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Item 9A. Controls and Procedures

2024-04-17 compared with 2023-04-10 · 1349 added, 1027 removed, 573 unchanged (81% of the section changed)

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Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2023, our disclosure controls

and procedures were effective.

We do not expect that our

disclosure controls and procedures will prevent all errors and all instances of fraud.

Disclosure controls and procedures, no matter how

well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures

Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the

benefits must be considered relative to their costs.

Because of the inherent limitations in all disclosure controls and procedures, no

evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and

instances of fraud, if any.

The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood

of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future

and procedures were not effective due to material weaknesses in controls over the protection of funds permitted for withdrawal from the

Trust account, including the timely payment of income and other tax liabilities.

Additionally, the Company lacks the controls needed to

assure that the accounting for its income tax payable and deferred tax liability is accurate and complete, including properly evaluating

classification of tax liabilities and differentiating them as current liability or non-current liability.

Finally, the Company lacks adequate

internal control over fair value measurement.

To address the material weakness management has implemented additional oversight of the cash availability for the Company’s operational

needs, which includes segregation of funds restricted for payment of taxes and the requirement for an additional member of the Company’s

management team to review and approve the disbursements from the Trust Account.

We also plan to enhance our internal control over accounting

for income tax and other tax liabilities and increase communication among our personnel and third-party professionals with whom we consult

regarding tax accounting.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud.

Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that

the objectives of the disclosure controls and procedures are met.

Further, the design of disclosure controls and procedures must reflect

the fact that there are resource constraints, and the benefits must be considered relative to their costs.

Because of the inherent limitations

in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we

have detected all our control deficiencies and instances of fraud, if any.

The design of disclosure controls and procedures also is based

partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving

its stated goals under all potential future conditions.

Management’s Report on Internal Controls Over Financial Reporting

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degree in Communications from University of Washington in 1987 and 1991, respectively.

Edward Cong Wang has been our Chief Financial Officer and a member of our board of directors

since January 2022.

Wang has also served as the managing partner at The Balloch (Holding) Group since March 2020.

Before that, he

was a partner at Prestige Financial Holdings Group Limited from August 2018 to September 2019.

Wang served as a partner at Shenzhen

Bode Chuangfu Investment Management Co.

Edward Cong Wang has

been our Chief Financial Officer and a member of our board of directors since January 2022.

Wang has also served as the managing partner

at The Balloch (Holding) Group since March 2020.

Before that, he was a partner at Prestige Financial Holdings Group Limited from August

2018 to September 2019.

Wang served as a partner at Shenzhen Bode Chuangfu Investment Management Co.

Ltd., from January 2017 to July

Wang served as the chief executive officer of ZS Fur

& Leather Fashion Co., a family owned business, from July 2014 to December 2016.

Prior to ZS Fur, he worked at Merrill Lynch, Pierce,

Fenner & Smith Incorporated as a vice president from July 2011 to June 2014.

Wang received a bachelor’s degree in Economics/Finance

from Stony Brook State University in 2006 and graduated with a master’s degree of Statistics from Columbia University in 2010.

Wang served as the chief executive officer of ZS Fur & Leather Fashion Co., a family owned business, from July 2014 to December

Prior to ZS Fur, he worked at Merrill Lynch, Pierce, Fenner & Smith Incorporated as a vice president from July 2011 to June

Wang received a bachelor’s degree in Economics/Finance from Stony Brook State University in 2006 and graduated with a

master’s degree of Statistics from Columbia University in 2010.

been a member of our board of directors since January 2022.

spent the last 21 years as chief financial officer or commercial director of high technology and fast moving consumer goods businesses

both in the quoted and private arenas.

Gibbs has co-chaired the UK-China Joint Working Group on Graphene Standardization, organized

by the BSI Group and the China Standards Authority, and he has served as the chairman of planarTECH LLC since July 2019.

he served as the president of business development and the chief executive officer of Haydale Graphene Industries PLC, a publicly listed

company in the UK, from May 2010 to July 2019.

He has spent the last 21 years as chief financial officer or commercial director

of high technology and fast moving consumer goods businesses both in the quoted and private arenas.

Gibbs has co-chaired the UK-China

Joint Working Group on Graphene Standardization, organized by the BSI Group and the China Standards Authority, and he has served as the

chairman of planarTECH LLC since July 2019.

In addition, he served as the president of business development and the chief executive officer

of Haydale Graphene Industries PLC, a publicly listed company in the UK, from May 2010 to July 2019.

Gibbs is a Chartered Accountant.

Gibbs received a bachelor’s degree from

Nottingham Trent University in 1977.

Gibbs received a bachelor’s degree from Nottingham Trent University in 1977.

Wei Kwang Ng has been

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The audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:

and discussing with management and the independent auditor the annual audited financial statements,

and recommending to the board whether the audited financial statements should be included

in our Form 10-K;

with management and the independent auditor significant financial reporting issues and judgments

made in connection with the preparation of our financial statements;

with management major risk assessment and risk management policies;

the independence of the independent auditor;

the rotation of the lead (or coordinating) audit partner having primary responsibility for

the audit and the audit partner responsible for reviewing the audit as required by law;

and approving all related-party transactions;

and discussing with management our compliance with applicable laws and regulations;

● pre-approving

all audit services and permitted non-audit services to be performed by our independent auditor,

including the fees and terms of the services to be performed;

or replacing the independent auditor;

● determining

the compensation and oversight of the work of the independent auditor (including resolution

of disagreements between management and the independent auditor regarding financial reporting)

for the purpose of preparing or issuing an audit report or related work;

● establishing

procedures for the receipt, retention and treatment of complaints received by us regarding

accounting, internal accounting controls or reports which raise material issues regarding

our financial statements or accounting policies;

reimbursement of expenses incurred by our management team in identifying potential target

● reviewing and discussing with

management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial

statements should be included in our Form 10-K;

● discussing with management

and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial

● discussing with management

major risk assessment and risk management policies;

● monitoring the independence

of the independent auditor;

● verifying the rotation of the

lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the

audit as required by law;

● reviewing and approving all

related-party transactions;

● inquiring and discussing with

management our compliance with applicable laws and regulations;

● pre-approving all audit services

and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;

● appointing or replacing the

independent auditor;

● determining the compensation

and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor

regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;

● establishing procedures for

the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which

raise material issues regarding our financial statements or accounting policies;

● approving reimbursement of

expenses incurred by our management team in identifying potential target businesses.

Financial Experts on Audit Committee

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duties, which are specified in our Compensation Committee Charter, include, but are not limited to:

and approving on an annual basis the corporate goals and objectives relevant to our Chief

Executive Officer and Chief Financial Officer’s compensation, evaluating our Chief

Executive Officer and Chief Financial Officer’s performance in light of such goals

and objectives and determining and approving the remuneration (if any) of our Chief Executive

Officer and Chief Financial Officer based on such evaluation;

and approving the compensation of all of our other executive officers;

our executive compensation policies and plans;

● implementing

and administering our incentive compensation equity-based remuneration plans;

management in complying with our proxy statement and annual report disclosure requirements;

all special perquisites, special cash payments and other special compensation and benefit

arrangements for our executive officers and employees;

a report on executive compensation to be included in our annual proxy statement;

evaluating and recommending changes, if appropriate, to the remuneration for directors.

● reviewing and approving on

an annual basis the corporate goals and objectives relevant to our Chief Executive Officer and Chief Financial Officer’s compensation,

evaluating our Chief Executive Officer and Chief Financial Officer’s performance in light of such goals and objectives and determining

and approving the remuneration (if any) of our Chief Executive Officer and Chief Financial Officer based on such evaluation;

● reviewing and approving the

compensation of all of our other executive officers;

● reviewing our executive compensation

policies and plans;

● implementing and administering

our incentive compensation equity-based remuneration plans;

● assisting management in complying

with our proxy statement and annual report disclosure requirements;

● approving all special perquisites,

special cash payments and other special compensation and benefit arrangements for our executive officers and employees;

● producing a report on executive

compensation to be included in our annual proxy statement;

● reviewing, evaluating and recommending

changes, if appropriate, to the remuneration for directors.

The charter also provides

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nominees, which are specified in the Nominating Committee Charter, generally provide that persons to be nominated:

have demonstrated notable or significant achievements in business, education or public service;

possess the requisite intelligence, education and experience to make a significant contribution

to the board of directors and bring a range of skills, diverse perspectives and backgrounds

to its deliberations;

have the highest ethical standards, a strong sense of professionalism and intense dedication

to serving the interests of the stockholders

● should have demonstrated notable

or significant achievements in business, education or public service;

● should possess the requisite

intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse

perspectives and backgrounds to its deliberations;

● should have the highest ethical

standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders

The nominating committee

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on our board of directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth

as of April 7, 2023 the number of shares of common stock beneficially owned by (i) each person who is known by us to be the beneficial

owner of more than five percent of our issued and outstanding shares of common stock;

(ii) each of our officers and directors;

all of our officers and directors as a group.

As of April 7, 2023, we had 8,801,650 shares of common stock issued and outstanding.

Unless otherwise indicated, we

believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially

owned by them.

The following table does not reflect record of beneficial ownership of any shares of common stock issuable upon exercise

of the warrants or conversion of the rights, as the warrants are not exercisable and the rights are not convertible within 60 days of

April 7, 2023.

Percentage of

information known to the Company regarding (i) the actual beneficial ownership of the Company’s common stock as of February 9,

2024 (before the business combination) and (ii) the expected beneficial ownership of the combined company’s common stock immediately

following consummation of the business combination, assuming that no public shares of the Company are redeemed, and alternatively the

maximum number of shares of the Company are redeemed, by:

● Each person who is, or is expected to be, the beneficial

owner of more than 5% of the outstanding shares of our common stock;

● Each of our current executive officers and directors;

● Each person who will become an executive officer or director

of the combined company;

● all executive officers and directors of the Company, as a

group, and of the combined company, as a group.

Beneficial ownership is determined

according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses

sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable

within sixty (60) days.

Except as described in the footnotes below and subject to applicable community property laws and similar laws,

we believe that each person listed above has sole voting and investment power with respect to such shares.

The beneficial ownership of

the Company’s common stock before the business combination is based on 5,165,194 shares of the Company’s common stock

issued and outstanding as of February 9, 2024.

The beneficial ownership of the combined company’s common stock immediately

following consummation of the business combination is based on an assumed 12,722,194 shares of the combined company’s common

stock issued and outstanding assuming that no public shares of the Company are redeemed, and 10,962,000 shares of the combined company’s

common stock issued and outstanding assuming that the maximum number of shares of the Company are redeemed, in each case assuming (i) that

no public stockholders exercise their redemption rights in connection with the initial business combination and (ii) all 12,030,000

public and private warrants which will become exercisable within sixty (60) days of the closing date of the initial business combination

are taken into account.

The maximum number of shares to be redeemed is calculated as 1,760,194 shares of the Company’s common

stock in connection with the initial business combination.

After the Business Combination

Before the Business Combination

No Redemption

Name and Address of Beneficial Owner (1)

Directors and Executive Officers Pre-Business Combination:

Edward Cong Wang

All officers and directors as a group (5 individuals)

All directors and executive officers prior to the business combination as a group (five individuals)

Five Percent Holders Pre-Business Combination:

Redwoods Capital LLC (2)

MMCAP International Inc.

MM Asset Management Inc.

* Less than one percent.

(1) Unless otherwise indicated, the business address of each of

the individuals is c/o Redwoods Acquisition Corp., 1115 Broadway 12th Floor, New York, NY 10010.

After the Business Combination

Before the Business Combination

No Redemption

Name and Address of Beneficial Owner (1)

Directors and Executive Officers Post-Business Combination:

Joseph Sinkule

Peter Moriarty

Samuel Zentman

Edward Cong Wang

All directors and executive officers of the Combined Company as a group (7 individuals)

Five Percent Holders Post-Business Combination:

Redwoods Capital LLC (2)

Joseph Sinkule

* Less than 1%.

(1) Unless otherwise noted, the business address of each of the

following entities or individuals listed under the headings “Directors and Executive Officers Pre-Business Combination” and

“Five Percent Holders Pre-Business Combination” is c/o Redwoods Acquisition Corp., 1115 Broadway, 12 th Floor,

New York, NY 10010.

(2) Redwoods Capital LLC, a Delaware limited liability company,

our sponsor, is controlled by Min Gan.

(3) Based on a Schedule 13G filed April 7, 2022, MMCAP International

SPC and MM Asset Management Inc.

have shared voting power over these shares.

The address of MMCAP International Inc.

Mourant Governance Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, P.O.

Box 1348, Grand Cayman, KY1-1108, Cayman Islands and

the address of MM Asset Management Inc.

is 161 Bay Street, TD Canada Trust Tower Ste 2240, Toronto, ON M5J 2S1 Canada.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Founder Shares

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Related Party Loans

On January 4, 2022 and February

28, 2022, the Sponsor agreed to loan us up to an aggregate amount of $200,000 to be used, in part, for transaction costs incurred in connection

with the IPO (the “promissory notes”).

The promissory notes were unsecured, interest-free and due on the closing the IPO.

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

On March 22, 2023, we issued

an unsecured, non-interest bearing promissory note in the principal amount of up to $150,000 to Redwoods Capital LLC, the Company’s

The note is payable upon the closing of the Company’s initial business combination or the liquidation of the Company.

holder of the note, in its sole discretion, may convert any or all of the unpaid principal under the note into private units of the Company,

at a price of $10.00 per unit, upon consummation of the Company’s initial business combination.

Convertible Note 1.

The promissory note is payable upon the closing of the Business Combination or the liquidation of the Company.

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

units of the Company, at a price of $10.00 per unit, upon consummation of the Business Combination.

On March 30, 2023, we issued

an unsecured, non-interest bearing promissory note in the principal amount of up to $360,000 to Redwoods Capital LLC, the Company’s

The note is payable upon the closing of the Company’s initial business combination or the liquidation of the Company.

holder of the note, in its sole discretion, may convert any or all of the unpaid principal under the note into private units of the Company,

at a price of $10.00 per unit, upon consummation of the Company’s initial business combination.

Convertible Note 2.

The promissory note is payable upon the closing of the Business Combination or the liquidation of the Company.

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

On June 28, 2023, the Company

issued Convertible Note 3.

Convertible 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 Convertible Note 4.

Convertible 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 Convertible Note 5.

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

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.

Working Capital Loans

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PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The firm of Friedman LLP,

or Friedman, acted as our independent registered public accounting firm from March 16, 2021 (inception) until October 11, 2022.

on information provided by Friedman, effective September 1, 2022, Friedman combined with Marcum LLP, or Marcum, and continued to operate

as an independent registered public accounting firm.

Friedman continued to serve as our independent registered public accounting firm

through October 11, 2022.

On October 11, 2022, our audit committee dismissed Friedman and engaged Marcum to serve as our independent registered

public accounting firm for the year ended December 31, 2022, effective immediately.

The following is a summary of fees paid to Friedman

and Marcum for services rendered.

year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021, fees for Friedman were approximately

$75,000 and $0, respectively, for the services Friedman performed in connection with our Initial Public Offering and the audit of our

financial for the period from January 1, 2022 to January 10, 2022 and for the period from March 16, 2021 (inception) through December

31, 2021, and two interim reviews.

For the year ended December 31, 2022, fees for Marcum were approximately $35,750 ($25,750 for the audit,

and $10,000 for the review), for the services Marcum performed in connection with the audit of our December 31, 2022 financial statements

included in this Annual Report on Form 10-K and one review.

The following is a summary of fees paid or to

be paid to Marcum LLP (“Marcum”) for services rendered.

Audit fees consist of fees

billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by

Marcum in connection with regulatory filings.

The aggregate fees billed by Marcum for professional services rendered for the audit of

our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required

filings with the SEC for the years ended December 31, 2023 and 2022 totaled $198,555 and $35,750, respectively.

The above amounts include

interim procedures and audit fees, as well as attendance at audit committee meetings.

Audit-Related Fees.

For the year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021, our independent registered

public accounting firms did not render assurance and related services related to the performance of the audit or review of financial statements.

year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021, our independent registered

public accounting firms did not render assurance and related services related to the performance of the audit or review of our financial

Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit

or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that

are not required by statute or regulation and consultations concerning financial accounting and reporting standards.

We did not pay Marcum

for consultations concerning financial accounting and reporting standards for the years ended December 31, 2023 and December 31, 2022.

year ended December 31, 2023 and 2022, our independent registered public accounting firms did not render assurance and related services

related to the performance of the audit or review of our financial statements.

All Other Fees .

the year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021, there were no fees billed

for products and services provided by our independent registered public accounting firms other than those set forth above.

the year ended December 31, 2023 and 2022, there were no fees billed for products and services provided by our independent registered

public accounting firms other than those set forth above.

Pre-Approval Policy

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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Annual Report

on Form 10-K:

(a) The following documents are filed

as part of this Annual Report on Form 10-K:

(1) Financial Statements:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm - Marcum LLP (PCAOB ID # 688)

Financial Statements:

Balance Sheets

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Underwriting Agreement, dated March 30, 2022, by and between the Company and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 1.1 filed with Form 8-K filed by the Registrant on April 4, 2022).

Business Combination Agreement, dated May 30, 2023, by and among Redwoods Acquisition Corp., ANEW MEDICAL SUB, INC.

and ANEW MEDICAL, INC.

(incorporated by reference to Exhibit 2.1 filed with Form 8-K filed by the Registrant on June 5, 2023)

Amendment No.

1 to Business Combination Agreement, dated as of November 4, 2023, by and among Redwoods Acquisition Corp., ANEW MEDICAL SUB, INC.

and ANEW MEDICAL, INC.

(incorporated by reference to Exhibit 2.1 filed with Form 8-K filed by the Registrant on November 7, 2023)

Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with Form 8-K filed by the Registrant on April 4, 2022).

1 unchanged sentence

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.5 filed with Form S-1 filed by the Registrant on March 10, 2022).

Certificate of Amendment, dated November 13, 2023, to Amended and Restated Certificate of Incorporation of RWOD (incorporated by reference to Exhibit 3.1 filed with Form 8-K filed by the Registrant on November 14, 2023).

Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 filed with Form S-1/A filed by the Registrant on March 25, 2022).

5 unchanged sentences

Unit Purchase Option, dated April 4, 2022, issued by the Company to Chardan Capital Markets, LLC (incorporated by reference to Exhibit 4.3 filed with Form 8-K filed by the Registrant on April 4, 2022).

Description of Securities

Description of Securities (incorporated by reference to Exhibit 4.8 filed with Form 10-K/A filed by the Registrant on October 18, 2023)

Letter Agreements, dated March 30, 2022, by and between the Company and each of the Company’s officers, directors and initial stockholders (incorporated by reference to Exhibit 10.1 filed with Form 8-K filed by the Registrant on April 4, 2022).

9 unchanged sentences

Amendment to the Investment Management Trust Agreement, dated April 4, 2023, by and between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 filed with Form 8-K filed by the Registrant on April 4, 2023).

Amendment No.

2 to the Investment Management Trust Agreement, dated November 13, 2023, by and between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 filed with Form 8-K filed by the Registrant on November 14, 2023).

Promissory Note to Redwoods Capital LLC, dated September 25, 2023 (incorporated by reference to Exhibit 10.1 filed with Form 8-K filed by Registrant on September 25, 2023)

Sponsor Support Agreement, dated May 30, 2023, by and among a Supporter, ANEW MEDICAL, INC.

and Redwoods Acquisition Corp.

(incorporated by reference to Exhibit 10.1 filed with Form 8-K filed by the Registrant on June 5, 2023)

Voting and Support Agreement, dated May 30, 2023, by and among ANEW MEDICAL, INC., certain stockholders of ANEW MEDICAL, INC.

and Redwoods Acquisition Corp.

(incorporated by reference to Exhibit 10.2 filed with Form 8-K filed by the Registrant on June 5, 2023)

Registration Rights Agreement, dated May 30, 2023, by and among Redwoods Acquisition Corp., certain stockholders of ANEW MEDICAL, INC.

and the Founder Holders.

(incorporated by reference to Exhibit 10.3 filed with Form 8-K filed by the Registrant on June 5, 2023)

Lock-up Agreement, dated May 30, 2023, by and between Holders of ANEW MEDICAL, INC.

and Redwoods Acquisition Corp .

(incorporated by reference to Exhibit 10.4 filed with Form 8-K filed by the Registrant on June 5, 2023)

Side Letter to Business Combination Agreement, dated April 16, 2024, by and among Redwoods Acquisition Corp, ANEW MEDICAL SUB, INC.

and ANEW MEDICAL, INC.

Code of Ethics (incorporated by reference to Exhibit 14 filed with Form S-1 filed by the Registrant on March 10, 2022)

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Clawback Policy

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** Furnished herewith.

This certification is being furnished solely

to accompany this report pursuant to 18 U.S.C.

Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act of

1934, as amended, and is not to be incorporated by reference into any filings of the Registrant, whether made before or after the date

hereof, regardless of any general incorporation language in such filing.

This certification

is being furnished solely to accompany this report pursuant to 18 U.S.C.

Section 1350, and is not being filed for purposes of Section

18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filings of the Registrant, whether made

before or after the date hereof, regardless of any general incorporation language in such filing.

FORM 10-K SUMMARY

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April 16, 2024

ACQUISITION CORP

TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm – Marcum LLP (PCAOB ID 688) F-2

Report of Independent Registered Public Accounting Firm – Friedman LLP (PCAOB ID 711 ) F-3

Balance Sheets as of December 31, 2022 and December 31, 2021 F-4

Statements of Operations for the year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021 F-5

Statements of Changes in Stockholders’ Deficit for the year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021 F-6

Statements of Cash Flows for the year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021 F-7

Notes to Financial Statements F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REDWOODS ACQUISITION CORP

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm - Marcum LLP (PCAOB ID # 688)

Financial Statements:

Balance Sheets

Statements of Operations

Statements of Changes in Stockholders’ Deficit

Statements of Cash Flows

Notes to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Shareholders and Board of Directors of

Redwoods Acquisition Corporation

Redwoods Acquisition Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheet

of Redwoods Acquisition Corporation (the “Company”) as of December 31, 2022, the related statements of operations, stockholders’

deficit and cash flows for year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles

generally accepted in the United States of America.

We have audited the accompanying balance sheets of

Redwoods Acquisition Corp.

(the “Company”) as of December 31, 2023 and 2022, the related statements of operations, changes

in stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each

of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States

Explanatory Paragraph – Going Concern

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As more fully described in Note 1 to the financial statements,

the Company’s business plan is dependent on the completion of a business combination and the Company’s cash and working capital

as of December 31, 2022 are not sufficient to complete its planned activities for a reasonable period of time, which is considered to

be one year from the issuance date of the financial.

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern.

Management’s plans in regard to these matters are also described in Note 1 .

The financial statements do not

include any adjustments that might result from the outcome of this uncertainty.

The accompanying financial statements have been prepared assuming that

the Company will continue as a going concern.

As described in Note 1 to the financial statements, the Company is a Special Purpose Acquisition

Corporation that 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 on or before June 4, 2024 (unless further extended monthly up

to December 4, 2024 as allowed under the Company’s amended and restated certificate of incorporation, as amended).

The Company entered

into a business combination agreement with a business combination target on May 30, 2023;

however, the completion of this transaction

is subject to the approval of the Company’s stockholders among other conditions.

There is no assurance that the Company will obtain

the necessary approvals, satisfy the required closing conditions, raise the additional capital it needs to fund its operations, and complete

the transaction prior to June 4, 2024, if at all.

The Company also has no approved plan in place to extend the business combination deadline

and fund operations for any period of time after June 4, 2024, in the event that it is unable to complete a business combination by that

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans

with regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that may be necessary

should the Company be unable to continue as a going concern.

Basis for Opinion

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of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and

are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit s to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

1 unchanged sentence

to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

As part of our audit s we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal

1 unchanged sentence

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

1 unchanged sentence

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provide s a reasonable basis for our opinion.

We believe that our audit s provide a reasonable basis for our opinion.

/s/ Marcum llp

We have served as the Company’s auditor since 2021 (such date

takes into account the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022)

East Hanover, NJ

We have served as the Company’s auditor since 2021 (such date takes

into account the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022).

East Hanover, New Jersey

April 16, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of

REDWOODS ACQUISITION CORP.

Opinion on the Financial Statements

We have audited the accompanying balance sheet

of Redwoods Acquisition Corp.

(the “Company”) as of December 31, 2021, the related statements of operations, changes in stockholder’s

equity and cash flows for the period from March 16, 2021 (inception) through December 31, 2021, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the period from March

16, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph — Going Concern

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, its business

plan is dependent on the completion of a financing and the Company’s cash and working capital as of December 31, 2021 are not sufficient

to complete its planned activities.

These conditions raise substantial doubt about the Company’s ability to continue as a going

Management’s plans in regard to these matters are also described in Notes 1 and 3.

The financial statements do not include

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

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Friedman LLP

We have served as the Company’s auditor

from 2021 through 2022.

January 31, 2022

ACQUISITION CORP.

BALANCE SHEETS

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Accrued expenses

Due to related party

Franchise tax payable

Income tax payable

Due to related party

Excise tax liability

Total Current Liabilities

Warrant liability

Deferred tax liability

Deferred income tax payable

Convertible promissory note - related party

Deferred underwriting fee payable

1 unchanged sentence

Commitments and Contingencies

Common stock subject to possible redemption, 11,500,000 shares at conversion value of $ 10.21 per share

Common stock subject to possible redemption, 1,760,194 shares and 11,500,000 shares at redemption value of $ 10.55 and $ 10.21 per share as of December 31, 2023 and 2022, respectively

Stockholders’ Deficit

1 unchanged sentence

50,000,000 shares authorized;

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

3,405,000 shares issued and outstanding

Additional paid-in capital

1 unchanged sentence

( 7,350,842 )

( 4,044,852 )

Total Stockholders’ Deficit

( 7,350,502 )

( 4,044,512 )

Total Liabilities, Temporary Equity, and Stockholders’ Deficit

$ 118,246,636

accompanying notes are an integral part of these financial statements.

ACQUISITION CORP.

The accompanying notes are an integral part of

these financial statements.

REDWOODS ACQUISITION CORP.

STATEMENTS OF OPERATIONS

General and administrative expenses

Franchise tax expenses

Franchise tax expense

Loss from operations

( 1,300,841 )

Interest earned on investment held in Trust Account

Unrealized gain on investment held in Trust Account

Change in fair value of warrant liabilities

Income (loss) before income taxes

Deferred income taxes provision

Income taxes provision

Net income (loss)

Income before income taxes

Income tax provision

Basic and diluted weighted average shares outstanding, redeemable common stock

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

accompanying notes are an integral part of these financial statements.

ACQUISITION CORP.

The accompanying notes are an integral part of

these financial statements.

REDWOODS ACQUISITION CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

the Year Ended December 31, 2022

For the Year Ended December 31, 2023

Stockholders’

Balance, January 1, 2023

$ ( 4,044,852 )

$ ( 4,044,512 )

Excise tax liability

( 1,024,249 )

Accretion of common stock to redemption value

( 3,627,865 )

Net income for the year

Balance as of December 31, 2023

$ ( 7,350,842 )

$ ( 7,350,502 )

For the Year Ended December 31, 2022

Stockholders’

Balance, January 1, 2022

Common stock issued to initial stockholders

20 unchanged sentences

$ ( 4,044,512 )

the period from March 16, 2021 (inception) through December 31, 2021

Stockholder’s

Balance as of March 16, 2021 (inception)

Balance as of December 31, 2021

accompanying notes are an integral part of these financial statements.

ACQUISITION CORP.

The accompanying notes are an integral part of

these financial statements.

REDWOODS ACQUISITION CORP.

STATEMENTS OF CASH FLOWS

March 16, 2021

Cash Flows from Operating Activities:

3 unchanged sentences

( 3,364,038 )

( 1,656,478 )

Change in fair value of warrant liabilities

4 unchanged sentences

Income tax payable

Deferred income tax liability

Formation costs paid by related party

Deferred income tax payable

Net cash used in operating activities

( 1,262,659 )

Cash Flows from Investing Activities:

1 unchanged sentence

( 116,150,000 )

Net cash used in financing activities

Cash withdrawn from Trust Account to pay taxes

Cash withdrawn from Trust Account to pay redeemed public stockholders

Cash deposited into Trust Account for term extension

( 1,030,000 )

Net cash provided by (used in) investing activities

( 116,150,000 )

Cash Flows from Financing Activities:

4 unchanged sentences

Proceeds from issuance of promissory note to related party

Advance from related party

Payment to redeemed public stockholders

( 102,424,861 )

Repayment of promissory note to related party

3 unchanged sentences

Payment of deferred offering costs

Net cash provided by financing activities

Net cash provided by (used in) financing activities

( 100,819,861 )

Net change in cash

Cash, beginning of the period

Cash, end of the period

Cash, beginning of the year

Cash, end of the year

Supplemental Disclosure of Non-cash Financing Activities

4 unchanged sentences

Accretion of Common stock to redemption value

accompanying notes are an integral part of these financial statements.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

1 — Description of Organization and Business Operations

Acquisition Corp.

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

The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization

or similar business combination with one or more businesses or entities (“Business Combination”).

The Company is not limited

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

of December 31, 2022, the Company had not commenced any operations.

All activities through December 31, 2022 are related to the Company’s

formation, the initial public offering (“IPO” as defined below in Note 4) and, subsequent to the IPO, identifying a target

company for a Business Combination.

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

at the earliest.

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

The Company has selected December 31 as its fiscal year end.

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

registration statement for the Company’s IPO became effective on March 30, 2022.

On April 4, 2022, the Company consummated the

IPO of 10,000,000 units at an offering price of $ 10.00 per unit (the “Public Units’), generating gross proceeds of $ 100,000,000 .

Simultaneously with the closing of the IPO, the Company sold to the Sponsor and Chardan Capital Markets LLC (“Chardan”),

in a private placement, 377,500 units and 100,000 units, respectively, at $ 10.00 per unit (the “Private Units”), generating

total gross proceeds of $ 4,775,000 , which is described in Note 5.

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

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

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

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

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

Unit, generating total proceeds of $ 525,000 .

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

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

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

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

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

government securities with

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

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

Excise tax liability

The accompanying notes are an integral part of

these financial statements.

REDWOODS ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations

Redwoods Acquisition Corp.

(the “Company”

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 December 31, 2023, the Company had not commenced

any operations.

All activities through December 31, 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

The Company’s sponsor is Redwoods Capital

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

The registration statement for the Company’s

IPO became effective on March 30, 2022.

On April 4, 2022, the Company consummated the IPO of 10,000,000 units at an offering price of

$ 10.00 per unit (the “Public Units’), generating gross proceeds of $ 100,000,000 .

Simultaneously with the closing of the IPO,

the Company sold to the Sponsor and Chardan Capital Markets LLC (“Chardan”), in a private placement, 377,500 units and 100,000

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

The Company granted the underwriters a 45-day

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

On April 7, 2022, the underwriters exercised

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

of $ 15,000,000 .

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

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

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

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

$ 1,177,839 of other offering costs.

Upon the closing of the IPO and the sale of Private

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

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

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

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

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

and that invest only in direct U.S.

government treasury obligations.

funds in the Trust Account will not be released until the earlier of the completion of the initial Business Combination and the liquidation

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

The proceeds deposited in

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

of the Company’s public stockholders.

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

the Company to pay its income or other tax obligations.

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

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

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

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

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

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

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

If the Company is

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

The Company will only complete a Business Combination if

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

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

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

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

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

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

The decision as to whether the Company will seek stockholder

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

The Public Stockholders

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

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

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

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

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

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

Securities and Exchange Commission (“SEC”) and

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

If, however, stockholder approval of the transaction

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

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

Additionally,

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

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

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

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

applicable period of time.

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

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

In addition, interest income earned on the

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

With these exceptions, expenses

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

in the Trust Account.

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

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.

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.

Subsequently on each month from January 2024 to April 2024, the Sponsor made a deposit of $ 35,000 into the Trust Account

to further extend the business combination period to May 4, 2024.

The Company will provide its holders of the outstanding

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

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

(ii) by means of a tender offer.

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

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

The Public Stockholders will be entitled to redeem their Public

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

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

tax obligations).

If a stockholder vote is not required by law and

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

and Restated Certificate of Incorporation (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, to the extent permitted by law, and (b) not to convert

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

tender offer in connection with, a proposed Business Combination.

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

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

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

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

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

The Company has until July 4, 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 (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.

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

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

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

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

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

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

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

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

of creditors and the requirements of other applicable law.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

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

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

However, if any Initial Stockholder

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

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

The underwriters have agreed to waive

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

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

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

In the event of such distribution, it is possible

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

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

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

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

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

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

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

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

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

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

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

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

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

Capital Resources and Going Concern

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

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

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

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

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

Public Shares in conjunction with any such amendment.

The Company has until June 4, 2024 (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

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

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

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

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

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

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

the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to

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

The Initial Stockholders and Chardan have agreed

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

a Business Combination within the Combination Period.

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

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

Combination within the Combination Period.

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

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

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

of the Public Shares.

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

distribution will be less than $ 10.10 .

In order to protect the amounts held in the Trust

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

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

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

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

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

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

party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not

such waiver is enforceable), nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against

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

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

of any liability for such third party claims.

On May 30, 2023, the Company 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, the

Company will acquire all of the outstanding equity interests of ANEW in exchange for shares of the Company’s 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;

(ii) 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.

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.

On November 4, 2023, Redwoods entered into

Amendment No.

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

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 April 16, 2024, Redwoods entered into a Side Letter to Business Combination Agreement by and among Redwoods, Merger Sub and ANEW pursuant

to which the parties agreed to extend the Termination Date to June 4, 2024 .

Use of Funds Restricted for Payment of Taxes

In April 2023, the Company withdrew approximately $ 519,231 of interest

income earned in the Trust Account.

Such amount was restricted for payment of the Company’s income and franchise tax liabilities

as provided in the Company’s charter.

During the third quarter of 2023, approximately $ 153,089 of these funds were inadvertently

used for the payments of general operating expenses.

These funds were replenished to the Company’s operating account by the Sponsor

loans during the fourth quarter 2023.

The Company subsequently paid $ 150,000 income tax on January 22, 2024.

Liquidity, Capital Resources and Going Concern

As of December 31, 2023, the Company had cash

of $ 340,962 and a working capital of $ 299,788 (excluding income tax and franchise tax payable as the taxes will be paid out of the Trust

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 (see Note 6).

The Company has until July 4, 2023 (or December 4, 2023, if the

time to complete a business combination is extended as described herein) 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 this date, there

will be a mandatory liquidation and subsequent dissolution.

Company 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.

The Company may need to obtain additional financing either to complete

its Business Combination or because it becomes obligated to redeem a significant number of public shares upon consummation of its Business

Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination.

to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of our

Business Combination.

If the Company is unable to complete its Business Combination because it does not have sufficient funds available,

it will be forced to cease operations and liquidate the Trust Account.

In addition, following the Business Combination, if cash on hand

is insufficient, the Company may need to obtain additional financing in order to meet its obligations.

In connection with the Company’s assessment

of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”)

2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, the Company has until

April 4, 2023 (or October 4, 2023, if the Company extends the time to complete a Business Combination) to complete a Business Combination.

It is uncertain that the Company will be able to consummate a Business Combination by this time.

If a Business Combination is not consummated

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

of $ 172,535 and a working capital deficit of $ 2,113,550 .

On March 22, 2023, March 30, 2023, June 28, 2023, August 29, 2023, September

25, 2023, and November 27, 2023, the Sponsor provided a loan of $ 150,000 , $ 360,000 , $ 360,000 , $ 150,000 , $ 120,000 , and $ 400,000 , respectively,

to be used, in part, for transaction costs related to the Business Combination (see Note 6).

Subsequently on each month from January 2024

to March 2024, the Sponsor made a deposit of $ 35,000 per month into the Trust Account to further extend the business combination period

to May 4, 2024.

The Company has until June 4, 2024 (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 this date, there will

be a mandatory liquidation and subsequent dissolution.

The Company 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.

The Company may need to obtain additional financing either to complete its Business Combination or because it

becomes obligated to redeem a significant number of public shares upon consummation of its Business Combination, in which case the Company

may issue additional securities or incur debt in connection with such Business Combination.

Subject to compliance with applicable securities

laws, the Company would only complete such financing simultaneously with the completion of our Business Combination.

If the Company is

unable to complete its Business Combination because it does not have sufficient funds available, it 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 June 4, 2024 (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.

Management has determined that the liquidity condition, the mandatory

liquidation, should a Business Combination not occur and an extension not be requested by the Sponsor, and potential subsequent dissolution

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

The financial statement does not include any

adjustments that might result from the outcome of this uncertainty.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

and Uncertainties

is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that

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

a target company, there has not been a significant impact as of the date of these financial statements.

The financial statements do not

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

Additionally,

as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related

economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which

the Company ultimately consummates a Business Combination, may be materially and adversely affected.

In addition, the Company’s

ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these

events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable

on terms acceptable to the Company or at all.

The impact of this action and related sanctions on the world economy and the specific impact

on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable.

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.

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

Risks and Uncertainties

In February 2022, an armed conflict escalated

between Russia and Ukraine.

The sanctions announced by the United States and other countries against Russia and Belarus following Russia’s

invasion of Ukraine to date include restrictions on selling or importing goods, services, or technology in or from affected regions and

travel bans and asset freezes impacting connected individuals and political, military, business, and financial organizations in Russia

The United States and other countries could impose wider sanctions and take other actions should the conflict further escalate.

Separately, in October 2023, Israel and certain Iranian-backed Palestinian forces began an armed conflict in Israel, the Gaza Strip, and

surrounding areas, which threatens to spread to other Middle Eastern countries including Lebanon and Iran.

As a result of the ongoing Russia/Ukraine, Hamas/Israel

conflicts and/or other future global conflicts, the Company’s ability to consummate a Business Combination, or the operations of

a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected.

the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be

impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing

being unavailable on terms acceptable to the Company or at all.

The impact of this action and potential future sanctions on the world

economy and the specific impact on the Company’s financial position, results of operations or ability to consummate a Business Combination

are not yet determinable.

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

Reduction Act of 2022

August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law.

The IR Act provides for,

among other things, a new U.S.

federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic

(i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations.

The excise tax is imposed on the

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

The amount of the excise tax is generally 1%

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

However, for purposes of calculating the excise tax,

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

stock repurchases during the same taxable year.

In addition, certain exceptions apply to the excise tax.

Department of the Treasury

(the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or

avoidance of the excise tax.

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

redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise,

may be subject to the excise tax.

Whether and to what extent the Company would be subject to the excise tax in connection with a Business

Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions

and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii)

the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued

not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content

of regulations and other guidance from the Treasury.

In addition, because the excise tax would be payable by the Company and not by the

redeeming holders, the mechanics of any required payment of the excise tax have not been determined.

The foregoing could cause a reduction

in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.

this time, it has been determined that none of the IR Act tax provisions have an impact to the Company’s fiscal 2022 tax provision.

The Company will continue to monitor for updates to the Company’s business along with guidance issued with respect to the IR Act

to determine whether any adjustments are needed to the Company’s tax provision in future periods.

2 — Significant Accounting Policies

of Presentation

accompanying audited financial statements are presented in U.S.

Dollars and in conformity with accounting principles generally accepted

in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

Accordingly, they include

all of the information and footnotes required by GAAP.

In the opinion of management, all adjustments (consisting of normal accruals)

considered for a fair presentation have been included.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

Growth Company

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

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

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

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

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

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

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

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

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

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

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

The Company has elected not to opt out

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

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

adopt the new or revised standard.

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

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

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

preparing these 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 financial

statements and the reported expenses during the reporting period.

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 financial statements, which management considered in formulating

its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ

significantly from those estimates.

and Cash Equivalents

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

The Company had $ 340,962 and $ 4,952 in cash and did not have any cash equivalents as of December 31, 2022 and December 31, 2021, respectively.

Held in Trust Account

of December 31, 2022, the assets held in the Trust Account were held in cash and U.S.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act

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

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

federal 1 % excise

tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic

subsidiaries of publicly traded foreign corporations.

The excise tax is imposed on the repurchasing corporation itself, not its shareholders

from which shares are repurchased.

The amount of the excise tax is generally 1 % of the fair market value of the shares repurchased at

the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair

market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

certain exceptions apply to the excise tax.

Department of the Treasury (the “Treasury”) has been given authority

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

The IR Act applies only to

repurchases that occur after December 31, 2022.

Any redemption or other repurchase that occurs

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

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

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

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

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

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

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

of the excise tax have not been determined.

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

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

At this time, it has been determined that the

IR Act tax provisions would have an impact to the Company’s fiscal 2023 tax provision as there were redemptions by the public stockholders

in March 2023 and November 2023;

as a result, the Company recorded $ 1,024,250 excise tax liability as of December 31, 2023.

will continue to monitor for updates to the Company’s business along with guidance issued with respect to the IR Act to determine

whether any adjustments are needed to the Company’s tax provision in future periods.

Note 2 — Significant Accounting Policies

Basis of Presentation

The accompanying audited financial statements

are presented in U.S.

Dollars and in conformity the U.S.

GAAP and pursuant to the rules and regulations of the SEC.

Accordingly, they

include all of the information and footnotes required by the U.S.

In the opinion of management, all adjustments (consisting of normal

accruals) considered for a fair presentation have been included.

Emerging Growth Company

The Company is an “emerging growth company,”

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

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

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

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

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

approval of any golden parachute payments not previously approved.

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

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

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

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

The JOBS Act provides that a company

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

any such an election to opt out is irrevocable.

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

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

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

This may make comparison

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

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

standards used.

Use of Estimates

In preparing these 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 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 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

The Company considers all short-term investments

with an original maturity of six months or less when purchased to be cash equivalents.

The Company had $ 172,535 and $ 340,962 in cash and

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

Investments Held in Trust Account

As of December 31, 2023, the assets held in the

Trust Account were held in cash and U.S.

Treasury securities.

The Company classifies its

Treasury securities as trading securities in accordance with Financial Accounting Standards Board (“FASB”) Accounting

Standards Codification (“ASC”) Topic 320, “Investments—Debt and Equity Securities.” Trading securities

are presented on the balance sheets at fair value at the end of each reporting period.

Gains and losses resulting from the change in

fair value of these securities is included in gain on investments held in Trust Account in the accompanying statement of operations.

The estimated fair values of all assets held in the Trust Account are determined using available market information and classified as

Level 1 measurements.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

Company complies with the requirements of FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs – SEC Materials”

(“ASC 340-10-S99”) and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering”.

Offering costs were $ 8,365,339

consisting principally of underwriting, legal, accounting and other expenses that are directly related to the IPO and charged to stockholders’

equity upon the completion of the IPO.

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 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.

740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes

a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected

to be taken in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination

by taxing authorities.

ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim

period, disclosure and transition.

Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

There were no unrecognized

tax benefits and no amounts accrued for interest and penalties as of December 31, 2022 and December 31, 2021.

The Company is currently

not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

Company has identified the United States and the State of New York as its only “major” tax jurisdiction.

The Company is subject

to income taxation by major taxing authorities since inception.

These examinations may include questioning the timing and amount of deductions,

the nexus of income among various tax jurisdictions and compliance with federal and state tax laws.

The Company’s management does

not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Loss Per Share

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

The 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

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 December 31, 2022, the Company did not have any dilutive securities and other contracts that could, potentially,

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

As a result, diluted loss per share is the

same as basic loss per share for the period presented.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

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

For the Year Ended December 31, 2022

March 16, 2021

(Inception) through

December 31, 2021

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.

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

held in Trust Account in the accompanying statement of operations.

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

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

Offering Costs

The Company complies with the requirements of

FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs – SEC Materials” (“ASC 340-10-S99”) and SEC

Staff Accounting Bulletin Topic 5A, “Expenses of Offering”.

Offering costs were $ 8,365,339 consisting principally of underwriting,

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”)”.

ASC 740 requires the recognition of deferred tax assets and liabilities for both

the expected impact of differences between the financial statement 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.

ASC 740 also clarifies the accounting for uncertainty

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

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

For those benefits

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

ASC 740 also provides

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

The Company recognizes accrued interest and penalties

related to unrecognized tax benefits as income tax expense.

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

and penalties as of December 31, 2023.

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

the State of New York as its only “major” tax jurisdictions.

The Company may be subject to potential examination

by federal and state taxing authorities in the areas of income taxes.

These potential examinations may include questioning the timing

and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws.

The Company’s

management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net Loss Per Share

The Company complies with accounting and disclosure

requirements of FASB ASC 260, Earnings Per Share.

The 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 December 31,

2023 and 2022, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted

into common shares and then share in the earnings of the Company.

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

for the period presented.

The net income (loss) per share presented in the

consolidated statement of operations is based on the following:

Ended December 31,

Net income $ 1,346,125 $ 1,233,352

Accretion of common stock to redemption value (1) ( 3,627,864 ) ( 29,388,057 )

( 29,388,057 )

Net loss including accretion of common stock to redemption value $ ( 2,281,739 ) $ ( 28,154,705 )

$ ( 28,154,705 )

March 16, 2021

For the Year Ended

December 31, 2023

For the Year Ended

December 31, 2022

Basic and diluted net income (loss) per common stock

Allocation of net loss

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

Allocation of net income (loss) including accretion of

$ ( 1,485,301 )

$ ( 796,439 )

Accretion of ordinary shares subject to possible redemption to redemption value

$ ( 20,407,722 )

$ ( 7,746,983 )

Accretion of common stock to redemption value (1)

Allocation of net income (loss)

$ ( 796,439 )

$ ( 7,746,983 )

Basic and diluted weighted average shares outstanding

Basic and diluted net income (loss) per common stock

Concentration

of Credit Risk

instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution

and money market funds held in the Trust Account.

The Company has not experienced losses on this account and management believes the

Company is not exposed to significant risks on such account.

Value of Financial Instruments

ASC Topic 820 “Fair Value Measurements and Disclosures” defines fair value, the methods used to measure fair value and the

expanded disclosures about fair value measurements.

Fair value is the price that would be received to sell an asset or paid to transfer

a liability in an orderly transaction between the buyer and the seller at the measurement date.

In determining fair value, the valuation

techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value.

FASB ASC Topic

820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset

or liability.

These inputs are further defined as observable and unobservable inputs.

Observable inputs are those that buyer and seller

would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs

reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed

based on the best information available in the circumstances.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

fair value hierarchy is categorized into three levels based on the inputs as follows:

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

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.

Concentration of Credit Risk

Financial instruments that potentially subject

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

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

on such account.

Fair Value of Financial Instruments

FASB ASC Topic 820 “Fair Value Measurements

and Disclosures” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the

buyer and the seller at the measurement date.

In determining fair value, the valuation techniques consistent with the market approach,

income approach and cost approach shall be used to measure fair value.

FASB ASC Topic 820 establishes a fair value hierarchy for inputs,

which represent the assumptions used by the buyer and seller in pricing the asset or liability.

These inputs are further defined as observable

and unobservable inputs.

Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market

data obtained from sources independent of the Company.

Unobservable inputs reflect the Company’s assumptions about the inputs that

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

The fair value hierarchy is categorized into three

levels based on the inputs as follows:

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

Valuation adjustments and block discounts are not being applied.

Since valuations are based on quoted prices that are readily and

regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active

for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived

principally from or corroborated by market through correlation or other means.

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

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.

values of cash and cash equivalents, and other current assets, accrued expenses, due to sponsor are estimated to approximate the carrying

values as of December 31, 2022 and December 31, 2021 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.

Company accounts for warrants (Public Warrants or Private Warrants) as either equity-classified or liability-classified instruments based

on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board

(“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”)

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

The assessment considers whether the warrants are freestanding

financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants

meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s

own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside

of the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional

judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

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

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

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

The fair value of the Company’s certain

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 December 31, 2023 and 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.

Convertible Promissory Notes

The Company 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 own equity.

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.

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

of contracts in an entity’s own equity.

The Company accounts for warrants (Public Warrants

or Private Warrants) as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific

terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

(“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480,

meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification

under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders

could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions

for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance

and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all

6 unchanged sentences

Warrants as equity and the Private Warrants as liabilities.

Stock Subject to Possible Redemption

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

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

measured at fair value.

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

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

is classified as temporary equity.

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

The Company’s

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

of uncertain future events.

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

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

Increases or decreases in the carrying

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

additional paid in capital equals to zero.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

Accounting Pronouncements

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

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

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

ASU 2020-06 eliminates

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

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

The new standard

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

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

all convertible instruments.

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

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

The Company is currently assessing the impact,

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

does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect

on the Company’s financial statements.

3 — Cash and Investment Held in Trust Account

As of December 31, 2022, investment securities

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

Treasury securities.

The Company did not have a Trust Account

at December 31, 2021.

following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of December

31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

Markets (Level 1)

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject

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

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

Conditionally redeemable

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

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

times, common stock is classified as stockholders’ equity.

The Company’s common stock features certain redemption rights that

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

The Company recognizes

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

value at the end of each reporting period.

Increases or decreases in the carrying 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.

Recent Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards

Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosure (“ASU 2023-09”).

ASU 2023-09 mostly requires,

on an annual basis, disclosure of specific categories in an entity’s effective tax rate reconciliation and income taxes paid disaggregated

by jurisdiction.

The incremental disclosures may be presented on a prospective or retrospective basis.

The ASU is effective for fiscal

years beginning after December 15, 2024 with early adoption permitted.

The Company is currently assessing the impact, if any, that ASU

2023-09 would have on its financial position, results of operations or cash flows.

Management does not believe that any recently

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

financial statements.

Note 3 — Cash and Investment Held in

Trust Account

As of December 31, 2023 and 2022, investment securities

in the Company’s Trust Account consisted of $ 19,256,423 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 December 31, 2023 and indicates the fair value hierarchy

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

Marketable securities held in Trust Account

$ 117,806,478

4 — Initial Public Offering

April 4, 2022, pursuant to its initial public offering (the “IPO”), the Company sold 10,000,000 Public Units at $ 10.00 per

Public Unit, generating gross proceeds of $ 100,000,000 .

The Company granted the underwriters a 45-day option to purchase up to 1,500,000

additional Public Units to cover over-allotments, if any.

On April 7, 2022, the underwriters exercised the over-allotment option in full

and purchased 1,500,000 Public Units at a price of $ 10.00 per Public Unit, generating gross proceeds of $ 15,000,000 .

Each Public Unit

consists of one share of common stock (“Public Share”), one right (“Public Right”) and one redeemable warrant

(“Public Warrant”).

Each Public Right will convert into one-tenth (1/10) of one share of common stock upon the consummation

of a Business Combination.

Each Public Warrant entitles the holder to purchase one share of common stock at a price of $ 11.50 per share,

subject to adjustment.

The Public Warrants will become exercisable on the later of the completion of the Company’s initial Business

Combination or 12 months from the closing of the IPO, and will expire five years after the completion of the Company’s initial

Business Combination or earlier upon redemption or liquidation.

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

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

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

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

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

outside of permanent equity.

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

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

been codified in ASC 480-10-S99.

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

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

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

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

The Company has elected to recognize the changes immediately.

The accretion or remeasurement is treated as a deemed dividend

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

of December 31, 2022, the shares of common stock reflected on the balance sheet are reconciled in the following table.

December 31, 2022

Note 4 — Initial Public Offering

On April 4, 2022, pursuant to its initial public

offering (the “IPO”), the Company sold 10,000,000 Public Units at $ 10.00 per Public Unit, generating gross proceeds of $ 100,000,000 .

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

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

$ 10.00 per Public Unit, generating gross proceeds of $ 15,000,000 .

Each Public Unit consists of one share of common stock (“Public

Share”), one right (“Public Right”) and one redeemable warrant (“Public Warrant”).

Each Public Right will

convert into one-tenth (1/10) of one share of common stock upon the consummation of a Business Combination.

Each Public Warrant entitles

the holder to purchase one share of common stock at a price of $ 11.50 per share, subject to adjustment.

The Public Warrants will become

exercisable on the later of the completion of the Company’s initial Business Combination or 12 months from the closing of the IPO,

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

All of the 11,500,000 Public Shares

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

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

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

In accordance with the SEC and

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

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

The Company’s redeemable common stock is

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

If it is probable

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

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

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

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

The Company has elected to recognize the changes

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

retained earnings, additional paid-in capital).

As of December 31, 2023 and 2022, 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

Common stock subject to possible redemption– December 31, 2022

$ 117,361,652

5 — Private Placement

Simultaneously

with the closing of the IPO, the Sponsor and Chardan purchased an aggregate of 477,500 Private Units at a price of $ 10.00 per Private

Unit for an aggregate purchase price of $ 4,775,000 in a private placement.

Simultaneously with the closing of the over-allotment option,

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

per Private Unit, generating total proceeds of $ 525,000 .

The Private Units are identical to the Public Units except with respect to certain

registration rights and transfer restrictions and the private warrants, which have terms and provisions that are identical to those of

the warrants being sold as part of the units in the IPO, except that the private warrants (i) will be exercisable either for cash or

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

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

The net proceeds from the Private Units were added

to the proceeds from the IPO to be held in the Trust Account.

If the Company does not complete a Business Combination within the Combination

Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements

of applicable law), and the Private Units and all underlying securities will expire worthless.

6 — Related Party Transactions

January 4, 2022, the Company issued 2,875,000 shares of common stock (the “Insider Shares”) to the Initial Stockholders for

an aggregate consideration of $ 25,000 , or approximately $ 0.009 per share.

As a result of the underwriters’ full exercise of their

over-allotment option on April 7, 2022, no insider shares are currently subject to forfeiture.

As of December 31, 2022, there were 2,875,000

Insider Shares issued and outstanding.

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

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

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

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

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

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

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

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

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

Note — Related Party

Accretion of carrying value to redemption value

Redeemed common stock payable to public stockholders

( 102,424,861 )

Common stock subject to possible redemption– December 31, 2023

Note 5 — Private Placement

Simultaneously with the closing of the IPO, the

Sponsor and Chardan purchased an aggregate of 477,500 Private Units at a price of $ 10.00 per Private Unit for an aggregate purchase price

of $ 4,775,000 in a private placement.

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

an additional aggregate of 52,500 Private Units with the Sponsor and Chardan at a price of $ 10.00 per Private Unit, generating total proceeds

of $ 525,000 .

The Private Units are identical to the Public Units except with respect to certain registration rights and transfer restrictions

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

in the IPO, except that the private warrants (i) will be exercisable either for cash or on a cashless basis at the holder’s option

and (ii) will not be redeemable by the Company, in either case as long as the private warrants are held by the initial purchasers or any

of their permitted transferees.

The net proceeds from the Private Units were added to the proceeds from the IPO to be held in the Trust

If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private

Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Units

and all underlying securities will expire worthless.

Note 6 — Related Party Transactions

Insider Shares

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

shares of common stock (the “Insider Shares”) to the Initial Stockholders for an aggregate consideration of $ 25,000 , or approximately

$ 0.009 per share.

As a result of the underwriters’ full exercise of their over-allotment option on April 7, 2022, no insider shares

are currently subject to forfeiture.

As of December 31, 2023 and 2022, there were 2,875,000 Insider Shares issued and outstanding.

The Initial Stockholders have agreed, subject

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

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

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

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

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

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

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

Promissory 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 December 31, 2022, the Company

had no borrowings under the Promissory Note.

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.

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

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

as may be required.

In the event that the initial business combination does not close, the Company may use a portion of the working capital

held outside the trust account to repay such loaned amounts, but no proceeds from the Trust Account would be used for such repayment.

As of December 31, 2023 and 2022,

the Company had no borrowings under the Promissory Notes.

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

non-interest bearing promissory note in the principal amount of $ 150,000 to the Sponsor (“Convertible Note 1”).

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

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.

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.

On November 27, 2023, the Company issued an unsecured,

non-interest bearing promissory note in the principal amount of $ 400,000 to the Sponsor (“Convertible Note 6”).

Note 6 is payable upon the closing of the Business Combination or the liquidation of the Company.

The holder of the Convertible Note 6,

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 December 31, 2023 and 2022, a total amount

of $ 1,540,000 and $ 0 was outstanding under promissory notes.

Related Party Loans

In addition, in order to finance transaction costs

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

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

In the event that the initial

business combination does not close, the Company may use a portion of the working capital held outside the trust account to repay such

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

Such loans would be evidenced by promissory notes.

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

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

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

The purchase price of these units will approximate the fair value

of such units when issued.

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

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

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

of December 31, 2022, the Company had no borrowings under the working capital loans.

Administrative

Services Agreement

Company entered into an agreement, commencing on the effective date of the IPO through the earlier of the Company’s consummation

of a Business Combination and its liquidation, to pay the Sponsor a total of $ 10,000 per month for office space, utilities, secretarial

and administrative support.

However, pursuant to the terms of such agreement, the Sponsor agreed to defer the payment of such monthly

Any such unpaid amount will accrue without interest and be due and payable no later than the date of the consummation of initial

Business Combination.

For the year ended December 31, 2022 and for the period from March 16, 2021 (inception) through December 31, 2021,

the Company incurred $ 90,000 and none , respectively, in fees for these services, of which $ 90,000 and none were included in accrued expenses

in the accompanying balance sheets as of December 31, 2022 and December 31, 2021, respectively.

Note 7 — Commitments

and Contingencies

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

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

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

signed on the effective date of the IPO.

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

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

The holders of

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

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

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

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

the Company consummate an initial business combination.

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

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

Furthermore, notwithstanding

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

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

one occasion.

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

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

to an underwriting agreement in connection with the IPO, the Company granted Chardan, the representative of the underwriters, a 45-day

option from the date of the prospectus for the IPO to purchase up to 1,500,000 additional Public Units to cover over-allotments,

if any, at the IPO price less the underwriting discounts and commissions.

On April 7, 2022, Chardan exercised the over-allotment option

in full (see Note 4).

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

option), or $ 2,875,000 .

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

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

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

Purchase Option

Simultaneously

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

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

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

The fair value of the Unit Purchase Option was $ 715,303 at the IPO which was included in the total offering costs of $ 8,365,339 .

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

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

The units issuable upon exercise of the Unit Purchase Option are

identical to those offered in the IPO.

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

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

The Unit Purchase Option and such units purchased

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

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

such warrants, have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(e)(1).

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

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

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

The Company will bear all fees and expenses attendant to

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

The exercise price

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

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

However, the option will not be

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

of First Refusal

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

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

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

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

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

of $ 10.00 per unit.

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

However, if it is determined,

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

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

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

As of December 31, 2023 and 2022, the Company

had no borrowings under the working capital loans.

Administrative Services Agreement

The Company entered into an agreement, commencing

on the effective date of the IPO through the earlier of the Company’s consummation of a Business Combination and its liquidation,

to pay the Sponsor a total of $ 10,000 per month for office space, utilities, secretarial and administrative support.

However, pursuant

to the terms of such agreement, the Sponsor agreed to defer the payment of such monthly fee.

Any such unpaid amount will accrue without

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

For the year ended December

31, 2023 and 2022, the Company incurred $ 120,000 and $ 90,000 , respectively, in fees for these services, of which $ 210,000 and $ 90,000

were included in accrued expenses in the accompanying balance sheets as of December 31, 2023 and 2022, respectively.

Note 7 — Commitments and

Contingencies

Registration Rights

The holders of the insider shares, the private

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

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

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

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

Unit Purchase Option) that the Company register such securities.

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

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

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

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

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

to the consummation of an initial business combination.

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

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

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

The Company will bear the expenses incurred

in connection with the filing of any such registration statements.

Underwriting Agreement

Pursuant to an underwriting agreement in connection

with the IPO, the Company granted Chardan, the representative of the underwriters, a 45-day option from the date of the prospectus for

the IPO to purchase up to 1,500,000 additional Public Units to cover over-allotments, if any, at the IPO price less the underwriting

discounts and commissions.

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

The underwriters were paid a cash underwriting

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

In addition, the

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

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

to the terms of the underwriting agreement.

Unit Purchase Option

Simultaneously with the IPO (including the closing

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

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

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

The Unit Purchase Option may be

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

statement related to the IPO.

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

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

a charge directly to stockholders’ equity.

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

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

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

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

The Unit Purchase Option grants to holders

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

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

exercise of the Unit Purchase Option.

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

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

The exercise price and number of units issuable upon exercise

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

recapitalization, reorganization, merger or consolidation.

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

price below its exercise price.

Right of First Refusal

The Company has granted Chardan a right of first

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

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

of the Company or any of its successors or subsidiaries.

Financial Advisor - Chardan

Chardan was independently retained as M&A and capital markets advisor

by each of Redwoods (in April of 2022) and ANEW (in October of 2022) in connection with possible business combinations and related transactions

that each was considering, including (eventually) the Merger.

When Redwoods and ANEW commenced discussions in March of 2023 related to

the Merger, Redwoods and ANEW consented to such dual representation in connection with the Merger and waived any conflicts of interest

arising therefrom.

On August 25, 2023, Redwoods received Chardan’s formal resignation from its previous engagement as Redwood’s

M&A and capital markets advisor in connection with the Merger and of the fees to which Chardan would have been entitled for such engagement

upon the closing of the Merger.

Chardan’s letter indicated that it would continue its representation of ANEW in connection with

the Merger and that Chardan was not waiving its entitlement to receive from Redwoods the deferred IPO underwriting commission described

in Redwoods’ IPO prospectus.

Upon the closing of the Merger, Chardan will be entitled to $ 4,312,500 in deferred IPO underwriting

commissions from Redwoods.

Financial Advisor – Del Mar Global Advisors

Limited (“Del Mar”)

On November 29, 2023, Redwoods and Del Mar executed

a Consultant Agreement pursuant to which Del Mar is serving as a financial advisor to Redwoods on a consultancy basis.

Redwoods has no

prior relationship with Del Mar.

At closing the business combination, 240,000 shares will be issued to Del Mar as financial advisor compensation

The 240,000 shares of Redwoods common stock are valued at $ 2,400,000 or $ 10 per share.

Del Mar will retain an ownership interest

of 2.2 % of the issued and outstanding shares of the Combined Company’s Common Stock.

Contingent Legal Fees

The Company engaged a legal counsel firm for legal advisory services, and the legal counsel agreed to defer their fees in excess of $ 200,000 .

The contingent fee will become payable in the event that the Company completes a Business Combination.

In the event that the Business

Combination does not close and the Company receive a break-up fee or similar payment from the target company, The Company agrees to pay

the legal counsel the balance of legal fees, up to the lesser of (i) one-half of the amount received from the target company, and (ii)

As of December 31, 2023 and 2022, the Company had deferred legal fees of $ 1.2 million and $ 0.3 million, respectively, in connection

with such services.

Note 8 — Stockholders’

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

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

At December 31, 2022, there were 3,405,000 shares of common

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

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

Rights — Each

holder of a right will receive one-tenth (1/10) of one share of common stock upon consummation of a Business Combination, even if the

holder of such right redeemed all shares held by it in connection with a Business Combination.

No fractional shares will be issued upon

conversion of the rights.

No additional consideration will be required to be paid by a holder of rights in order to receive its additional

shares upon consummation of a Business Combination, as the consideration related thereto has been included in the unit purchase price

paid for by investors in the IPO.

If the Company enters into a definitive agreement for a Business Combination in which the Company will

not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration

the holders of the common stock will receive in the transaction on an as-converted into common stock basis and each holder of a right

will be required to affirmatively covert its rights in order to receive 1/10 share underlying each right (without paying additional consideration).

Common Stock — The

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

Holders of the common stock are

entitled to one vote for each share.

At December 31, 2023 and 2022, there were 3,405,000 shares of common stock issued and outstanding

(excluding 1,760,194 shares and 11,500,000 shares subject to possible redemption, respectively).

Rights — Each holder

of a right will receive one-tenth (1/10) of one share of common stock upon consummation of a Business Combination, even if the holder

of such right redeemed all shares held by it in connection with a Business Combination.

No fractional shares will be issued upon conversion

of the rights.

No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares

upon consummation of a Business Combination, as the consideration related thereto has been included in the unit purchase price paid for

by investors in the IPO.

If the Company enters into a definitive agreement for a Business Combination in which the Company will not be

the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the

holders of the common stock will receive in the transaction on an as-converted into common stock basis and each holder of a right will

be required to affirmatively covert its rights in order to receive 1/10 share underlying each right (without paying additional consideration).

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

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

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

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

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

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

Accordingly, holders of the rights

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

If the Company is unable to complete a Business

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

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

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

Further, there are no contractual penalties for failure

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

Additionally, in no event will the Company

be required to net cash settle the rights.

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

As of December 31, 2023 and 2022, there were 12,030,000 rights issued and outstanding.

Warrants — Each

redeemable warrant entitles the holder thereof to purchase one share of common stock at a price of $ 11.50 per share, subject to adjustment

The warrants will become exercisable on the later of the completion of an initial Business Combination and 12 months from the closing

However, no Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement

covering the issuance of the common stock issuable upon exercise of the warrants and a current prospectus relating to such common stock.

Notwithstanding the foregoing, if a registration statement covering the issuance of the common stock issuable upon exercise of the Public

Warrants is not effective within 90 days from the closing of the Company’s initial Business Combination, warrant holders may,

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

registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities

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

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

City time or earlier redemption.

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

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

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

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

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

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

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

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

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

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

as described in this prospectus.

As of December 31, 2023 and 2022, there were 12,030,000 warrants issued and outstanding.

will become exercisable on the later of the completion of an initial Business Combination and 12 months from the closing of the IPO.

However, no Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering

the issuance of the common stock issuable upon exercise of the warrants and a current prospectus relating to such common stock.

Notwithstanding

the foregoing, if a registration statement covering the issuance of the common stock issuable upon exercise of the Public Warrants is

not effective within 90 days from the closing of the Company’s initial Business Combination, warrant holders may, until such

time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration

statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act.

exemption from registration is not available, holders will not be able to exercise their warrants on a cashless basis.

The warrants will

expire five years from the closing of the Company’s initial Business Combination at 5:00 p.m., New York City time

or earlier redemption.

In addition, if (x) the Company issues additional

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

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

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

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

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

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

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

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

to 165 % of the Market Value.

The Company may redeem the outstanding Public

Warrants at any time while the warrants are exercisable:

● in whole and not in part;

2 unchanged sentences

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

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

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

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

In such event, each holder would pay

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

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

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

The “fair market

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

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

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

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

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

holder of the warrants.

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

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

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

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

will not be required to settle any such warrant exercise.

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

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

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

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

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

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

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

9 —Fair Value Measurements

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

the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities

in an orderly transaction between market participants at the measurement date.

In connection with measuring the fair value of its assets

and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize

the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following

fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order

to value the assets and liabilities:

Quoted prices in active

markets for identical assets or liabilities.

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

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

Observable inputs other

than Level 1 inputs.

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

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

Unobservable inputs based

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

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

following table presents information about the Company’s liabilities that are measured at fair value on December 31, 2022 and December

31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

If the Company calls the Public Warrants for redemption,

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

as described in the warrant agreement.

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

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

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

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

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

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

is sent to the holders of warrants.

Except as described above, no warrants will be

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

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

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

Under the terms of

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

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

However, the Company cannot assure that

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

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

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

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

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

the warrants may expire worthless.

The private warrants have terms and provisions

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

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

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

Note 9 — Fair Value Measurements

The fair value of the Company’s consolidated

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

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

at the measurement date.

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

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

about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities

based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Quoted prices in active markets for identical assets or liabilities.

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

Observable inputs other than Level 1 inputs.

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

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

The following table presents information about

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

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

Warrant liability

December 31, 2021

Warrant liability

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

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

table below shows the change in fair value of warrant liabilities as of December 31, 2022:

The private warrants are accounted for as liabilities

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

Changes in the fair value of the warrants

are recorded in the statement of operations each period.

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

as of December 31, 2023:

Fair value at January 1, 2023

Initial recognition

Change in fair value

Fair value as of December 31, 2023

Company established the initial fair value for the private warrants at $ 587,717 (including over-allotment) on April 4, 2022, the date

of the Company’s IPO, using the Black-Scholes model.

The Company allocated the proceeds received from the sale of Private Units,

first to the private warrants based on their fair values as determined at initial measurement, with the remaining proceeds recorded as

common shares subject to possible redemption, and common shares based on their relative fair values recorded at the initial measurement

The warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs.

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

The Company established the initial fair value

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

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

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

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

The warrants were classified as Level 3 at the initial

measurement date due to the use of unobservable inputs.

The key inputs into the Black-Scholes model were

as follows at their measurement date:

Exercise Price

3 unchanged sentences

Risk-free rate

ACQUISITION CORP.

TO FINANCIAL STATEMENTS

10 — Income Taxes

Company’s net deferred tax assets are as follows:

The fair value of the Convertible Note 1 was estimated

at the as converted value at March 31, 2023 and initial measurement date of March 22, 2023 to be $ 13,930 and $ 13,910 , respectively.

fair value of the Convertible Note 2 was estimated at the as converted value at March 31, 2023 and initial measurement date of March 30,

2023 to be $ 33,400 and $ 33,400 , respectively.

The binomial tree model was used for the underlying warrants based on the following key

assumptions which were unchanged as of March 31, 2023.

Time to maturity

Business combination success rate

Expected Volatility

Expected dividend rate

Risk-free rate

The following table presents the changes in the

fair value of the Level 3 Convertible Notes:

Fair value as of January 1, 2023

Proceeds received through Convertible Note 1 on March 22, 2023

Proceeds received through Convertible Note 2 on March 30, 2023

Change in valuation inputs or other assumptions

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.

As of December 31, 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 — Income Taxes

The Company’s net deferred tax assets are

Deferred tax asset

4 unchanged sentences

Valuation allowance

Deferred tax asset (liability), net of allowance

income tax provision consists of the following:

Deferred tax liability, net of allowance

The income tax provision consists of the following:

For the year ended

Change in valuation allowance

Income tax provision

reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows:

A reconciliation of the Company’s statutory

income tax rate to the Company’s effective income tax rate is as follows (in thousands):

For the year ended

Income at U.S.

2 unchanged sentences

Change in fair value of warrants

Transaction costs

Change in valuation allowance

of December 31, 2022, the Company did not have any U.S.

federal and state net operating loss carryovers available to offset future taxable

assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all

of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of

future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies

in making this assessment.

After consideration of all of the information available, management believes that significant uncertainty

exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.

in the valuation allowance was $ 112,138 for the year ended December 31, 2022.

As of December 31, 2023 and 2022, the Company

did not have any U.S.

federal and state net operating loss carryovers available to offset future taxable income.

In assessing the realization of the deferred tax

assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which

temporary differences representing net future deductible amounts become deductible.

Management considers the scheduled reversal of deferred

tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

After consideration of all of

the information available, management believes that significant uncertainty exists with respect to future realization of the deferred

tax assets and has therefore established a full valuation allowance.

The changes in the valuation allowance were $ 308,260 and $ 112,138

for the year ended December 31, 2023 and 2022, respectively.

The provisions for U.S.

federal and state income taxes were $ 322,025

(including deferred tax liability of $ 78,955 ) and $ 0 for the year ended December 31, 2022 and for the period from March 16, 2021 (inception)

to December 31, 2021, respectively.

The Company’s tax returns for the year ended December 31, 2022 and 2021 remain open and subject

to examination.

11 — Subsequent Events

federal income taxes were

$ 690,572 and $ 322,025 (including deferred tax liability of $ 17,919 and $ 78,955 ) for the years ended December 31, 2023 and 2022, respectively.

The Company’s tax returns for the year ended December 31, 2023, 2022 and 2021 remain open and subject to examination.

Note 11 — 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 financial statements were issued.

Based on the review, management identified the following subsequent events that are required disclosure

in the financial statements.

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

non-interest bearing promissory note in the principal amount of up to $ 150,000 to the Sponsor.

The promissory note is payable upon the

closing of the Business Combination or the liquidation of the Company.

The holder of the promissory note, in its sole discretion, may

convert any or all of the unpaid principal under the promissory note into private units of the Company, at a price of $ 10.00 per unit,

upon consummation of the Business Combination.

On March 30, 2023, the Company issued an unsecured,

non-interest bearing promissory note in the principal amount of up to $ 360,000 to the Sponsor.

The promissory note is payable upon the

closing of the Business Combination or the liquidation of the Company.

The holder of the promissory note, in its sole discretion, may

convert any or all of the unpaid principal under the promissory note into private units of the Company, at a price of $ 10.00 per unit,

upon consummation of the Business Combination.

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 of the Company’s common stock were tendered for

Subject upon 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.

the 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 consolidated financial statements.

On January 31, 2024, February 29, 2024, and March

31, 2024, the Sponsor made a deposit of $ 35,000 each time into the Trust Account to further extend the business combination period from

February 4, 2024 to May 4, 2024.

On April 12, 2024, the Company

completed its special meeting that was originally convened and adjourned on March 8, 2024.

At the special meeting holders of 4,189,027

shares of common stock of the Company were present in person or by proxy, representing 81 % of the total shares of common stock as of February

16, 2024, the record date for the special meeting, and constituting a quorum for the transaction of business.

At the special meeting,

the stockholders approved the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal,

the director election proposal and the Nasdaq proposal.

The Company plans to close the business combination transaction as soon as possible

and will continue to accept reversal of redemption requests until closing.

The Company’s stockholders elected to redeem an aggregate of 1,739,776 shares of common stock in connection with the special meeting.

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

What changed 10-K

Item 9A. Controls and Procedures