What changed in this filing

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Item 1. Financial Statements

2023-11-17 compared with 2023-08-21 · 342 added, 231 removed, 882 unchanged (39% of the section changed)

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CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets

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Commitments and Contingencies

Common stock subject to possible redemption, 5,396,650 shares and 11,500,000 shares at redemption value of $10.47 and $ 10.21 per share as of June 30, 2023 and December 31, 2022, respectively

Common stock subject to possible redemption, 5,396,650 shares and 11,500,000 shares at redemption value of $ 10.60 and $ 10.21 per share as of September 30, 2023 and December 31, 2022, respectively

Stockholders’ Deficit

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Three months ended

Six months ended

September 30,

Nine months ended

September 30,

General and administrative expenses

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Change in fair value of warrant liabilities

Income (loss) before income taxes

Income before income taxes

Income taxes provision

Net income (loss)

$ ( 153,546 )

$ ( 208,826 )

$ ( 213,836 )

Basic and diluted weighted average shares outstanding, redeemable common stock

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

For the Three and Six Months

Ended June 30, 2023

For the Three and Nine Months

Ended September 30, 2023

Stockholders’

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( 6,045,713 )

For the Three and Six Months

Ended June 30, 2022

Accretion of common stock to redemption value

Balance as of September 30, 2023

$ ( 6,435,880 )

$ ( 6,435,540 )

For the Three and Nine Months

Ended September 30, 2022

Stockholders’

equity(deficit)

Balance, January 1, 2022

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$ ( 4,280,048 )

Accretion of common stock to redemption value

Balance as of September 30, 2022

$ ( 4,007,863 )

$ ( 4,007,523 )

The accompanying notes are an integral part of

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

Net Income (loss)

$ ( 213,836 )

Adjustments to reconcile net cash used in operating activities:

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Net cash used in operating activities

( 1,013,860 )

Cash flows from investing activities:

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Accretion of Common stock to redemption value

Redeemed common stock payable

$ ( 3,016,543 )

Excise tax liability

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REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Note 1 — Description of Organization and Business Operations

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(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 June 30, 2023, the Company had not commenced

any operations.

All activities through June 30, 2023 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 generates 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

or “Redwoods”) is a newly organized blank check company incorporated as a Delaware corporation on March 16, 2021.

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, 2023, the Company had not

commenced any operations.

All activities through September 30, 2023 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 generates

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

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in the Trust Account.

On March 31, 2023, the Company 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 with

redemption value of approximately $ 63,169,451 (or $ 10.35 per share) of the Company’s common stock were tendered for

On June 29, 2023, the Sponsor made a deposit of $ 360,000 to the Trust

Account and extended the period of time the Company has to consummate an initial Business Combination from July 4, 2023 to October 4,

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 March 31, 2023, the Company 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 (the “Trust Agreement”), by and between the Company and Continental

Stock Transfer & Trust Company, as trustee (the “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 with redemption value of approximately $ 63,169,451 (or $ 10.35 per share) of the Company’s common stock were tendered for

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

As a result of 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.

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 March 31, 2023, the Sponsor made a deposit

of $ 360,000 into the Trust Account and extended the period of time the Company has to consummate an initial Business Combination from

April 4, 2023 to July 4, 2023, on June 29, 2023, the Sponsor made a deposit of $ 360,000 into the Trust Account and extended the period

of time the Company has to consummate an initial Business Combination from July 4, 2023 to October 4, 2023, and subsequently on each of

September 26, 2023 and November 1, 2023, the Sponsor made a deposit of $ 120,000 into the Trust Account to further extend the business

combination period to December 4, 2023.

On November 13, 2023, the Company 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 “Second Extension Amendment”) to allow the Company to extend the date by which the Company

must consummate a business combination up to twelve (12) times for an additional one month each time from December 4, 2023 to December

4, 2024 and (ii) an amendment to the Trust Agreement (the “Second Trust Amendment”) to allow the Company to extend the date

on which the Trustee must liquidate the Trust Account by up to twelve (12) times for an additional one month each time from December

4, 2023 to December 4, 2024 by depositing $ 35,000 per month for each monthly extension.

In connection with the stockholders’ vote

at the special meeting, an aggregate of 3,636,456 shares with redemption value of approximately $ 39,255,410 (or $ 10.79 per share) of

the Company’s common stock were tendered for redemption.

The Company will provide its holders of the outstanding

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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.

and Restated Certificate of Incorporation (as amended, 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.

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.

The Initial Stockholders and Chardan have agreed

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Public Shares in conjunction with any such amendment.

The Company has until October 4, 2023 (after depositing

$ 360,000 into the Trust Account on June 29, 2023) to consummate a Business Combination.

In addition, if the Company anticipates that it

may not be able to consummate a Business Combination by such date, the Sponsor or its affiliates may extend the period of time to consummate

a Business Combination five times by an additional one month each time to December 4, 2023 (for a total of 20 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 Sponsor or its affiliates or designees, within two business days prior to the applicable deadline, must deposit into the Trust Account

$120,000 for each subsequent one-month extension.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The Company has until December 4, 2023 (unless

further extended monthly up to December 4, 2024 as allowed under the Company’s amended and restated certificate of incorporation,

as amended) to consummate a Business Combination.

As a result of stockholder approval of the Second Extension Amendment and the Second

Trust Amendment, in order to extend the period of time available for the Company to consummate a Business Combination (the “Combination

Period”), the Sponsor, or any of its affiliates or designees, within two business days prior to the applicable deadline, must deposit

$35,000 into the Trust Account for each additional one-month extension.

If the Company is unable to complete a Business

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

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

In connection with the execution of the Business

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

On November 4, 2023, Redwoods entered into Amendment

1 to the Business Combination (the “Amendment”) with the other parties thereto.

The Amendment extends the termination

date under the Business Combination Agreement from November 4, 2023 to March 4, 2024 (the “Termination Date”);

provided, further,

that (i) the right to terminate the Business Combination Agreement will not be available to Redwoods if any Redwoods party’s breach

of any of its covenants or obligations under the Business Combination Agreement will have proximately caused the failure to consummate

the transactions contemplated by the Business Combination Agreement on or before the Termination Date, and (ii) the right to terminate

the Business Combination Agreement will not be available to the Company if the Company’s breach of its covenants or obligations

under the Business Combination Agreement will have proximately caused the failure to consummate the transactions contemplated by the Business

Combination Agreement on or before the Termination Date.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Liquidity, Capital Resources and Going Concern

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

and a working capital deficit of $ 646,300 (excluding income tax and franchise tax payable as the taxes will be paid out of the Trust Account).

On March 22, 2023, March 30, 2023, 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 (see Note 6).

The Company has until October 4, 2023 (or December

4, 2023, if the time to complete a business combination is extended as described herein) to consummate a Business Combination.

As of September 30, 2023, the Company had cash

of $ 146,334 and a working capital deficit of $ 755,526 (excluding income tax and franchise tax payable as the taxes will be paid out of

the Trust Account).

On March 22, 2023, March 30, 2023, June 28, 2023, August 29, 2023 and September 25, 2023, the Sponsor provided a loan

of $ 150,000 , $ 360,000 , $ 360,000 , $ 150,000 , and $ 120,000 , respectively, to be used, in part, for transaction costs related to the Business

Combination (see Note 6).

The Company has until December 4, 2023 (unless further extended monthly up to December 4, 2024 as allowed under

the Company’s amended and restated certificate of incorporation, as amended) to consummate a Business Combination.

It is uncertain

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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 stockholders, there will be a

mandatory liquidation and subsequent dissolution of the Company.

Management has determined that the date for liquidation and subsequent

dissolution as well as liquidity concerns raise substantial doubt about the Company’s ability to continue as a going concern.

financial statement does not include any adjustments that might result from the outcome of this uncertainty.

Risks and Uncertainties

Management has evaluated the impact of

persistent inflation and rising interest rates, financial market instability, including the recent bank failures, the lingering

effects of the COVID-19 pandemic and certain geopolitical events, including the conflict in Ukraine and the surrounding region, and

has concluded that while it is reasonably possible that the risks and uncertainties related to or resulting from these events could

have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the

specific impact is not readily determinable as of the date of these unaudited condensed consolidated financial statements.

unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these

December 4, 2023 (unless further extended monthly up to December 4, 2024 as allowed under the Company’s amended and restated certificate

of incorporation, as amended) to consummate 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.

has determined that the date for liquidation and subsequent dissolution as well as liquidity concerns 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 has evaluated the impact of persistent

inflation and rising interest rates, financial market instability, including the recent bank failures, the lingering effects of the COVID-19

pandemic and certain geopolitical events, including the conflict in Ukraine and the surrounding region, and has concluded that while it

is reasonably possible that the risks and uncertainties related to or resulting from these events could have a negative effect on the

Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable

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

The unaudited condensed consolidated financial statements

do not include any adjustments that might result from the outcome of these risks and uncertainties.

Inflation Reduction Act of 2022

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repurchases that occur after December 31, 2022.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Any redemption or other repurchase that occurs

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in March 2023;

as a result, the Company recorded $ 631,696 excise tax liability as of June 30, 2023.

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

as a result, the Company recorded $ 631,696 excise tax liability as of September 30, 2023.

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.

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Basis of Presentation

The accompanying unaudited condensed

consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of

America (“GAAP”) and pursuant to the rules and regulations of the SEC, and include all normal and recurring adjustments

that management of the Company considers necessary for a fair presentation of its financial position and operation results.

Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the

year ending December 31, 2023 or any future period.

These financial statements should be read in conjunction with the

Company’s 2022 Annual Report on Form 10-K as filed with the SEC on April 10, 2023.

The accompanying unaudited condensed consolidated

financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”)

and pursuant to the rules and regulations of the SEC, and include all normal and recurring adjustments that management of the Company

considers necessary for a fair presentation of its financial position and operation results.

Operating results for the nine months ended

September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or any future

These financial statements should be read in conjunction with the Company’s 2022 Annual Report on Form 10-K as filed with

the SEC on April 10, 2023.

Emerging Growth Company

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standards used.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Use of Estimates

In preparing these unaudited condensed

consolidated 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 consolidated 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 consolidated 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.

In preparing these unaudited condensed consolidated

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 consolidated

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 consolidated 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.

Cash and Cash Equivalents

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The Company had $ 146,334 and $ 340,962 in cash and

did not have any cash equivalents as of June 30, 2023 and December 31, 2022, respectively.

did not have any cash equivalents as of September 30, 2023 and December 31, 2022, respectively.

Investments Held in Trust Account

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

Account were held in cash and U.S.

As of September 30, 2023, 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 balance sheets at fair value at the end of each reporting period.

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 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

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

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 consolidated 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 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 consolidated 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 33.91 %

and 0.00 % for the three months ended June 30, 2023 and 2022, respectively, and 30.76 % and 0.00 % for six months ended June 30, 2023 and

2022, respectively.

The effective tax rate differs from the statutory tax rate of 21 % for the three and six months ended June 30, 2023

and 2022, due to change in fair value of warrants and convertible notes and the change in valuation of deferred tax assets.

and 9.84 % for the three months ended September 30, 2023 and 2022, respectively, and 31.52 % and 13.36 % for nine months ended September 30,

2023 and 2022, respectively.

The effective tax rate differs from the statutory tax rate of 21 % for the three and nine months ended September

30, 2023 and 2022, due to change in fair value of warrants, the change in valuation of deferred tax assets and non-deductible M&A

ASC 740 also clarifies the accounting for uncertainty

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

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

While ASC 740 identifies usage of an effective

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As such, the Company is computing its taxable

income (loss) and associated income tax provision based on actual results through June 30, 2023.

income (loss) and associated income tax provision based on actual results through September 30, 2023.

The Company recognizes accrued interest and penalties

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

and penalties as of June 30, 2023 and December 31, 2022.

The Company is currently not aware of any issues under review that could result

in significant payments, accruals or material deviation from its position.

and penalties as of September 30, 2023 and December 31, 2022.

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 has identified the United States and

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Net Loss Per Share

The Company complies with accounting and

disclosure requirements of FASB ASC 260, Earnings Per Share.

The unaudited condensed consolidated 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 June 30, 2023, 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 Company complies with accounting and disclosure

requirements of FASB ASC 260, Earnings Per Share.

The unaudited condensed consolidated 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.

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, 2023, 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

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) $ ( 153,546 ) $ ( 208,826 ) $ 967,065 $ ( 213,836 )

Net income $ 290,145 $ 731,121 $ 1,257,210 $ 517,286

Accretion of common stock to redemption value (1) ( 679,973 ) ( 27,171,067 ) ( 3,016,544 ) ( 27,171,067 )

Net loss including accretion of common stock to redemption value $ ( 389,828 ) $ ( 26,439,946 ) $ ( 1,759,334 ) $ ( 26,653,781 )

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Three Months Ended

June 30, 2023

September 30, 2023

Three Months Ended

June 30, 2022

September 30, 2022

Basic and diluted net income/(loss) per share:

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Basic and diluted net income (loss) per share

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

Nine Months Ended

Basic and diluted net income/(loss) per share:

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Basic and diluted net income (loss) per share

(1) Accretion

amount includes fees deposited into the Trust Account to extend the time for the Company to complete the Business Combination and franchise

and income taxes paid out of the Trust Account.

Accretion amount includes fees deposited into the Trust Account to extend the time for the Company to complete the Business Combination and franchise and income taxes paid out of the Trust Account.

Concentration of Credit Risk

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the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The fair value hierarchy is categorized into three

9 unchanged sentences

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,

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

2022 due to the short maturities of such instruments.

1 unchanged sentence

were measured at fair value on a recurring basis.

Promissory Note

Promissory Notes

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

24 unchanged sentences

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

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.

The Company considers the derivative scope exception guidance under ASC 815 pertaining to equity classification

of contracts in an entity’s own equity.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The Company accounts for warrants (Public Warrants

30 unchanged sentences

value at the end of each reporting period.

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

Increases or decreases in the carrying number 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.

5 unchanged sentences

Trust Account

As of June 30, 2023 and December 31, 2022, investment

securities in the Company’s Trust Account consisted of $ 56,950,088 and $ 117,806,478 in cash and U.S.

Treasury securities, respectively.

As of September 30, 2023 and December 31, 2022,

investment securities in the Company’s Trust Account consisted of $ 57,811,916 and $ 117,806,478 in cash and U.S.

Treasury securities,

respectively.

The following table presents information about

the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2023 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, 2023 and indicates the fair value

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

September 30,

Marketable securities held in Trust Account

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Marketable securities held in Trust Account

33 unchanged sentences

retained earnings, additional paid-in capital).

As of June 30, 2023, the shares of common stock

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

As of September 30, 2023, the shares of common

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

Gross proceeds

7 unchanged sentences

Accretion of carrying value to redemption value

Class A Common stock subject to possible redemption– December 31, 2022

Common stock subject to possible redemption– December 31, 2022

$ 117,361,652

Accretion of carrying value to redemption value – six months period ended June 30, 2023

Accretion of carrying value to redemption value – nine months period ended September 30, 2023

Redeemed common stock payable to public stockholders

( 63,169,451 )

Class A Common stock subject to possible redemption– June 30, 2023

Common stock subject to possible redemption– September 30, 2023

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Note 5 — Private Placement

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are currently subject to forfeiture.

As of June 30, 2023, there were 2,875,000 Insider Shares issued and outstanding.

As of September 30, 2023, there were 2,875,000 Insider Shares issued and outstanding.

The Initial Stockholders have agreed, subject

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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

Promissory Notes — Related Party

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

3 unchanged sentences

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

As of June 30, 2023, the Company had

no borrowings under the Promissory Notes.

As of September 30, 2023, the Company

had no borrowings under the Promissory Notes.

On March 22, 2023, the Company issued an unsecured,

1 unchanged sentence

2023, the Company issued an unsecured, non-interest bearing promissory note in the principal amount of $ 360,000 to the Sponsor (“Convertible

Both convertible promissory notes are payable upon the closing of the Business Combination or the liquidation of the Company.

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 Private Units of the Company, at a price of $ 10.00 per unit, upon consummation 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.

As of June 30, 2023, a total amount of $ 870,000

was outstanding under the three convertible promissory notes.

These promissory notes are payable upon the closing of the Business Combination or the liquidation of the Company.

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

Private Units of the Company, at a price of $ 10.00 per unit, upon consummation 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 promissory notes, in its sole discretion, may convert any or all of the unpaid

principal under the 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.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

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 3”).

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

The holder of the Convertible Note 3,

in its sole discretion, may convert any or all of the unpaid principal under the promissory note into shares of common stock of the Company,

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

On August 29, 2023, the Company issued an unsecured,

non-interest bearing promissory note in the principal amount of $ 150,000 to the Sponsor (“Convertible Note 4”).

Note 4 is payable upon the closing of the Business Combination or the liquidation of the Company.

The holder of the Convertible Note 4,

in its sole discretion, may convert any or all of the unpaid principal under the promissory note into shares of common stock of the Company,

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

On September 25, 2023, the Company issued an unsecured,

non-interest bearing promissory note in the principal amount of $ 120,000 to the Sponsor (“Convertible Note 5”).

Note 5 is payable upon the closing of the Business Combination or the liquidation of the Company.

The holder of the Convertible Note 5,

in its sole discretion, may convert any or all of the unpaid principal under the promissory note into shares of common stock of the Company,

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

As of September 30, 2023, a total amount of $ 1,140,000

was outstanding under all five promissory notes.

Related Party Loans

14 unchanged sentences

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

As of June 30, 2023, the Company had no borrowings

As of September 30, 2023, the Company had no borrowings

under the working capital loans.

7 unchanged sentences

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

For the six months ended June

30, 2023 and 2022, the Company incurred $ 60,000 and $ 30,000 , respectively, in fees for these services, of which $ 150,000 and $ 90,000 were

included in accrued expenses in the accompanying unaudited condensed consolidated balance sheets as of June 30, 2023 and December 31,

2022, respectively.

For the nine months ended

September 30, 2023 and 2022, the Company incurred $ 90,000 and $ 30,000 , respectively, in fees for these services, of which $ 180,000 and

$ 90,000 were included in accrued expenses in the accompanying unaudited condensed consolidated balance sheets as of September 30, 2023

and December 31, 2022, respectively.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Note 7 — Commitments and

61 unchanged sentences

of the Company or any of its successors or subsidiaries.

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Note 8 — Stockholders’

3 unchanged sentences

entitled to one vote for each share.

At June 30, 2023, there were 3,405,000 shares of common stock issued and outstanding (excluding 5,396,650

At September 30, 2023, there were 3,405,000 shares of common stock issued and outstanding (excluding

5,396,650 shares subject to possible redemption).

52 unchanged sentences

● at a price of $ 0.01 per warrant;

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the 30-day redemption period;

28 unchanged sentences

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

Note 9 —Fair Value Measurements

Note 9 — Fair Value

The fair value of the Company’s consolidated

12 unchanged sentences

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

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The following table presents information about

the Company’s liabilities that are measured at fair value on June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, and indicates the fair value

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

September 30,

Warrant liability

5 unchanged sentences

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

as of June 30, 2023:

as of September 30, 2023:

Fair value at January 1, 2023

Change in fair value

Fair value as of June 30, 2023

Fair value as of September 30, 2023

The Company established the initial fair value

5 unchanged sentences

measurement date due to the use of unobservable inputs.

The key inputs into the Black-Scholes model were as follows at their

measurement date:

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

REDWOODS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

The fair value of the Convertible Note 1 was estimated

16 unchanged sentences

Fair value as of March 31, 2023

As a result of amendments to the conversion feature of Convertible

Note 1 and Convertible Note 2, 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.

June 30, 2023, the Convertible Note 1 and Convertible Note 2 were recorded at $ 150,000 and $ 360,000 , respectively, based on the cash proceeds

on March 22, 2023 and March 30, 2023.

As a result of amendments to the conversion feature

of Convertible Note 1 and Convertible Note 2, 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.

As of September 30, 2023, the Convertible Note 1 and Convertible Note 2 were recorded at $ 150,000 and $ 360,000 , respectively,

based on the cash proceeds on March 22, 2023 and March 30, 2023.

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 the date that the unaudited condensed consolidated financial statements were issued.

Based on this review, the Company did not

identify any subsequent events that would have required disclosure in the unaudited condensed consolidated financial statements.

In accordance with ASC 855, “Subsequent

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

the unaudited condensed consolidated financial statements were issued.

Based on this review, as further disclosed in the footnotes and

except as disclosed below, the Company did not identify any subsequent events that would have required disclosure in the unaudited condensed

consolidated financial statements.

On November 1, 2023, the Sponsor made a deposit

of $ 120,000 into the Trust Account to further extend the business combination period from November 4, 2023 to December 4, 2023.

On November 4, 2023, Redwoods entered into Amendment

1 to the Business Combination (the “Amendment”) with the other parties thereto.

The Amendment extends the termination

date under the Business Combination Agreement from November 4, 2023 to March 4, 2024 (the “Termination Date”);

provided, further,

that (i) the right to terminate the Business Combination Agreement will not be available to Redwoods if any Redwoods party’s breach

of any of its covenants or obligations under the Business Combination Agreement will have proximately caused the failure to consummate

the transactions contemplated by the Business Combination Agreement on or before the Termination Date, and (ii) the right to terminate

the Business Combination Agreement will not be available to the Company if the Company’s breach of its covenants or obligations

under the Business Combination Agreement will have proximately caused the failure to consummate the transactions contemplated by the Business

Combination Agreement on or before the Termination Date.

On November 13, 2023, the Company held a special

meeting of stockholders, at which the Company’s stockholders approved (i) the Second Extension Amendment and (ii) the Second Trust

In connection with the stockholders’ vote at the special meeting, an aggregate of 3,636,456 shares with redemption value

of approximately $ 39,255,410 (or $ 10.79 per share) of the Company’s common stock were tendered for redemption.

Following the special meeting on November 13,

2023, the Company and the Trustee entered into the Second Trust Amendment and the Company filed the Second Extension Amendment with the

Secretary of State of the State of Delaware which became effective upon filing.

Pursuant to the Second Extension Amendment, the Company

is permitted to extend the date by which the Company must consummate an initial business combination on a monthly basis up to twelve times

from December 4, 2023 to December 4, 2024 by depositing $ 35,000 for each monthly extension in accordance with the terms of the Second

Trust Amendment.

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