’s Trust Account after investor redemptions, or (ii) $300,000,
which fee shall be due and payable in immediately available funds on the day of closing of the proposed Business Combination. In addition
to any fees which may be payable to ThinkEquity under the agreement, the Company shall reimburse ThinkEquity, upon reasonable request
made from time to time, for its reasonable and documented out-of-pocket expenses incurred in connection with the Advisory Services up
to a maximum of $15,000, including, but not limited to, the reasonable and documented fees and disbursements of ThinkEquity’s legal
counsel.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note 7 — Stockholders’
(Deficit) Equity
Preferred
Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per
share. As of December 31, 2022 and 2021, there were no shares of preferred stock issued or outstanding.
Class
A Common Stock — The Company is authorized to issue 100,000,000 shares of Class A common stock with a par
value of $0.0001 per share. At December 31, 2022 and 2021, there were 57,500 shares of Class A common stock issued and
outstanding (excluding 11,500,000 shares of Class A common stock subject to possible redemption).
Class
B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par
value of $0.0001 per share. At December 31, 2022 and 2021, there were 2,889,149 shares of Class B common stock issued
and outstanding.
The
shares of Class B common stock will automatically convert into shares of the Class A common stock at the time of the initial Business
Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations, and
the like, and subject to further adjustment as provided herein.
Warrants
– At December 31, 2022 and 2021, 11,500,000 Public Warrants and 5,500,000 Private Placement Warrants
are currently outstanding. Each warrant entitles the holder to purchase one share of the Company’s Class A common stock at a price
of $11.50 per share, subject to adjustment as described herein. In addition, if (x) the Company issues additional shares of Class A common
stock or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at
a Newly Issued Price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined
in good faith by the board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account
any Founder Shares held by the Sponsor or its affiliates, prior to such issuance), (y) the aggregate gross proceeds from such issuances
represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination
on the date of the consummation of the initial Business Combination (net of redemptions), and (z) The Market Value (defined as the volume
weighted average reported trading price of Class A Common Stock for twenty trading days starting on the trading day prior to the date
of the consummation of the initial Business Combination) is below $9.20 per share, the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption
trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly
Issued Price.
Each
warrant is exercisable at any time commencing on the later of 30 days after the completion of an initial business combination and 12
months from the closing of the IPO and terminating at 5:00 p.m., New York City time on the earlier to occur of (i) the date that is five
(5) years after the date on which the Company consummates a Business Combination, (ii) at 5:00 p.m., New York City time on the Redemption
Date as provided in the Warrant Agreement and (iii) the liquidation of the Trust Account (the “Expiration Date”). The Company
in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will
provide at least twenty (20) days’ prior written notice of any such extension to registered holders and, provided further that
any such extension shall be applied consistently to all of the Warrants. Notwithstanding anything to the contrary contained herein, for
so long as any Private Warrant is held by the Sponsor and/or their designees, such Private Warrant may not be exercised after five years
from the Effective Date of the Registration Statement. The warrants will expire at 5:00 p.m., New York City time on the warrant expiration
date, which is five years after the completion of the initial Business Combination or earlier upon redemption or liquidation. On the
exercise of any warrant, the warrant exercise price will be paid directly to the Company and not placed in the Trust Account.
The
Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common
stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying
its obligations described below with respect to registration. No warrant will be exercisable, and the Company will not be obligated to
issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been
registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of
such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will
the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised
warrants, the purchaser of a Unit containing such warrant will have paid the full purchase price for the Unit solely for the share of
Class A common stock underlying such Unit.
The
Company is not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, the Company
has agreed that as soon as practicable after the closing of the initial Business Combination, the Company will use its best efforts to
file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants, to cause
such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock
until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of
Class A common stock issuable upon exercise of the warrants is not effective within 60 business days after the closing of the initial
Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when
the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in
accordance with Section 3(a)(9) of the Securities Act or another exemption.
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Redemption
of warrants:
Once
the warrants become exercisable, the Company may redeem the outstanding warrants:
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● |
In
whole and not in part; |
|
|
|
|
● |
at
a price of $0.01 per warrant; |
|
|
|
|
● |
upon
not less than 30 days’ prior written notice of redemption given after the warrants become exercisable to each warrant holder;
and |
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|
|
|
● |
if,
and only if, the last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the
third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
If
the Company calls the warrants for redemption as described above, the management will have the option to require all holders that wish
to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants
on a “cashless basis,” the management will consider, among other factors, its cash position, the number of warrants that
are outstanding and the dilutive effect on the stockholders of issuing the maximum number of shares of Class A common stock issuable
upon the exercise of the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number
of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common
stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”
(defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of
the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption
is sent to the holders of warrants. If the Company’s management takes advantage of this option, the notice of redemption will contain
the information necessary to calculate the number of shares of Class A common stock to be received upon exercise of the warrants, including
the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be
issued and thereby lessen the dilutive effect of a warrant redemption.
Note
8. Income Tax
The Company’s
net deferred tax assets at December 31, 2022 and 2021 are
as follows:
Schedule of deferred tax asset | |
| | | |
| | |
| |
December 31, | |
December 31, |
| |
2022 | |
2021 |
Deferred tax assets | |
| | | |
| | |
Net operating
loss carryforward | |
$ | — | | |
$ | 37,512 | |
Organizational costs/Start-up
costs | |
| 200,597 | | |
| 41,294 | |
Unrealized gain on interest
income in Trust Account | |
| — | | |
| (1,623 | ) |
Total deferred tax assets
| |
| 200,597 | | |
| 77,183 | |
Valuation Allowance | |
| (200,597 | ) | |
| (77,183 | ) |
Deferred tax assets | |
$ | — | | |
$ | — | |
The provision for
income taxes for the year ended December 31, 2022 and for the period from February 8, 2021 (inception) through December 31, 2021 consist
of the following:
Schedule of income tax provision | |
| | | |
| | |
| |
For the year ended
December 31, | |
For the period from February 8, 2021 (inception) through December 31, |
| |
2022 | |
2021 |
Federal | |
| | | |
| | |
Current | |
$ | 268,239 | | |
$ | — | |
Deferred | |
| (123,414 | ) | |
| (77,183 | ) |
Change in valuation allowance | |
| 123,414 | | |
| 77,183 | |
| |
| | | |
| | |
Provision for income taxes | |
$ | 268,239 | | |
$ | — | |
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
As
of December 31, 2022 and 2021, the Company had $0 and $178,630 of U.S. federal net operating loss carryovers, respectively, available
to offset future taxable income, which do not expire.
In
assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies
in making this assessment. After consideration of all of the information available, management believes that significant uncertainty
exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the
period from February 8, 2021 (inception) through December 31, 2021, the change in the valuation allowance was $77,183. For the year ended
December 31, 2022, the change in the valuation allowance was $123,414.
A reconciliation
of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows:
Schedule of reconciliation of federal income tax rate | |
| | | |
| | |
| |
December 31, | |
December 31, |
| |
2022 | |
2021 |
Statutory federal
income tax rate | |
| 21.0 | % | |
| 21.0 | % |
Permanent book/tax differences | |
| (45.6 | )% | |
| 0.0 | % |
Stock Based Compensation | |
| (0.0 | )% | |
| (13.8 | )% |
Change in valuation allowance | |
| (20.9 | )% | |
| (7.2 | )% |
Provision for income taxes | |
| (45.5 | )% | |
| 0.0 | % |
The
Company files income tax returns in the U.S. federal jurisdiction. The Company’s tax returns for the year ended December 31, 2022
and 2021 remain open and subject to examination.
Note
9 — Fair Value Measurements
The
fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, approximates
the carrying amounts represented in the balance sheets as of December 31, 2022 and 2021. The fair values of cash and cash equivalents,
prepaid assets, accounts payable and accrued expenses are estimated to approximate the carrying values as of December 31, 2022 and 2021
due to the short maturities of such instruments.
The
following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis at December 31, 2022 and 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine
such fair value:
Schedule of fair value on a recurring basis | |
| | | |
| | | |
| | | |
| | |
Description: | |
Level | |
December
31, 2022 | |
Level | |
December 31,
2021 |
Assets:
| |
| | | |
| | | |
| | | |
| | |
U.S. Money
Market Funds Held in Trust Account | |
| 1 | | |
| 118,956,557 | | |
| 1 | | |
$ | — | |
The
carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities on December 31, 2021 are as follows:
Debt securities, available-for-sale | |
| |
| |
| |
|
| |
Carrying
Value as of December 31, 2021 | |
Gross
Unrealized Gains | |
Gross
Unrealized Losses | |
Fair Value
as of December 31, 2021 |
U.S. Treasury
Securities (maturity 05/20/2021) | |
$ | 117,307,072 | | |
$ | — | | |
$ | (21,399 | ) | |
$ | 117,285,673 | |
TG
VENTURE ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
There
were no transfers between Levels 1, 2 or 3 during the year ended December 31, 2022 and 2021.
Note
10 — Subsequent Events
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the financial
statements were issued. Except as disclosed in the footnotes elsewhere and below, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the financial statements.
On March
16, 2023, the Sponsor issued a promissory note allowing the Company to borrow up to $3,000,000 under an unsecured promissory note to be
used to defray expenses in connection with the proposed Business Combination. The promissory note is payable on the date on which the
Company consummates its initial Business Combination. $350,000 in previously advanced fund from the Sponsor is included as part of the
principal of the promissory note and is therefore not available for further use by the Company.