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Item 2. Management’s Discussion and Analysis

2023-05-05 compared with 2022-11-07 · 167 added, 107 removed, 72 unchanged (79% of the section changed)

Management’s Discussion and

Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

References to the “Company,” “our,”

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statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking

This Quarterly Report on Form 10-Q includes forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”).

We have based these forward-looking statements on our current expectations and

projections about future events.

These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions

about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future

results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you

can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,”

“expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,”

or the negative of such terms or other similar expressions.

Such statements include, but are not limited to, possible business combinations

and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in

this Form 10-Q.

Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our

other Securities and Exchange Commission (“SEC”) filings.

We are a blank check company incorporated on

January 8, 2021 as a Cayman Islands exempted company 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 (the “Business Combination”),

that we have not yet identified.

While we may pursue an initial business combination target in any business or industry, we intent to

focus our search for targets in the Israeli technology industry, including those engaged in cybersecurity, automotive technology, fintech,

enterprise software, cloud computing, semiconductors, medical technology, AI and robotics and that offer a differentiated technology

platform and products.

We are a blank check company incorporated on January

8, 2021 as a Cayman Islands exempted company 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 (the “Business Combination”), that

we have not yet identified.

While we may pursue an initial business combination target in any business or industry, we intent to focus

our search for targets in the Israeli technology industry, including those engaged in cybersecurity, automotive technology, fintech, enterprise

software, cloud computing, semiconductors, medical technology, AI and robotics and that offer a differentiated technology platform and

Our sponsor is Byte Holdings LP, a Cayman Islands exempted limited partnership (our “Sponsor”).

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offering was declared effective on March 17, 2021.

On March 23, 2021, we consummated its Initial Public Offering of 30,000,000 units

(the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”),

On March 23, 2021, we consummated its Initial Public Offering of 30,000,000 units (the

“Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”),

at $10.00 per Unit, generating gross proceeds of $300.0 million, and incurring offering costs of approximately $17.2 million, inclusive

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Upon the closing of the Initial Public Offering,

sale of the Over-Allotment Units, and the Private Placement, $323.7 million ($10.00 per Unit) of the net proceeds of the sale of the

Units in the Initial Public Offering and certain of proceeds of the Private Placement were placed in a trust account (“Trust Account”)

sale of the Over-Allotment Units, and the Private Placement, $323.7 million ($10.00 per Unit) of the net proceeds of the sale of the Units

in the Initial Public Offering and certain of proceeds of the Private Placement were placed in a trust account (“Trust Account”)

with Continental Stock Transfer & Trust Company acting as trustee and invested in United States “government securities”

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certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.

government treasury

obligations, as determined by us, until the earlier of:

(i) the completion of a Business Combination and (ii) the distribution of the

Trust Account to the shareholders.

government treasury obligations,

as determined by us, until the earlier of:

(i) the completion of a Business Combination and (ii) the distribution of the Trust Account

to the shareholders.

If we are unable to complete a Business Combination

within 24 months from the closing of the Initial Public Offering, or March 23, 2023, we will (i) cease all operations except for the

purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding

Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest

earned (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public

Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive

further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval

of the remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman

Islands law to provide for claims of creditors and the requirements of other applicable law.

by the Extended Date, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but

no more than 10 business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to

the aggregate amount then on deposit in the Trust Account, including interest earned (less taxes payable and up to $100,000 of interest

to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public

shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly

as reasonably possible following such redemption, subject to the approval of the remaining shareholders and our board of directors, dissolve

and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements

of other applicable law.

The Company had until

March 23, 2023 to consummate an initial business combination.

On March 16, 2023, the Company held an extraordinary general meeting of

shareholders (the “EGM”).

In this meeting the shareholders approved amendments to the Company’s amended and restated

memorandum and articles of association to extend the date by which the Company must complete an initial business combination from March

23, 2023 to September 25, 2023 (the “Extension” and such date, the “Extended Date”).

In connection with the EGM,

shareholders holding an aggregate of 30,006,034 shares of the Company’s Class A Ordinary Shares exercised their right to redeem

their shares for $10.20 per share of the funds held in the Company’s trust account, leaving approximately $24.1 million in the trust

account after such redemption.

Non-Redemption Agreements

On March 8, 2023, the

Company entered into non-redemption agreements (collectively, the “Non-Redemption Agreements”) with certain of its existing

shareholders (the “Non-Redeeming Shareholders”) holding Class A Ordinary Shares of the Company.

Pursuant to the Non-Redemption

Agreements, each of the Non-Redeeming Shareholders agreed to (a) not redeem 1,000,000 Class A Ordinary Shares held by them on the date

of the Non-Redemption Agreements (the “Shares”) in connection with the vote to amend the Company’s amended and restated

memorandum and articles of association to extend the date by which the Company has to consummate an initial business combination from

March 23, 2023 to September 25, 2023 and (b) vote their Shares in favor of the Extension presented by the Company for approval by its

shareholders.

In connection with the foregoing, the Company agreed to pay to each Non-Redeeming Shareholder $0.033 per Share in cash per

month through the Extended Date.

Letter of Intent

On March 10, 2023, the

Company issued a press release announcing that it has entered into a non-binding letter of intent (“LOI”) for a business combination

with Airship AI Holdings, Inc.

(“Airship AI”).

Airship AI, a robust AI-driven edge video, sensor and data management platform

for government agencies and enterprises that gathers unstructured data from surveillance cameras and sensors, applies artificial intelligence

(“AI”) analytics, and provides visualization tools to improve decision making in mission critical environments.

terms of the LOI, the Company and Airship AI would become a combined entity, with Airship AI’s existing equity holders rolling 100%

of their equity into the combined public company.

The proposed transaction values Airship AI at an enterprise value of $290 million.

Company expects to announce additional details regarding the proposed business combination when a definitive merger agreement is executed.

Class B Conversion

Effective as of March 27, 2023, pursuant to the terms of the amended

and restated memorandum and articles of association after the EGM, the Sponsor elected to convert each outstanding Class B ordinary share

held by it on a one-for-one basis into Class A ordinary shares of the Company, with immediate effect.

Results of Operations

Our entire activity since inception through September

Our entire activity since inception through March

31, 2023 related to our formation, the preparation for the Initial Public Offering, and since the closing of the Initial Public Offering,

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company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended September 30, 2022,

we had net income of approximately $1.5 million, which primarily consisted of a noncash gain of approximately $0.3 million resulting

from changes in fair value of derivative warrant liabilities and income from investments held in the Trust Account of approximately $1.4

million, partially offset by approximately $268,000 of general and administrative expenses, including $30,000 of general and administrative

expenses to related parties.

For the three months ended September 30, 2021,

we had net income of approximately $9.8 million, which primarily consisted of a noncash gain of approximately $10.0 million resulting

from changes in fair value of derivative warrant liabilities and income from investments held in the Trust Account of approximately $6,000,

partially offset by approximately $227,000 of general and administrative expenses, including $30,000 of general and administrative expenses

to related parties.

For the nine months ended September 30, 2022,

we had net income of approximately $8.7 million, which primarily consisted of a noncash gain of approximately $7.7 million resulting

from changes in fair value of derivative warrant liabilities and income from investments held in the Trust Account of approximately $1.9

million, partially offset by approximately $905,000 of general and administrative expenses, including $90,000 of general and administrative

expenses to related parties.

For the period from January 8, 2021 (inception)

through September 30, 2021, we had net income of approximately $3.9 million, which primarily consisted of a noncash gain of approximately

$5.4 million resulting from changes in fair value of derivative warrant liabilities and income from investments held in the Trust Account

of approximately $17,000, partially offset by approximately $684,000 of general and administrative expenses, including $70,000 of general

and administrative expenses to related parties.

Liquidity and Going Concern

As of September 30, 2022, we had cash of $1.2

Until the consummation of the Public Offering, our only source of liquidity was an initial purchase of ordinary shares and private

placement units by the Sponsor and loans from our Sponsor.

For the three months ended March 31, 2023, we

had net income of $1,163,141, which primarily consisted of interest earned from investments held in the Trust Account of $2,998,349 and

interest income from bank account of $9,275, offset by $675,589 of losses from operations and a noncash loss of $1,168,894 resulting from

changes in fair value of derivative warrant liabilities.

For the three months ended March 31, 2022, we

had net income of $5,255,353, which primarily consisted of interest earned from investments held in the Trust Account of $30,627 and a

noncash gain of $5,573,010 resulting from changes in fair value of derivative warrant liabilities, offset by $348,284 of losses from operations.

Liquidity, Capital Resources and Going Concern

Consideration

As of March 31, 2023, we had cash of $568,236.

Until the consummation of the Public Offering, our only source of liquidity was an initial purchase of ordinary shares and private placement

units by the Sponsor and loans from our Sponsor.

Our liquidity needs prior to the consummation

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going concern.

No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate

after March 23, 2023.

The unaudited condensed financial statements do not include any adjustment that might be necessary if the Company

is unable to continue as a going concern.

We continue to evaluate the impact of the COVID-19

pandemic and have concluded that the specific impact is not readily determinable as of the date of the balance sheet.

The unaudited condensed

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

Management continues to seek to complete a Business Combination within the Combination Period.

No adjustments have been

made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Extended Date.

The financial

statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

Contractual Obligations

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Critical Accounting Policies

The preparation of financial statements in accordance

with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates

and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.

A summary of our significant accounting

policies is included in Note 2 to our condensed financial statements in Part I, Item 1 of this Quarterly Report.

Certain of our accounting

policies are considered critical, as these policies are the most important to the depiction of our financial statements and require significant,

difficult or complex judgments, often employing the use of estimates about the effects of matters that are inherently uncertain.

policies are summarized in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in

our 2021 Annual Report on Form 10-K filed with the SEC on April 6, 2022.

There have been no significant changes in the application of

our critical accounting policies during the nine months ended September 30, 2022.

The preparation of financial statements and related

disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date

of the financial statements, and income and expenses during the periods reported.

Actual results could materially differ from those estimates.

We have identified the following critical accounting policy:

Derivative Warrant Liabilities

We do not use derivative instruments to hedge

exposures to cash flow, market, or foreign currency risks.

We evaluate all of our financial instruments, including issued stock purchase

warrants and forward purchase agreements, to determine if such instruments are derivatives or contain features that qualify as embedded

derivatives, pursuant to FASB ASC Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”) and FASB ASC

Topic 815, “Derivatives and Hedging” (“ASC 815”).

The classification of derivative instruments, including whether

such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

The warrants issued in connection with the Initial

Public Offering and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815.

Accordingly, we

recognize the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period.

liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the

Company’s statements of operations.

The initial estimated fair value of the warrants was measured using a Monte Carlo simulation.

The subsequent estimated fair value of the Public Warrants is based on the listed price in an active market for such warrants while the

fair value of the Private Placement Warrants continues to be measured using a Monte Carlo simulation.

Class A ordinary shares subject to possible

We account for our Class A ordinary shares subject

to possible redemption in accordance with the guidance in ASC 480.

Class A ordinary shares subject to mandatory redemption (if any) is

classified as liability instruments and are measured at fair value.

Conditionally redeemable Class A ordinary shares (including Class

ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence

of uncertain events not solely within the Company’s control) are classified as temporary equity.

At all other times, Class A ordinary

shares are classified as shareholders’ equity.

The Company’s Public Shares feature certain redemption rights that are considered

to be outside of the Company’s control and subject to the occurrence of uncertain future events.

Accordingly, as of March 31, 2023

and December 31, 2022, 2,363,217 and 32,369,251 Class A ordinary shares subject to possible redemption are presented at redemption value

as temporary equity, outside of the shareholders’ equity section of our balance sheet.

Effective with the closing of the Public Offering

(including sale of the Over-Allotment Units), we recognized the accretion from initial book value to redemption amount, which resulted

in charges against additional paid-in capital (to the extent available) and accumulated deficit.

Net Income per ordinary share

We have two classes of shares, which are referred to as Class A ordinary

shares subject to possible redemption and non-redeemable Class A ordinary shares and Class B ordinary shares.

Income and losses are shared

pro rata between the two classes of shares.

Net income per ordinary share is calculated by dividing the net income by the weighted average

of ordinary shares outstanding for the respective period.

The calculation of diluted net income per ordinary

shares does not consider the effect of the warrants issued in connection with the Public Offering (including sale of the Over-Allotment

Units) and the Private Placement to purchase an aggregate of 16,699,626 ordinary shares in the calculation of diluted income per share,

because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method.

a result, diluted net income per share is the same as basic net income per share for the period ended March 31, 2023 and December 31,

Accretion associated with the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates

Recent Accounting Standards

See Note 2 to the unaudited condensed financial

statements included in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.

In June 2016, the FASB issued Accounting Standards

Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments (“ASU 2016-13”).

This update requires financial assets measured at amortized cost basis to be presented at the

net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events, including

historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.

Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies.

The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early

adoption permitted.

The Company adopted ASU 2016-13 on January 1, 2023.

The adoption of ASU 2016-13 did not an impact on its financial

Management does not believe that any other recently

issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

Off-Balance Sheet Arrangements and Contractual

As of September 30, 2022, we did not have any

off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

The JOBS Act contains provisions that, among

other things, relax certain reporting requirements for qualifying public companies.

We qualify as an “emerging growth company”

and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not

publicly traded) companies.

We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not

comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging

growth companies.

As a result, our financial statements may not be comparable to companies that comply with new or revised accounting

pronouncements as of public company effective dates.

As of March 31, 2023, we did not have any off-balance

sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

The JOBS Act contains provisions that, among other

things, relax certain reporting requirements for qualifying public companies.

We qualify as an “emerging growth company” and

under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly

traded) companies.

We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with

new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as

of public company effective dates.

Additionally, we are in the process of evaluating

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in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among

other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant

to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth

public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted

by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about

other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to

Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public

companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by

the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about

the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items

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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-Q

Item 2. Management’s Discussion and Analysis