[10-Q] Metal Sky Star Acquisition Corporation Unit Quarterly Earnings Report
Metal Sky Star Acquisition Corporation completed an IPO that raised gross proceeds of $115,000,000 and a concurrent private placement of $3,300,000. A majority of the net proceeds were deposited into a trust account for public shareholders, with the filing stating 861,784 shares and $6,677,519 held in the Wilmington Trust account. The company reports 3,205,000 ordinary shares issued and outstanding (excluding shares subject to possible redemption). As of June 30, 2025 the company had a working capital deficit of approximately $4.97 million and reported no cash equivalents. The filing discloses fees and deferred underwriting commissions related to the offering totaling $5,704,741 and deferred underwriting commissions of $2,875,000 recorded as noncurrent liabilities. Sponsor support is material: multiple promissory notes and extensions are disclosed, with sponsor advances and amounts due to the sponsor reported. The company discloses a potential unrecorded liability of $245,000 related to terminated legal services, which management has not accrued. The filing highlights limited liquidity, redeemable shares subject to measurement adjustments, and absence of dilutive securities as of June 30, 2025.
Metal Sky Star Acquisition Corporation ha completato un'IPO che ha raccolto proventi lordi per $115.000.000 e un collocamento privato contestuale di $3.300.000. La maggior parte dei proventi netti è stata depositata in un conto fiduciario per gli azionisti pubblici; il deposito nel Wilmington Trust ammontava a 861.784 azioni e $6.677.519. La società riporta 3.205.000 azioni ordinarie emesse e in circolazione (escluse le azioni soggette a possibile rimborso). Al 30 giugno 2025 la società mostrava un deficit di capitale circolante di circa $4,97 milioni e non dichiarava equivalenti di cassa. Il deposito segnala oneri e commissioni di sottoscrizione differite relativi all'offerta per un totale di $5.704.741 e commissioni di sottoscrizione differite per $2.875.000 contabilizzate come passività non correnti. Il supporto dello sponsor è significativo: sono indicate più cambiali e proroghe, con anticipi e importi dovuti allo sponsor. La società segnala una possibile passività non registrata di $245.000 relativa a servizi legali cessati, che la direzione non ha rilevato. Il documento evidenzia liquidità limitata, azioni rimborsabili soggette ad aggiustamenti di valutazione e assenza di strumenti diluitivi al 30 giugno 2025.
Metal Sky Star Acquisition Corporation completó una OPI que recaudó ingresos brutos por $115.000.000 y una colocación privada concurrente de $3.300.000. La mayor parte de los ingresos netos se depositó en una cuenta fiduciaria para los accionistas públicos; la presentación indica 861.784 acciones y $6.677.519 en la cuenta de Wilmington Trust. La compañía informa 3.205.000 acciones ordinarias emitidas y en circulación (excluyendo acciones sujetas a posible reembolso). A 30 de junio de 2025, la empresa tenía un déficit de capital de trabajo de aproximadamente $4,97 millones y no reportó equivalentes de efectivo. La presentación revela cargos y comisiones de suscripción diferidas relacionados con la oferta por un total de $5.704.741 y comisiones de suscripción diferidas por $2.875.000 registradas como pasivos no corrientes. El respaldo del patrocinador es material: se divulgan múltiples pagarés y prórrogas, con anticipos y cantidades adeudadas al patrocinador. La compañía revela una posible responsabilidad no contabilizada de $245.000 relacionada con servicios legales terminados, que la dirección no ha provisionado. El documento subraya liquidez limitada, acciones reembolsables sujetas a ajustes de medición y ausencia de valores dilutivos al 30 de junio de 2025.
Metal Sky Star Acquisition Corporation는 총 $115,000,000의 공모(IPO)와 $3,300,000의 동시 사모 발행을 완료했습니다. 순수익의 대부분은 공공 주주용 신탁계좌에 예치되었으며, 제출서류에는 Wilmington Trust 계좌에 861,784주와 $6,677,519가 보유되어 있다고 기재되어 있습니다. 회사는 환매 가능 주식을 제외하고 3,205,000주의 보통주가 발행·유통 중이라고 보고했습니다. 2025년 6월 30일 기준 회사의 운전자본 부족액은 약 $4.97 million이며 현금성자산은 없다고 보고했습니다. 제출서류는 공모와 관련된 수수료 및 이연 인수 수수료 총액이 $5,704,741이고, 이연 인수 수수료 $2,875,000는 비유동부채로 계상되었다고 공개합니다. 스폰서 지원은 중요한 사안으로 여러 약속어음과 연장이 공개되어 있으며, 스폰서에 대한 선급금 및 미지급액이 보고되어 있습니다. 회사는 종료된 법률서비스와 관련해 경영진이 계상하지 않은 잠재적 미계상 부채 $245,000를 공개했습니다. 제출서류는 유동성 제한, 측정 조정 대상인 환매가능 주식, 2025년 6월 30일 기준 희석성 증권 부재를 강조합니다.
Metal Sky Star Acquisition Corporation a réalisé une introduction en bourse générant des produits bruts de $115 000 000 et un placement privé concomitant de $3 300 000. La majorité des produits nets a été déposée sur un compte fiduciaire pour les actionnaires publics ; le dossier indique 861 784 actions et $6 677 519 détenus sur le compte Wilmington Trust. La société déclare 3 205 000 actions ordinaires émises et en circulation (hors actions susceptibles d'être rachetées). Au 30 juin 2025, la société présentait un déficit de fonds de roulement d'environ $4,97 millions et ne déclarait pas d'équivalents de trésorerie. Le dossier divulgue des frais et commissions d'émission différés liés à l'offre pour un total de $5 704 741 et des commissions d'émission différées de $2 875 000 comptabilisées en passifs non courants. Le soutien du sponsor est important : plusieurs billets à ordre et prolongations sont divulgués, avec des avances et montants dus au sponsor. La société signale une éventuelle responsabilité non comptabilisée de $245 000 liée à des services juridiques interrompus, que la direction n'a pas provisionnée. Le dossier met en avant une liquidité limitée, des actions remboursables soumises à des ajustements de mesure et l'absence de titres dilutifs au 30 juin 2025.
Metal Sky Star Acquisition Corporation schloss einen Börsengang (IPO) ab, der Bruttoerlöse von $115.000.000 und eine gleichzeitige Privatplatzierung von $3.300.000 einbrachte. Ein Großteil der Netterlöse wurde auf ein Treuhandkonto für die öffentlichen Aktionäre eingezahlt; die Einreichung weist 861.784 Aktien und $6.677.519 im Wilmington Trust-Konto aus. Das Unternehmen meldet 3.205.000 ausgegebene und ausstehende Stammaktien (ohne Aktien, die möglichen Rückzahlungen unterliegen). Zum 30. Juni 2025 wies das Unternehmen ein Working-Capital-Defizit von rund $4,97 Millionen auf und meldete keine Zahlungsmitteläquivalente. Die Einreichung offenbart Gebühren und abgegrenzte Underwriting-Kommissionen im Zusammenhang mit dem Angebot in Höhe von insgesamt $5.704.741 sowie abgegrenzte Underwriting-Kommissionen von $2.875.000, die als langfristige Verbindlichkeiten verbucht sind. Die Unterstützung durch den Sponsor ist wesentlich: Es werden mehrere Schuldscheine und Verlängerungen offengelegt sowie Vorschüsse und Forderungen gegenüber dem Sponsor berichtet. Das Unternehmen gibt eine potenzielle nicht erfasste Verbindlichkeit von $245.000 im Zusammenhang mit beendeten Rechtsdienstleistungen an, die das Management nicht angesetzt hat. Die Einreichung hebt begrenzte Liquidität, rückzahlbare Aktien, die Bewertungsanpassungen unterliegen, sowie das Fehlen verwässernder Wertpapiere zum 30. Juni 2025 hervor.
- Substantial IPO proceeds: Gross proceeds of $115,000,000 from the IPO provide a significant capital base.
- Trust account protection: Net proceeds were deposited in a Wilmington Trust account for public shareholders, with $6,677,519 and 861,784 shares reported as held.
- Private placement completed: The company raised an additional $3,300,000 in a private placement with the Sponsor.
- No dilutive securities outstanding as of June 30, 2025, so diluted EPS equals basic EPS for the periods presented.
- Working capital deficit of approximately $4.97 million and no cash equivalents reported at June 30, 2025.
- Reliance on sponsor financing: Multiple promissory notes and sponsor advances indicate dependence on related-party funding.
- Potential unrecorded liability: Management discloses a potential $245,000 loss contingency for terminated legal services that is not accrued.
- Significant offering-related costs: Total offering costs of $5,704,741 and deferred underwriting commissions of $2,875,000 impact available resources.
Insights
TL;DR The company has strong IPO proceeds secured in trust but faces immediate liquidity strain and reliance on sponsor funding.
The deposit of IPO proceeds into a trust provides protection for public shareholders, yet the operating picture shows a $4.97 million working capital deficit and no cash equivalents at period end. Deferred underwriting commissions of $2.875 million and offering costs of $5.704 million are significant relative to current liquidity. Sponsor promissory notes and extensions (increasing available principal over time) indicate dependency on sponsor financing to cover extension fees and operations. The disclosure of a potential $245,000 contingent liability for terminated legal services, which is not accrued, adds additional short-term risk. Overall, financial runway appears constrained absent consummation of a business combination or further sponsor funding.
TL;DR Governance disclosures show typical SPAC sponsor arrangements and founder share mechanics, with some contingent exposure.
The filing documents founder shares, sponsor forfeiture mechanics tied to over-allotment, and extensive related-party arrangements including monthly service fees and promissory notes. The sponsor has repeatedly amended notes to extend financing capacity, and sponsor-paid operating expenses are disclosed. Management evaluated excise tax exposure and concluded no accrual is necessary at period end. The company discloses potential unbilled legal fees but has not recorded a liability, citing probability considerations. These disclosures are standard for SPACs but underscore dependence on sponsor decisions and related-party support until a business combination is completed.
Metal Sky Star Acquisition Corporation ha completato un'IPO che ha raccolto proventi lordi per $115.000.000 e un collocamento privato contestuale di $3.300.000. La maggior parte dei proventi netti è stata depositata in un conto fiduciario per gli azionisti pubblici; il deposito nel Wilmington Trust ammontava a 861.784 azioni e $6.677.519. La società riporta 3.205.000 azioni ordinarie emesse e in circolazione (escluse le azioni soggette a possibile rimborso). Al 30 giugno 2025 la società mostrava un deficit di capitale circolante di circa $4,97 milioni e non dichiarava equivalenti di cassa. Il deposito segnala oneri e commissioni di sottoscrizione differite relativi all'offerta per un totale di $5.704.741 e commissioni di sottoscrizione differite per $2.875.000 contabilizzate come passività non correnti. Il supporto dello sponsor è significativo: sono indicate più cambiali e proroghe, con anticipi e importi dovuti allo sponsor. La società segnala una possibile passività non registrata di $245.000 relativa a servizi legali cessati, che la direzione non ha rilevato. Il documento evidenzia liquidità limitata, azioni rimborsabili soggette ad aggiustamenti di valutazione e assenza di strumenti diluitivi al 30 giugno 2025.
Metal Sky Star Acquisition Corporation completó una OPI que recaudó ingresos brutos por $115.000.000 y una colocación privada concurrente de $3.300.000. La mayor parte de los ingresos netos se depositó en una cuenta fiduciaria para los accionistas públicos; la presentación indica 861.784 acciones y $6.677.519 en la cuenta de Wilmington Trust. La compañía informa 3.205.000 acciones ordinarias emitidas y en circulación (excluyendo acciones sujetas a posible reembolso). A 30 de junio de 2025, la empresa tenía un déficit de capital de trabajo de aproximadamente $4,97 millones y no reportó equivalentes de efectivo. La presentación revela cargos y comisiones de suscripción diferidas relacionados con la oferta por un total de $5.704.741 y comisiones de suscripción diferidas por $2.875.000 registradas como pasivos no corrientes. El respaldo del patrocinador es material: se divulgan múltiples pagarés y prórrogas, con anticipos y cantidades adeudadas al patrocinador. La compañía revela una posible responsabilidad no contabilizada de $245.000 relacionada con servicios legales terminados, que la dirección no ha provisionado. El documento subraya liquidez limitada, acciones reembolsables sujetas a ajustes de medición y ausencia de valores dilutivos al 30 de junio de 2025.
Metal Sky Star Acquisition Corporation는 총 $115,000,000의 공모(IPO)와 $3,300,000의 동시 사모 발행을 완료했습니다. 순수익의 대부분은 공공 주주용 신탁계좌에 예치되었으며, 제출서류에는 Wilmington Trust 계좌에 861,784주와 $6,677,519가 보유되어 있다고 기재되어 있습니다. 회사는 환매 가능 주식을 제외하고 3,205,000주의 보통주가 발행·유통 중이라고 보고했습니다. 2025년 6월 30일 기준 회사의 운전자본 부족액은 약 $4.97 million이며 현금성자산은 없다고 보고했습니다. 제출서류는 공모와 관련된 수수료 및 이연 인수 수수료 총액이 $5,704,741이고, 이연 인수 수수료 $2,875,000는 비유동부채로 계상되었다고 공개합니다. 스폰서 지원은 중요한 사안으로 여러 약속어음과 연장이 공개되어 있으며, 스폰서에 대한 선급금 및 미지급액이 보고되어 있습니다. 회사는 종료된 법률서비스와 관련해 경영진이 계상하지 않은 잠재적 미계상 부채 $245,000를 공개했습니다. 제출서류는 유동성 제한, 측정 조정 대상인 환매가능 주식, 2025년 6월 30일 기준 희석성 증권 부재를 강조합니다.
Metal Sky Star Acquisition Corporation a réalisé une introduction en bourse générant des produits bruts de $115 000 000 et un placement privé concomitant de $3 300 000. La majorité des produits nets a été déposée sur un compte fiduciaire pour les actionnaires publics ; le dossier indique 861 784 actions et $6 677 519 détenus sur le compte Wilmington Trust. La société déclare 3 205 000 actions ordinaires émises et en circulation (hors actions susceptibles d'être rachetées). Au 30 juin 2025, la société présentait un déficit de fonds de roulement d'environ $4,97 millions et ne déclarait pas d'équivalents de trésorerie. Le dossier divulgue des frais et commissions d'émission différés liés à l'offre pour un total de $5 704 741 et des commissions d'émission différées de $2 875 000 comptabilisées en passifs non courants. Le soutien du sponsor est important : plusieurs billets à ordre et prolongations sont divulgués, avec des avances et montants dus au sponsor. La société signale une éventuelle responsabilité non comptabilisée de $245 000 liée à des services juridiques interrompus, que la direction n'a pas provisionnée. Le dossier met en avant une liquidité limitée, des actions remboursables soumises à des ajustements de mesure et l'absence de titres dilutifs au 30 juin 2025.
Metal Sky Star Acquisition Corporation schloss einen Börsengang (IPO) ab, der Bruttoerlöse von $115.000.000 und eine gleichzeitige Privatplatzierung von $3.300.000 einbrachte. Ein Großteil der Netterlöse wurde auf ein Treuhandkonto für die öffentlichen Aktionäre eingezahlt; die Einreichung weist 861.784 Aktien und $6.677.519 im Wilmington Trust-Konto aus. Das Unternehmen meldet 3.205.000 ausgegebene und ausstehende Stammaktien (ohne Aktien, die möglichen Rückzahlungen unterliegen). Zum 30. Juni 2025 wies das Unternehmen ein Working-Capital-Defizit von rund $4,97 Millionen auf und meldete keine Zahlungsmitteläquivalente. Die Einreichung offenbart Gebühren und abgegrenzte Underwriting-Kommissionen im Zusammenhang mit dem Angebot in Höhe von insgesamt $5.704.741 sowie abgegrenzte Underwriting-Kommissionen von $2.875.000, die als langfristige Verbindlichkeiten verbucht sind. Die Unterstützung durch den Sponsor ist wesentlich: Es werden mehrere Schuldscheine und Verlängerungen offengelegt sowie Vorschüsse und Forderungen gegenüber dem Sponsor berichtet. Das Unternehmen gibt eine potenzielle nicht erfasste Verbindlichkeit von $245.000 im Zusammenhang mit beendeten Rechtsdienstleistungen an, die das Management nicht angesetzt hat. Die Einreichung hebt begrenzte Liquidität, rückzahlbare Aktien, die Bewertungsanpassungen unterliegen, sowie das Fehlen verwässernder Wertpapiere zum 30. Juni 2025 hervor.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from to
Commission
File No.
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate
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METAL SKY STAR ACQUISITION CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2025
TABLE OF CONTENTS
| Page | |
| Part I. Financial Information | 1 |
| Item 1. Consolidated Financial Statements | 1 |
| Consolidated Balance Sheets (Unaudited) | 1 |
| Consolidated Statements of Operations (Unaudited) | 2 |
| Consolidated Statements of Changes in Shareholders’ Deficit (Unaudited) | 3 |
| Consolidated Statements of Cash Flows (Unaudited) | 4 |
| Notes to Unaudited Consolidated Financial Statements | 5 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk | 22 |
| Item 4. Controls and Procedures | 22 |
| Part II. Other Information | |
| Item 1. Legal Proceedings | 23 |
| Item 1A. Risk Factors | 23 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 24 |
| Item 3. Defaults Upon Senior Securities | 24 |
| Item 4. Mine Safety Disclosures | 24 |
| Item 5. Other Information | 24 |
| Item 6. Exhibits | 24 |
| Part III. Signatures | 25 |
| i |
Part I. Financial Information
Item 1. Consolidated Financial Statements
METAL SKY STAR ACQUISITION CORPORATION AND SUBDISIARY
CONSOLIDATED BALANCE SHEETS
As of June 30, 2025 | As of December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Prepaid expense | ||||||||
| Total current assets | ||||||||
| Noncurrent assets | ||||||||
| Marketable securities held in trust account | ||||||||
| Total noncurrent assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities, redeemable ordinary shares and shareholders’ deficit | ||||||||
| Current liabilities: | ||||||||
| Accrued expenses | $ | $ | ||||||
| Due to related parties | ||||||||
| Promissory notes-related party | ||||||||
| Total current liabilities | $ | |||||||
| Noncurrent liabilities | ||||||||
| Deferred underwriting commissions | ||||||||
| Total noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 6) | - | - | ||||||
| Ordinary shares subject to possible redemption, | ||||||||
| Shareholders’ deficit: | ||||||||
| Ordinary shares, par value $ | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities, redeemable ordinary shares and shareholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited consolidated financial statements.
| 1 |
METAL SKY STAR ACQUISITION CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six month ended June 30, 2025 | For the six month ended June 30, 2024 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Formation and operational costs | $ | $ | $ | $ | ||||||||||||
| Loss from operations | ||||||||||||||||
| Operating loss | - | - | - | - | ||||||||||||
| Other income: | ||||||||||||||||
| Realized interest | ||||||||||||||||
| Unrealized gain | ||||||||||||||||
| Total other income | ||||||||||||||||
| Income (loss) before income taxes | ( | ) | ( | ) | ||||||||||||
| Income tax (benefit) expense | - | - | - | - | ||||||||||||
| Net income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Basic and diluted weighted average shares outstanding | ||||||||||||||||
| Redeemable ordinary shares, basic and diluted | ||||||||||||||||
| Redeemable ordinary shares, basic and diluted per share | $ | $ | $ | $ | ||||||||||||
| Non-Redeemable ordinary shares, basic and diluted net loss | ||||||||||||||||
| Non-redeemable ordinary shares, basic and diluted net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of the unaudited consolidated financial statements.
| 2 |
METAL SKY STAR ACQUISITION CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT (UNAUDITED)
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| For the six months ended June 30, 2025 | ||||||||||||||||||||
| Additional | Total | |||||||||||||||||||
| Ordinary Shares | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance at December 31, 2024 | $ | $ | - | $ | ( | ) | $ | ( | ) | |||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealize gain on trust account) | ( | ) | ( | ) | ||||||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (additional funding for business combination extension) | ( | ) | ( | ) | ||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance at March 31, 2025 | - | ( | ) | ( | ) | |||||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealize gain on trust account) | ( | ) | ( | ) | ||||||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (additional funding for business combination extension) | ( | ) | ( | ) | ||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance at June 30, 2025 | $ | $ | - | $ | ( | ) | $ | ( | ) | |||||||||||
| For the six months ended June 30, 2024 | ||||||||||||||||||||
| Additional | Total | |||||||||||||||||||
| Ordinary Shares | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance at December 31, 2023 | $ | $ | - | $ | ( | ) | $ | ( | ) | |||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealize gain on trust account) | - | - | - | ( | ) | ( | ) | |||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (additional funding for business combination extension) | - | - | - | ( | ) | ( | ) | |||||||||||||
| Net income | - | - | - | |||||||||||||||||
| Balance at March 31, 2024 | - | ( | ) | ( | ) | |||||||||||||||
| Balance | - | ( | ) | ( | ) | |||||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealize gain on trust account) | - | - | - | ( | ) | ( | ) | |||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (additional funding for business combination extension) | - | - | - | ( | ) | ( | ) | |||||||||||||
| Net income | - | - | - | |||||||||||||||||
| Net income (loss) | - | - | - | |||||||||||||||||
| Balance at June 30, 2024 | $ | $ | - | $ | ( | ) | $ | ( | ) | |||||||||||
| Balance | $ | $ | - | $ | ( | ) | $ | ( | ) | |||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 3 |
METAL SKY STAR ACQUISITION CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Interest earned on marketable securities held in trust account | ( | ) | ( | ) | ||||
| Unrealized gain on marketable securities held in trust account | ( | ) | ( | ) | ||||
| Amortization | ||||||||
| Net changes in operating assets & liabilities: | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Due to related parties | ||||||||
| Accrued expenses | ||||||||
| Net cash used in operating activities | - | - | ||||||
| Cash flows from investing activities: | ||||||||
| Investment of cash in trust account | ( | ) | ( | ) | ||||
| Cash withdrawn from trust account to redeem public shares | - | |||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds of Sponsor loan | ||||||||
| Redemption of public shares | ( | ) | ||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net change in cash and cash equivalents | - | - | ||||||
| Cash and cash equivalents at beginning of period | - | - | ||||||
| Cash and cash equivalents at end of period | $ | - | $ | - | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Subsequent measurement of ordinary shares subject to redemption (interest earned, unrealized gain on trust account and additional funding for business combination extension) | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited consolidated financial statements.
| 4 |
METAL SKY STAR ACQUISITION CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Description of Organization and Business Operations
Organization and General
Metal Sky Star Acquisition Corporation (the “Company”) is a blank check company incorporated in the Cayman Islands on May 5, 2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”).
The Company’s efforts in identifying prospective target businesses will not be limited to a particular geographic region. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The Company’s sponsor is M-Star Management Corporation, a British Virgin Islands incorporated company (the “Sponsor”). As of June 30, 2025, the Company had not yet commenced any operations. All activity through June 30, 2025 relates to the Company’s formation and the proposed initial public offering (“IPO”) and its Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year-end.
The Company initially had 9 months from the closing of the IPO (or up to 45 months from the closing of our IPO if we extend the period of time to consummate a business combination) to consummate a Business Combination (the “Combination Period”). If the Company fails to consummate a Business Combination within the Combination Period, it will trigger its automatic winding up, liquidation and subsequent dissolution pursuant to the terms of the Company’s amended and restated memorandum and articles of association (“Amended and Restated Memorandum and Articles of Association”). As a result, this has the same effect as if the Company had formally gone through a voluntary liquidation procedure under the Companies Law. Accordingly, no vote would be required from the Company’s shareholders to commence such a voluntary winding up, liquidation and subsequent dissolution.
On
April 5, 2022, the Company consummated the IPO of
At the Extraordinary General Meeting which held on October 30, 2023, the shareholders approved an amendment to the Company’s Amended and Restated Memorandum and Articles of Association to extend the date up to six (6) months which the Company must consummate a business combination to August 5, 2024.
On August 6, 2024, the Company filed the preliminary proxy statements to SEC, which had proposed to amend the Amended and Restated Memorandum and Articles of Association of the Company to extend the date of consummate a business combination to April 5, 2025.
On March 17, 2025, the Company filed a definitive proxy statement with the SEC in connection with calling on an Extraordinary General Meeting to be held on April 2, 2025, which had proposed to amend the Company’s Amended and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination from April 5, 2025 to January 5, 2026.
On April 2, 2025, the Company received a letter (the “Letter”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) stating that (i) the Staff has determined that the Company’s securities will be delisted from Nasdaq; (ii) trading of the Company’s Ordinary Shares, Units, Rights, and Warrants will be suspended at the opening of business on April 9, 2025; and (iii) a Form 25-NSE will be filed with the SEC, which will remove the Company’s securities from listing and registration on Nasdaq. Pursuant to Nasdaq Listing Rule IM-5101-2, a special purpose acquisition company must complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. Since the Company failed to complete its initial business combination by March 31, 2025, the Company did not comply with IM-5101-2, and its securities are now subject to delisting.
A Form 25-NSE has been filed by Nasdaq with the SEC on July 14, 2025. Following the filing of the Form 25-NSE, the Company’s securities have been delisted from Nasdaq. The Company’s ordinary shares, units, rights and warrants are currently traded on the OTCID Market. The Company is currently working diligently to complete a business combination as soon as practicable.
| 5 |
The Trust Account
As
of April 5, 2022, a total of $
As
of June 30, 2025, and December 31, 2024, the Company had $
The funds held in the Trust Account will be invested only in United States government treasury bills, bonds or notes having a maturity of 180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act and that invest solely in United States government treasuries. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its income or other tax obligations, the proceeds will not be released from the Trust Account until the earlier of the completion of a Business Combination or the Company’s liquidation.
Liquidity
On
April 5, 2022, the Company consummated the IPO of
Simultaneously
with the consummation of the IPO, the Company sold to its Sponsor
Offering
costs amounted to $
As
of June 30, 2025, and December 31, 2024, the Company had nil cash held in escrow, $
In
September 2021, the Company repurchased
| 6 |
Going Concern and Management Liquidity Plan
As
of June 30, 2025, the Company had nil in cash and a working capital deficit of $
The Company’s liquidity needs up to the closing of the IPO on April 5, 2022 had been satisfied through proceeds from notes payable and advances from related party and from the issuance of ordinary shares.
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 with working capital. The Company’s management plans to continue its efforts to complete a Business Combination within the Combination Period after the closing of the Initial Public Offering.
If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination. Moreover, we may need to obtain other financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our business combination.
If we are unable to complete our business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
The Company has filed a preliminary proxy statement to amend its Amended and Restated Memorandum and Articles of Association, extending the deadline for consummating a business combination to January 5, 2026. The Company will have approximately 6 months to consummate a business combination as of June 30, 2025.
It is uncertain that we will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution.
In connection with the Company’s assessment of going concern considerations in accordance with the Accounting Standards Codification (the “ASC”) issued by Financial Accounting Standards Board (the “FASB”), in Topic 205-40, “Presentation of Financial Statements — Going Concern,” management has determined that mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance of the consolidated financial statements.
Note 2 –Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC, specifically Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three months and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the period ending December 31, 2025, or any future period.
These unaudited consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Annual Report for the year ended December 31, 2024, which are included in the Form 10-K filed on March 31, 2025.
| 7 |
Basis of Consolidation
The unaudited consolidated financial statements include the accounts of the Company and its subsidiary, which was newly established on February 7, 2025. All significant intercompany accounts and transactions have been eliminated in consolidation.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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 consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash
equivalents. The Company have nil cash held in escrow
as of June 30, 2025, and December 31, 2024, respectively. The Company did
Marketable Securities Held in Trust Account
As per ASC Topic 230, “Statement of Cash Flow” (“ASC 230”), operating cash flows include interest and dividend income receipts related to investments in other reporting entities or deposits with financial institutions (i.e., returns on investment). Interest income earned on Investments held in Trust Account is fully reinvested into the Trust Account and therefore considered as an adjustment to reconcile net profit/(loss) to net cash used in operating activities in the Statements of Cash Flows. Such interest income reinvested will be used to redeem all or a portion of the ordinary shares upon the completion of a business combination.
As of June 30, 2025, substantially all of the assets held in the Trust Account were held in U.S. Treasury securities. The Company’s marketable securities held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of marketable securities held in Trust Account are included in interest earned and unrealized gain on marketable securities held in Trust Account in the accompanying statement of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
The securities are presented on the balance sheets at fair value at the end of each reporting period. Earnings on these securities are included in dividends, interest earned, and unrealized gain on marketable securities held in Trust Account in the accompanying statements of operations and are automatically reinvested. The fair value for these securities is determined using quoted market prices in active markets for identical assets.
| 8 |
During
the three months ended June 30, 2025, other income from the Trust account amounted to $
During
the three months ended June 30, 2024, other income from the Trust account amounted to $
During
the six months ended June 30, 2025, other income from the Trust account amounted to $
During
the six months ended June 30, 2024, other income from the Trust account amounted to $
Deferred Offering Costs
Offering
costs consisted of underwriting, legal, accounting, registration and other expenses incurred through the balance sheet date that directly
related to the IPO. As of April 5, 2021, offering costs amounted to $
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the consolidated financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the consolidated financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s
only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income
tax expense. The Company had generated interest income from the Marketable securities held in trust that is the Unite States sources
investment, which is tax exemption interest and dividends. There were
On
August 16, 2022, the U.S. Government enacted legislation commonly referred to as the Inflation Reduction Act. The main provisions of
the Inflation Reduction Act (the IRA) that we anticipate may impact us is a
The provision for income taxes was deemed to be immaterial for the three months and six months ended June 30, 2025 and 2024.
Net Income (Loss) Per Share
Net
income (loss) per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period,
excluding ordinary shares subject to forfeiture. The calculation of diluted income (loss) per ordinary shares does not consider the effect
of the warrants issued in connection with the (i) IPO; and (ii) the private placement since the exercise of the warrants
is contingent upon the occurrence of future events. The warrants are exercisable to purchase
| 9 |
The net income (loss) per share presented in the consolidated statement of operations is based on the following:
Schedule of Statement of Operations
For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | |||||||||||||
| Net (loss) income | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Remeasurement to redemption value – interest income earned | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Remeasurement to redemption value – extension fee | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss including accretion of temporary equity to redemption value | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Schedule of Net Income (Loss) Per Share
| Basic and Diluted net income (loss) per share: | Non-redeemable shares | Redeemable shares | Non-redeemable shares | Redeemable shares | Non-redeemable shares | Redeemable shares | Non-redeemable shares | Redeemable shares | ||||||||||||||||||||||||
Three Months Ended of June 30, 2025 | Three Months Ended of June 30, 2024 | Six Months ended June 30, 2025 | Six Months ended June 30, 2024 | |||||||||||||||||||||||||||||
| Basic and Diluted net income (loss) per share: | Non-redeemable shares | Redeemable shares | Non-redeemable shares | Redeemable shares | Non-redeemable shares | Redeemable shares | Non-redeemable shares | Redeemable shares | ||||||||||||||||||||||||
| Numerators: | ||||||||||||||||||||||||||||||||
| Allocation of net losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||
| Accretion of temporary equity | - | - | - | - | ||||||||||||||||||||||||||||
| Accretion of temporary equity - interest | - | - | - | - | ||||||||||||||||||||||||||||
| Allocation of net income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
| Denominators: | ||||||||||||||||||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||||||||||||||||||
| Basic and diluted net income (loss) per share | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
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. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recently Issued Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s consolidated financial statements.
Warrants
The Company evaluates the Public and Private Warrants as either equity-classified or liability-classified instruments based on an assessment of the warrants’ specific terms and applicable authoritative guidance in FASB 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 ordinary shares, among other conditions for equity classification. Pursuant to such evaluation, both Public and Private Warrants issued were classified in shareholders’ equity.
| 10 |
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature 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, ordinary shares is classified as shareholders’ equity. The Company’s ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption is presented at redemption value (plus any interest earned on the Trust Account) as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Note 3 – Initial Public Offering
On
April 5, 2022, the Company sold
The
Company granted the underwriter a 45-day option from the date of the IPO to purchase up to an additional
On
January 26, 2023, an Extraordinary General Meeting of shareholders was held to approve the proposal to amend the Company’s Amended
and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination
twelve (12) times for an additional one (1) month each time from February 5, 2023 to February 5, 2024. In connection with the Extraordinary
General Meeting, a total of
On
October 30, 2023, an Extraordinary General Meeting of shareholders was held to approve the proposal to amend the Company’s Amended
and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination
six (6) times for an additional one (1) month each time from February 5, 2024 to August 5, 2024. To effectuate each monthly extension,
the Company and/or its Sponsor will deposit the lesser of (i) $
On August 6, 2024, the Company filed the preliminary proxy statements to SEC, which had proposed to amend the Amended and Restated Memorandum and Articles of Association of the Company to extend the date of consummate a business combination to April 5, 2025.
On March 17, 2025, the Company filed a definitive proxy statement with the SEC in connection with calling on an Extraordinary General Meeting to be held on April 2, 2025, which had proposed to amend the Company’s Amended and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination from April 5, 2025 to January 5, 2026.
As of June 30, 2025, the ordinary shares reflected in the balance sheet are reconciled in the following tables:
Schedule of Ordinary Share Reflected in Balance Sheet
| Gross proceeds from public shares | $ | |||
| Less: | ||||
| Proceeds allocated to public rights | ( | ) | ||
| Proceeds allocated to public warrants | ( | ) | ||
| Allocation of offering costs related to ordinary shares | ( | ) | ||
| Redemption of Public Shares | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Subsequent measurement of Class A ordinary shares subject to possible redemption (interest earned and unrealized gains on trust account) | ||||
| Ordinary shares subject to possible redemption (plus any interest earned on the Trust Account) | $ |
| 11 |
Note 4 – Private Placement
The
Sponsor has committed to purchase an aggregate of
Note 5 – Related Party Transactions
Founder Shares
In
May 2021, Harneys Fiduciary (Cayman) Limited transferred one ordinary share to the Sponsor for par value. On July 5, 2021 the Company
redeemed the one share for par value and the Sponsor purchased
The
In
September 2021, the Company repurchased
Administrative Services Agreement
The
Company entered into an administrative services agreement, commencing on April 5, 2022, through the earlier of the Company’s
consummation of a Business Combination or its liquidation, to pay to the Sponsor a total of $
Promissory Note — Related Party
On
June 15, 2021, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate
principal amount of $
On
January 3, 2023, the Company issued a promissory note in the principal amount of up to $
| 12 |
On
January 4, 2023, the Company started to draw the funds and deposited it into the trust account to extend the period of time the Company
has to consummate a business combination by one month to February 5, 2023. The $
Starting
in February 2023, the extension fee changed to $
Starting
in November 2023, the extension fee changed to the lower of $
Starting
in April 2025, the extension fee changed to $
As
of June 30, 2025, and December 31, 2024, the loans under the promissory notes were $
Due to Related Party
As
of June 30, 2025, and December 31, 2024, the Company has amounts due to the Sponsor of $
Note 6 – Commitments and Contingencies
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In the beginning of February 2022, the Russian Federation and Belarus commenced a military action against 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. The impact of this action and related sanctions on the world economy are not determinable as of the date of these consolidated financial statements.
Registration Rights
The holders 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 IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
On
August 10, 2021, the Company engaged Ladenburg Thalmann & Co. Inc. as its underwriter. The Company granted the underwriters
a 45-day option to purchase up to
Ladenburg Thalmann has agreed to revise the warrant agreement that the warrant is exercisable on the later of one year after the closing of this offering or the consummation of an initial business combination.
| 13 |
The
underwriters were entitled to a cash underwriting discount of: (i) two percent (
Professional Fees
The
Company has paid professional fees of $
Contingencies and Dismissal of the Then-Legal Counsel
The Company may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. As of June 30, 2025, and December 31, 2024, there were no legal or administrative proceedings for which a loss was probable and expected to be material to the consolidated financial statements.
On
February 5, 2024, management and the Sponsor decided to dismiss the Company’s then-legal counsel and terminated its services of
maintaining and managing the escrow account. For the year ended December 31, 2023, the Company received invoices with the total amounts
of $
Note 7 – Shareholders’ Deficit
Ordinary Shares
The
Company is authorized to issue
| 14 |
Warrants
Each
warrant entitles the holder to purchase one ordinary share at a price of $
In
addition, if (a) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection
with the closing of the initial Business Combination at an issue price or effective issue price of less than $
Note 8 – Fair Value Measurements
The Company complies with ASC 820, “Fair Value Measurements”, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. ASC 820 determines fair value to be the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date.
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
As of June 30, 2025, the assets held in the trust account were entirely comprised of marketable securities, with all investments fully allocated to money market funds securities.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2025, and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
Schedule of Assets Measured at Fair Value on a Recurring Basis
As of June 30, 2025
| Assets | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
| Marketable Securities held in Trust Account | $ | $ | - | $ | - | |||||||
As of December 31, 2024
| Assets | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
| Marketable Securities held in Trust Account | $ | $ | - | $ | - | |||||||
Note 9 – Subsequent Events
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred up to the date of the consolidated financial statements were available to issue. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements except the following:
Expenses Sponsor paid on behalf of the Company
Subsequent
to June 30, 2025, the Sponsor paid a total of $
Subsequent drawdown of the Promissory note
In
August, 2025, the Sponsor deposited $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Metal Sky Star Acquisition Corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to M-Star Management Corporation. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations thereof and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in the Cayman Islands on May 5, 2021 which formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the IPO and the sale of the Private Units, our shares, debt or a combination of cash, shares and debt.
We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through June 30, 2025 were organizational activities, those necessary to prepare for the IPO, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenue until after the completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held after the IPO. We incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.
On February 7, 2025, we established a wholly owned subsidiary in Cayman Islands which has no operations, and only had limited activities.
For the three months ended June 30, 2025 and 2024, we had a net loss of $(198,020) and net income of $392,165, respectively, which consists of operating costs of $225,904 and $74,148, interest income of $25,052 and $311,583, and unrealized gain on Trust Accounts of $2,832 and $154,730, respectively.
For the six months ended June 30, 2025 and 2024, we had a net loss of $(351,198) and net income of $689,185, respectively, which consists of operating costs of $449,724 and $235,967, interest income of $95,694 and $770,422, and unrealized gain on Trust Accounts of $2,832 and $154,730, respectively.
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Liquidity and Capital Resources
Going Concern
The accompanying consolidated financial statements were prepared assuming that the Company will continue as a going concern. The Company has an accumulated deficit of $7,850,446 and a working capital deficit of $4,972,241 as of June 30, 2025, which raises substantial doubt about its ability to continue as a going concern.
We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. We will need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors, or third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Until the consummation of the Business Combination, we will be using the funds not held in the Trust Account.
On April 5, 2022, we consummated the IPO of 11,500,000 Units, generating gross proceeds of $115,000,000. Simultaneously with the closing of the IPO, we consummated the sale of 330,000 Private Units to the Sponsor at a price of $10.00 per Private Unit, generating gross proceeds of $3,300,000.
Following the IPO and the sale of the Private Units, a total of $115,000,000 was placed in the Trust Account. We incurred $5,704,741 in transaction costs, including $2,300,000 of underwriting fees, $2,875,000 of deferred underwriting fees and $529,741 of other offering costs.
For the six months ended June 30, 2025 and 2024, net cash used in operating activities was nil and nil, respectively.
For the six months ended June 30, 2025 and 2024, net cash provided by (used in) investing activities was $5,914,261 and $(400,000), respectively.
For the six months ended June 30, 2025 and 2024, net cash (used) provided by financing activities was $(5,914,261) and $400,000, respectively.
As of June 30, 2025, we had investments held in the Trust Account of $861,784. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding deferred underwriting commissions, to complete our Business Combination. We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of June 30, 2025, we had nil cash held outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may loan us funds as may be required. Such working capital loans would be evidenced by promissory notes. If we complete a Business Combination, we may repay such notes out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such notes, but no proceeds from our Trust Account would be used for such repayment.
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In order to complete a Business Combination, the Company will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern if a Business Combination is not consummated.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee of $10,000 for certain general and administrative services, including office space, utilities and administrative services, provided to the Company. We began incurring these fees on April 5, 2022 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination or the Company’s liquidation.
The underwriters are entitled to a deferred fee of two and one-half percent (2.5%) of the gross proceeds of the Initial Public Offering, or $2,500,000. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.
On January 3, 2023, the Company issued a promissory note in the principal amount of up to $1,000,000 (the “Promissory Note”) to M-Star Management Corp. Pursuant to which the Sponsor shall loan to the Company up to $1,000,000 to pay the extension fee and transaction cost. The Notes bear no interest and are repayable in full upon the earlier of (a) December 31, 2023 or (b) the date of the consummation of the Company’s initial business combination. The issuance of the Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. The Company amended and restated Promissory Note (the Amended Promissory Note”) in order to a) increase the available principal amount from $1,000,000 to $2,500,000 on April 18, 2023, and b) change the repayment term as repayable in full upon the date of the consummation of the Company’s initial business combination. On December 22, 2023, the Company amended and restated Promissory Note (the “Second Amended Promissory Note”) in order to increase the available principal amount from $2,500,000 up to $3,000,000. On August 4, 2025, the Company amended and restated Promissory note (the “Third Amended Promissory Note”) in order to increase the available principal amount from $3,000,000 up to $4,500,000. As of June 30, 2025, the balance of the Promissory Note was $3,047,403.
We may need to raise additional funds in order to meet the expenditures required for operating our business. If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such a business combination.
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General Meeting
On January 26, 2023, the Company held its Extraordinary General Meeting at which the Company’s shareholders approved proposals to (i) amend the Company’s amended and restated memorandum and articles of association to extend the date by which the Company has to consummate a business combination to February 5, 2024. As a result of the exercise of the redemption right, 5,885,324 shares held by public shareholders were redeemed.
On October 30, 2023, the Company held an Extraordinary General Meeting at which the Company’s shareholders approved proposals to (i) amend the Company’s Amended and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination to August 5, 2024 and to reduce the amount of the fee to extend such time period (the “Charter Amendment Proposal”); and (ii) amend the Investment Management Trust Agreement dated March 30, 2022 among the Company, Wilmington Trust, National Association (the “Trustee”) and Vstock Transfer LLC (“Vstock”) to reflect the Charter Amendment Proposal. Following the Extraordinary General Meeting, effective as of October 31, 2023, the Company, the Trustee and Vstock entered into an amendment to the Investment Management Trust Agreement (the “Amendment Agreement”) to change the date on which the Company’s ability to complete a business combination may be extended by up to six (6) additional increments of one-month each until August 5, 2024, subject to the payment into the Trust Account by the Sponsor (or its designees or affiliates) of an amount for each one-month extension equal to the lesser of (i) $50,000 for all remaining public shares and (ii) $0.033 per public share for each remaining Ordinary Share held by a Public Stockholder (the “Monthly Extension Payment”), and which Monthly Extension Payments, if any, shall be added to the Trust Account. As a result of the exercise of the redemption right, 2,412,260 shares held by public shareholders were redeemed.
On December 20, 2023, the Company held an Annual General Meeting at which the Company’s shareholders approved the proposal to amend the Company’s Amended and Restated Memorandum and Articles of Association to allow the Company to undertake an initial business combination with an entity or business, with a physical presence, operation, or other significant ties to China or which may subject the post-business combination business or entity to the laws, regulations and policies of China (including Hong Kong and Macao), or an entity or business that conducts operations in China through variable interest entities, or VIEs, pursuant to a series of contractual arrangements with the VIE and its shareholders on one side, and a China-based subsidiary of the China-based Target, on the other side.
On November 12, 2024, the Company held an Extraordinary General Meeting at which the Company’s shareholders approved proposals to (i) amend the Company’s Amended and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination to April 5, 2025; and (ii) amend the Investment Management Trust Agreement dated March 30, 2022, as amended on October 31, 2023, by and among the Company, Wilmington Trust, National Association and VStock Transfer LLC to reflect the Extension Proposal. As a result of the exercise of the redemption right, 2,649,965 shares held by public shareholders were redeemed.
On April 2, 2025, the Company held an Extraordinary General Meeting at which the Company’s shareholders approved proposal to (i) amend the Company’s Amended and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination from April 5, 2025 to January 5, 2026 and to reduce the amount of the fee to extend such time period; (ii) amend the Investment Management Trust Agreement dated March 30, 2022, as amended on October 31, 2023 and November 12, 2024, by and among the Company, Wilmington Trust, National Association and VStock Transfer LLC to reflect the Extension Proposal with the reduced extension payment of $25,000 for each one-month extension; and (iii) amend the Company’s Amended and Restated Memorandum and Articles of Association to eliminate the limitation that we shall not redeem its public shares to the extent that such redemption would result in the ordinary shares, or the securities of any entity that succeeds the Company as a public company, becoming “penny stock” (as defined in accordance with Rule 3a51-1 of the Securities Exchange Act of 1934, as amended), or cause the Company to not meet any greater net tangible asset or cash requirement which may be contained in the agreement relating to a business combination. As a result of the exercise of the redemption right, 491,928 shares held by public shareholders were redeemed.
As of June 30, 2025, 60,523 shares held by public shareholders remained outstanding.
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Merger Agreement
On April 12, 2023, Metal Sky entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Future Dao Group Holding Limited, a Cayman Islands exempted company (the “Future Dao”), and Future Dao League Limited, a Cayman Islands exempted company and wholly owned subsidiary of Future Dao (the “Merger Sub”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, (i) Merger Sub will merge with and into Metal Sky (the “First Merger”), with Metal Sky surviving the First Merger as a wholly owned subsidiary of Future Dao, and (ii) Metal Sky will merge with and into Future Dao (the “Second Merger” and together with the First Merger, the “Mergers”), with Future Dao surviving the Second Merger (the “Second Business Combination”). Immediately prior to the First Effective Time, Future Dao will effect a recapitalization of its equity securities (the “Recapitalization”) including a share split of each outstanding Future Dao Ordinary Share into such number of Future Dao Ordinary Shares, calculated in accordance with the terms of the Merger Agreement, such that, based on a value of $350 million for all of the outstanding Future Dao Ordinary Shares, each Future Dao Ordinary Share will have a value of $10.00 per share after giving effect to such share split (the “Share Split”). The Business Combination has been unanimously approved by the boards of directors of both Metal Sky and Future Dao pursuant to a written resolution.
On October 6, 2023, the parties to the Merger Agreement entered into a Termination of Agreement and Plan of Merger (the “Termination Agreement”), pursuant to which, among other things, the parties agreed to mutually terminate the Merger Agreement, pursuant to Section 10.01 (a) of the Merger Agreement, effective as of October 6, 2023 (the “Termination”).
As a result of the Termination, the Merger Agreement will be of no further force and effect except as provided in Section 10.02 of the Merger Agreement, and the Transaction Agreements (as defined in the Merger Agreement) will either be terminated in accordance with their terms or be of no further force and effect. Neither party will be required to pay the other any fees or expenses as a result of the Termination. Metal Sky, Future Dao and Merger Sub have also agreed on behalf of themselves and their respective related parties, to a release of claims relating to the transactions contemplated under the Merger Agreement.
On October 1, 2024, the Company has entered into a non-binding letter of intent for a business combination with Okidoki OÜ, and existing equity holders would roll 100% of their equity into the combined public company, based on a total equity value of $120 million for Okidoki.
There are no guarantees that the parties will successfully negotiate and enter into a definitive agreement, or that the proposed transaction will be consummated on the terms or timeframe currently contemplated, or at all. Any transaction would be subject to board and equity holder approval of both companies, regulatory approvals and other customary conditions.
On November 4, 2024, Metal Sky entered into a letter of intent with Fedilco Group Limited (“Fedilco”), a Cyprus-based company which holds an 80% equity interest in Viva Armenia Closed Joint-Stock Company, an Armenia-based telecom company. Pursuant to the letter of intent, Metal Sky expresses interest in acquiring all the issued and outstanding shares of Fedilco. The parties will seek necessary permissions and/or approvals from the Republic of Armenia’s state authorities for the proposed transaction.
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Critical Accounting Policies
The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“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 ordinary 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, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
Ordinary Shares Subject to Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value (plus any interest earned on the Trust Account) as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheets.
Net Income (Loss) Per Ordinary Share
We apply the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. Our net income (loss) is adjusted for the portion of income that is attributable to ordinary shares subject to redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.
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 our consolidated financial statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of June 30, 2025, we were not subject to any market or interest rate risk. Following the consummation of our IPO, the net proceeds of our IPO, including amounts in the Trust Account, have been invested in certain U.S. government securities with a maturity of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of June 30, 2025.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.
We have identified material weaknesses in our internal control over financial reporting as of December 31, 2024, relating to: (i) ineffective review and approval procedures over journal entries and financial statement preparation which resulted in errors not being timely identified in prior period financial statements, such as the misclassification of the trust account balance and deferred underwriting commissions payable as current assets and current liabilities instead of non-current assets and non-current liabilities, respectively; (ii) lack of segregation of duties of chief executive officer and chief financial officer for performing formal process of reviewing transactions. We concluded that the failure to timely identify such accounting errors constituted material weakness as defined in the SEC regulations. As such, management determined that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of December 31, 2024.
To respond to these material weaknesses, we have devoted and plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our system of evaluating and implementing the complex accounting standards that apply to our consolidated financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications, and add second approval which establish a dual-approval process to ensure proper segregation of duties. The elements of our remediation plan can only be accomplished over the time, and we can offer no assurance that these initiatives will ultimately have the intended effects, or that any additional material weaknesses or of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. Even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our consolidated financial statements.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our final prospectus for our IPO filed with the SEC on April 4, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, other than as described herein and below, there have been no material changes to the risk factors disclosed in our final prospectus for our IPO filed with the SEC on April 4, 2022 and the annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025.
Nasdaq Rule 5815 was amended effective October 7, 2024 to provide for immediate suspension and delisting for failure to meet the 36-month requirement in Nasdaq Rule IM 5101-2(b) to complete a business combination, and our securities have been delisted from Nasdaq due to the failure to complete a business combination within the 36-month window ended on March 31, 2025.
Nasdaq Rule IM 5101-2 requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement, which, in the case of the Company, would be March 31, 2025. Nasdaq Rule IM 5810-1 provides that Nasdaq will inform a company that its securities are immediately subject to suspension and delisting in the event that the company fails to comply with rule IM 5101-2. Nasdaq Rule 5815 was amended effective October 7, 2024 to provide for the immediate suspension and delisting upon issuance of a delisting determination letter for failure to meet the requirement in Nasdaq Rule IM 5101-2. Nasdaq may only reverse the determination if it finds it made a factual error applying the applicable rule, which is unlikely if Nasdaq provides the delisting determination letter after the 36-month window.
On April 2, 2025, we received a letter from the Listing Qualifications Department of Nasdaq stating that (i) the Staff has determined that our securities would be delisted from Nasdaq pursuant to Nasdaq Listing Rule IM-5101-2, since we failed to complete our initial business combination by March 31, 2025; (ii) trading of our ordinary shares, units, rights, and warrants would be suspended at the opening of business on April 9, 2025; and (iii) a Form 25-NSE will be filed with the SEC, which will remove our securities from listing and registration on Nasdaq. We did not appeal the delisting determination. As a result, at the opening of business on April 9, 2025, our securities were suspended from trading on Nasdaq. Following the filing of a Form 25-NSE filed by Nasdaq with the SEC on July 14, 2025, our securities have been delisted from Nasdaq.
We currently have our units, ordinary shares, rights and warrants traded on the OTCID Market, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. We will no longer be attractive as a merger partner if it is no longer listed on an exchange. We would face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; | |
| ● | reduced demand and liquidity for our securities; | |
| ● | a determination that our securities constitute a “penny stock,” which will require brokers trading in Metal Sky to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; | |
| ● | a limited amount of news and analyst coverage; and | |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or pre-empts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our securities are no longer listed on Nasdaq, they would no longer be considered to be “covered securities” under the National Securities Markets Improvement Act of 1996, and we would be subject to regulation in each state in which we offers our securities, including in connection with our initial business combination, which may make it more difficult and costly to complete a business combination. In addition, our shareholders could be prohibited from trading in our securities absent registration in the state where such shareholders live. To date we have not registered our securities in any state and do not currently plan to do so. This may make it difficult or impossible for our shareholders to trade in our securities.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
No unregistered sales or issuances of equity occurred during the quarter ended June 30, 2025.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| No. | Description of Exhibit | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Date File (Embedded within the Inline XBRL document and included in Exhibit 101). |
| * | Filed herewith. |
| ** | Furnished. |
| 24 |
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| METAL SKY STAR ACQUISITION CORPORATION | ||
| Date: August 15, 2025 | /s/ Wenxi He | |
| Name: | Wenxi He | |
| Title: | Chief Executive Officer and Chairman(Principal Executive Officer) | |
| Date: August 15, 2025 | /s/ Kin Sze | |
| Name: | Kin Sze | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) | |
| 25 |
FAQ
How much did MSSAU raise in its IPO and private placement?
What amount is held in the trust account for MSSAU shareholders?
Does MSSAU have sufficient liquidity as of June 30, 2025?
Are there any contingent liabilities disclosed in the 10-Q?
How many ordinary shares are issued and outstanding for MSSAU?
