| DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE
1- DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Valuence
Merger Corp. I (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on August 27, 2021.
The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination with one or more businesses or entities (a “Business Combination”). The
Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. However, the Company intends
to concentrate its efforts in identifying a potential Business Combination partner that is based in Asia (excluding China, Hong Kong
and Macau) and who is developing breakthrough technology in life sciences and/or advancing a platform for sustainable technology. 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. As
of June 30, 2024, the Company had not commenced any operations. All activity for the period from August 27, 2021 (inception) through
June 30, 2024 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), and subsequent
to the Initial Public Offering, identifying a target company for a Business Combination, which is described below. The Company will not
generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering. The
registration statement for the Company’s Initial Public Offering was declared effective on February 28, 2022. On March 3, 2022,
the Company consummated the Initial Public Offering of 20,000,000 0.0001 11.50 10.00 200,000,000 Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 6,666,667 1.50 2,666,667 4,000,000 10,000,000 Following
the closing of the Initial Public Offering on March 3, 2022, an amount of $ 206,000,000 10.30 On
March 8, 2022, the underwriters partially exercised their over-allotment option, resulting in an additional 2,009,963 20,099,630 267,995 1.50 401,993 20,702,619 10.30 226,702,619 Transaction
costs amounted to $ 10,718,994 4,000,000 2,200,996 8,105,480 814,510
VALUENCE
MERGER CORP. I NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS JUNE
30, 2024 Prior
to the consummation of the Initial Public Offering, on October 4, 2021, the Sponsor paid $ 25,000 5,750,000 0.0001 750,000 20 1,200,000 247,510 5,502,490 The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. The stock exchange listing rules require that the Business Combination must be with one or more
operating businesses or assets with a fair market value equal to at least 80 50 The
Company will provide the holders of the Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a
portion of their Public Shares upon the completion of the Business Combination, either (i) in connection with a general meeting called
to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders
will be entitled to redeem their Public Shares, for a per share redemption price payable in cash equal to the aggregate amount then on
deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest
(which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares. The per-share amount
to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by the deferred underwriting commissions
the Company will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business
Combination with respect to the Company’s warrants. If
a shareholder vote is not required in connection with a Business Combination and the Company does not decide to hold a shareholder vote
for business or other legal reasons, the Company will, pursuant to the Company’s amended and restated memorandum and articles of
association, as amended (the “Articles”), conduct the redemptions pursuant to the tender offer rules of the Securities and
Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included
in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection
with a Business Combination, the holders of the Company’s shares prior to the Initial Public Offering (the “Initial Shareholders”)
have agreed to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of approving
a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do
vote, irrespective of whether they vote for or against a proposed Business Combination. Notwithstanding
the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant
to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder
is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15 The
Initial Shareholders have each agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by
it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Articles (i) to modify the
substance or timing of the Company’s obligation to allow redemption in connection with the Company’s Business Combination
or to redeem 100 The
Initial Shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder
Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Shareholders or
any of their respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust
Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive
their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete
a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the
Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that
the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($ 10.00 In
order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent
any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products
sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality, or
other similar agreement for a Business Combination, reduce the amount of funds in the Trust Account to below the lesser of (1) $ 10.00
VALUENCE
MERGER CORP. I NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS JUNE
30, 2024 On
May 25, 2023, the Company held an extraordinary general meeting (the “May 2023 Meeting”), where shareholders approved, among
other things, an amendment to the Articles to extend the date by which the Company must consummate a Business Combination (the “Combination
Period”) from June 3, 2023 to September 3, 2023 and to allow the Company, without another shareholder vote, by resolution of the
Board of Directors of the Company (the “Board of Directors”), to elect to further extend the Combination Period in one-month
increments up to eighteen (18) additional times, or a total of up to thirty-six (36) months after the Initial Public Offering, until
up to March 3, 2025. In connection with such extensions to the Combination Period, the Sponsor or its designees was required to deposit
into the Trust Account, as a loan, $ 420,000 140,000 5,000,001 5,000,001 15,799,245 167,831,206 10.62 6,210,718 1,680,000 On
June 5, 2023, in connection with the required Contributions for monthly extensions to the Combination Period and for working capital
purposes, the Company issued a non-interest bearing, unsecured convertible promissory note to the Sponsor in the aggregate principal
amount of $ 613,207 1,650,943 (i) consummation of a Business Combination
and (ii) the date of the liquidation of the Company (the “Maturity Date”). Such loans may be converted into warrants of the
post-Business Combination entity at the option of the payees, which shall have terms identical to the Private Placement Warrants. If
the Company does not consummate a Business Combination by the end of the Combination Period, any the outstanding principal amount of
the Contribution Notes will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise
forgiven 613,207 1,650,943 On
March 1, 2024, the Company entered into Amendment No. 1 (the “IMTA Amendment”) to the Investment Management Trust Agreement
(the “IMTA”) with Continental Stock Transfer & Trust Company, as trustee. Pursuant to the IMTA Amendment, Section 1(c)
of the IMTA was amended to provide that the trustee may, at the direction of the Company (i) hold funds uninvested, (ii) hold funds in
an interest-bearing or non-interest bearing bank demand deposit account at a U.S. chartered commercial bank with consolidated assets
of $ 100
VALUENCE
MERGER CORP. I NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS JUNE
30, 2024 On
June 3, 2024, the Company held an extraordinary general meeting (the “June 2024 Meeting”), where shareholders approved an
amendment to the Articles to extend the Combination Period from June 3, 2024 for an initial two month period to August 3, 2024 and to
permit the Company, without another shareholder vote, by resolution of the Board of Directors to elect to further extend such date up
to nineteen (19) additional times for an additional one (1) month each time, up to March 3, 2026, provided that the Sponsor or its designees
deposit into the Trust Account (i) on June 4, 2024, with respect to the initial extension, an amount equal to the lesser of (x) $60,000 or (y) $0.03 per public share multiplied by the number of Public Shares outstanding and (ii) one business day following the public announcement by the Company that the Board of Directors has elected to further extend such date for an additional month, an amount equal to the lesser of (x) $30,000 or (y) $0.015 per public share multiplied by the number of Public Shares outstanding (the “New Contributions”) 4,343,316 49,900,380 11.49 1,867,402 In
connection with the June 2024 Meeting, on June 3, 2024, the Company entered into a non-redemption agreement (the “Non-Redemption
Agreement”) with an existing shareholder of the Company (the “Non-Redeeming Shareholder”) and the Sponsor. Pursuant
to the Non-Redemption Agreement, the Non-Redeeming Shareholder agreed not to redeem a number of Class A ordinary shares of the Company
equal to the lesser of (i) 300,000 9.9 75,000 On
June 3, 2024, pursuant to the terms of the Articles, the Sponsor and Valuence Partners LP elected to convert an aggregate of 5,502,488 one-for-one basis 7,369,890 2 On
June 4, 2024, the Company issued a convertible promissory note to the Sponsor, in the principal amount of $ 300,000 (a) the date of the consummation of the
Company’s initial Business Combination or (b) the Maturity Date. If the Company does not consummate an initial Business Combination
by the Maturity Date, the June 2024 Note will be repaid only from funds held outside of the Trust Account established in connection with
the Company’s Initial Public Offering or will be forfeited, eliminated or otherwise forgiven. 1.50 1.5 300,000 On
June 4, 2024, the Company deposited $ 56,022 28,011 Liquidity
and Going Concern As
of June 30, 2024, the Company had cash of $ 20,106 5,267,583 Based
on the foregoing, management believes that the Company will not have sufficient working capital and borrowing capacity from the Sponsor
or an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the
consummation of a Business Combination or one year from this filing. However, (the “Working Capital Loans”) and the June 2024 Note will provide
additional flexibility to continue the identification and pursuit of potential Business Combination targets. Over this time period, the
Company will be using available funds, including those from the Working Capital Loans, for the purpose of paying existing accounts payable,
identifying and evaluating prospective Business Combination candidates, performing due diligence on prospective target businesses, paying
for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business
Combination. In
connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s
Ability to Continue as a Going Concern,” the Company has until up to March 3, 2026, if the Company, without shareholder approval,
elects to further extend such deadline and causes to be deposited the New Contributions in connection with each monthly extension of
the Combination Period, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business
Combination by this time. If a Business Combination is not consummated by the end of the Contribution Period, there will be a mandatory
liquidation of the Trust Account and potential subsequent dissolution of the Company. Management has determined that the liquidity condition
and mandatory liquidation of the Trust Account, should a Business Combination not occur, and potential subsequent dissolution raises
substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts
of assets or liabilities should the Company be required to liquidate after March 3, 2026, if the Company, without shareholder approval,
elects to further extend such deadline.
VALUENCE
MERGER CORP. I NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS JUNE
30, 2024 |
