What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-21 compared with 2023-05-24 · 240 added, 142 removed, 238 unchanged (62% of the section changed)

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Condition and Results of Operations

References in this report (this “Quarterly

Report”) to “we,” “us” or the “Company” refer to Redwoods Acquisition Corp.

References to our

“management” or our “management team” refer to our officers and directors.

The following discussion and analysis

of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial

statements and the notes thereto contained elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis

set forth below includes forward-looking statements that involve risks and uncertainties.

References in this report (this

“Quarterly Report”) to “we,” “us” or the “Company” refer to Redwoods Acquisition

References to our “management” or our “management team” refer to our officers and directors.

following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction

with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks

and uncertainties.

Special Note Regarding Forward-Looking Statements

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reorganization or other similar business combination with one or more target businesses, which we refer to herein as our “initial

business combination.” Our efforts to identify a prospective target business are not limited to any particular industry or geographic

region, although we intend to focus on the carbon neutral and energy storage industries.

We intend to utilize cash derived from the proceeds

of our initial public offering (“IPO” as defined below) and the private placement of Private Units (as defined below), our

securities, debt or a combination of cash, securities and debt, in effecting our initial business combination.

The issuance of additional shares of capital stock

in connection with our initial business combination:

significantly dilute the equity interest of our stockholders who would not have pre-emption rights in respect of any such issuance;

subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded

to our shares of common stock;

cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our

ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers

and directors;

have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking

to obtain control of us;

adversely affect prevailing market prices for our securities.

Similarly, if we issue debt securities or otherwise

incur significant debt, it could result in:

and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

● acceleration

of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants

that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing

while the debt security is outstanding;

a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends

on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate

● limitations

on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

● limitations

on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of

our strategy, and other purposes and other disadvantages compared to our competitors who have less debt.

business combination.” We intend to effectuate our initial business combination using cash from the proceeds of our initial public

offering (“IPO” as defined below) and the private placement of Private Units (as defined below), our securities, debt or a

combination of cash, securities and debt.

We expect to continue to incur significant costs

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We cannot assure you that our plans to complete an initial business combination will be successful.

Recent Developments

On March 31, 2023, we held a special meeting of

stockholders, at which our stockholders approved (i) an amendment to our amended and restated certificate of incorporation (the “Extension

Amendment”) and (ii) an amendment (the “Trust Amendment”) to the Investment Management Trust Agreement, dated March

30, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as trustee, extending the date by which we must

consummate a Business Combination from April 4, 2023 to July 4, 2023, with the ability to further extend the deadline on a monthly basis

up to five times from July 4, 2023 to December 4, 2023.

In connection with the stockholders’ vote at the special meeting, an aggregate

of 6,103,350 shares with redemption value of approximately $63,169,451 (or $10.35 per share) of the Company’s common stock were

tendered for redemption.

As a result of the stockholder approval of the

Extension Amendment and the Trust Amendment, the Sponsor, or any of their respective affiliates or designees, agreed to deposit into the

Trust Account $360,000 for the initial three-month extension and $120,000 per month for each subsequent one-month extension.

The extension

payment(s) will bear no interest and will be repayable by the Company to the contributors upon consummation of the Business Combination.

The loans will be forgiven by the contributors if the Company is unable to consummate the Business Combination except to the extent of

any funds held outside of the Trust Account.

On May 30, 2023, we entered into a business combination

agreement (the “Business Combination Agreement”) by and among the Company, ANEW Medical Sub, Inc., a Wyoming corporation (“Merger

Sub”), and ANEW Medical, Inc., a Wyoming corporation (“ANEW”).

The Business Combination Agreement provides, among other

things, that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into ANEW, with ANEW as the

surviving company in the merger and, after giving effect to such merger, a wholly owned subsidiary of the Company (the “Merger”).

Upon the closing of the Merger, the Company will change its name to “ANEW Medical, Inc.”

Under the Business Combination Agreement, we will

acquire all of the outstanding equity interests of ANEW in exchange for shares of our common stock, par value $0.0001 per share (the “Common

Stock”), based on an implied ANEW equity value of $60,000,000, to be paid to ANEW stockholders at the effective time of the Merger.

In addition, certain ANEW stockholders will be issued additional shares of Common Stock (the “Contingent Consideration Shares”),

which will be issued as follows:

(i) 2,000,000 Contingent Consideration Shares upon the Company achieving a closing price equal to or

exceeding $12.50 for 10 trading days within a 20-day trading period in the first three years following the closing of the Merger;

2,000,000 Contingent Consideration Shares upon the Company achieving a closing price equal to or exceeding $15.00 for 10 trading days

within a 20-day trading period in the first three years following the closing of the Merger;

and (iii) 1,000,000 Contingent Consideration

Shares upon the Company achieving a closing price equal to or exceeding $20.00 for 10 trading days within a 20-day trading period in the

first five years following the closing of the Merger.

In connection with the execution of the Business

Combination Agreement, the Sponsor and other persons party thereto (together with the Sponsor, collectively, the “Company Insiders”),

entered into a support agreement with the Company and ANEW (the “Sponsor Support Agreement”).

Under the Sponsor Support Agreement,

the Sponsor agreed to vote, at any meeting of the stockholders of the Company and in any action by written consent of the stockholders

of the Company, all of such Sponsor’s 2,875,000 shares of common stock (the “Founder Shares”) and 530,000 Private Units,

each consisting of one share of Common Stock (such shares, together with the Founder Shares, the “Supporter Shares”), one

warrant and one right, (i) in favor of (a) the Business Combination Agreement and each ancillary document to which the Company is a party

and the transactions contemplated thereby and (b) the other proposals that the Company and ANEW agreed in the Business Combination Agreement

shall be submitted at such meeting for approval by the Company’s stockholders together with the proposal to approve the Merger,

(ii) approval of the Company’s Amended and Restated Certificate of Incorporation and Bylaws and (iii) against any other action that

would reasonably be expected to impede, interfere with or adversely affect the Merger.

The Sponsor Support Agreement also prohibits the

Sponsor from, among other things and subject to certain exceptions, selling, assigning or transferring any Supporter Shares held by the

Sponsor or taking any action that would have the effect of preventing or materially delaying the Sponsor from performing its obligations

under the Sponsor Support Agreement.

In addition, in the Sponsor Support Agreement, the Sponsor agreed to waive, and not to assert or

claim, to the fullest extent permitted by applicable law, any anti-dilution protection pursuant to the organizational documents of the

Company in connection with the Merger.

The Sponsor Support Agreement commits 1,375,000

Founder Shares (the “Deferred Shares”) to a share escrow account which will be established at the closing of the Merger pursuant

to an escrow agreement to be entered into on such date by and among the Company, the Company Insiders and Continental Stock Transfer &

Trust Company, as escrow agent.

The Deferred Shares will be released from the escrow account as follows:

(i) 458,333 Deferred Shares upon

the Company achieving a closing price equal to or exceeding $12.50 for 10 trading days within a 20-day trading period in the first three

years following the closing of the Merger;

(ii) 458,333 Deferred Shares upon the Company achieving a closing price equal to or exceeding

$15.00 for 10 trading days within a 20-day trading period in the first three years following the closing of the Merger;

and (iii) 458,333

Deferred Shares upon the Company achieving a closing price equal to or exceeding $20.00 for 10 trading days within a 20-day trading period

in the first five years following the closing of the Merger.

In connection with the execution of the Business

Combination Agreement, certain ANEW stockholders (the “ANEW Supporting Stockholders”) entered into a voting and support agreement

with the Company and ANEW (the “ANEW Support Agreement”).

Under the ANEW Support Agreement, each ANEW Supporting Stockholder

agreed that, at any meeting of ANEW’s stockholders related to the transactions contemplated by the Business Combination Agreement,

each such ANEW Supporting Stockholder will appear at the meeting or otherwise cause its shares to be voted (i) in favor of the Business

Combination Agreement and the transactions contemplated thereby, and authorize and approve any amendment to ANEW’s governing documents

that is deemed necessary or advisable by ANEW to effect the Merger;

and (ii) against any other action would reasonably be expected to

impede, interfere with or adversely affect the Merger.

The ANEW Support Agreement also restricts the

ANEW Supporting Stockholders from, among other things, selling, assigning or otherwise transferring any of its shares unless the buyer,

assignee or transferee thereof executes a joinder agreement to the ANEW Support Agreement in a form reasonably acceptable to the Company.

See the Registration Statement on Form S-4 filed

by the Company with the SEC on August 4, 2023 for additional information

On June 29, 2023, the Sponsor made a deposit of

$360,000 to the Trust Account and extended the period of time we have to consummate an initial Business Combination from July 4, 2023

to October 4, 2023.

Results of Operations

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generated any operating revenues to date.

Our only activities through March 31, 2023 were organizational activities and those necessary

Our only activities through June 30, 2023 were organizational activities and those necessary

to prepare for our IPO, which is described below, and subsequent to the IPO, identifying a target company for an initial business combination.

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as well as for due diligence expenses in connection with searching for, and completing, an initial business combination.

For the three months ended March 31, 2023, we had

net income of $1,120,611 which consisted of general and administrative expenses of $293,654, franchise tax of $32,100, increase in fair

value of warrant liabilities of $10,600, change in fair value of convertible promissory notes of $462,670 and income tax expense of $255,773,

For the three months ended June 30, 2023, we had

a net loss of $153,546 which consisted of general and administrative expenses of $324,051, franchise tax of $33,900, an increase in fair

value of warrant liabilities of $21,200, increase in fair value of convertible promissory notes of $462,670 and income tax expense of

$173,949, offset by interest earned on the investments held in the Trust Account of $862,224.

For the three months ended March 31, 2022, we had

a net loss of $5,010, all of which were derived from general and administrative expenses.

Liquidity and Capital Resources

For the three months ended June 30, 2022,

we had a net loss of $208,826 which consisted of general and administrative expenses of $193,440, franchise tax of $39,300, and an increase

in fair value of warrant liabilities of $122,483, offset by interest earned on the investments held in the Trust Account of $146,397.

For the six months ended June 30, 2023, we had

net income of $967,065 which consisted of general and administrative expenses of $617,705, franchise tax of $ 66,000, an increase in fair

value of warrant liabilities of $31,800, and income tax expense of $429,722, offset by interest earned on the investments held in the

Trust Account of $2,112,292.

For the six months ended June 30, 2022, we had a net loss of $213,836 which consisted of general and administrative

expenses of $198,450, franchise tax of $39,300, and an increase in fair value of warrant liabilities of $122,483, offset by interest earned

on the investments held in the Trust Account of $146,397.

Liquidity, Capital Resources and Going Concern

On April 4, 2022, we completed our initial public

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of an initial business combination) and $1,177,839 of other offering costs.

On March 31, 2023, we held a special meeting of stockholders,

at which the Company’s stockholders approved (i) an amendment to the Company’s amended and restated certificate of incorporation

(the “Extension Amendment”) and (ii) an amendment (the “Trust Amendment”) to the Investment Management Trust Agreement,

dated March 30, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as trustee, extending the date by

which the Company must consummate a business combination from April 4, 2023 to July 4, 2023, with the ability to further extend the deadline

on a monthly basis up to five times from July 4, 2023 to December 4, 2023.

In connection with the stockholders’ vote at the special

meeting, an aggregate of 6,103,350 shares of the Company’s common stock were tendered for redemption representing a total redemption

amount of $63,169,451 (or $10.35 per share).

On March 31, 2023, we held a special meeting of

stockholders, at which the Company’s stockholders approved (i) an amendment to the Company’s amended and restated certificate

of incorporation (the “Extension Amendment”) and (ii) an amendment (the “Trust Amendment”) to the Investment Management

Trust Agreement, dated March 30, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as trustee, extending

the date by which the Company must consummate a business combination from April 4, 2023 to July 4, 2023, with the ability to further extend

the deadline on a monthly basis up to five times from July 4, 2023 to December 4, 2023.

In connection with the stockholders’ vote

at the special meeting, an aggregate of 6,103,350 shares of the Company’s common stock were tendered for redemption representing

a total redemption amount of $63,169,451 (or $10.35 per share).

As a result of the approval of the Extension Amendment

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held outside of the Trust Account.

As of March 31, 2023, we had marketable securities

held in the Trust Account of $119,416,545 consisting of securities held in a treasury trust fund that invests in U.S.

As of June 30, 2023, we had marketable securities

held in the Trust Account of $56,950,088 consisted of securities held in a treasury trust fund that invests in U.S.

securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less.

Interest income on the balance in the Trust Account may be used by us to pay taxes.

Through March 31, 2023, we did not withdraw any interest

Through June 30, 2023, we did not withdraw any interest

earned on the Trust Account to pay our taxes.

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if the funds available to us outside of the Trust Account were insufficient to cover such expenses.

As of March 31, 2023, the Company had cash of $117,985 and a working

capital deficit of $598,362 (excluding redemptions payable to public stockholders and income tax and franchise tax payable as these amounts

will be paid out of the Trust Account).

On March 22 and March 30, 2023, the Sponsor provided a loan of up to $150,000 and $360,000, respectively,

to be used, in part, for transaction costs related to the Business Combination.

Until consummation of the Business Combination, we intend

to use the funds held outside the Trust Account for identifying and evaluating prospective acquisition candidates, performing business

due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses,

reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring,

negotiating and consummating the Business Combination.

If our 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, we may have insufficient funds

available to operate our business prior to our Business Combination.

In this event, our officers, directors or their affiliates may, but

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

If we consummate an initial Business Combination, we would repay such loaned amounts

out of the proceeds of the Trust Account released to us upon consummation of the Business Combination.

In the event that a Business Combination

does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds

from our Trust Account would be used for such repayment.

The terms of such loans by our initial shareholders, officers and directors,

if any, have not been determined and no written agreements exist with respect to such loans.

The Company has incurred and expects to continue to incur significant

professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of

a 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 July 4, 2023 (or December 4, 2023, if the Company extends the time to complete a Business Combination) to complete

a Business Combination.

As of June 30, 2023, the Company had cash of $123,722

and a working capital deficit of $646,300 (excluding redemptions payable to public stockholders and income tax and franchise tax payable

as these amounts will be paid out of the Trust Account).

On March 22, March 30, and June 28, 2023, the Sponsor provided a loan of $150,000,

$360,000 and $360,000, respectively, to be used, in part, for transaction costs related to the Business Combination.

Until consummation

of the Business Combination, we intend to use the funds held outside the Trust Account for identifying and evaluating prospective acquisition

candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations

of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the

target business to acquire and structuring, negotiating and consummating the Business Combination.

If our 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, we may have insufficient funds available to operate our business prior to our Business Combination.

In this event, our officers,

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

If we consummate an initial Business Combination,

we would repay such loaned amounts out of the proceeds of the Trust Account released to us upon consummation of the Business Combination.

In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to

repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment.

The terms of such loans by our initial

shareholders, officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.

The Company has incurred and expects to continue

to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of

the consummation of a 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 October 4, 2023 (or December 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

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.

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We have no obligations, assets or liabilities,

which would be considered off-balance sheet arrangements as of March 31, 2023.

which would be considered off-balance sheet arrangements as of June 30, 2023.

We do not participate in transactions that create relationships

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Contractual Obligations

Convertible Promissory Notes – Related Party

Convertible Promissory Notes – Related

On March 22, 2023, we issued an unsecured, non-interest

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of the Business Combination.

On May 15, 2023, the conversion feature of

Convertible Note 1 and Convertible Note 2 was amended;

the holder of the convertible promissory notes, in its sole discretion, may

convert any or all of the unpaid principal under the convertible promissory notes into shares of common stock of the Company, at a

conversion price of $10.00 per share, upon consummation of the Business Combination.

On June 28, 2023, the Company issued an

unsecured, non-interest bearing promissory note in the principal amount of $360,000 to the Sponsor (“Convertible Note

Convertible Note 3 is payable upon the closing of the Business Combination or the liquidation of the Company.

of the Convertible Note 3, in its sole discretion, may convert any or all of the unpaid principal under the convertible promissory

notes into shares of common stock of the Company, at a price of $10.00 per share, upon consummation of the Business Combination.

Registration Rights

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Critical Accounting Policies

The preparation of unaudited condensed financial

statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets

and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported.

results could materially differ from those estimates.

We have identified the following critical accounting policies:

The preparation of unaudited condensed

consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United

States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,

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

and expenses during the periods reported.

Actual results could materially differ from those estimates.

We have identified the

following critical accounting policies:

Investments Held in Trust Account

As of March 31, 2023, the assets held in the Trust

As of June 30, 2023, the assets held in the Trust

Account were held in cash and U.S.

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

The fair value of the Company’s

certain assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and

Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet.

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, 2023 and December 31, 2022 due to the short maturities of such instruments.

See Note 9 to unaudited condensed

consolidated financial statements for the disclosure of the Company’s assets and liabilities that were measured at fair value

on a recurring basis.

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 March 31, 2023 and December 31,

current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of June 30, 2023 and December 31,

2022 due to the short maturities of such instruments.

See Note 9 to unaudited condensed financial statements for the disclosure of the

Company’s assets and liabilities that were measured at fair value on a recurring basis.

The fair value of the Company’s certain assets

and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates

the carrying amounts represented in the consolidated balance sheet.

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 March 31, 2023 and December 31, 2022 due

to the short maturities of such instruments.

See Note 9 for the disclosure of the Company’s assets and liabilities that were measured

at fair value on a recurring basis.

See Note 9 for the disclosure of the Company’s assets and liabilities that

were measured at fair value on a recurring basis.

Convertible Promissory Note

accounts for their convertible promissory notes under ASC 815, “Derivatives and Hedging” (“ASC 815”).

815-15-25, the election can be at the inception of a financial instrument to account for the instrument under the fair value option under

The Company has made such election for their convertible promissory notes.

Using the fair value option, each convertible promissory

note is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter.

the estimated fair value of the notes are recognized as a non-cash gain or loss on the statements of operations.

initially accounted for its convertible promissory notes under ASC 815, “Derivatives and Hedging” and elected the fair value

option under ASC 825.

Using the fair value option method, each convertible promissory note is required to be recorded at its initial fair

value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair value of the notes are recognized

as a non-cash gain or loss on the statements of operations.

Subsequently,

the conversion feature of the convertible promissory notes was amended on May 15, 2023;

the holder of the convertible promissory notes,

in its sole discretion, may convert any or all of the unpaid principal under the convertible promissory notes into common stocks of the

Company (see Note 6).

As a result, the Company assessed the change in conversion feature and determined that the convertible promissory

notes should be recorded as debt (liability) at cash proceeds on the balance sheet.

The Company’s assessment of the embedded conversion

feature considered the derivative scope exception guidance under ASC 815 pertaining to equity classification of contracts in an entity’s

The Company’s assessment was also based

on ASC 470-50 – Debt Modifications and Exchanges;

management determined that the amended conversion option (which is based on shares

of the Company’s common stocks) is substantially different from the original conversion option (which was based on units).

each unit consists of one share of common stock, one share of right convertible into one-tenth (1/10) of one share of common stock upon

the consummation of a Business Combination, the original conversion option offers at least 10% more shares of common stock (including

underlying shares from the rights conversion) than the amended conversion option.

As such, a remeasurement under ASC 825 has occurred

and the previously selected fair value option is no longer applied.

The convertible promissory notes were recorded as debt (liability)

at cash proceeds on the balance sheet effective May 15, 2023.

For all newly issued and unmodified convertible promissory notes, the

Company elects an early adoption of 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”) and accounts for newly issued s as debt (liability) on the balance sheet.

considers the derivative scope exception guidance under ASC 815 pertaining to equity classification of contracts in an entity’s

The Company accounts for warrants (Public Warrants

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as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair

value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

The Company has elected to account

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

Changes in the estimated

fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

The Company has elected to

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

Common Stock Subject to Possible Redemption

We account for our common stock subject to possible

conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities

from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value.

Conditionally

redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject

to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity.

At all other times,

common stock is classified as stockholders’ equity.

Our common stock features certain redemption rights that are considered to be

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

Accordingly, common stock subject to possible redemption

is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our condensed balance sheets.

We recognize 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.

We account for our common stock subject to

possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480,

“Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability

instrument and measured at fair value.

Conditionally redeemable common stock (including common stock that features redemption rights

that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within

our control) is classified as temporary equity.

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

common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of

uncertain future events.

Accordingly, common stock subject to possible redemption is presented at redemption value as temporary

equity, outside of the stockholders’ equity section of our unaudited condensed consolidated balance sheets.

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.

stock are affected by charges against additional paid in capital or accumulated deficit if additional paid in capital equals to

Net Income (Loss) Per Share

18 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis