UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-41304

VALUENCE MERGER CORP. I

(Exact name of registrant as specified in its charter)

Cayman Islands

N/A

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

4 Orinda Way, Suite 100D Orinda, CA 94563

(Address of Principal Executive Offices, including zip code)

Registrant’s telephone number, including area code: (415) 340-0222

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant	VMCAU	Nasdaq Stock Market LLC

Class A ordinary shares, par value $0.0001	VMCA	Nasdaq Stock Market LLC

Redeemable warrants, each warrant exercisable for one Class A ordinary share, each at an exercise price of $11.50 per share	VMCAW	Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐	Large accelerated filer	☐	Accelerated filer
☒	Non-accelerated filer	☒	Smaller reporting company
		☒	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒ No ☐

As of November 14, 2024 there were 7,369,890 Class A ordinary shares, par value $0.0001 per share, and 2 Class B ordinary shares, $0.0001 par value per share, issued and outstanding.

VALUENCE MERGER CORP. I

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION	1

Item 1. Interim Unaudited Condensed Financial Statements	1
Condensed Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023	1
Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	2
Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the Three and Nine Months Ended September 30, 2024 and 2023	3
Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	4
Notes to Unaudited Condensed Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
Item 4. Controls and Procedures	22

PART II-OTHER INFORMATION	23

Item 1. Legal Proceedings	23
Item 1A. Risk Factors	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3. Defaults Upon Senior Securities	24
Item 4. Mine Safety Disclosures	24
Item 5. Other Information	24
Item 6. Exhibits	24

SIGNATURES	25

PART I - FINANCIAL INFORMATION

ITEM 1. INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS

VALUENCE MERGER CORP. I

CONDENSED BALANCE SHEETS

	September 30, 2024			December 31, 2023
		(Unaudited)
ASSETS
Current assets
Cash	$	15,539		$	684,816
Prepaid expenses		88,267			78,070
Total current assets		103,806			762,886

Cash and investments held in Trust Account		21,920,833			69,402,338
TOTAL ASSETS	$	22,024,639		$	70,165,224

LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION, AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accrued expenses and accounts payable	$	2,471,034		$	2,228,646
Advance from related party		623,384			198,384
Working capital loans		613,207			613,207
Convertible notes - related party		1,950,941			1,650,941
Total current liabilities		5,658,566			4,691,178

Deferred underwriting fees		8,105,480			8,105,480
TOTAL LIABILITIES		13,764,046			12,796,658

Commitments and Contingencies		-			-

Class A ordinary shares subject to possible redemption, $0.0001 par value; 1,867,402 and 6,210,718 shares at redemption value of $11.74 and $11.15 per share at September 30, 2024 and December 31, 2023, respectively		21,920,833			69,262,338

SHAREHOLDERS’ DEFICIT
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding at September 30, 2024 and December 31, 2023		—			—
Class A ordinary shares, $0.0001 par value; 180,000,000 shares authorized; 5,502,488 and none issued or outstanding (excluding 1,867,402 and 6,210,718 shares subject to possible redemption) as of September 30, 2024 and December 31, 2023, respectively		550			—
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 2 and 5,502,490 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		—			550
Common Stock value		—			550
Additional paid-in capital		—			—
Accumulated deficit		(13,660,790	)		(11,894,322	)
TOTAL SHAREHOLDERS’ DEFICIT		(13,660,240	)		(11,893,772	)
TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION, AND SHAREHOLDERS’ DEFICIT	$	22,024,639		$	70,165,224

The accompanying notes are an integral part of these unaudited condensed financial statements.

VALUENCE MERGER CORP. I

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

	2024			2023			2024			2023
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023

General and administrative expenses	$	203,143		$	235,620		$	926,412		$	1,268,085
Loss from operations		(203,143	)		(235,620	)		(926,412	)		(1,268,085	)

Other income:
Interest earned on cash and investments held in Trust Account		238,177			865,386			1,718,819			5,258,992
Total other income		238,177			865,386			1,718,819			5,258,992

Net income	$	35,034		$	629,766		$	792,407		$	3,990,907

Weighted average shares outstanding of Class A redeemable ordinary shares		1,867,402			6,210,718			4,340,239			15,065,240

Basic and diluted net income per common share, Class A redeemable ordinary shares	$	0.00		$	0.05		$	0.08		$	0.19

Weighted average shares outstanding of Class A & Class B non-redeemable ordinary shares		5,502,490			5,502,490			5,502,490			5,502,490

Basic and diluted net income per common share, Class A and Class B non-redeemable ordinary shares	$	0.00		$	0.05		$	0.08		$	0.19

The accompanying notes are an integral part of these unaudited condensed financial statements.

VALUENCE MERGER CORP. I

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

‌	Shares		Amount		Shares			Amount			Capital		Deficit			Deficit
‌	Class A ordinary shares				Class B ordinary shares						Additional Paid-in		Accumulated			Shareholders’
‌	Shares		Amount		Shares			Amount			Capital		Deficit			Deficit
Balance — January 1, 2024		—	$	—		5,502,490		$	550		$	—	$	(11,894,322	)	$	(11,893,772	)
		—		—
Accretion of Class A ordinary shares subject to possible redemption						—			—			—		(1,266,149	)		(1,266,149	)

Net income		—		—		—			—			—		588,681			588,681

Balance as of March 31, 2024 (unaudited)		—		—		5,502,490			550			—		(12,571,790	)		(12,571,240	)

Accretion of Class A ordinary shares subject to possible redemption		—		—		—			—			—		(970,515	)		(970,515	)

Conversion of Class B ordinary shares to Class A ordinary shares		5,502,488		550		(5,502,488	)		(550	)		—		—			—

Net income		—		—		—			—			—		168,692			168,692

Balance as of June 30, 2024 (unaudited)		5,502,488		550		2			—			—		(13,373,613	)		(13,373,063	)

Accretion of Class A ordinary shares subject to possible redemption		—		—		—			—			—		(322,211	)		(322,211	)

Net income		—		—		—			—			—		35,034			35,034

Balance as of September 30, 2024 (unaudited)		5,502,488	$	550		2		$	—		$	—	$	(13,660,790	)	$	(13,660,240	)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

	Shares		Amount		Capital		Deficit			Deficit
	Class B Ordinary Shares				Additional Paid-in		Accumulated			Total Shareholders’
	Shares		Amount		Capital		Deficit			Deficit
Balance — January 1, 2023		5,502,490	$	550	$	—	$	(9,522,238	)	$	(9,521,688	)

Accretion of Class A ordinary shares subject to possible redemption		—		—		—		(2,430,776	)		(2,430,776	)

Net income		—		—		—		1,776,101			1,776,101

Balance – March 31, 2023 (unaudited)		5,502,490		550		—		(10,176,913	)		(10,176,363	)

Accretion of Class A ordinary shares subject to possible redemption		—		—		—		(2,382,830	)		(2,382,830	)

Net income		—		—		—		1,585,040			1,585,040

Balance – June 30, 2023 (unaudited)		5,502,490		550		—		(10,974,703	)		(10,974,153	)
Balance		5,502,490	$	550	$	—	$	(10,974,703	)	$	(10,974,153	)

Accretion of Class A ordinary shares subject to possible redemption		—		—		—		(1,005,386	)		(1,005,386	)

Net income		—		—		—		629,766			629,766

Balance – September 30, 2023 (unaudited)		5,502,490	$	550	$	—	$	(11,350,323	)	$	(11,349,773	)
Balance		5,502,490	$	550	$	—	$	(11,350,323	)	$	(11,349,773	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

VALUENCE MERGER CORP. I

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

	2024			2023
	For the Nine Months Ended September 30,
	2024			2023
Cash Flows from Operating Activities:
Net income	$	792,407		$	3,990,907
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on cash and investments held in Trust Account		(1,718,819	)		(5,258,992	)
Changes in operating assets and liabilities:
Prepaid expenses		(10,197	)		312,864
Accrued expenses and accounts payable		242,387			432,907
Net cash used in operating activities		(694,222	)		(522,314	)

Cash Flows from Investing Activities:
Investment of cash into Trust Account		(700,055	)		(560,000	)
Cash withdrawn from Trust Account in connection with redemption		49,900,380			167,831,206
Net cash provided by investing activities		49,200,325			167,271,206

Cash Flows from Financing Activities:
Proceeds from convertible promissory note - related party		300,000			172,714
Proceeds from convertible promissory note					1,285,246
Advance from related party		425,000			—
Payment of offering costs		—			(70,000	)
Redemption of ordinary shares		(49,900,380	)		(167,831,206	)
Net cash used in financing activities		(49,175,380	)		(166,443,246	)

Net Change in Cash		(669,277	)		305,646
Cash – Beginning of period		684,816			319,201
Cash – End of period	$	15,539		$	624,847

The accompanying notes are an integral part of these unaudited condensed financial statements.

VALUENCE MERGER CORP. I

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

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 September 30, 2024, the Company had not commenced any operations. All activity for the period from August 27, 2021 (inception) through September 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 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”). Each Unit consists of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Class A ordinary shares”) and one-half of one redeemable warrant (the “Public Warrants”), with each Public Warrant entitling the holder thereof to purchase one Class A ordinary share for an initial exercise price of $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $200,000,000, which is described in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 6,666,667 warrants (each, a “Private Placement Warrant” and, collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement, consisting of 2,666,667 Private Placement Warrants sold to VMCA Sponsor, LLC (f/k/a Valuence Capital, LLC) (the “Sponsor”) and 4,000,000 Private Placement Warrants sold to Valuence Partners LP, an investment fund affiliated with the Company’s Sponsor, generating gross proceeds of $10,000,000, which is described in Note 4.

Following the closing of the Initial Public Offering on March 3, 2022, an amount of $206,000,000 ($10.30 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), and was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as determined by the Company, until the earlier of (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. As further described below, on March 1, 2024, pursuant to the IMTA Amendment (as defined below), the Company instructed Continental Stock Transfer and Trust Company to move the Trust Account out of investment in securities and into an interest-bearing bank deposit account.

On March 8, 2022, the underwriters partially exercised their over-allotment option, resulting in an additional 2,009,963 Units issued for an aggregate amount of $20,099,630. In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale of an additional 267,995 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total proceeds of $401,993. A total of $20,702,619 ($10.30 per Unit) was deposited into the Trust Account, bringing the aggregate proceeds deposited in the Trust Account to $226,702,619.

Transaction costs amounted to $10,718,994, consisting of $4,000,000 of underwriting fees, net of $2,200,996 reimbursed from the underwriters (see Note 6), $8,105,480 of deferred underwriting fees and $814,510 of other offering costs.

VALUENCE MERGER CORP. I
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024

Prior to the consummation of the Initial Public Offering, on October 4, 2021, the Sponsor paid $

SEC Form 10-Q filed by Valuence Merger Corp. I