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 has not yet engaged in any operations or generated any revenue, and its only activities so far have been organizational and preparing for its initial public offering (IPO).

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 has not generated any operating revenue to date. Its net income for the years ended December 31, 2023 and 2022 was $2,152,160 and $1,274,669 respectively, which consisted primarily of interest income and unrealized gains on marketable securities held in its trust account, offset by operating expenses.

Liquidity and Capital Resources

The company has an accumulated deficit of $5,772,847 and a working capital deficit of $2,844,642 as of December 31, 2023, which raises substantial doubt about its ability to continue as a going concern. It will need to raise additional capital through loans, investments, or other means in order to fund its operations and complete a business combination.

Metal Sky Star completed its IPO in April 2022, raising $115 million which was placed in a trust account. It has used cash outside the trust account for operating expenses. As of December 31, 2023, the company had $35,359,088 invested in the trust account.

The company has issued a promissory note to its sponsor, M-Star Management Corp., for up to $2.5 million to cover extension fees and transaction costs. It has also incurred a $2.5 million deferred underwriting fee from its IPO that is payable upon completion of a business combination.

In order to extend the deadline to complete a business combination, the company’s sponsor or affiliates must deposit additional funds into the trust account. Shareholders have also exercised redemption rights, reducing the number of public shares outstanding.

General Meeting

Metal Sky Star has held several extraordinary general meetings of shareholders to extend the deadline to complete a business combination. The most recent extension was to August 5, 2024, subject to the sponsor making monthly extension payments into the trust account.

Merger Agreement

In April 2023, Metal Sky Star entered into a merger agreement with Future Dao Group Holding Limited, a Cayman Islands company. However, this agreement was mutually terminated in October 2023. The company is now pursuing other potential business combination targets.

Critical Accounting Policies

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

Overall, Metal Sky Star faces significant challenges in its ability to continue as a going concern and complete a successful business combination within the required timeframe. Its financial position and future prospects remain uncertain.