Overview

Metal Sky Star Acquisition Corporation is a blank check company formed in the Cayman Islands in 2021 for the purpose of merging with or acquiring one or more businesses. The company went public through an initial public offering (IPO) in 2022, raising $115 million.

On September 28, 2023, the company’s board of directors appointed Wenxi He as the new Chief Executive Officer and director, replacing the previous CEO Man Chak Leung. Ms. He has over 15 years of experience in the investment banking industry, previously working at firms like Bank of America Merrill Lynch and Citigroup.

Results of Operations

Metal Sky Star Acquisition Corporation has not engaged in any operations or generated any revenue to date. Its activities have been limited to organizational tasks, preparing for the IPO, and identifying potential target companies for a business combination. The company expects to incur increased expenses as a public company and in searching for and completing a business combination.

For the years ended December 31, 2023 and 2022, the company reported net income of $2,152,160 and $1,274,669 respectively. This income consisted primarily of interest earned on the funds held in the company’s trust account, as well as unrealized gains on the marketable securities in the trust account.

Liquidity and Capital Resources

The company’s financial statements raise substantial doubt about its ability to continue as a going concern, as it has an accumulated deficit of $5,772,847 and a working capital deficit of $2,844,642 as of December 31, 2023.

To fund its operations and a potential business combination, the company will need to raise additional capital through loans or investments from its sponsor, shareholders, officers, directors, or third parties. The company’s officers, directors and sponsor may provide loans, but are not obligated to do so.

As of December 31, 2023, the company had $35,359,088 invested in the trust account from the IPO proceeds. It intends to use these funds, along with any interest earned, to complete a business combination, with the exception of funds needed to pay taxes. The company had no cash held outside the trust account as of that date.

The company has issued a promissory note to its sponsor for up to $2,500,000 to cover extension fees and transaction costs. It may also issue up to $1,500,000 in convertible notes to fund working capital needs.

General Meetings and Merger Agreement

In January 2023 and October 2023, the company held extraordinary general meetings where shareholders approved proposals to extend the deadline to complete a business combination. As a result of redemption requests, the number of public shares outstanding has decreased from 11,500,000 to 3,202,416 as of December 31, 2023.

The company previously entered into a merger agreement with Future Dao Group Holding Limited in April 2023, but the parties mutually terminated that agreement in October 2023. As of the filing date, the company has not yet held a meeting to propose a new business combination.

Critical Accounting Policies

The company’s critical accounting policies include the treatment of warrants as either equity-classified or liability-classified instruments, the classification of ordinary shares subject to possible redemption, and the calculation of net loss per ordinary share.

Overall, Metal Sky Star Acquisition Corporation faces significant challenges in completing a successful business combination given its current financial position and the need to raise additional capital. The outlook for the company’s future remains uncertain.