CERTAIN TERMS
Unless otherwise stated in this Annual Report on Form 10-K (this “Annual Report”), references to:
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some statements contained in this Annual Report are forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual Report may include, for example, statements about:
The forward-looking statements contained in this Annual Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Item 1. BUSINESS
General
Flag Ship Acquisition Corporation is a blank check company incorporated on May 14, 2018 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
The registration statement for our initial public offering was declared effective by the Securities and Exchange Commission on June 17, 2024. We completed our initial public offering on June 20, 2024. In our initial public offering, we sold units at an offering price of $10.00 and consisting of one ordinary share, one right to receive one-tenth (1/10) of an ordinary share upon the consummation of an initial business combination.
In connection with our initial public offering, we sold 6,900,000 units, generating gross proceeds of $69,000,000. Simultaneously with the closing of the IPO, pursuant to the Private Placement Units Purchase Agreement by and between the Company and our sponsor, Whale Management Corporation, a British Virgin Islands company, the Company completed the private sale of an aggregate of 238,000 units (the “Private Placement Units”) to the Sponsor at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds to the Company of $2,380,000. The Private Placement Units are identical to the Units in the IPO, except that the Sponsor has agreed not to transfer, assign or sell any of the Private Placement Units (except to certain permitted transferees) until (1) with respect to 50% of the founder shares, the earlier of six months after the completion of a business combination and the date on which the closing price of the ordinary shares equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing after a business combination and (2) with respect to the remaining 50% of the founder shares, six months after the completion of a business combination, or earlier, in either case, if, subsequent to a business combination, the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
Transaction costs amounted to $3,448,233, consisting of $1,380,000 of underwriting commissions, $1,725,000 of deferred underwriting commissions and $343,233 of other offering costs. A total of $69,000,000, comprised of $67,545,000 of the proceeds from the IPO (which amount includes up to $1,725,000 of the underwriter’s deferred discount) and $1,455,000 of the proceeds of the sale of the Private Placement Units, was placed in a U.S.-based trust account, established by VStock Transfer LLC, our transfer agent and maintained at Wilmington Trust, National Association, acting as trustee. Except with respect to interest earned on the funds in the trust account that may be released to the Company to pay its taxes, the funds held in the trust account will not be released from the trust account until the earliest of (i) the completion of the Company’s initial business combination, (ii) the redemption of any of the Company’s public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association to (A) modify the substance or timing of its obligation to redeem 100% of the Company’s public shares if it does not complete its initial business combination within 12 months (or 15 months if we enter into a business combination agreement within 12 months from the closing of this offering (the “Event”)) from the closing of the IPO (or up to 21 months, or 24 months if the Event occurs, from the closing of the IPO if we extend the period of time to consummate a business combination, after amended and restated memo and articles), or (B) with respect to any other provision relating to shareholders’ rights or pre-business combination activity, and (iii) the redemption of the Company’s public shares if it is unable to complete its initial business combination within 12 months (or 15 months if the Event occurs) from the closing of the IPO (or up to 21 months or 24 months from the closing of the IPO if we extend the period of time to consummate a business combination, after amended and restated memo and articles).
At December 31, 2024, the Company had a working capital deficit of $539,737, which excludes the amount of $70,799,136 for marketable securities held in the trust account within non-current assets, and the amount of $1,725,000 for deferred underwriting commissions within non-current liabilities.
The Company’s units are listed on The Nasdaq Global Market (“Nasdaq”) and commenced trading under the ticker symbol “FSHPU” on June 18, 2024. Each unit consists of one ordinary share, one right to receive one-tenth (1/10) of an ordinary share upon the consummation of an initial business combination. The units began separate trading on August 15, 2024 and the ordinary shares and rights commenced trading on Nasdaq under the symbols “FSHP,” and “FSHPR,” respectively.
Proposed GRT Business Combination
On October 21, 2024, Flag Ship Acquisition Corporation entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Great Rich Technologies Limited, a public limited company incorporated under the laws of Hong Kong, and GRT Merger Star Limited, a Cayman Islands company limited by shares and a wholly-owned subsidiary of GRT (“Merger Sub”).
The Merger Agreement and related agreements are further described in our Current Report on Form 8-K filed with the SEC on October 23, 2024. Other than as specifically discussed, this Annual Report does not assume the closing of the transactions contemplated by the Merger Agreement (“Proposed GRT Business Combination”). The following description of the Merger Agreement and related agreements do not purport to be complete and is qualified in its entirety by reference to the full text of the corresponding agreements, the forms of which were filed as exhibits to the Current Report on Form 8-K on October 23, 2024 and the terms of which are incorporated by reference herein. On February 28, 2025, Flag Ship, GRT and Merger Sub entered into the first amendment to the Merger Agreement (the “First Amendment”) solely to amend Section 10.01 of the Merger Agreement to extend the Outside Date defined thereunder from February 28, 2025 to August 28, 2025.
Pursuant to the Merger Agreement, among other things, the Company will merge with and into Merger Sub (the “Merger”), with Merger Sub continuing as the surviving entity and a wholly-owned subsidiary of GRT (the “Surviving Company”). Immediately upon Closing, the Company and Merger Sub will cause a plan of merger (the “Plan of Merger”) approved by the directors of each such entity consistent with the Merger Agreement, and in the form and containing such other documents as may be required by the Cayman Companies Act (the “Merger Documents”) to be executed and then filed for registration by the Cayman Registrar. The Merger will become effective at such time as the Plan of Merger is registered by the Cayman Registrar, or at such other time subsequent thereto, but not exceeding 90 days from the date of registration, as mutually agreed between Merger Sub and the Company and specified in the Plan of Merger (the “Effective Time”).