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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-06 · 365 added, 273 removed, 1 unchanged (100% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and

analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes

thereto contained elsewhere in this report.

Certain information contained in the discussion and analysis set forth below includes forward-looking

statements that involve risks and uncertainties.

We are a blank check company

incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock

purchase, reorganization or similar business combination (the “initial business combination”) with one or more businesses.

We intend to complete our initial business combination using cash from the IPO, our capital stock, debt or a combination of cash, stock

We presently have no revenue,

have had losses since inception from incurring formation and operating costs and have had no operations other than identifying and evaluating

suitable acquisition transaction candidates.

We have relied upon the sale of our securities and loans from the Sponsor to fund our operations.

On June 21, 2022, we consummated

our initial public offering (the “IPO”) of 9,775,000 units (the “Units”), which included 1,275,000 units issued

upon the full exercise of the over-allotment option of the underwriters of the IPO.

Each Unit consists of one share of our Class A common

stock (the “Class A Common Stock”), $0.0001 par value per share (the “Public Shares”), one redeemable warrant

(the “Warrants”), each Warrant entitling the holder thereof to purchase one share of Class A Common Stock at an exercise price

of $11.50 per share, and one right (the “Rights”), each one Right entitling the holder thereof to exchange for one-tenth (1/10)

of one Class A Common Stock upon the completion of the Company’s initial business combination, generating gross proceeds of $97,750,000.

Simultaneously with the closing of the IPO, we completed the private sale (the “Private Placement”) of 498,875 units (the

“Private Units”, consisting of one Class A Common Stock, or the “Private Share”, one warrant, or the “Private

Warrant”, and one right, or the “Private Right”) , including 478,875 units to the Company’s sponsor, Feutune Light

Sponsor LLC (the “Sponsor”), and 20,000 units to US Tiger Securities, Inc.

(“US Tiger”, together with our Sponsor,

directors and officers, the “founders”), the representative of the underwriters of the IPO, at a purchase price of $10.00

per Private Unit, generating gross proceeds of $4,988,750 (including $4,788,750 from Sponsor and $200,000 from US Tiger) (the “Private

Placement Proceeds”).

The Private Units are identical to the units as part of the Units in the IPO, except that the Private Units

are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with or related

to our founders, each of whom will be subject to the same transfer restrictions) until 30 days after the completion of our initial business

The proceeds of $99,216,250 ($10.15 per Unit) in the aggregate from the IPO and a portion from the Private Placement (the

“Trust Funds”), were placed in a trust account (the “Trust Account”) established for the benefit of the Company’s

public stockholders and the underwriters of the IPO with Wilmington Trust, National Association acting as trustee.

The Trust Funds include $3,421,250

payable to the underwriters (the “deferred underwriting compensation”) pursuant to the underwriting agreement dated June 15,

2022, entered among us, US Tiger and EF Hutton, division of Benchmark Investments, LLC, the representatives (the “Representatives”)

of the underwriters of the IPO.

Our management has broad discretion

with respect to the specific application of the proceeds of the Private Placement that are held out of the Trust Account, although substantially

all the net proceeds are intended to be applied generally towards consummating an initial business combination and working capital.

Extension of the Period of Time to Consummate

Initial Business Combination

On March 21, 2023, an aggregate

of $977,500 (the “Extension Payment”) was deposited by the Sponsor into the Trust Account for the public stockholders, representing

$0.10 per public share, which enables the Company to extend the period of time it has to consummate its initial business combination by

three months from March 21, 2023 to June 21, 2023 (the “Extension”).

$977,500 Extension Payment, (i) $600,000 were deposited by the Company’s sponsor, Feutune Light Sponsor LLC (the “Sponsor”),

and (ii) $377,500 by the Company from the working capital account of the Company in lieu of the Sponsor, pursuant to a non-interest, short-term

loan provided by the Company to the Sponsor (the “Short-Term Loan Note”) to the Company, which provides for repayment of the

Short-Term Loan on or before March 31, 2023.

June to September 2023, four $100,000 Monthly Extension Payments were deposited into the Trust Account for the public stockholders, which

enabled the Company to extend the period of time it has to consummate its initial business combination by four months from June 21, 2023

to October 21, 2023.

Among the four $100,000 Monthly Extension Payments, the $100,000 deposited on July 20, 2023 (the “July Monthly

Extension Payment”) was deposited by the Company from its working capital account in lieu of a deposit by the Sponsor.

Such advancement

was repaid by the Sponsor to the Company in September 2023.

From October to February 2024, five Monthly Extension Payments were

deposited into the Trust Account by TPH (as defined below) which

enabled the Company to extend the date by which it has to consummate its initial business combination by one month from October 21, 2023

to March 21, 2024.

connection with the Extension Payment, the Company issued four unsecured promissory notes of $100,000 to the Sponsor to evidence the payments

made by the Sponsor for the Monthly Extension Payment.

In connection with the October to December Monthly Extension Payments, and pursuant

to the Merger Agreement (as defined below), the Company issued three unsecured promissory notes of $100,000 each to TPH to evidence the

payment made for the October to December Monthly Extension Payments.

The notes bear no interest

and are in full upon the earlier to occur of (i) the consummation of the Company’s business combination or (ii) the date of expiry

of the term of the Company (the “Maturity Date”).

The following shall constitute an event of default:

(i) a failure to pay

the principal within five business days of the Maturity Date;

(ii) the commencement of a voluntary or involuntary bankruptcy action, (iii)

the breach of the Company’s obligations thereunder;

(iv) any cross defaults;

(v) any enforcement proceedings against the Company;

and (vi) any unlawfulness and invalidity in connection with the performance of the obligations thereunder, in which case the notes may

be accelerated.

payee of the notes, the Sponsor, has the right, but not the obligation, to convert the notes, in whole or in part, respectively, into

Private Units of the Company, that are identical to Public Units of the Company, subject to certain exceptions, as described in the Prospectus,

by providing the Company with written notice of the intention to convert at least two business days prior to the closing of the business

The number of Private Units to be received by the Sponsor in connection with such conversion shall be an amount determined

by dividing (x) the sum of the outstanding principal amount payable to the Sponsor by (y) $10.00.

Business Combination Agreement with Thunder

Power Holdings Limited

October 26, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Thunder Power Holdings

Limited, a British Virgin Islands company (“TPH” or “Thunder Power”), and Feutune Light Merger Sub, Inc., a Delaware

corporation and wholly owned subsidiary of the Company (“Merger Sub”).

is a technology innovator and manufacturer of premium electric vehicles (“EVs”).

TPH is dedicated to creating electric vehicles

that deliver a premium driving experience combined with a high degree of personalization and has developed and is planning to manufacture

a family of EVs suited to various stages of life and driving environments.

to the Merger Agreement, TPH will be merged with and into Merger Sub (the “Merger”), with the Merger Sub surviving the Merger

as a direct wholly owned subsidiary of the Company.

the effective time of the Merger (the “Effective Time”), by virtue of the Merger and without any action on the part of the

Company, Merger Sub, TPH or the shareholders of TPH immediately prior to the Effective Time (collectively, the “TPH Shareholders”),

each TPH Shareholder’s ordinary shares of TPH (“TPH Ordinary Shares”) issued and outstanding immediately prior to the

Effective Time (excluding dissenting shares and shares held by TPH or any of its direct or indirect subsidiaries as of immediately prior

to the Effective Time) will be canceled and automatically converted into (i) the right to receive, without interest, the applicable portion

of the Closing Merger Consideration Shares (as defined below) as set forth in the Closing Consideration Spreadsheet (as defined in the

Merger Agreement) and (ii) the contingent right to receive the applicable portion of the Earnout Shares (as defined in the Merger Agreement),

if, as and when payable in accordance with the earnout provisions described in the Merger Agreement.

For avoidance of any doubt, each

TPH Shareholder will cease to have any rights with respect to such TPH Shareholder’s TPH Ordinary Shares, except the right to receive

the Closing Per Share Merger Consideration and the Earnout Shares.

“Closing Merger Consideration Shares” means 40,000,000

shares of common stock of the Company upon and following the Merger (the “PubCo”), which are equal or equivalent in value

to the sum of $400,000,000 divided by $10.00 per share.

to the Merger Agreement, at the Effective Time, an aggregate of 20,000,000 shares of common stock of PubCo issued to the TPH Shareholders

(the “Earnout Shares”) will be deposited with an escrow agent in a segregated escrow account (the “Earnout Escrow Account”)

pursuant to an escrow agreement effective as of the Effective Time and will be released from the Earnout Escrow Account and delivered

to the TPH Shareholders after the closing of the Merger as follows:

aggregate of 5,000,000 Earnout Shares will be vested, if and only if, on the occurrence that the amount of sales/revenues of PubCo for

any of the fiscal years (such fiscal year is referred as “Tranche 1 Fiscal Year”) ending from December 31, 2023 to December

31, 2025 is no less than $42,200,000 as evidenced by the audited financial statements of PubCo prepared in accordance with U.S.

for the Tranche 1 Fiscal Year that is contained in an annual report on Form 10-K filed by PubCo with the SEC.

aggregate of 15,000,000 Earnout Shares will be vested, if and only if, on the occurrence that the amount of sales/revenues of PubCo for

any of the fiscal years (such fiscal year is referred as “Tranche 2 Fiscal Year”) ending from December 31, 2023 to December

31, 2026 is no less than $415,000,000 as evidenced by the audited financial statements of PubCo prepared in accordance with U.S.

for the Tranche 2 Fiscal Year that is contained in an annual report on Form 10-K filed by PubCo with the SEC.

Results of Operations

Our entire activity from inception

up to date was related to the Company’s formation, the IPO and general and administrative activities.

Since the IPO, our activity

has been limited to the evaluation of initial business combination candidates, and we will not be generating any operating revenues until

the closing and completion of our initial business combination.

We generate non-operating income in the form of interest income earned

on investment held in the Trust Account.

We are incurring expenses as a result of being a public company (for legal, financial reporting,

accounting and auditing compliance), as well as for due diligence expenses.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

You should read the following discussion and

analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related

notes and other financial information included elsewhere in this Annual Report on Form 10-K.

As discussed in the section titled “Note

Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks

and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially

from those expressed or implied by such forward-looking statements.

Factors that could cause or contribute to these differences include,

but are not limited to, those identified below and those discussed in the section titled “Risk Factors”.

Our mission is to power

the future of sustainable transportation by creating stylish, innovative and cost-efficient premium electric vehicles centered around

differentiated designs and solutions tailored for every lifestyle.

We are a technology innovator and a developer of premium electric

vehicles (“EVs”).

We have developed several proprietary technologies which are the building blocks of the Thunder Power family

We focus on the development

and manufacturing of premium EVs with differentiated designs and solutions for every lifestyle.

Four models are currently featured in

our phased development and roll-out strategy:

the limited-edition coupe, (the “Coupe” or “488”), long-range Sedan

(the “Sedan”), compact city car (the “City Car” or “Chloe”) and the long-range SUV (the “SUV”,

and together with the Coupe, Sedan, and City Car, the “Models”).

We intend to target not just consumers who desire EVs, but

consumers who desire practical and innovative EVs, as well as consumers who seek a luxury experience.

We believe that by leveraging our

modular integration concept starting with the modularized chassis system patented by us, we are creating a family of EVs (excluding the

City Car) which share common parts and modules which we believe requires lower investment and reduced design and production time as opposed

to those of traditional automotive manufacturers.

We intend to first create the initial design for our Sedan, and then scale upwards

to create the Coupe and scale downward to create the City Car.

In time, we expect to round off our offering with the SUV.

We expect to offer to the

market eco-friendly, premium EVs positioned to earn market share based on design, quality, comfort, range, and price.

Among other advantages,

we believe that our proprietary technologies will significantly increase the driving range for our EVs while allowing for faster recharging

and lower costs of ownership.

Business Combination

On June 21, 2024, Feutune

Light Acquisition Corporation (“FLFV”) consummated the business combination with Thunder Power Holdings Limited (“TP

Holdings”), pursuant to the Merger Agreement (the “Business Combination”).

Following the Business Combination, the

combined company changed its name to “Thunder Power Holdings, Inc.” (the “Company”), which is organized under

the laws of the State of Delaware.

Upon consummation of the

Business Combination, FLFV acquired all of the issued and outstanding securities of TP Holdings in exchange for (i) 40,000,000 shares

of common stock, and (ii) earn out payments consisting of up to an additional 20,000,000 shares of common stock (the “Earnout

Shares”) if the Company met certain revenue performance target in the following years through December 31, 2026 (see “ Note

11 – Contingent Consideration ”).

Following the consummation

of the Business Combination, the combined Company’s common stock began trading on the Nasdaq Global Market (the “Nasdaq”)

under the symbol “AIEV” on June 24, 2024.

The reverse recapitalization

is equivalent to the issuance of securities by TP Holdings for the net monetary assets of FLFV, accompanied by a recapitalization.

Company debited equity for the fair value of the net liabilities of FLFV.

In the subsequent financial statements after the Business Combination,

the amounts of assets and liabilities for the period before the reverse recapitalization in financial statements, are presented as those

of TP Holdings and recognized and measured at their pre-combination carrying amounts.

Recent development

On December 19, 2024, the

Company entered into a Share Exchange Agreement (the “Agreement”) with certain shareholders (the “TW Company Shareholders”)

of Electric Power Technology Limited, a Taiwan corporation (“TW Company”).

Pursuant to the Agreement,

the TW Company Shareholders will exchange 26,079,550 ordinary shares of TW Company for 31,034,666 newly issued shares of the Company’s

common stock, par value $0.0001 per share (the “Exchange”).

Upon completion of the Exchange, the Company will acquire approximately

30.8% of TW Company’s total issued and outstanding shares.

The closing of the Exchange is subject to customary conditions, including

receipt of all necessary regulatory approvals and the approval of the Company’s shareholders.

The Agreement contains customary

representations, warranties and covenants by the parties.

The closing must occur no later than October 31, 2025.

The Agreement may be

(1) by mutual consent of the parties;

(2) by either party upon material breach by the other party that remains uncured for

10 days after notice;

(3) if the closing has not occurred within 90 days of signing (subject to extension for regulatory approvals);

or (4) by either party if a court or regulatory authority permanently enjoins the transaction.

Key Factors Affecting Our Results of Operations

We believe that our performance

and future success will depend on several Company specific factors, including those key factors discussed below and other factors in

the section under the heading “ Risk Factors ” of the registration statement on Form S-4 filed with the Securities and

Exchange Commission (the “SEC”) on December 7, 2023, as amended from time to time.

Our ability to evaluate our business and future prospects

We are an early-stage company

with an early stage/limited operating history, operating in a rapidly evolving and highly regulated market.

Furthermore, we have not

released any commercially available vehicle, and we have no experience manufacturing or selling a commercial product at scale.

we have not generated revenue from the sale of EVs, and because of the capital-intensive nature of our business, we expect to continue

to incur substantial operating losses for the foreseeable future.

Our ability to develop different models of vehicles

We currently have four models

featured in our phased development strategy and our revenue in the foreseeable future will be significantly dependent on a limited number

Although we have other vehicle models on our product roadmap, we currently do not expect to introduce another vehicle model

until at least 2030.

We expect to rely on sales from the Coupe, the Sedan, the City Car, and the SUV, among other sources of financing,

for the capital that will be required to develop and commercialize future models.

To the extent that production of the models is delayed,

reduced or is not well-received by the market for any reason, our revenue and cash flow would be adversely affected, we may need to seek

additional financing earlier than we expect, and such financing may not be available to us on commercially reasonable terms, or at all.

Our ability to control the substantial costs associated

with our operations

We will require significant

capital to develop and grow our business.

We have incurred and expect to continue to incur significant expenses as we build our brand

and develop and market our vehicles;

expenses relating to developing and manufacturing our vehicles, tooling and expanding our manufacturing

research and development expenses (including expenses related to the development of the current and future products), raw

material procurement costs;

and general and administrative expenses as we scale our operations.

As a company, we do not have historical

experience forecasting and budgeting for any of these expenses, and these expenses could be significantly higher than we currently anticipate.

In addition, any disruption to our manufacturing operations, obtaining necessary equipment or supplies, expansion of our manufacturing

facilities, or the procurement of permits and licenses relating to our expected manufacturing, sales and distribution model could significantly

increase our expenses.

Our ability to develop a third-party retail product

distribution and a full-service network

We anticipate utilizing

third-party retail product distribution and full-service networks to execute on such plans in all markets.

If our use of third-party

retail production and full-service networks is not effective, our results of operations and financial conditions could be adversely affected.

Key Components of Results of Operations

The following section presents

the key components of our results of operations by the nature of corresponding operating activities for the periods indicated.

read this financial information in conjunction with those presented elsewhere in this Annual Report including our financial statements

and notes to our financial statements.

We have not generated revenue

from the sale of EVs.

We expect to generate revenue from the sale of our EV models, the sale and/or licensing of our technologies, and

from research and development services.

Cost of revenues

Although we have no revenue,

we have incurred costs associated with trying to generate revenue such as research and development, general and administrative expenses,

liquidity and financing expenses and other operating activities as further described below.

General and administrative expenses

General and administrative

expenses primarily consist of personnel salary and welfare expenses and professional and consulting expenses.

Over the next several years,

we anticipate an increase in our general and administrative expenses with our launch of production lines of our EV cars.

Additionally,

we expect to incur higher costs related to professional and consulting expenses associated with being a publicly traded company.

The Company is incorporated

in the State of Delaware and is required to pay franchise taxes to the State of Delaware on an annual basis.

The Company is also registered

as a foreign corporation with the State of New Jersey Department of the Treasury.

The Company would be subject to income tax under New

Jersey state tax laws if it has operations in New Jersey.

On August 16, 2022,

the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law.

The IRA provides for, among other things, a

federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.)

corporations and certain domestic subsidiaries of publicly traded foreign corporations.

The excise tax is imposed on the repurchasing

corporation itself, not its shareholders from which shares are repurchased.

The amount of the excise tax is generally 1% of the

fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing

corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases

during the same taxable year.

In addition, certain exceptions apply to the excise tax.

Department of the Treasury (the “Treasury”)

has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

The IRA applies only to repurchases that occur after December 31, 2022.

Our operating subsidiary

Thunder Power New Electric Vehicles (TPNEV) are under the current and applicable laws of BVI and is not subject to tax on income or capital

As of December 31, 2024 and 2023, there was no temporary differences and no deferred tax asset or liability recognized.

not believe that there was any uncertain tax position as of December 31, 2024 and 2023.

Results of Operations for the years ended December 31, 2024

The following table sets

forth a summary of our results of operations for the years ended December 31, 2024 and 2023.

This information should be read together

with our consolidated financial statements and related notes included elsewhere in this Annual Report.

The operating results in any period

are not necessarily indicative of the results that may be expected for any future period.

For the Year Ended

Operating expenses

General and administrative expenses

Total operating expenses

Other income (expenses)

Interest income, net

Foreign currency exchange loss

Total other expenses, net

Loss before income taxes

Income tax expenses

$ (2,502,351 )

$ (1,815,644 )

General and administrative

For the years ended December 31, 2024 and 2023, our general and administrative expenses were approximately $2.5 million

and $1.8 million, respectively.

The increase in general and administrative expenses was primarily due to an increase of approximately

$0.3 million in professional expenses which were incurred to support the closing of business combination, and an increase of share-based

compensation of approximately $0.7 million as we issued 90,000 shares of common stock to three independent directors of FLFV at the consummation

of the Business Combination, partially offset by a decrease of share-based settlement expenses of approximately $0.5 million.

a result of the foregoing, we incurred a net loss of approximately $2.5 million and $1.8 million for the years ended December

31, 2024 and 2023.

Liquidity and Capital Resources

To date, we have financed

our operating activities primarily through cash raised in loans from related parties (see “ Note 9 – Related Party Transactions

and Balances ”), and equity financing including private placements.

As of September 30, 2024, our cash was $142,616.

We have been incurring losses

from operations since inception.

Accumulated loss amounted to approximately $36.9 million and $34.4 million as of December 31, 2024 and

2023, respectively.

Net cash used in operating activities were approximately $1.2 million and $0.7 million for the years ended December

31, 2024 and 2023.

As of December 31, 2024, we had a negative working capital of $6.6 million, compared to a working capital of approximately

$0.7 million as of December 31, 2023.

The working capital excluded the non-cash items, which are prepaid expenses for the certain forward

purchase agreement entered into on June 11, 2024, by and among FLFV, the Company and certain investors (the “Forward Purchase Agreement”),

deferred offering costs and advance of subscription fees from shareholders.

These conditions raised substantial doubts about the Company’s

ability to continue as a going concern.

Our liquidity is based on

our ability to generate cash from operating activities, obtain capital financing from equity interest investors and borrow funds on favorable

economic terms to fund our general operations and capital expansion needs.

Our ability to continue as a going concern is dependent on

management’s ability to successfully execute our business plan, which includes increasing revenue while controlling operating cost

and expenses to generate positive operating cash flows and obtaining funds from outside sources of financing to generate positive financing

Currently, we are working to improve our liquidity and capital sources mainly through borrowing from related parties by obtaining

financial support from our principal shareholder who has committed to continue providing funds for our working capital needs whenever

In addition, in order to

fully implement our business plan and sustain continued growth, we are also actively seeking private equity financing from outside investors.

However, there can be no assurance that these plans and arrangements will be sufficient to fund our ongoing capital expenditure, working

capital, and other requirements.

The following table sets

forth a summary of our cash flows for the periods presented:

For the Year Ended

Net cash used in operating activities

$ (1,227,253 )

Net cash provided by investing activities

Net cash provided by financing

Net decrease in cash

Cash at beginning of year

Cash at end of year

Operating Activities

Net cash used in operating

activities for the years ended December 31, 2024 was approximately $1.2 million, primarily attributable to net loss of approximately

$2.5 million, adjusted for non-cash share-based compensation expenses of approximately $1.0 million, an increase of approximately

$0.1 million in due to related parties, and an increase of $0.1 million in accrued expenses and other current liabilities incurred for

professional consulting expenses since the closing of the Business Combination.

Net cash used in operating

activities for the year ended December 31, 2023 was approximately $0.7 million, primarily attributable to net loss of approximately

$1.8 million, adjusted for non-cash share-based compensation expenses of approximately $0.3 million, share-based settlement

expenses of approximately $0.5 million, and an increase of approximately $0.2 million in amounts due to related parties which

paid certain operating expenses on behalf of us.

Investing activities

For the year ended December

31, 2023 and period from January 19, 2022 (inception) through December 31, 2022, we had a net income of $1,336,935 and $404,616, respectively,

from interest income less formation and operating costs and tax expenses.

Liquidity and Capital Resources and Going Concern

The Company’s liquidity

needs up to December 31, 2023 had been satisfied through initial payment from the Sponsor of $25,000 for the insider shares and proceeds

from the Private Placement.

On June 21, 2022, we consummated

the IPO of 9,775,000 Public Units at a price of $10.00 per unit (including 1,275,000 units issued upon the full exercise of the over-allotment

option), generating gross proceeds of $97,750,000.

Simultaneously with the closing of the IPO and full exercise of the over-allotment

option by the underwriters, we consummated the sale of 498,875 units as Private Placement Units to the Sponsor (for 478,875 units) and

US Tiger (for 20,000 units), one of the representative of the underwriters, with each unit consisting of one share of Class A common stock,

one warrant and one right, at a price of $10.00 per unit, generating gross proceeds of $4,988,750.

Following the closings of the IPO and

the sales of the Private Placement Units on June 21, 2022, a total of $99,216,250 (or $10.15 per share) was placed in the Trust Account.

As of December 31, 2023, the

Company had cash of $18,330 and a working capital deficit of $2,268,086.

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.

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, 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, but are not obligated to, loan us funds as may be required.

If the Company completes the initial business

combination, it will repay such loaned amounts.

In the event that the initial business combination does not close, we may use a portion

of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used

for such repayment.

Up to $3,000,000 of such loans may be convertible into units, at a price of $10.00 per unit at the option of the lender.

If our estimate of the costs

of identifying a target business, undertaking in-depth due diligence and negotiating a business combination is 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 business combination or because we become obligated to redeem

a significant number of our public shares upon completion of our business combination, in which case we may issue additional securities

or incur debt in connection with such business combination, all of which raise substantial doubt about our ability to continue as a going

In addition, the Current Charter

allows the Company until June 21, 2023 to consummate an initial business combination and to elect to extend the period to consummate an

initial business combination up to nine times, each by an additional one-month period, for a total of up to nine months to March 21, 2024.

If we are unable to complete our initial business combination by March 21, 2024 upon maximum extension, we may seek approval from our

stockholders holding no less than 65% or more of the votes to approve to extend the completion period if we fail to obtain approval from

our stockholders for such extension or we do not seek such extension, the Company will cease all operations.

a result, management has determined that there is substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Financing Arraignments

We have no obligations, assets

or liabilities that would be considered off-balance sheet arrangements as of December 31, 2023.

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

As of December 31, 2023 and

December 31, 2022, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

We are obligated to pay the

Representatives the deferred underwriting compensation equal to 3.5% of the IPO Proceeds which amounted to $3,421,250.

The deferred underwriting

compensation will become payable to the Representatives from the amounts held in the Trust Account solely in the event that we complete

the business combination.

holders of the Founder Shares, the Private Placement Units, and any units that may be issued upon conversion of working capital loans

(and any underlying securities) will be entitled to registration rights pursuant to a registration rights agreement entered into in connection

with the IPO.

The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register

such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements

filed subsequent to our completion of our initial business combination.

We will bear the expenses incurred in connection with the filing

of any such registration statements.

Critical Accounting Policies and Estimates

We account 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 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, whether they 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 our own Class A Common Stock and whether the warrant

holders could potentially require “net cash settlement” in a circumstance outside of our 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

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.

We determined that upon

further review of the proposed form of warrant agreement, management concluded that the warrants included in the units issued in the IPO

pursuant to the warrant agreement qualify for equity accounting treatment.

Common Stock Subject to Possible Redemption

We account for our Class A Common Stock subject to possible redemption

in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A Common Stock subject to

mandatory redemption (if any) are classified as a liability instrument and are measured at fair value.

Conditionally redeemable Class

A Common Stock (including Class A Common Stock 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 our control) are classified as temporary equity.

times, Class A Common Stock are classified as stockholders’ equity.

Our Public Shares feature certain redemption rights that are

considered to be outside of our control and subject to occurrence of uncertain future events.

Accordingly, as of December 31, 2023, shares

of Class A Common Stock subject to possible redemption are presented at redemption value of $10.84 per share as temporary equity, outside

of the stockholders’ equity section of our balance sheet.

We recognize changes in redemption value immediately as they occur and

adjusts the carrying value of redeemable Class A Common Stock to equal the redemption value at the end of each reporting period.

or decreases in the carrying amount of shares of redeemable Class A Common Stock are affected by charges against additional paid in capital

or accumulated deficit if additional paid in capital equals to zero.

Fair Value of Financial Instruments

The fair value of our assets

and liabilities approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

The fair value of our financial

assets and liabilities reflects management’s estimate of amounts that we would have received in connection with the sale of the

assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement

In connection with measuring the fair value of its assets and liabilities, we seek to maximize the use of observable inputs (market

data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants

would price assets and liabilities).

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 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active market.

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.

Recent Accounting Pronouncements

Management does not believe

that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on

the Company’s financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company,

we are not required to make disclosures under this Item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements and

the notes thereto begin on page F-1 of this Annual Report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

31, 2024, we reported cash provided by investing activities of approximately $0.9 million, which was from the reverse acquisition we

closed with FLFV in June 2024.

For the year ended December

31, 2023, we did not report cash provided by or used in investing activities.

Financing Activities

For the year ended December

31, 2024, we reported cash provided by financing activities of approximately $0.2 million, which were primarily provided by subscription

fees of $0.4 million from shareholders in the private placements raised by TP Holdings, borrowings of approximately $1.0 million from

our controlling shareholder, and proceeds of approximately $0.2 million from investors pursuant to Forward Purchase Agreement, partially

offset by payment of offering cost of approximately $1.0 million and payment of approximately $0.4 million of extension loans on behalf

of the Sponsor.

For the year ended

December 31, 2023, we reported cash provided by financing activities of approximately $0.6 million, which were primarily provided

by subscription fees of approximately $1.8 million advanced from shareholders, partially offset by payment of approximately $0.6 million

of extension loans on behalf of the sponsor of a SPAC and payment of approximately $0.4 million of offering costs.

Commitment and Contingencies

On June 21, 2024, the Company

entered into an escrow agreement (the “Escrow Agreement”) with Mr.

Wellen Sham, Yuanmei Ma and CST, pursuant to which, among

other things, (1) CST will act as the escrow agent under the Escrow Agreement;

(2) at the closing of the Business Combination, the Company

deposited with CST 20,000,000 shares of common stock as Earnout Shares, to be held by CST in a segregated escrow account (“Earnout

Escrow Account”);

and (3) if any portion of the Earnout Shares becomes eligible for release in accordance with the terms of the

Escrow Agreement, CST will release the applicable portion of the Earnout Shares from the Earnout Escrow Account in accordance with the

terms of the Escrow Agreement and disburse to each eligible recipient the applicable portion of Earnout Shares therefrom.

The Earnout Shares shall

be released or otherwise forfeited as follows:

(i) an aggregate of 5,000,000 Earnout Shares (the “Tranche 1 Earnout Shares”)

will be vested, if and only if, on the occurrence that the amount of sales/revenues of the Company for any of the fiscal years (such

fiscal year is referred to as “Tranche 1 Fiscal Year”) ending from December 31, 2023 to December 31, 2025 is no less than

$42,200,000 as evidenced by the audited financial statements of the Company prepared in accordance with U.S.

GAAP for the Tranche 1 Fiscal

Year that is contained in an annual report on Form 10-K filed by the Company with the SEC (the “Tranche 1 Annual Report”);

(ii) an aggregate of 15,000,000 Earnout Shares (the “Tranche 2 Earnout Shares”) will be vested, if and only if, on the occurrence

that the amount of sales/revenues of the Company for any of the fiscal years (such fiscal year is referred to as “Tranche 2 Fiscal

Year”) ending from December 31, 2023 to December 31, 2026 is no less than $415,000,000 as evidenced by the audited financial statements

of the Company prepared in accordance with U.S.

GAAP for the Tranche 2 Fiscal Year that is contained in an annual report on Form 10-K

filed by the Company with the SEC (the “Tranche 2 Annual Report”);

(iii) Within five (5) business days following the determination

that all or any portion of the Tranche 1 Earnout Shares or Tranche 2 Earnout Shares become vested, the Company, together with Mr.

Ma, shall instruct the Escrow Agent to irrevocably and unconditionally release the vested tranche of Earnout Shares from the

Escrow Account in accordance with the terms of the Escrow Agreement to certain of the Company’s shareholders.

Each tranche of Earnout

Shares may be released only once, but more than one tranche can be released in any year in accordance with the Escrow Agreement.

The Earnout Shares are determined

as contingent consideration in connection with the reverse recapitalization.

In addition, the issuance of Earnout Shares does not meet

any condition to be classified as a liability under ASC 815, thus it should be classified as an equity financial instrument, and measure

at fair value using the quoted market price on grant date, June 11, 2024, which was $2.56 per share.

For the years ended December

31, 2024, the sales/revenue condition described above was not met.

Currently the Company could not reasonably assess the performance

condition for the year ending December 31, 2025.

Other than the above, in

the normal course of business, we are subject to loss contingencies, such as certain legal proceedings, claims and disputes.

a liability for such loss contingencies when the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably

Off-Balance Sheet Arrangements

We have not entered into

any financial guarantees or other commitments to guarantee the payment obligations of any third parties.

In addition, we have not entered

into any derivative contracts that are indexed to the shares of our common stock and classified as shareholder’s equity or that

are not reflected in our consolidated financial statements.

Furthermore, we do not have any retained or contingent interest in assets

transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

We do not have any variable

interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in product development

services with us.

Research and Development

We have incurred minimal

research and development expenses for the years ended December 31, 2024 and 2023.

The researched and development expenses were recorded

in “general and administrative expenses” in the consolidated statements of operations.

Critical Accounting Estimates

We prepare our financial

statements in accordance with U.S.

GAAP, which requires our management to make judgments, estimates and assumptions that affect

the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the consolidated financial

statements, and the reported amounts of revenue and expenses during the reporting period.

We continually evaluate these judgments, estimates

and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations

regarding the future based on available information and various assumptions that we believe to be reasonable, which together form our

basis for making judgments about matters that are not readily apparent from other sources.

Since the use of estimates is an integral

component of the financial reporting process, our actual results could differ from those estimates.

Some of our accounting policies require

a higher degree of judgment than others in their application.

The selection of critical

accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results

to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements.

We believe the

following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements.

You should read the description of critical accounting policies, judgments and estimates in conjunction with our consolidated financial

statements and other disclosures included in this Annual Report.

We do not have critical

accounting estimates that are related to us.

A list of accounting policies, judgements and estimates that are relevant to us is included

in notes to our consolidated financial statements included elsewhere in this Annual Report (see “ Note 2 – Summary of Significant

Accounting Policies ”).

Recently Issued Accounting Pronouncements

The Company has evaluated

all recently issued accounting pronouncements and believes such pronouncements do not have a material effect on the Company’s condensed

consolidated financial statements.

A list of recently issued accounting pronouncements that are relevant to us is included in the notes

to our consolidated financial statements included elsewhere in this Annual Report (see “ Note 2 – Summary of Significant

Accounting Policies ”).

Quantitative and Qualitative Disclosures

About Market Risk

Under SEC rules and regulations,

because we are considered to be a “smaller reporting company”, we are not required to provide the information required by

this item in this report.

Financial Statements and Supplementary

The Financial Statements

and Supplementary Data required by this Item 8 are incorporated by reference to information beginning on Page F-1 of this Form 10-K.

Changes in and Disagreements with Accountants

on Accounting and Financial Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis