What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 651 added, 568 removed, 279 unchanged (81% of the section changed)

Financial Statements.

ACQUISITION CORP.

UNAUDITED CONDENSED BALANCE SHEETS

REDWOODS ACQUISITION CORP.

CONDENSED BALANCE SHEETS

September 30,

Current Assets

7 unchanged sentences

Franchise tax payable

Income tax payable

Due to related party

8 unchanged sentences

50,000,000 shares authorized;

3,405,000 and 0 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

3,405,000 and 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

1 unchanged sentence

( 4,007,863 )

stockholders’ deficit

Total Stockholders’ Deficit

( 4,007,523 )

1 unchanged sentence

$ 117,163,725

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

ACQUISITION CORP.

The accompanying notes are an integral part of

these unaudited condensed financial statements.

REDWOODS ACQUISITION

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

Three months ended

March 16, 2021

September 30,

General and administrative expenses

3 unchanged sentences

Change in fair value of warrant liabilities

Loss before income taxes

Income (loss) before income taxes

Income taxes provision

Net income (loss)

Basic and diluted weighted average shares outstanding, redeemable common stock

2 unchanged sentences

Basic and diluted net loss per share, non-redeemable common stock

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

ACQUISITION CORP.

The accompanying notes are an integral part of

these unaudited condensed financial statements.

REDWOODS ACQUISITION

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY(DEFICIT)

Months Ended June 30, 2022

Nine Months Ended September 30,

Stockholders’

6 unchanged sentences

Underwriter commissions

( 7,187,500 )

Offering costs

1 unchanged sentence

Reclassification of common stock subject to redemption

( 11,500,000 )

( 96,337,784 )

( 96,338,934 )

Allocation of offering costs to common stock subject to redemption

Accretion of common stock to redemption value

( 22,649,478 )

( 4,062,993 )

( 26,712,471 )

Balance as of June 30, 2022

$ ( 4,280,388 )

$ ( 4,280,048 )

the period from March 16, 2021 (inception) through June 30, 2021

Accretion of common stock to redemption value

Balance as of September 30, 2022

For the period from March 16, 2021 (inception) through September

Stockholder’s

Balance as of

March 16, 2021 (inception)

as of June 30, 2021

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

ACQUISITION CORP.

Balance as of March 16, 2021 (inception)

Balance as of June 30, 2021

Balance as of September 30, 2021

The accompanying notes are an integral part of

these unaudited condensed financial statements.

REDWOODS ACQUISITION

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

2021 (inception)

September 30,

Cash flows from operating activities:

Net Income (loss)

Adjustments to reconcile net cash used in operating activities:

1 unchanged sentence

Change in fair value of warrant liabilities

Changes in current assets and current liabilities:

Prepaid expenses

1 unchanged sentence

Franchise tax payable

Income tax payable

Formation costs paid by related party

14 unchanged sentences

Payment of underwriters’ commissions

( 2,875,000 )

Payment of deferred offering costs

9 unchanged sentences

Accretion of Common stock to redemption value

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

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1 — Description of Organization and Business Operations

Acquisition Corp.

(the “Company”) is a newly organized blank check company incorporated as a Delaware corporation on March

The Company was formed 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 (“Business Combination”).

The Company is not limited

to a particular industry or geographic region for purposes of consummating a Business Combination.

As of June 30, 2022, the Company had not commenced

any operations.

All activities through June 30, 2022 are related to the Company’s formation, the initial public offering (“IPO”

as defined below in Note 4) and, subsequent to the IPO, identifying a target company for a Business Combination.

The Company will not

generate any operating revenues until after the completion of a Business Combination, at the earliest.

The Company will generate non-operating

income in the form of interest income from the proceeds derived from the IPO.

The Company has selected December 31 as its fiscal year

Company’s sponsor is Redwoods Capital LLC, a Delaware limited liability company (the “Sponsor”).

The accompanying notes are an integral part of

these unaudited condensed financial statements.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Description of Organization

and Business Operations

Redwoods Acquisition Corp.

(the “Company”)

is a newly organized blank check company incorporated as a Delaware corporation on March 16, 2021.

The Company was formed 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 (“Business Combination”).

The Company is not limited to a particular industry or geographic region

for purposes of consummating a Business Combination.

As of September 30, 2022, the Company had not

commenced any operations.

All activities through September 30, 2022 are related to the Company’s formation, the initial public offering

(“IPO” as defined below in Note 4) and, subsequent to the IPO, identifying a target company for a Business Combination.

Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest.

The Company will

generate non-operating income in the form of interest income from the proceeds derived from the IPO.

The Company has selected December

31 as its fiscal year end.

The Company’s sponsor is Redwoods Capital

LLC, a Delaware limited liability company (the “Sponsor”).

The registration statement for the Company’s

5 unchanged sentences

units, respectively, at $ 10.00 per unit (the “Private Units”), generating total gross proceeds of $ 4,775,000 , which is described

Company granted the underwriters a 45-day option to purchase up to 1,500,000 additional Public Units to cover over-allotments, if any.

On April 7, 2022, the underwriters exercised the over-allotment option in full and purchased 1,500,000 Public Units at a price of $ 10.00

per Public Unit, generating gross proceeds of $ 15,000,000 .

Simultaneously with the closing of the over-allotment option, the Company

consummated the sale of an additional aggregate of 52,500 Private Units with the Sponsor and Chardan at a price of $ 10.00 per Private

Unit, generating total proceeds of $ 525,000 .

costs amounted to $ 8,365,339 , consisting $ 2,875,000 of underwriting fees, $ 4,312,500 of deferred underwriting fees (payable only upon

completion of a Business Combination) and $ 1,177,839 of other offering costs.

the closing of the IPO and the sale of Private Units on April 4, 2022, and the exercise of the over-allotment option and the sale of

the additional Private Units on April 7, 2022, a total of $ 116,150,000 was placed in a trust account (the “Trust Account”)

maintained by Continental Stock Transfer & Trust Company as a trustee and will be invested only in U.S.

government treasury bills

with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company

Act of 1940, as amended (the “Investment Company Act”), and that invest only in direct U.S.

The Company granted the underwriters a 45-day

option to purchase up to 1,500,000 additional Public Units to cover over-allotments, if any.

On April 7, 2022, the underwriters exercised

the over-allotment option in full and purchased 1,500,000 Public Units at a price of $ 10.00 per Public Unit, generating gross proceeds

of $ 15,000,000 .

Simultaneously with the closing of the over-allotment option, the Company consummated the sale of an additional aggregate

of 52,500 Private Units with the Sponsor and Chardan at a price of $ 10.00 per Private Unit, generating total proceeds of $ 525,000 .

Transaction costs amounted to $ 8,365,339 , consisting

$ 2,875,000 of underwriting fees, $ 4,312,500 of deferred underwriting fees (payable only upon completion of a Business Combination) and

$ 1,177,839 of other offering costs.

Upon the closing of the IPO and the sale of Private

Units on April 4, 2022, and the exercise of the over-allotment option and the sale of the additional Private Units on April 7, 2022, a

total of $ 116,150,000 was placed in a trust account (the “Trust Account”) maintained by Continental Stock Transfer & Trust

Company as a trustee and will be invested only in U.S.

government treasury bills with a maturity of 185 days or less or in money market

funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”),

and that invest only in direct U.S.

government treasury obligations.

These funds will not be released until the earlier of the completion of the initial Business Combination and the liquidation due to the

Company’s failure to complete a Business Combination within the applicable period of time.

The proceeds deposited in the Trust

Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the

Company’s public stockholders.

In addition, interest income earned on the funds in the Trust Account may be released to the Company

to pay its income or other tax obligations.

With these exceptions, expenses incurred by the Company may be paid prior to a business combination

only from the net proceeds of the IPO and private placement not held in the Trust Account.

to Nasdaq listing rules, the Company’s initial Business Combination must occur with one or more target businesses having an aggregate

fair market value equal to at least 80% of the value of the funds in the Trust account (excluding any deferred underwriting discounts

and commissions and taxes payable on the income earned on the Trust Account), which the Company refers to as the 80% test, at the time

of the execution of a definitive agreement for its initial Business Combination, although the Company may structure a Business Combination

with one or more target businesses whose fair market value significantly exceeds 80% of the trust account balance.

If the Company is

no longer listed on Nasdaq, it will not be required to satisfy the 80% test.

The Company will only complete a Business Combination if

the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a

controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Company will provide its holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem

all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting

called to approve the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company will seek stockholder

approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion.

The Public Stockholders

will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated

to be $ 10.10 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to

the Company to pay its franchise and income tax obligations).

a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons,

the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”),

conduct the redemptions pursuant to the tender offer rules of the U.S.

Securities and Exchange Commission (“SEC”) and

file tender offer documents with the SEC prior to completing a Business Combination.

If, however, stockholder approval of the transaction

is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem

shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.

Additionally,

each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.

If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor and any of the Company’s

officers or directors that may hold Insider Shares (as defined in Note 6) (the “Initial Stockholders”) and Chardan have

agreed (a) to vote their Insider Shares, the shares underlying the Private Units (“Private Shares”) and any Public Shares

purchased during or after the IPO in favor of approving a Business Combination and (b) not to convert any shares (including the

Insider Shares) in connection with a stockholder vote to approve, or sell the shares to the Company in any tender offer in connection

with, a proposed Business Combination.

Initial Stockholders and Chardan have agreed (a) to waive their redemption rights with respect to the Insider Shares, Private Shares

and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose, or vote in favor of,

an amendment to the Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s

obligation to redeem 100 % of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the

public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

Company will have until 12 months from the closing of the IPO to consummate a Business Combination.

In addition, if the Company anticipates

that it may not be able to consummate initial business combination within 12 months, the Company’s insiders or their affiliates

may, but are not obligated to, extend the period of time to consummate a business combination two times by an additional three months

each time (for a total of 18 months to complete a business combination) (the “Combination Period”).

In order to extend

the time available for the Company to consummate a Business Combination, the Company’s insiders or their affiliates or designees,

upon five days’ advance notice prior to the applicable deadline, must deposit into the Trust Account $1,150,000 ($0.10 per Public

Share or an aggregate of $2,300,000), on or prior to the date of the applicable deadline.

the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except

for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public

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

(which interest shall be net of taxes payable, and less certain amount of interest to pay dissolution expenses) divided by the number

of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders

(including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably

possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board

of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims

of creditors and the requirements of other applicable law.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Initial Stockholders and Chardan have agreed to waive their liquidation rights with respect to the Insider Shares and Private Shares,

as applicable, if the Company fails to complete a Business Combination within the Combination Period.

However, if any Initial Stockholder

or Chardan acquires Public Shares in or after the IPO, such Public Shares will be entitled to liquidating distributions from the Trust

Account if the Company fails to complete a Business Combination within the Combination Period.

The underwriters have agreed to waive

their rights to their deferred underwriting commissions (see Note 7) held in the Trust Account in the event the Company does not complete

a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in

the Trust Account that will be available to fund the redemption of the Public Shares.

In the event of such distribution, it is possible

that the per share value of the assets remaining available for distribution will be less than $ 10.10 .

order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims

by a third party (excluding the Company’s independent registered public accounting firm) for services rendered or products sold

to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality

or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.10

per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust

Account, if less than $ 10.10 per share due to reductions in the value of the trust assets, in each case less taxes payable, provided

that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all

rights to the monies held in the Trust Account (whether or not such waiver is enforceable), nor will it apply to any claims under the

Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act

of 1933, as amended (the “Securities Act”).

Moreover, in the event that an executed waiver is deemed to be unenforceable

against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims.

and Capital Resources

As of June 30, 2022, the Company had cash of $ 447,382

and a working capital of $ 596,255 .

The Company’s liquidity needs prior to the

closing of IPO were satisfied through a payment from the Sponsor of $ 25,000 (see Note 6) for the insider shares to cover certain offering

costs and the loan under an unsecured promissory note from the Sponsor of $ 200,000 (see Note 6).

Subsequent to the closing of the IPO,

the Company’s liquidity has been satisfied through the net proceeds of $ 1,215,100 from the consummation of the IPO (including the

over-allotment option) and the private placements held outside of the Trust Account.

In addition, in order to finance transaction costs

in connection with a Business Combination, the Sponsor, Initial Shareholders or their affiliates may, but are not obligated to, provide

the Company working capital loans (see Note 6).

As of June 30, 2022, there were no amounts outstanding under any working capital loans.

on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs

through the earlier of the consummation of a Business Combination or one year from this filing.

Over this time period, the Company will

use these funds to pay existing accounts payable, identify and evaluate prospective initial Business Combination candidates, perform

due diligence on prospective target businesses, pay for travel expenditures, select the target business to merge with or acquire, and

structure, negotiate and consummate the Business Combination.

2 — Significant Accounting Policies

of Presentation

These funds will not be released until the earlier of the completion

of the initial Business Combination and the liquidation due to the Company’s failure to complete a Business Combination within the

applicable period of time.

The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors,

if any, which could have priority over the claims of the Company’s public stockholders.

In addition, interest income earned on the

funds in the Trust Account may be released to the Company to pay its income or other tax obligations.

With these exceptions, expenses

incurred by the Company may be paid prior to a business combination only from the net proceeds of the IPO and private placement not held

in the Trust Account.

Pursuant to Nasdaq listing rules, the Company’s

initial Business Combination must occur with one or more target businesses having an aggregate fair market value equal to at least 80%

of the value of the funds in the Trust account (excluding any deferred underwriting discounts and commissions and taxes payable on the

income earned on the Trust Account), which the Company refers to as the 80% test, at the time of the execution of a definitive agreement

for its initial Business Combination, although the Company may structure a Business Combination with one or more target businesses whose

fair market value significantly exceeds 80% of the trust account balance.

If the Company is no longer listed on Nasdaq, it will not be

required to satisfy the 80% test.

The Company will only complete a Business Combination if the post-transaction company owns or acquires

50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for

it not to be required to register as an investment company under the Investment Company Act.

The Company will provide its holders of the outstanding

Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the

completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or

(ii) by means of a tender offer.

The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct

a tender offer will be made by the Company, solely in its discretion.

The Public Stockholders will be entitled to redeem their Public

Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $ 10.10 per Public Share, plus any

pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income

tax obligations).

If a stockholder vote is not required by law

and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended

and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions

pursuant to the tender offer rules of the U.S.

Securities and Exchange Commission (“SEC”) and file tender offer documents

with the SEC prior to completing a Business Combination.

If, however, stockholder approval of the transaction is required by law, or

the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction

with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.

Additionally, each public stockholder

may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.

If the Company seeks

stockholder approval in connection with a Business Combination, the Company’s Sponsor and any of the Company’s officers or

directors that may hold Insider Shares (as defined in Note 6) (the “Initial Stockholders”) and Chardan have agreed (a) to

vote their Insider Shares, the shares underlying the Private Units (“Private Shares”) and any Public Shares purchased during

or after the IPO in favor of approving a Business Combination and (b) not to convert any shares (including the Insider Shares) in

connection with a stockholder vote to approve, or sell the shares to the Company in any tender offer in connection with, a proposed Business

The Initial Stockholders and Chardan have agreed

(a) to waive their redemption rights with respect to the Insider Shares, Private Shares and Public Shares held by them in connection with

the completion of a Business Combination and (b) not to propose, or vote in favor of, an amendment to the Amended and Restated Certificate

of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100 % of its Public Shares if the

Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their

Public Shares in conjunction with any such amendment.

The Company will have until 12 months from the

closing of the IPO to consummate a Business Combination.

In addition, if the Company anticipates that it may not be able to consummate

initial business combination within 12 months, the Company’s insiders or their affiliates may, but are not obligated to, extend

the period of time to consummate a business combination two times by an additional three months each time (for a total of 18 months to

complete a business combination) (the “Combination Period”).

In order to extend the time available for the Company to

consummate a Business Combination, the Company’s insiders or their affiliates or designees, upon five days’ advance notice

prior to the applicable deadline, must deposit into the Trust Account $1,150,000 ($0.10 per Public Share or an aggregate of $2,300,000),

on or prior to the date of the applicable deadline.

If the Company is unable to complete a Business

Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly

as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash,

equal to the aggregate amount then on deposit in the Trust Account including interest (which interest shall be net of taxes payable,

and less certain amount of interest to pay dissolution expenses) divided by the number of then outstanding Public Shares, which

redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating

distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to

the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject

in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable

The Initial Stockholders and Chardan have agreed

to waive their liquidation rights with respect to the Insider Shares and Private Shares, as applicable, if the Company fails to complete

a Business Combination within the Combination Period.

However, if any Initial Stockholder or Chardan acquires Public Shares in or after

the IPO, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business

Combination within the Combination Period.

The underwriters have agreed to waive their rights to their deferred underwriting commissions

(see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period

and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption

of the Public Shares.

In the event of such distribution, it is possible that the per share value of the assets remaining available for

distribution will be less than $ 10.10 .

In order to protect the amounts held in the Trust

Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (excluding the Company’s

independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business

with which the Company has entered into a written letter of intent, confidentiality or similar agreement or business combination agreement,

reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.10 per Public Share and (ii) the actual amount per Public

Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $ 10.10 per share due to reductions

in the value of the trust assets, in each case less taxes payable, provided that such liability will not apply to any claims by a third

party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or

not such waiver is enforceable), nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against

certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the

extent of any liability for such third party claims.

Liquidity, Capital Resources and Going Concern

As of September 30, 2022, the Company had cash

of $ 414,144 and a working capital of $ 336,777 .

The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business.

However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business

Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business

prior to a Business Combination.

Moreover, the Company may need to obtain additional financing or draw on the Working Capital Loans (see

Note 6) either to complete a Business Combination or because it becomes obligated to redeem a significant number of the Public Shares

upon consummation of a Business Combination, in which case the Company may issue additional securities or incur debt in connection with

such Business Combination.

Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously

with the completion of its Business Combination.

If the Company is unable to complete the Business Combination because it does not have

sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account.

In addition, following the

Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations.

In connection with the Company’s assessment of going concern considerations

in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures

of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, the Company has until April 4, 2023 (or October

4, 2023, if the Company extends the time to complete a Business Combination) to complete a Business Combination.

It is uncertain that

the Company will be able to consummate a Business Combination by this time.

If a Business Combination is not consummated by such date

and an extension has not been requested by the Sponsor and approved by the Company’s stockholders, there will be a mandatory liquidation

and subsequent dissolution of the Company.

Management has determined that the mandatory liquidation, should a Business Combination not

occur and an extension not be requested by the Sponsor, and potential subsequent dissolution raise substantial doubt about the Company’s

ability to continue as a going concern.

The financial statement does not include any adjustments that might result from the outcome of

this uncertainty.

Risks and Uncertainties

Management is currently evaluating the impact

of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s future financial position, results of its operations and/or search for a target company, there has not been a significant

impact as of the date of these unaudited condensed financial statements.

The unaudited condensed financial statements do not include any

adjustments that might result from the future outcome of this uncertainty.

Additionally, as a result of the military action

commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s

ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business

Combination, may be materially and adversely affected.

In addition, the Company’s ability to consummate a transaction may be dependent

on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility,

or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all.

The impact of this

action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations

and/or ability to consummate a Business Combination are not yet determinable.

The financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act

of 2022 (the “IR Act”) was signed into federal law.

The IR Act provides for, among other things, a new U.S.

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.

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 IR Act applies only to

repurchases that occur after December 31, 2022.

Any redemption or other repurchase that occurs

after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax.

and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise

would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business

Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE”

or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination

but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury.

In addition, because the excise tax would be payable by the Company and not by the redeeming holders, the mechanics of any required payment

of the excise tax have not been determined.

The foregoing could cause a reduction in the cash available on hand to complete a Business

Combination and in the Company’s ability to complete a Business Combination.

At this time, it has been determined that none

of the IR Act tax provisions have an impact to the Company’s fiscal 2022 tax provision.

The Company will continue to monitor for

updates to the Company’s business along with guidance issued with respect to the IR Act to determine whether any adjustments are

needed to the Company’s tax provision in future periods.

Note 2 — Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements are presented

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for any other interim period or for the full year.

Growth Company

Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our

Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements

that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required

to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding

executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory

vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting

standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do

not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such an election to opt out is irrevocable.

The Company has elected not to opt out

of such extended transition period which means that when a standard is issued or revised and it has different application dates for public

or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies

adopt the new or revised standard.

This may make comparison of the Company’s financial statements with another public company which

is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult

or impossible because of the potential differences in accounting standards used.

In preparing these unaudited condensed financial statements in conformity

GAAP, the Company’s management makes estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported expenses

during the reporting period.

Making estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the

date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near

term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

and Cash Equivalents

Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had $ 447,382 in cash and did not have any cash equivalents as of June 30, 2022.

Emerging Growth Company

The Company is an “emerging growth company,”

as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”),

and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that

are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements

of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and

proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder

approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts

emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that

is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered

under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company

can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but

any such an election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means

that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging

growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison

of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth

company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting

standards used.

Use of Estimates

In preparing these unaudited condensed financial

statements in conformity with U.S.

GAAP, the Company’s management makes estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements

and the reported expenses during the reporting period.

Making estimates requires management to exercise

significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances

that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could

change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity

of three months or less when purchased to be cash equivalents.

The Company had $ 414,144 and $ 4,952 in cash and did not have any cash equivalents

as of September 30, 2022 and December 31, 2021, respectively.

Investments Held in Trust Account

As of June 30, 2022, the assets held in the Trust

Account were held in cash and U.S.

As of September 30, 2022, the assets held in the

Trust Account were held in cash and U.S.

Treasury securities.

The Company classifies its U.S.

Treasury securities as trading securities in accordance

with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 320, “Investments—Debt

and Equity Securities.” Trading securities are presented on the balance sheets at fair value at the end of each reporting period.

Gains and losses resulting from the change in fair value of these securities is included in gain on investments held in Trust Account

in the accompanying statement of operations.

The estimated fair values of all assets held in the Trust Account are determined using available

market information and classified as Level 1 measurements.

Treasury securities as trading securities

in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic

320, “Investments—Debt and Equity Securities.” Trading securities are presented on the balance sheets at fair value

at the end of each reporting period.

Gains and losses resulting from the change in fair value of these securities is included in gain

on investments held in Trust Account in the accompanying statement of operations.

The estimated fair values of all assets held in the

Trust Account are determined using available market information and classified as Level 1 measurements.

Offering Costs

The Company complies with the requirements of

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legal, accounting and other expenses that are directly related to the IPO and charged to stockholders’ equity upon the completion

Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred

tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial

statements carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are

measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected

to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the

period that included the enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount

expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition

and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must

be more likely than not to be sustained upon examination by taxing authorities.

The Company recognizes accrued interest and penalties

related to unrecognized tax benefits as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest

and penalties as of June 30, 2022.

The Company accounts for income taxes under ASC

740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected

impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected

future tax benefit to be derived from tax loss and tax credit carry forwards.

ASC 740 additionally requires a valuation allowance to be

established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

The Company’s effective tax rate was 7.07 % and 0.0 % for the three

months ended September 30, 2022 and 2021, respectively, and 13.36 % and 0.0 % for the nine months ended September 30, 2022 and for the period

from March 16, 2021 (inception) through September 30, 2021, respectively.

The effective tax rate differs from the statutory tax rate of

21 % for the three months ended September 30, 2022 and 2021, for the nine months ended September 30, 2022 and for the period from March

16, 2021 (inception) through September 30, 2021, due to the valuation allowance on the deferred tax assets.

ASC 740 also clarifies the accounting for uncertainty

in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process

for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

For those benefits

to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

ASC 740 also provides

guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized

tax benefits as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September

30, 2022 and December 31, 2021.

The Company is currently not aware of any issues under review that could result in significant payments,

accruals or material deviation from its position.

The Company is subject to income tax examinations by major taxing authorities since

Company has identified the United States as its only “major” tax jurisdiction.

Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes.

These potential

examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance

with federal and state tax laws.

The Company’s management does not expect that the total amount of unrecognized tax benefits will

materially change over the next twelve months.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The provision for income taxes was deemed to be immaterial for the

six months ended June 30, 2022.

Loss Per Share

Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share.

The unaudited condensed statements

of operations include a presentation of income (loss) per redeemable share and income (loss) per non-redeemable share following the two-class

method of income per share.

In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable

shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares

and the undistributed income (loss) is calculated using the total net loss less any dividends paid.

The Company then allocated the undistributed

income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares.

remeasurement of the accretion to redemption value of the common shares subject to possible redemption was considered to be dividends

paid to the public shareholders.

As of June 30, 2022, the Company did not have any dilutive securities and other contracts that could,

potentially, be exercised or converted into common shares and then share in the earnings of the Company.

As a result, diluted loss per

share is the same as basic loss per share for the period presented.

net income (loss) per share presented in the unaudited condensed statement of operations is based on the following:

The Company has identified the United States as

its only “major” tax jurisdiction.

The Company is subject to income taxation by major taxing authorities since inception.

These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and

compliance with federal and state tax laws.

The Company’s management does not expect that the total amount of unrecognized tax benefits

will materially change over the next twelve months.

Net Loss Per Share

The Company complies with accounting and disclosure

requirements of FASB ASC 260, Earnings Per Share.

The unaudited condensed statements of operations include a presentation of income (loss)

per redeemable share and income (loss) per non-redeemable share following the two-class method of income per share.

In order to determine

the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed

income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using

the total net loss less any dividends paid.

The Company then allocated the undistributed income (loss) ratably based on the weighted average

number of shares outstanding between the redeemable and non-redeemable shares.

Any remeasurement of the accretion to redemption value

of the common shares subject to possible redemption was considered to be dividends paid to the public shareholders.

As of September 30,

2022, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common

shares and then share in the earnings of the Company.

As a result, diluted loss per share is the same as basic loss per share for the

period presented.

The net income (loss) per share presented in

the unaudited condensed statement of operations is based on the following:

September 30,

Accretion of common stock to redemption value

( 27,171,067 )

Net loss including accretion of common stock to redemption value

$ ( 26,439,946 )

$ ( 26,653,781 )

Three Months Ended

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Basic and diluted net loss per common stock

Allocation of net loss

$ ( 20,399,824 )

$ ( 6,040,122 )

Accretion of ordinary shares subject to possible redemption to redemption value

Allocation of net income (loss)

$ ( 6,040,122 )

Basic and diluted weighted average shares outstanding

Basic and diluted net loss per ordinary share

Six Months Ended

June 30, 2022

June 30, 2021

Basic and diluted net loss per common stock

Nine Months Ended

September 30, 2022

September 30, 2021

Basic and diluted net income (loss) per common stock

Allocation of net loss

$ ( 18,735,533 )

$ ( 7,918,248 )

Accretion of ordinary shares subject to possible redemption to redemption value

Allocation of net income (loss)

$ ( 7,918,248 )

Basic and diluted weighted average shares outstanding

Basic and diluted net loss per ordinary share

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Concentration

of Credit Risk

Financial instruments that potentially subject the Company to concentration

of credit risk consist of a cash account in a financial institution and money market funds held in the Trust Account.

The Company has

not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

June 30, 2022 and December 31, 2021, approximately $ 116 million and $Nil, respectively, was over the Federal Deposit Insurance Corporation

(FDIC) limit.

Value of Financial Instruments

Basic and diluted net income (loss) per common stock

Concentration of Credit Risk

Financial instruments that potentially subject

the Company to concentration of credit risk consist of a cash account in a financial institution and money market funds held in the Trust

The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks

on such account.

As of September 30, 2022 and December 31, 2021, approximately $ 116.6 million and $ Nil , respectively, was over the Federal

Deposit Insurance Corporation (FDIC) limit.

Fair Value of Financial Instruments

FASB ASC Topic 820 “Fair Value Measurements

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levels based on the inputs as follows:

Level 1 — Valuations

based on unadjusted quoted prices in active markets for identical assets or liabilities that

the Company has the ability to access.

Valuation adjustments and block discounts are not

being applied.

Since valuations are based on quoted prices that are readily and regularly

available in an active market, valuation of these securities does not entail a significant

degree of judgment.

Level 2 — Valuations

based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted

prices in markets that are not active for identical or similar assets, (iii) inputs other

than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally

from or corroborated by market through correlation or other means.

Level 3 — Valuations

based on inputs that are unobservable and significant to the overall fair value measurement.

Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Valuation adjustments and block discounts are not being applied.

Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The fair value of the Company’s certain

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The fair values of cash and cash equivalents, and other

current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of June 30, 2022 and December 31,

current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of September 30, 2022 and December 31,

2021 due to the short maturities of such instruments.

20 unchanged sentences

for its Public Warrants as equity and the Private Warrants as liabilities.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Stock Subject to Possible Redemption

Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing

Liabilities from Equity.” Common stock subject to mandatory redemption (if any) are classified as a liability instrument and are

measured at fair value.

Conditionally redeemable common stock (including common stock that feature redemption rights that is either within

the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control)

is classified as temporary equity.

At all other times, common stock is classified as stockholders’ equity.

The Company’s

common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence

of uncertain future events.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value

of redeemable common stock to equal the redemption value at the end of each reporting period.

Increases or decreases in the carrying

amount of shares of redeemable common stock are affected by charges against additional paid in capital or accumulated deficit if

additional paid in capital equals to zero.

Accounting Pronouncements

August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s

Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments.

ASU 2020-06 eliminates

the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies

the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

The new standard

also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s

ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for

all convertible instruments.

ASU 2020-06 is effective January 1, 2024 for the Company and should be applied on a full or modified

retrospective basis, with early adoption permitted beginning on January 1, 2021.

The Company is currently assessing the impact,

if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Management does not believe that any recently issued, but not effective,

accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject

to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock

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

Conditionally redeemable

common stock (including common stock that feature redemption rights that is either within the control of the holder or subject to redemption

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

times, common stock is classified as stockholders’ equity.

The Company’s common stock features certain redemption rights that

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

The Company recognizes

changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption

value at the end of each reporting period.

Increases or decreases in the carrying amount of shares of redeemable common stock are

affected by charges against additional paid in capital or accumulated deficit if additional paid in capital equals to zero.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting

Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion

and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU

2020-06”) to simplify accounting for certain financial instruments.

ASU 2020-06 eliminates the current models that require separation

of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance

pertaining to equity classification of contracts in an entity’s own equity.

The new standard also introduces additional disclosures

for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity.

ASU 2020-06 amends

the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.

2020-06 is effective January 1, 2024 for the Company and should be applied on a full or modified retrospective basis, with early

adoption permitted beginning on January 1, 2021.

The Company is currently assessing the impact, if any, that ASU 2020-06 would have

on its financial position, results of operations or cash flows.

Management does not believe that any recently

issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed

financial statements.

Note 3 — Cash and Investment Held in

Trust Account

As of June 30, 2022, investment securities in the Company’s Trust

Account consisted of $ 116,296,397 cash and U.S.

As of September 30, 2022, investment securities

in the Company’s Trust Account consisted of $ 116,608,596 cash and U.S.

Treasury securities.

The Company did not have a Trust Account at December 31, 2021.

The Company did not have a Trust Account

at December 31, 2021.

The following table presents information about

the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2022 and indicates the fair value hierarchy

of the valuation inputs the Company utilized to determine such fair value.

the Company’s assets that are measured at fair value on a recurring basis as of September 30, 2022 and indicates the fair value

hierarchy of the valuation inputs the Company utilized to determine such fair value.

September 30,

Markets (Level 1)

Other Observable

Inputs (Level 2)

Other Unobservable

Marketable securities held in trust account

1 unchanged sentence

$ 116,608,596

4 — Initial Public Offering

Note 4 — Initial Public Offering

On April 4, 2022, pursuant to its initial public

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and will expire five years after the completion of the Company’s initial Business Combination or earlier upon redemption or liquidation.

of the 11,500,000 Public Shares sold as part of the Public Units in the IPO contain a redemption feature which allows for the

redemption of such Public Shares if there is a stockholder vote or tender offer in connection with the Business Combination and in connection

with certain amendments to the Company’s amended and restated certificate of incorporation, or in connection with the Company’s

In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC

480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified

outside of permanent equity.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Company’s redeemable common stock is subject to SEC and its staff’s guidance on redeemable equity instruments, which has

been codified in ASC 480-10-S99.

If it is probable that the equity instrument will become redeemable, the Company has the option to either

accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the

instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption

value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting

The Company has elected to recognize the changes immediately.

The accretion or remeasurement is treated as a deemed dividend

(i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).

As of June 30, 2022, the shares of common stock

reflected on the balance sheet are reconciled in the following table.

All of the 11,500,000 Public Shares

sold as part of the Public Units in the IPO contain a redemption feature which allows for the redemption of such Public Shares if there

is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s

amended and restated certificate of incorporation, or in connection with the Company’s liquidation.

In accordance with the SEC and

its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely

within the control of the Company require common stock subject to redemption to be classified outside of permanent equity.

The Company’s redeemable common stock is

subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99.

If it is probable

that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the

period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the

earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying

amount of the instrument to equal the redemption value at the end of each reporting period.

The Company has elected to recognize the changes

The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of

retained earnings, additional paid-in capital).

As of September 30, 2022, the shares of common

stock reflected on the balance sheet are reconciled in the following table.

September 30,

Gross proceeds

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and all underlying securities will expire worthless.

6 — Related Party Transactions

Note 6 — Related Party Transactions

Insider Shares

On January 4, 2022, the Company issued 2,875,000

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are currently subject to forfeiture.

As of June 30, 2022, there were 2,875,000 Insider Shares issued and outstanding.

Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of their Insider Shares

until, with respect to 50% of the Insider Shares, the earlier of six months after the consummation of a Business Combination and

the date on which the closing price of the common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends,

reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after a

Business Combination and, with respect to the remaining 50% of the Insider Shares, until the six months after the consummation of

a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger,

stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their

shares of common stock for cash, securities or other property.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note — Related Party

On January 4, 2022 and February 28, 2022, the Sponsor agreed to loan

the Company up to an aggregate amount of $ 200,000 to be used, in part, for transaction costs incurred in connection with the IPO (the

“Promissory Notes”).

As of September 30, 2022, there were 2,875,000 Insider Shares issued and outstanding.

The Initial Stockholders have agreed, subject

to certain limited exceptions, not to transfer, assign or sell any of their Insider Shares until, with respect to 50% of the Insider Shares,

the earlier of six months after the consummation of a Business Combination and the date on which the closing price of the common

stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like)

for any 20 trading days within a 30-trading day period commencing after a Business Combination and, with respect to the remaining

50% of the Insider Shares, until the six months after the consummation of a Business Combination, or earlier, in either case, if,

subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results

in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Promissory Note — Related Party

On January 4, 2022 and February 28, 2022, the

Sponsor agreed to loan the Company up to an aggregate amount of $ 200,000 to be used, in part, for transaction costs incurred in connection

with the IPO (the “Promissory Notes”).

The Promissory Notes were unsecured, interest-free and due on the closing the IPO.

The Company repaid

the outstanding balance of $ 200,000 to the Sponsor on April 7 and April 8, 2022.

As of June 30, 2022, the Company had no borrowings under

the Promissory Note.

addition, in order to finance transaction costs in connection with searching for a target business or consummating an intended initial

business combination, the initial stockholders, officers, directors or their affiliates may, but are not obligated to, loan us funds

as may be required.

In the event that the initial business combination does not close, the Company 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.

The Company repaid the outstanding balance of $ 200,000 to the Sponsor on April 7 and April 8, 2022.

As of September 30, 2022, the Company

had no borrowings under the Promissory Note.

Related Party Loans

In addition, in order to finance transaction costs

in connection with searching for a target business or consummating an intended initial business combination, the initial stockholders,

officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required.

In the event that the initial

business combination does not close, the Company 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.

Such loans would be evidenced by promissory notes.

The notes would either be paid upon consummation of our initial business combination,

without interest, or, at the lender’s discretion, up to $ 500,000 of the notes may be converted upon consummation of the Company’s

business combination into private units at a price of $ 10.00 per unit.

The purchase price of these units will approximate the fair value

of such units when issued.

However, if it is determined, at the time of issuance, that the fair value of such units exceeds the purchase

price, the Company would record compensation expense for the excess of the fair value of the units on the day of issuance over the

purchase price in accordance with Accounting Standards Codification (“ASC”) 718 - Compensation - Stock Compensation.

of June 30, 2022, the Company had no borrowings under the working capital loans.

Administrative

Services Agreement

The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender’s discretion,

up to $ 500,000 of the notes may be converted upon consummation of the Company’s business combination into private units at a price

of $ 10.00 per unit.

The purchase price of these units will approximate the fair value of such units when issued.

However, if it is determined,

at the time of issuance, that the fair value of such units exceeds the purchase price, the Company would record compensation expense for

the excess of the fair value of the units on the day of issuance over the purchase price in accordance with Accounting Standards

Codification (“ASC”) 718 - Compensation - Stock Compensation.

As of September 30, 2022, the Company had no borrowings

under the working capital loans.

Administrative Services Agreement

The Company entered into an agreement, commencing

5 unchanged sentences

interest and be due and payable no later than the date of the consummation of initial Business Combination.

For the three months and six

months ended June 30, 2022, the Company incurred $ 30,000 and $ 30,000 , respectively, in fees for these services, of which $ 30,000 and none

were included in accrued expenses in the accompanying condensed unaudited balance sheets as of June 30, 2022 and December 31, 2021, respectively.

Note 7 — Commitments

and Contingencies

and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic

on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s

future financial position, results of its operations and/or search for a target company, there has not been a significant impact as of

the date of these unaudited condensed financial statements.

The unaudited condensed financial statements do not include any adjustments

that might result from the future outcome of this uncertainty.

holders of the insider shares, the private units, securities underlying the Unit Purchase Option and any units that may be issued upon

conversion of working capital loans or extension loans (and any securities underlying the private units or units issued upon conversion

of the working capital loans or extension loans) will be entitled to registration rights pursuant to a registration rights agreement

signed on the effective date of the IPO.

The holders of a majority of these securities are entitled to make up to two demands (or one

demand with respect to the securities underlying the Unit Purchase Option) that the Company register such securities.

The holders of

the majority of the Insider Shares can elect to exercise these registration rights at any time commencing three months prior to the date

on which these shares of common stock are to be released from escrow.

The holders of a majority of the private units and units issued

in payment of working capital loans made to us can elect to exercise these registration rights at any time commencing on the date that

the Company consummate an initial business combination.

In addition, the holders have certain “piggy-back” registration rights

with respect to registration statements filed subsequent to the consummation of an initial business combination.

Furthermore, notwithstanding

the foregoing, pursuant to FINRA Rule 5110, Chardan may not exercise its demand and “piggyback” registration rights after

five and seven years, respectively, after the commencement of sales of this offering and may not exercise its demand rights on more than

one occasion.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

For the three months and nine

months ended September 30, 2022, the Company incurred $ 30,000 and $ 60,000 , respectively, in fees for these services, of which $ 60,000

and none were included in accrued expenses in the accompanying condensed unaudited balance sheets as of September 30, 2022 and December

31, 2021, respectively.

Note 7 — Commitments and

Contingencies

Registration Rights

The holders of the insider shares, the private

units, securities underlying the Unit Purchase Option and any units that may be issued upon conversion of working capital loans or extension

loans (and any securities underlying the private units or units issued upon conversion of the working capital loans or extension loans)

will be entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the IPO.

of a majority of these securities are entitled to make up to two demands (or one demand with respect to the securities underlying the

Unit Purchase Option) that the Company register such securities.

The holders of the majority of the Insider Shares can elect to exercise

these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released

The holders of a majority of the private units and units issued in payment of working capital loans made to us can elect

to exercise these registration rights at any time commencing on the date that the Company consummate an initial business combination.

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

to the consummation of an initial business combination.

Furthermore, notwithstanding the foregoing, pursuant to FINRA Rule 5110, Chardan

may not exercise its demand and “piggyback” registration rights after five and seven years, respectively, after the commencement

of sales of this offering and may not exercise its demand rights on more than one occasion.

The Company will bear the expenses incurred

in connection with the filing of any such registration statements.

Underwriting Agreement

Pursuant to an underwriting agreement in connection

3 unchanged sentences

On April 7, 2022, Chardan exercised the over-allotment option in full (see Note 4).

underwriters were paid a cash underwriting discount of 2.5 % of the gross proceeds of the IPO (including the exercise of the over-allotment

option), or $ 2,875,000 .

In addition, the underwriters will be entitled to a deferred fee of 3.75 % of the gross proceeds of the IPO (including

the exercise of the over-allotment option), or $ 4,312,500 , which will be paid upon the closing of a Business Combination from the amounts

held in the Trust Account, subject to the terms of the underwriting agreement.

Purchase Option

Simultaneously

with the IPO (including the closing of the over-allotment option), the Company sold to Chardan, for $ 100 , an option (the “Unit

Purchase Option”) to purchase 345,000 units exercisable at $ 11.50 per unit (or an aggregate exercise price of $ 3,967,500 ) commencing

on the later of six months from the effective date of the registration statement related to the IPO and the consummation of a Business

The Unit Purchase Option may be exercised for cash or on a cashless basis, at the holder’s option, and expires five

years from the effective date of the registration statement related to the IPO.

The units issuable upon exercise of the Unit Purchase

Option are identical to those offered in the IPO.

The Company accounts for the Unit Purchase Option, inclusive of the receipt of $ 100

cash payment, as an expense of the IPO resulting in a charge directly to stockholders’ equity.

The Unit Purchase Option and such

units purchased pursuant to the Unit Purchase Option, as well as the common stock underlying such units, the rights included in such

units, the shares of common stock that are issuable for the rights included in such units, the warrants included in such units, and the

shares underlying such warrants, have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA

Rule 5110(e)(1).

The Unit Purchase Option grants to holders demand and “piggy back” rights for periods of five and seven years,

respectively, from the effective date of the registration statement with respect to the registration under the Securities Act of the

securities directly and indirectly issuable upon exercise of the Unit Purchase Option.

The Company will bear all fees and expenses attendant

to registering the securities, other than underwriting commissions which will be paid for by the holders themselves.

The exercise price

and number of units issuable upon exercise of the Unit Purchase Option may be adjusted in certain circumstances including in the event

of a stock dividend, or the Company’s recapitalization, reorganization, merger or consolidation.

However, the option will not be

adjusted for issuances of common stock at a price below its exercise price.

of First Refusal

Company has granted Chardan a right of first refusal, for a period of 18 months after the date of the consummation of a Business

Combination, to act as a book-running manager or placement agent, with at least 30% of the economics, for any and all future public and

private equity, equity linked and debt offerings of the Company or any of its successors or subsidiaries.

The underwriters were paid a cash underwriting

discount of 2.5 % of the gross proceeds of the IPO (including the exercise of the over-allotment option), or $ 2,875,000 .

In addition, the

underwriters will be entitled to a deferred fee of 3.75 % of the gross proceeds of the IPO (including the exercise of the over-allotment

option), or $ 4,312,500 , which will be paid upon the closing of a Business Combination from the amounts held in the Trust Account, subject

to the terms of the underwriting agreement.

Unit Purchase Option

Simultaneously with the IPO (including the closing

of the over-allotment option), the Company sold to Chardan, for $ 100 , an option (the “Unit Purchase Option”) to purchase 345,000

units exercisable at $ 11.50 per unit (or an aggregate exercise price of $ 3,967,500 ) commencing on the later of six months from the effective

date of the registration statement related to the IPO and the consummation of a Business Combination.

The Unit Purchase Option may be

exercised for cash or on a cashless basis, at the holder’s option, and expires five years from the effective date of the registration

statement related to the IPO.

The units issuable upon exercise of the Unit Purchase Option are identical to those offered in the IPO.

The Company accounts for the Unit Purchase Option, inclusive of the receipt of $ 100 cash payment, as an expense of the IPO resulting in

a charge directly to stockholders’ equity.

The Unit Purchase Option and such units purchased pursuant to the Unit Purchase Option,

as well as the common stock underlying such units, the rights included in such units, the shares of common stock that are issuable for

the rights included in such units, the warrants included in such units, and the shares underlying such warrants, have been deemed compensation

by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(e)(1).

The Unit Purchase Option grants to holders

demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of the registration

statement with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon

exercise of the Unit Purchase Option.

The Company will bear all fees and expenses attendant to registering the securities, other than

underwriting commissions which will be paid for by the holders themselves.

The exercise price and number of units issuable upon exercise

of the Unit Purchase Option may be adjusted in certain circumstances including in the event of a stock dividend, or the Company’s

recapitalization, reorganization, merger or consolidation.

However, the option will not be adjusted for issuances of common stock at a

price below its exercise price.

Right of First Refusal

The Company has granted Chardan a right of first

refusal, for a period of 18 months after the date of the consummation of a Business Combination, to act as a book-running manager

or placement agent, with at least 30% of the economics, for any and all future public and private equity, equity linked and debt offerings

of the Company or any of its successors or subsidiaries.

Note 8 — Stockholders’

Stock — The Company is authorized to issue 50,000,000 shares of common stock with a par value of $ 0.0001 per

Holders of the common stock are entitled to one vote for each share.

At June 30, 2022, there were 3,405,000 shares of common stock

issued and outstanding (excluding 11,500,000 shares subject to possible redemption).

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Common Stock — The

Company is authorized to issue 50,000,000 shares of common stock with a par value of $ 0.0001 per share.

Holders of the common stock are

entitled to one vote for each share.

At September 30, 2022, there were 3,405,000 shares of common stock issued and outstanding (excluding

11,500,000 shares subject to possible redemption).

Rights — Each holder

11 unchanged sentences

The shares issuable upon conversion of the rights will be freely tradable (except to the extent held by affiliates of the Company).

the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the

Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution

from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless.

Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business

Additionally, in no event will the Company be required to net cash settle the rights.

Accordingly, holders of the rights

might not receive the shares of common stock underlying the rights.

If the Company is unable to complete a Business

Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive

any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of

the Trust Account with respect to such rights, and the rights will expire worthless.

Further, there are no contractual penalties for failure

to deliver securities to the holders of the rights upon consummation of a Business Combination.

Additionally, in no event will the Company

be required to net cash settle the rights.

Accordingly, holders of the rights might not receive the shares of common stock underlying

Warrants — Each

8 unchanged sentences

upon exercise of the Public Warrants is not effective within 90 days from the closing of the Company’s initial Business Combination,

warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed

to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration

warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to

maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration

under the Securities Act.

If an exemption from registration is not available, holders will not be able to exercise their warrants on

a cashless basis.

If an exemption from registration is not available, holders will not be able to exercise their warrants on a

cashless basis.

The warrants will expire five years from the closing of the Company’s initial Business Combination at 5:00 p.m.,

New York City time or earlier redemption.

addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in

connection with the closing of the Company’s initial Business Combination at an issue price or effective issue price of less than

$ 9.50 per share (with such issue price or effective issue price to be determined in good faith by our board of directors), (y) the

aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for

the funding of the Company’s initial Business Combination, and (z) the volume weighted average trading price of the Company’s

common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates

its initial Business Combination (such price, the “Market Price”) is below $ 9.50 per share, the exercise price of the warrants

will be adjusted (to the nearest cent) to be equal to 115 % of the Market Price, and the $ 16.50 per share redemption trigger price described

below will be adjusted (to the nearest cent) to be equal to 165 % of the Market Value.

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Company may redeem the outstanding Public Warrants at any time while the warrants are exercisable:

In addition, if (x) the Company issues additional

shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of the Company’s

initial Business Combination at an issue price or effective issue price of less than $ 9.50 per share (with such issue price or effective

issue price to be determined in good faith by our board of directors), (y) the aggregate gross proceeds from such issuances represent

more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination,

and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting

on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market

Price”) is below $ 9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 %

of the Market Price, and the $ 16.50 per share redemption trigger price described below will be adjusted (to the nearest cent) to be equal

to 165 % of the Market Value.

The Company may redeem the outstanding Public

Warrants at any time while the warrants are exercisable:

● in whole and not in part;

2 unchanged sentences

● if, and only if, the last reported sale price of the Company’s common stock equals or exceeds $ 16.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the to the warrant holders.

the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the

Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

In such event, each holder would pay

the exercise price by surrendering the whole warrants for that number of shares of common stock equal to the quotient obtained by dividing

(x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise

price of the warrants and the “fair market value” (defined below) by (y) the fair market value.

The “fair market

value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading

day prior to the date on which the notice of redemption is sent to the holders of warrants.

as described above, no warrants will be exercisable and the Company will not be obligated to issue common stock unless at the time a

holder seeks to exercise such warrant, a prospectus relating to the common stock issuable upon exercise of the warrants is current and

the common stock have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the

holder of the warrants.

Under the terms of the warrant agreement, the Company has agreed to use its best efforts to meet these conditions

and to maintain a current prospectus relating to the common stock issuable upon exercise of the warrants until the expiration of the

However, the Company cannot assure that it will be able to do so and, if the Company does not maintain a current prospectus

relating to the common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants and the Company

will not be required to settle any such warrant exercise.

If the prospectus relating to the common stock issuable upon the exercise of

the warrants is not current or if the common stock is not qualified or exempt from qualification in the jurisdictions in which the holders

of the warrants reside, the Company will not be required to net cash settle or cash settle the warrant exercise, the warrants may have

no value, the market for the warrants may be limited and the warrants may expire worthless.

private warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the IPO, except

that the private warrants (i) will be exercisable either for cash or on a cashless basis at the holder’s option and (ii) will not

be redeemable by the Company, in either case as long as the private warrants are held by the initial purchasers or any of their permitted

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

9 —Fair Value Measurements

fair value of the Company’s consolidated financial assets and liabilities reflects management’s estimate of amounts that

the Company 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 date.

In connection with measuring the fair value of its assets

and liabilities, the Company seeks 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:

Quoted prices in active

markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the

asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Observable inputs other

than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted

prices for identical assets or liabilities in markets that are not active.

Unobservable inputs based

on the assessment of the assumptions that market participants would use in pricing the asset or liability.

If the Company calls the Public Warrants for redemption,

management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,”

as described in the warrant agreement.

In such event, each holder would pay the exercise price by surrendering the whole warrants for

that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common

stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”

(defined below) by (y) the fair market value.

The “fair market value” shall mean the average reported last sale price

of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption

is sent to the holders of warrants.

Except as described above, no warrants will be

exercisable and the Company will not be obligated to issue common stock unless at the time a holder seeks to exercise such warrant, a

prospectus relating to the common stock issuable upon exercise of the warrants is current and the common stock have been registered or

qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants.

Under the terms of

the warrant agreement, the Company has agreed to use its best efforts to meet these conditions and to maintain a current prospectus relating

to the common stock issuable upon exercise of the warrants until the expiration of the warrants.

However, the Company cannot assure that

it will be able to do so and, if the Company does not maintain a current prospectus relating to the common stock issuable upon exercise

of the warrants, holders will be unable to exercise their warrants and the Company will not be required to settle any such warrant exercise.

If the prospectus relating to the common stock issuable upon the exercise of the warrants is not current or if the common stock is not

qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside, the Company will not be required

to net cash settle or cash settle the warrant exercise, the warrants may have no value, the market for the warrants may be limited and

the warrants may expire worthless.

The private warrants have terms and provisions

that are identical to those of the warrants being sold as part of the units in the IPO, except that the private warrants (i) will be exercisable

either for cash or on a cashless basis at the holder’s option and (ii) will not be redeemable by the Company, in either case as

long as the private warrants are held by the initial purchasers or any of their permitted transferees.

Note 9 —Fair Value Measurements

The fair value of the Company’s consolidated

financial assets and liabilities reflects management’s estimate of amounts that the Company 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 date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks 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:

Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Unobservable inputs based on the assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about

the Company’s liabilities that are measured at fair value on June 30, 2022 and December 31, 2021, and indicates the fair value hierarchy

of the valuation inputs the Company utilized to determine such fair value:

the Company’s liabilities that are measured at fair value on September 30, 2022 and December 31, 2021, and indicates the fair value

hierarchy of the valuation inputs the Company utilized to determine such fair value:

September 30,

Warrant liability

private warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the balance

Changes in the fair value of the warrants are recorded in the statement of operations each period.

table below shows the change in fair value of warrant liabilities as of June 30, 2022:

Private Warrants

The private warrants are accounted for as liabilities

in accordance with ASC 815-40 and are presented within warrant liabilities on the balance sheet.

Changes in the fair value of the warrants

are recorded in the statement of operations each period.

The table below shows the change in fair value of warrant liabilities

as of September 30, 2022:

Fair value at January 1, 2022

1 unchanged sentence

Change in fair value

Fair value as of June 30, 2022

ACQUISITION CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Company established the initial fair value for the private warrants at $ 529,495 on April 4, 2022, the date of the Company’s IPO,

using the Black-Scholes model.

The Company allocated the proceeds received from the sale of Private Units, first to the private warrants

based on their fair values as determined at initial measurement, with the remaining proceeds recorded as common shares subject to possible

redemption, and common shares based on their relative fair values recorded at the initial measurement date.

The warrants were classified

as Level 3 at the initial measurement date due to the use of unobservable inputs.

key inputs into the Black-Scholes model were as follows at their measurement date:

June 30, 2022

(initial measurement)

Fair value as of September 30, 2022

The Company established the initial fair value

for the private warrants at $ 587,717 (including over-allotment) on April 4, 2022, the date of the Company’s IPO, using the Black-Scholes

The Company allocated the proceeds received from the sale of Private Units, first to the private warrants based on their fair values

as determined at initial measurement, with the remaining proceeds recorded as common shares subject to possible redemption, and common

shares based on their relative fair values recorded at the initial measurement date.

The warrants were classified as Level 3 at the initial

measurement date due to the use of unobservable inputs.

The key inputs into the Black-Scholes model were

as follows at their measurement date:

September 30,

Exercise Price

3 unchanged sentences

Risk-free rate

10 — Subsequent Events

In accordance with ASC 855, “Subsequent Events,” the Company

evaluated subsequent events and transactions that occurred after the balance sheet date up to August 15, 2022 on which the unaudited condensed

financial statements were issued.

Based on this review, the Company did not identify any subsequent events that would have required adjustment

or disclosure in the unaudited condensed financial statements.

Note 10 — Subsequent Events

In accordance with ASC 855, “Subsequent

Events,” the Company evaluated subsequent events and transactions that occurred after the balance sheet date up to November

14, 2022 on which the unaudited condensed financial statements were issued.

Based on this review, the Company did not identify

any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

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 1. Financial Statements