OneMedNet Corp 10-Q/A

Item 1. Financial Statements Financial Statements: Condensed Consolidated Balance Sheet as of September 30, 2023 (Unaudited) and as of December 31, 2022 (Audited) 1 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 (Unaudited) and for the three and nine months ended September 30, 2022 (Unaudited) 2 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 (Unaudited) and for the three and nine months ended September 30, 2022 (Unaudited) 3 Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2023 (Unaudited) and for the nine months ended September 30, 2022 (Unaudited) 4 Notes to Condensed Consolidated Financial Statements (Unaudited) 5 iv ONEMEDNET CORPORATION (F/K/A DATA KNIGHTS ACQUISITION CORP.) CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2023 2022 (Unaudited) (Audited) ASSETS Current assets Cash $ 1,537 $ 30,870 Prepaid expense 21,600 - Total Current Assets 23,137 30,870 Investments held in Trust Account 19,308,261 29,029,416 Total assets $ 19,331,398 $ 29,060,286 LIABILITIES AND STOCKHOLDER’S EQUITY Current Liabilities Accrued expenses $ 2,835,755 $ 1,679,821 Amount due to related parties 11,200 11,500 Income tax payable 120,017 214,850 Franchise tax payable - 69,966 Excise tax liability 113,353 - Total Current Liabilities 3,080,325 1,976,137 Warrant liabilities 604,849 362,558 Deferred underwriter fee payable 4,025,000 4,025,000 Extension loan 3,556,278 207,081 Working capital loans 477,548 2,545,838 Total liabilities 11,744,000 9,116,614 Commitments and Contingencies - - Class A Common Stock subject to possible redemption; 1,712,698 and 2,731,544 shares at redemption value of $ 11.22 and $ 10.53 per share as of September 30, 2023 and December 31, 2022, respectively 19,209,844 28,750,110 Stockholders’ Deficit Preferred shares, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding - - Class A Common Stock, $ 0.0001 par value; 100,000,000 shares authorized; 585,275 issued and outstanding, excluding 1,712,698 and 2,731,544 shares subject to redemption as of September 30, 2023 and December 31, 2022, respectively 59 59 Class B Common Stock, par value $ 0.0001 ; 10,000,000 shares authorized; 4,253,517 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 425 425 Common Stock, value 425 425 Additional paid-in capital 917,476 2,825,823 Accumulated deficit ( 12,540,406 ) ( 11,632,745 ) Total Stockholders’ Deficit ( 11,622,446 ) ( 8,806,438 ) Total Liabilities and Stockholders’ Deficit $ 19,331,398 $ 29,060,286 The accompanying notes are an integral part of the condensed consolidated financial statements. 1 ONEMEDNET CORPORATION (F/K/A DATA KNIGHTS ACQUISITION CORP.) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 2023 2022 2023 2022 For the For the Three Months Ended Nine months ended September 30, September 30, 2023 2022 2023 2022 Formation and operating costs $ 908,077 $ 467,223 $ 1,455,434 $ 1,771,902 Franchise tax expense 10,400 52,802 102,281 152,802 Loss from operation costs ( 918,477 ) ( 520,025 ) ( 1,557,715 ) ( 1,924,704 ) Other income (expense): Dividends, realized and unrealized gain in Trust Account 431,961 587,303 1,102,363 779,706 Change in fair value of warrant liabilities ( 242,291 ) ( 113,829 ) ( 242,291 ) 4,243,893 Net income (loss) before provision for income taxes $ ( 728,807 ) $ ( 46,551 ) $ ( 697,643 ) $ 3,098,895 Provision for income taxes ( 87,713 ) ( 106,724 ) ( 210,017 ) ( 106,724 ) Net income (loss) $ ( 816,520 ) $ ( 153,275 ) $ ( 907,660 ) $ 2,992,171 Weighted average shares outstanding of Class A Common Stock subject to redemption 2,166,749 11,500,000 2,541,210 11,500,000 Basic and diluted net income (loss) per common stock $ ( 0.12 ) $ 0.01 $ ( 0.12 ) $ 0.20 Weighted average shares outstanding of Class A and Class B non-redeemable common stock 4,838,792 3,460,275 4,838,792 3,460,275 Basic and diluted net income (loss) per common stock $ ( 0.12 ) $ 0.01 $ ( 0.12 ) $ 0.20 The accompanying notes are an integral part of the condensed consolidated financial statements. 2 ONEMEDNET CORPORATION (F/K/A DATA KNIGHTS ACQUISITION CORP.) CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 (UNAUDITED) Shares Amounts Shares Amounts Capital Deficit Deficit Class A Class B Additional Total Common Stock Common Stock Paid in Accumulated Stockholders’ Shares Amounts Shares Amounts Capital Deficit Deficit Balance — January 1, 2023 585,275 $ 59 4,253,517 $ 425 $ 2,242,253 $ ( 11,632,745 ) $ ( 8,806,438 ) Re-measurement of Class A Common Stock Subject to Possible Redemption — — — — ( 583,570 ) — ( 583,570 ) Net Loss — — — — — ( 85,983 ) ( 85,983 ) Balance — March 31, 2023 (unaudited) 585,275 $ 59 4,253,517 $ 425 $ 2,242,253 $ ( 11,718,728 ) $ ( 9,475,991 ) Re-measurement of Class A Common Stock Subject to Possible Redemption — — — — ( 604,656 ) — ( 604,656 ) Net Loss — — — — — ( 5,158 ) ( 5,158 ) Balance — June 30, 2023 (unaudited) 585,275 $ 59 4,253,517 $ 425 $ 1,637,597 $ ( 11,723,886 ) $ ( 10,085,805 ) Re-measurement of Class A Common Stock Subject to Possible Redemption — — — — ( 606,768 ) — ( 606,768 ) Excise tax liability — — — — ( 113,353 ) — ( 113,353 ) Net Loss — — — — — ( 816,520 ) ( 816,520 ) Balance — September 30, 2023 (unaudited) 585,275 $ 59 4,253,517 $ 425 $ 917,476 $ ( 12,540,406 ) $ ( 11,622,446 ) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 (UNAUDITED) Class A Class B Additional Total Common Stock Common Stock Paid in Accumulated Stockholders’ Shares Amounts Shares Amounts Capital Deficit Deficit Balance — January 1, 2022 585,275 $ 59 2,875,000 $ 288 $ — $ ( 8,609,810 ) $ ( 8,609,463 ) Re-measurement of carrying value of Class A redeemable stock to redemption value — — — — — ( 1,150,000 ) ( 1,150,000 ) Net income — — — — — 3,145,445 3,145,455 Balance — June 30, 2022 (unaudited) 585,275 $ 59 2,875,000 $ 288 $ — $ ( 6,614,365 ) $ ( 6,614,018 ) Re-measurement of carrying value of Class A redeemable stock to redemption value — — — — — ( 1,150,000 ) ( 1,150,000 ) Accretion of Class A common stocks at redemption value — — — — — ( 533,869 ) ( 533,869 ) Net income — — — — — ( 153,275 ) ( 153,275 ) Net income (loss) — — — — — ( 153,275 ) ( 153,275 ) Balance — September 30, 2022 (unaudited) 585,275 $ 59 2,875,000 $ 288 $ — $ ( 8,451,509 ) $ ( 8,451,162 ) Balance 585,275 $ 59 2,875,000 $ 288 $ — $ ( 8,451,509 ) $ ( 8,451,162 ) The accompanying notes are an integral part of the condensed consolidated financial statements. 3 ONEMEDNET CORPORATION (F/K/A DATA KNIGHTS ACQUISITION CORP.) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 2023 2022 For the Nine Months Ended September 30, 2023 2022 Cash flow from operating activities: Net income (loss) $ ( 907,660 ) $ 2,992,171 Adjustments to reconcile net income to net cash used in operating activities: Dividends, realized and unrealized gain in Trust Account ( 1,102,363 ) ( 779,706 ) Change in fair value of warrant liability 242,291 ( 4,243,893 ) Changes in operating assets and liabilities: Prepaid expense ( 21,600 ) 83,061 Accrued expenses 1,155,934 1,159,114 Franchise tax payable ( 69,966 ) ( 114,008 ) Income tax payable ( 94,833 ) 106,724 Net cash used in operating activities ( 798,197 ) ( 796,537 ) Cash flow from investing activities: Investment of cash in Trust Account ( 1,010,440 ) ( 2,300,000 ) Cash withdrawn from Trust Account in connection with redemption 11,335,260 - Interest withdraw from Trust Account 498,697 226,809 Net cash used in investing activities 10,823,517 ( 2,033,191 ) Cash flow from financing activities: Advances from related parties ( 300 ) — Proceeds from working capital loan 270,467 300,000 Redemption of Class A common stock ( 11,335,260 ) - Amount due to related parties - 11,500 Proceeds from extension loans 1,010,440 2,300,000 Net cash provided by financing activities ( 10,054,653 ) 2,611,500 Net change in cash ( 29,333 ) ( 218,228 ) Cash at the beginning of the period 30,870 453,151 Cash at the end of the period $ 1,537 $ 234,923 Supplemental disclosure of non-cash financing activities: Re-measurement of Class A common stock subject to possible redemption $ 1,794,994 $ 2,833,869 Excise tax liability accrued for Class A Common Stock subject to redemption $ 113,353 $ - The accompanying notes are an integral part of the condensed consolidated financial statements. 4 ONEMEDNET CORPORATION (F/K/A DATA KNIGHTS ACQUISITION CORP.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS OneMedNet Corporation (f/k/a Data Knights Acquisition Corp.) (the “Company”) was incorporated in Delaware on February 8, 2021. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of September 30, 2023, the Company had not yet commenced any operations. All activity for the period February 8, 2021 (inception) through September 30, 2023, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”), and, since the closing of the initial public offering, the Company has entered into a merger agreement (as described below), and continued a search for a Business Combination candidate. The Company has selected December 31 as its fiscal year end. The registration statement for the Company’s Initial Public Offering was declared effective on May 6, 2021. On May 11, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (“Units” and, with respect to the shares of Class A Common Stock included in the Units offered, the “Public Shares”), generating gross proceeds of $ 115,000,000 , which is described in Note 3. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 585,275 private placement units (the “Private Placement Units”) at a price of $ 10.00 per unit in a private placement to the Sponsor, generating gross proceeds of $ 5,852,750 , which is described in Note 4. Following the closing of the Initial Public Offering on May 11, 2021, an amount of $ 117,300,000 ($ 10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Units was placed in a trust account (“Trust Account”) which may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account to the Company’s stockholders, as described below. Transaction costs of the Initial Public Offering amounted to $ 6,771,112 , of which $ 2,300,000 was for underwriting fees paid at the time of the IPO, $ 4,025,000 was for deferred underwriting commissions, and $ 446,112 was for other offering costs. Following the closing of the Initial Public Offering $ 959,560 of cash was held outside of the Trust Account available for working capital purposes. As of September 30, 2023, the Company has $ 1,537 of cash and a working capital deficit of $ 2,943,835 . The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80 % of the balance in the Trust Account (as defined below) (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50 % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully affect a Business Combination. 5 NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Continued) On April 25, 2022, the Company, Data Knights Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and Data Knights, LLC, the Company’s sponsor (the “Sponsor”), entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with OneMedNet Corporation, Inc., a Delaware corporation (the “Target”, and together with the Company and Merger Sub, the “Parties”) and Paul J. Casey, as seller representative (“Casey”). Pursuant to the Merger Agreement, upon the closing (the “Closing”) of the Business Combination, the Parties will effect the merger of Merger Sub with and into the Target, with the Target continuing as the surviving entity (the “Merger”), as a result of which all of the issued and outstanding capital stock of the Target shall be exchanged shares of the Class A Common Stock of the Company upon the terms set forth in the Merger Agreement. On May 5, 2022, the Company extended the date by which the Company has to consummate a business combination from May 11, 2022 to August 11, 2022 (the “First Extension”). The First Extension was the first of two three-month extensions permitted under the Company’s governing documents. On August 10, 2022, the Company extended the date by which the Company has to consummate a business combination from August 11, 2022 to November 11, 2022 (the “Second Extension”). The Second Extension was the second of two three-month extensions permitted under the Company’s governing documents. On October 27, 2022, the Company filed a definitive proxy statement with the SEC in connection with the Company’s solicitation of proxies for the vote by the stockholders of the Company at a special meeting of the Company’s stockholders to be held on November 11, 2022 (the “Special Meeting”). On November 11, 2022, at 10:00 a.m. ET, the Company held a virtual special meeting of its stockholders. At the special meeting, Company stockholders entitle to vote at the special meeting cast their votes and approved the Trust Amendment Proposal, pursuant to which the Trust Agreement was amended to extend the date on which Continental must liquidate the Trust Account established in connection with the IPO if the Company has not completed its initial business combination, from November 11, 2022 to August 11, 2023 (or such earlier date after November 11, 2022, as determined by the Company Board). As a part of Special Meeting, the Company’s stockholders approved amendments to its second amended and restated certificate of incorporation (the “Extension Amendment”) and the investment management trust agreement (the “Trust Agreement”) between Continental Stock Transfer & Trust Company, as trustee (“Continental”), and the Company governing the trust account (the “Trust Account”) established in connection with the Company’s initial public offering dated May 11, 2021 (the “Trust Amendment”), which together allow the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods. In connection with each such extension, Data Knights, LLC, the Company’s sponsor, shall cause $ 0.045 per outstanding share of the Company’s Class A Common Stock, or approximately $ 122,920 , to be deposited in the Trust Account.On July 12, 2023, the Company elected to exercise its ninth of nine one-month extension to the Termination Date, which extended its deadline to complete its initial business combination to August 11, 2023, by depositing $ 0.045 per share for each Public Share outstanding after giving effect to the redemptions disclosed above, or approximately $ 122,920 , was deposited in the Trust Account. 6 NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Continued) In connection with the proposed Business Combination with the Target, the Company will provide its public stockholders with the opportunity to redeem all or a portion of their Class A Common Stock upon the completion of such Business Combination in connection with a stockholder meeting called to approve such Business Combination. In the event the proposed Business Combination with the Target is not consummated, in connection with an alternative proposed initial business combination, the Company will provide its 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. In connection with a proposed Business Combination, the Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $ 5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. In connection with the voting on the Extension Amendment Proposal and the Trust Amendment Proposal at the special meeting, holders of 8,768,456 shares of Class A Common Stock exercised their right to redeem those shares for cash at an approximate price of $ 10.42 per share, for an aggregate of approximately $ 91.4 million. Following the payment of the redemptions, the Trust Account had a balance of approximately $ 28.5 million. On August 11, 2023, at 1:00 p.m. ET, the Company held a virtual special meeting of its stockholders. At the Special Meeting, the Company stockholders entitled to vote at the Special Meeting cast their votes and approved the proposal (the “Trust Amendment Proposal”) to authorize the Company to enter into Amendment No. 2 to the Trust Agreement (the “Trust Agreement Amendment”) to amend the Trust Agreement to allow the Company to extend beyond August 11, 2023 the date by which either the Company must have completed its initial business combination or Continental must liquidate the Trust Account established in connection with the IPO (the “Trust Account”). Following approval of the Trust Amendment Proposal by the Stockholders, the Company and Continental promptly entered into the Trust Agreement Amendment. At the Special Meeting, the Stockholders approved the Extension Amendment Proposal to amend Company’s Charter and authorized the Company to adopt and file the Amended Charter with the Secretary of State of Delaware, which the Company promptly filed following the Stockholders’ approval. The stockholders approved amendments to the Company’s charter and trust agreement allowing the Company to extend its termination date in a series of up to nine (9) one-month extensions until May 11, 2024 in exchange for depositing into its trust account (the “Trust Account”) with Continental Stock Transfer and Trust Company the lesser of $75,000 or $0.045 per share for each public share outstanding (the “Extension Amount”). In connection with the voting on the Extension Amendment Proposal and the Trust Amendment Proposal at the Special Meeting, holders of 1,018,846 shares of Class A ordinary shares exercised the right to redeem such shares for cash. On August 11, 2023, the Company deposited $ 75,000 into the Company’s trust account, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from August 11, 2023 to September 11, 2023 (the “Extension”). The Extension is the first of nine (9) one-month extensions permitted under the Company’s governing documents. As of September 30, 2023, the Company has executed two one-month extensions, out of the nine, resulting in deposits of approximately $ 150,000 into the Trust Account. 7 NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Continued) Based on the above, the Company will have until May 11, 2024 to consummate a Business Combination. If the Company is unable to complete a Business Combination on May 11, 2024 at the election of the Company subject to satisfaction of certain conditions, including the deposit of up $ 2,300,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit), into the Trust Account, or as extended by the Company’s stockholders in accordance with the Company’s amended and restated certificate of incorporation) (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no 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 earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $ 100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of applicable law. The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the 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 the Initial Public Offering price per Unit ($ 10.00 ). There will be no redemption rights or liquidating distributions with respect to the Founder Shares (as defined below) or the shares of Class A Common Stock and the warrants that are included as components of the Private Placement Units. Such warrants will expire worthless if the Company fails to complete a Business Combination within the Combination Period. The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party 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) $ 10.20 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $ 10.20 per share due to reductions in the value of the trust assets, 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 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 underwriter of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure its stockholders that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Business Combination with OneMedNet On November 7, 2023, the Company consummated its initial business combination (the “Business Combination”) with OneMedNet Solutions Corporation (formerly named OneMedNet Corporation), a Delaware corporation (“OneMedNet”), pursuant to an agreement and plan of merger, dated as of April 25, 2022 (the “Merger Agreement”), by and among the Company, Data Knights Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), OneMedNet, Data Knights, LLC, a Delaware limited liability company (“Sponsor” or “Purchaser Representative”) in its capacity as the representative of the stockholders of the Company, and Paul J. Casey in his capacity as the representative of the stockholders of OneMedNet (“Seller Representative”). 8 NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Continued) On July 22, 2022, the Company filed a registration statement on Form S-4 (File No. 333-266274) (the “Form S-4”, as amended on September 20, 2022, November 10, 2022, January 3, 2023, February 3, 2023, April 11, 2023, July 5, 2023, August 2, 2023, August 8, 2023, August 29, 2023 and September 21, 2023) with the SEC, which includes the proxy statement/prospectus/information statement distributed to holders of the Company’s ordinary shares in connection with the Company’s solicitation for proxies for the vote by the Company’s stockholders in connection with the Business Combination and other matters as described in the Form S-4. The Form S-4 was declared effective by the SEC on September 22, 2023, and the definitive proxy statement/prospectus/information statement was mailed to the Company’s shareholders of record on the record date for voting on the Business Combination. The Business Combination closed on November 13, 2023. Effective November 7, 2023, the Company’s units ceased trading, and effective November 8, 2023, the Company’s common stock began trading on the Nasdaq Capital Market under the symbol “ONMD” and warrants began trading on the Nasdaq Capital Market under the symbol “ONMDW.” The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby the Company is treated as the acquired company and OneMedNet is treated as the acquirer. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of OneMedNet issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company were stated at historical cost, with no goodwill or other intangible assets recorded. Subsequent presentations of the results of operations presented for the period prior to the Business Combination will be for those of OneMedNet. OneMedNet has been determined to be the accounting acquirer in the Business Combination based on the following predominate factors: ● OneMedNet’s existing stockholders have the greatest voting interest in the combined entity; ● OneMedNet has the ability to nominate a majority of the initial members of the OneMedNet Board; ● OneMedNet’s senior management is the senior management of the combined entity; and ● OneMedNet is the larger entity based on historical operating activity and has the larger employee base. Going Concern, Liquidity and Capital Resources As of September 30, 2023 and December 31, 2022, the Company had cash held outside of the Trust Account of $ 1,537 and $ 30,870 , respectively. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete our initial business combination. As of September 30, 2023 and December 31,2022, the Company had working capital deficit of $ 3,057,188 and $ 1,945,267 , respectively. The Company’s liquidity needs prior to the consummation of its IPO were satisfied through the proceeds of $ 25,000 from the sale of the Founder Shares and proceed from the promissory note from sponsor of $ 78,925 , which was repaid upon closure of the IPO. Subsequent to the IPO, the Company’s liquidity will be satisfied through a portion of the net proceeds from IPO held outside of the Trust Account. As of September 30, 2023 and December 31, 2022, we had investments of $ 19,308,261 and $ 29,029,416 held in the Trust Account, respectively. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes paid and deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes. For the nine months ended September 30, 2023, we withdraw $ 498,697 of interest earned on the Trust Account pay Delaware Franchise Tax and Income Tax. During the period ended December 31, 2022, we withdraw $ 299,601 interest earned on the Trust Account to pay Delaware Franchise Tax. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. 9 NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Continued) The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management plans to address this uncertainty during the period leading up to the business combination, however this cannot be guaranteed. The Company will have until May 11, 2024 to consummate a Business Combination. If our initial business combination is not consummated by May 11, 2024, less than one year after the date the financial statements are issued, then our existence will terminate, and we will distribute all amounts in the trust account. The Company intends to complete a business combination before the liquidation date and no adjustments have been made to the carrying amounts of assets or liabilities should the company be required to liquidate after such date. There can be no assurance that the Company will be able to consummate an initial business combination by May 11, 2024 and/or have sufficient working capital and borrowing capacity to meet its needs. Based upon the above analysis, management determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern. In order to fund working capital deficiencies or finance transaction costs in connection with our initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Accounts to repay such loaned amounts but no proceeds from our Trust Accounts would be used for such repayment. Up to $ 1,500,000 of such loans may be convertible into units identical to the Placement Units, at a price of $ 10.00 per unit at the option of the lender. Risks and Uncertainties Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statement. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law. The IR Act provides for, among other measures, a new 1% U.S. federal excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from whom the shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased. For purposes of calculating the excise tax, however, 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. The U.S. Department of the Treasury (the “Treasury Department”) 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. 10 NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Continued) Any redemption or other repurchase effected by us that occurs after December 31, 2022, in connection with a Business Combination or otherwise, may be subject to this excise tax. Whether and to what extent we would be subject to the excise tax in connection with a Business Combination will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, (ii) the nature and amount of any PIPE financing or other equity issuances in connection with the Business Combination (or any other equity issuances within the same taxable year of the Business Combination) and (iii) the content of any regulations and other guidance issued by the Treasury Department and/or the Internal Revenue Service. In addition, because the excise tax would be payable by us and not by the redeeming holder, it could cause a reduction in the value of our stock. The foregoing could cause a reduction in the cash available on hand to complete a business Combination in the required time and redeem 100% of our public shares in accordance with our amended and restated certificate of incorporation) could be subject to the excise tax, in which case the amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. 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. In addition, certain exceptions apply to the excise tax. The U.S. 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. 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. 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 August 2023; as a result, the Company recorded $113,353 excise tax liability as of September 30, 2023. The Company will continue to monitor for updates to the Company’s business along with guidance issued with respect to the IR Act to determine whether any adjustments are needed to the Company’s tax provision in future periods. 11 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying financial statements are presented in U.S. Dollars and conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. 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 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 The preparation of financial statements in conformity with GAAP requires management to make 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 amounts of revenues and 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 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 highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The Company had $ 1,537 and $ 30,870 in cash and no cash equivalents as of September 30, 2023 and December 31, 2022, respectively. 12 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Trust Account Upon the closing of the Initial Public Offering and the Private Placement, $ 117,300,000 ($ 10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was held in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government treasury obligations 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 1940, as amended (the “Investment Company Act”), which will be invested only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below. Offering Costs Associated with the Initial Public Offering Offering costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as offering costs allocated to warrants in the consolidated statements of operations. Offering costs associated with the Public Shares were charged to stockholders’ equity upon the completion of the Initial Public Offering. Class A Common Stock Subject to Possible Redemption The Company accounts for its shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable shares of common stock (including shares of common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, shares are classified as stockholders’ equity. The Company’s Class A 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. On September 30, 2023, there are 585,275 shares of Class A Common Stock related to the Private Placement Units (Note 8) outstanding, which are not subject to redemption, and 1,712,698 shares of Class A Common Stock outstanding, which are subject to possible redemption. 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 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). 13 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) As of September 30, 2023 and 2022, the Class A Common Stock reflected on the balance sheet are reconciled in the following table: SCHEDULE OF RECONCILED CLASS A COMMON STOCK 2023 2022 For the Nine Months Ended September 30, 2023 2022 Contingently redeemable Class A Common Stock – Opening Balance $ 28,750,110 $ 117,300,000 Less: Redemption of Class A Common Stock, including interest ( 11,335,260 ) Plus: Re-measurement of carrying value to redemption value 1,794,994 2,833,869 Contingently redeemable Class A Common Stock - Ending Balance 19,209,844 120,133,869 Net income (loss) per share Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock shares outstanding for the period. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the Initial Public Offering and warrants issued as components of the Private Placement Units (the “Placement Warrants”) since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The Company applies the two-class method in calculating earnings per share. The contractual formula utilized to calculate the redemption amount approximates fair value. The Class feature to redeem at fair value means that there is effectively only one class of stock. Changes in fair value are not considered a dividend for the purposes of the numerator in the earnings per share calculation. Net income per common share is computed by dividing the pro rata net income (loss) between the redeemable shares and the non-redeemable shares by the weighted average number of common shares outstanding for each of the periods. The calculation of diluted income (loss) per common stock does not consider the effect of the warrants issued in connection with the IPO since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable for 12,085,275 shares of common stock in the aggregate. 14 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The following table reflects the calculation of basic and diluted net income (loss) per common share: RECONCILIATION OF NET LOSS PER COMMON SHARE 2023 2022 2023 2022 For the Three Months Ended For the Nine months ended September 30, September 30, 2023 2022 2023 2022 Redeemable Class A common shares Numerator: Net income (loss) allocable to common stock subject to possible redemption $ ( 252,542 ) $ ( 117,823 ) $ ( 312,541 ) $ 2,300,089 Denominator: weighted average number of redeemable common share 2,166,749 11,500,000 2,541,210 11,500,000 Basic and diluted net income (loss) per redeemable common share $ ( 0.12 ) $ 0.01 $ ( 0.12 ) $ 0.20 Non-redeemable Class A and Class B common shares Numerator: Net income (loss) allocable to common stock not subject to redemption $ ( 563,978 ) $ ( 35,452 ) $ ( 595,119 ) $ 692,082 Denominator: weighted average number of non-redeemable common shares 4,838,792 3,460,275 4,838,792 3,460,275 Basic and diluted net income (loss) per non-redeemable common share $ ( 0.12 ) $ 0.01 $ ( 0.12 ) $ 0.20 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 which, at times may exceed the Federal depository insurance coverage of $250,000. At September 30, 2023 and 2022, the Company had 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 The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature, except warrant liabilities (See Note 9). Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. 15 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the United States is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2023 and 2022, respectively. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Our effective tax rate was ( 12.03 )% and ( 229.26 )% for the three months ended September 30, 2023 and 2022, respectively. Our effective tax rate was ( 30.10 )% and 3.44 % for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21 % for the three months ended September 30, 2023 and 2022, due to transaction costs and the valuation allowance on the deferred tax assets. Recently Issued Accounting Standards In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt — Debt with Conversion and Other Options” (Subtopic 470-20) and “Derivatives and Hedging — Contracts in Entity’s Own Equity” (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for the Company for the fiscal year beginning after December 15, 2023, including interim periods within those fiscal years. Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. NOTE 3. INITIAL PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 11,500,000 Units at a purchase price of $ 10.00 per Unit. Each Unit consists of one share of the Company’s Class A Common Stock, $ 0.0001 par value, and one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A Common Stock at an exercise price of $ 11.50 per whole share (see Note 9). NOTE 4. PRIVATE PLACEMENT Simultaneously with the Initial Public Offering, the Sponsor purchased an aggregate of 585,275 Private Placement Units at a price of $ 10.00 per Private Placement Unit for an aggregate purchase price of $ 5,852,750 . The Private Placement Units are identical to the Units, except that (a) the Private Placement Units and their component securities will not be transferable, assignable or saleable until 30 days after the consummation of the Company’s initial business combination except to permitted transferees and (b) the Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) may be exercised by the holders on a cashless basis and (ii) will be entitled to registration rights. 16 NOTE 5. RELATED PARTY TRANSACTIONS Introducing Advisor Agreement On June 26, 2021, the Company entered into an introducing advisor agreement (the “Introducing Advisor Agreement”) with ARC Group Limited, the Company’s financial advisor (“ARC”), pursuant to which ARC will make strategic introductions to the Company of potential target companies and/or their subsidiaries, affiliates, or representatives (each an “Advisor Target”) who may be interested in potential business combinations with the Company. In consideration for ARC’s services under the Introducing Advisor Agreement, we agreed to (i) pay to ARC (a) a retainer of $ 50,000 upon execution of the Introducing Advisor Agreement and (b) a success fee of $ 100,000 upon the closing our initial business combination, and (ii) cause to be issued to ARC equity interests in the post-combination company representing a five-percent ( 5 %) ownership interest in the post-combination company, if at any time prior to June 25, 2022 (the “Termination Date”), or within six ( 6 ) months after the consummation of an initial business combination or any financing with any Advisor Target or any affiliate of an Advisor Target (the “Equity Issuance”). On March 22, 2022, the Company and ARC entered into the First Amendment to the Introducing Advisor Agreement, pursuant to which both parties agreed that the Company would pay to ARC an additional success fee equivalent to five percent ( 5 %) on any PIPE that was brought by ARC in connection with the Company’s initial business combination upon the closing of the Company’s initial business combination. On December 31, 2022, the Company and ARC entered into the Second Amendment to the Introducing Advisor Agreement, pursuant to which both parties agreed to extend the Termination Date to December 31, 2024, and to change the performance condition for the Equity Issuance from the closing of an initial business combination to the execution of a business combination agreement. On December 31, 2022, following the execution of the Second Amendment to the Introducing Advisor Agreement, the performance condition for the Equity Issuance was deemed to have been met, and ARC was issued 1,378,517 shares of the Company’s Class B Common Stock, up to 143,766 shares of which are subject to forfeiture if the public stockholders exercise redemption rights with respect to any of the remaining outstanding shares of Class A Common Stock. Founder Shares On February 25, 2021, the Company issued an aggregate of 2,875,000 shares of Class B Common Stock (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $ 25,000 . On February 25, 2021, the Sponsor transferred 15,000 shares to the Company’s Chief Executive Officer, 15,000 shares to the Company’s Chief Financial Officer and 5,000 shares to two of the Company’s independent directors. Following the determination of the Company’s third independent director, on March 23, 2021, the Sponsor transferred 5,000 shares to such independent director. The Founder Shares which the Sponsor and its permitted transferees will collectively own, on an as-converted basis, represent 20 % of the Company’s issued and outstanding shares after the Initial Public Offering. In connection with the Introducing Advisors Agreement, on December 31, 2022, ARC was granted 1,378,517 shares of Class B common stock, $ 0.0001 par value per share, up to 143,766 of which are subject to forfeiture by ARC if the Company’s public shareholders exercise redemption rights with respect to any of outstanding shares of Class A common stock. 17 NOTE 5. RELATED PARTY TRANSACTIONS (Continued) The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) six months after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last reported sale price of the Company’s Class A Common Stock equals or exceeds $ 12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Note — Related Party On February 8, 2021, the Sponsor committed to loan the Company an aggregate of up to $ 300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and was payable on the earlier of July 31, 2021 or the completion of the Initial Public Offering. On June 1, 2021, the $ 78,925 outstanding under the promissory note was repaid in full. On September 30, 2023 and December 31, 2022, there is no amount outstanding under the promissory note. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of notes may be converted upon consummation of a Business Combination into units at a price of $ 10.00 per unit. The Units will be identical to the Private Placement Units. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. On September 30, 2023 and December 31, 2022, there is $ 477,548 and $ 207,081 outstanding under the Working Capital Loans, respectively. 18 NOTE 5. RELATED PARTY TRANSACTIONS (Continued) The Company’s second amended and restated certificate of incorporation provides that, if the Company anticipates that it may not be able to consummate a Business Combination within 12 months from the closing of the Company’s initial public offering, the Company may, by resolution of the Company’s board if requested by the Sponsor, extend the period of time to consummate a Business Combination up to two times, each by an additional three months (for a total of up to 18 months to complete a Business Combination), subject to the Sponsor depositing additional funds into the Trust Account as set out below. Pursuant to the terms of the Company’s second amended and restated certificate of incorporation and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company, in order for the time available for the Company to consummate the initial Business Combination to be extended, the Sponsor or its affiliates or designees, upon five business days advance notice prior to the applicable deadline, must deposit into the Trust Account $ 1,150,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit), on or prior to the date of the applicable deadline, for each of the available three month extensions, providing a total possible Business Combination period of 18 months at a total payment value of $ 2,300,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit) (the “Extension Loans”). Any such payments would be made in the form of non-interest-bearing loans. If the Company completes its initial Business Combination, the Company will, at the option of the Sponsor, repay the Extension Loans out of the proceeds of the Trust Account released to the Company or convert a portion or all of the total loan amount into units at a price of $ 10.00 per unit, which units will be identical to the Private Placement Units. If the Company does not complete a Business Combination, the Company will repay such loans only from funds held outside of the Trust Account. Furthermore, the letter agreement among the Company and the Company’s officers, directors, and the Sponsor contains a provision pursuant to which the Sponsor will agree to waive its right to be repaid for such loans to the extent there is insufficient funds held outside of the Trust Account in the event that the Company does not complete a Business Combination. The Sponsor and its affiliates or designees are not obligated to fund the Trust Account to extend the time for the Company to complete the initial Business Combination. The public stockholders will not be afforded an opportunity to vote on the extension of time to consummate an initial Business Combination from 12 months to 18 months described above or redeem their shares in connection with such extensions. Pursuant to the foregoing, on May 5, 2022, the Company extended the date by which the Company had to consummate a business combination from May 11, 2022 to August 11, 2022. On August 10, 2022, the Company extended the date by which the Company had to consummate a business combination from August 11, 2022 to November 11, 2022. As described in Note 1, on August 11, 2023, the Stockholders of the Company approved the Extension Amendment and the Trust Amendment to allow the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods from August 11, 2023. In connection with each such extension, Data Knights, LLC, the Company’s sponsor, caused approximately $ 75,000 , deposited in the Trust Account in connection with the exercise of the monthly extension. In connection with each such extension, the Company will have until May 11, 2023 to consummate a Business Combination(see Note 10). On September 30, 2023 and December 31, 2022, there is $ 3,556,278 and $ 2,545,838 outstanding under the Extension Loan, respectively. Administrative Services Arrangement Commencing on the date of the prospectus and until completion of the Company’s Business Combination or liquidation, the Company may reimburse ARC Group Ltd., an affiliate of the Sponsor, up to an amount of $ 10,000 per month for office space, secretarial and administrative support. For the three months ended September 30, 2023 and 2022, we have incurred $ 30,000 in fees under this agreement, respectively. For the nine months ended September 30, 2023 and 2022, we have incurred $ 90,000 in fees under this agreement, respectively. 19 NOTE 6. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on May 6, 2021, the holders of the Founder Shares, Private Placement Units (including the securities contained therein), the units (including the securities contained therein) that may be issued upon conversion of the Working Capital Loans, and any shares of Class A Common Stock issuable upon the exercise of the Placement Warrants and any shares of Class A Common Stock, warrants (and underlying Class A Common Stock) that may be issued upon conversion of the units issued as part of the working capital loans and Class A Common Stock issuable upon conversion of the founder shares are entitled to registration rights. The holders of a majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriters Agreement The Company granted the underwriter a 45 -day option to purchase up to 1,500,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The aforementioned option was exercised on May 11, 2021. The underwriter was paid a cash underwriting discount of two percent ( 2.00 %) of the gross proceeds of the Initial Public Offering, or $ 2,300,000 . In addition, the underwriter is entitled to a deferred fee of three and a half percent ( 3.50 %) of the gross proceeds of the Initial Public Offering, or $ 4,025,000 . The deferred fee was placed in the Trust Account and will be paid in cash upon the closing of a Business Combination, subject to the terms of the underwriting agreement. Right of First Refusal For a period beginning on May 7, 2021 and ending 12 months from the closing of a business combination, we have granted the underwriters a right of first refusal to act as lead-left book running manager and lead left manager for any and all future private or public equity, convertible and debt offerings during such period. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first refusal shall not have a duration of more than three years from the effective date of our Registration Statement. First Amendment to the Introducing Advisor Agreement On March 22, 2022, the Company and ARC entered into the First Amendment to the Introducing Advisor Agreement, pursuant to which both parties agreed that the Company would pay to ARC an additional success fee equivalent to five percent ( 5 %) on any PIPE that was brought by ARC in connection with an initial business combination upon the closing of an initial business combination. Second Amendment to the Introducing Advisor Agreement On December 31, 2022, the Company and ARC entered into the Second Amendment to the Introducing Advisor Agreement, pursuant to which both parties agreed to extend the Termination Date to December 31, 2024, and to change the performance condition for the Equity Issuance from the closing of an initial business combination to the execution of a business combination agreement. On December 31, 2022, following the execution of the Second Amendment to the Introducing Advisor Agreement, the performance condition for the Equity Issuance was deemed to have been met, and ARC was issued 1,378,517 shares of the Company’s Class B Common Stock, up to 143,766 shares of which are subject to forfeiture if the public stockholders exercise redemption rights with respect to any of the remaining outstanding shares of Class A Common Stock. 20 NOTE 7. WARRANT LIABILITY Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any shares of Class A Common Stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A Common Stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A Common Stock is available, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of its initial Business Combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement or a new registration statement covering the shares of Class A Common Stock issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A Common Stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A Common Stock issuable upon exercise of the warrants is not effective by the 60th business day after 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 the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.. Notwithstanding the above, if the Company’s shares of Class A Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, it may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event it does not so elect, it will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. Redemption of warrants when the price per Class A Common Stock equals or exceeds $ 18.00 . Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $ 0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and certain issuances of Class A Common Stock and equity-linked securities) for any 20 trading days within a 30-trading day period commencing no earlier than the date the warrants become exercisable and ending on the third business day before the date on which the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. 21 NOTE 7. WARRANT LIABILITY (Continued) 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. The exercise price and number of shares of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Window and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. The Placement Warrants were identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Placement Warrants and the Class A Common Stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. In addition, if (x) the Company issues additional shares of Class A Common Stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $ 9.20 per share of Class A Common Stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (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 on the date of the consummation of such initial Business Combination (net of redemptions), 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 Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180 % of the greater of the Market Value and the Newly Issued Price and the $ 10.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to the greater of the Market Value and the Newly Issued Price. The Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Placement Warrants and the Class A Common Stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. At September 30, 2022 and December 31, 2022, the Company accounted for the aggregate 12,085,275 warrants issued in connection with the Initial Public Offering (the 11,500,000 Public Warrants and the 585,275 Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value, with the change in fair value recognized in the Company’s statement of operations. 22 NOTE 8. STOCKHOLDER’S EQUITY Preferred Shares — The Company is authorized to issue 1,000,000 preferred shares with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At September 30, 2023 and December 31, 2022, there were no preferred shares issued or outstanding. Class A Common Stock — The Company is authorized to issue 100,000,000 shares of Class A Common Stock with a par value of $ 0.0001 per share. Holders of the Company’s Class A Common Stock are entitled to one vote for each share . At September 30, 2023 and December 31, 2022, there were 1,712,698 shares of Class A Common Stock issued and outstanding that were subject to possible redemption and 585,275 shares of non-redeemable Class A Common Stock issued and outstanding that were issued in connection with the private placement (Note 4). Class B Common Stock — The Company is authorized to issue up to 10,000,000 shares of Class B Common Stock with a par value of $ 0.0001 per share. Holders of the Company’s Class B Common Stock are entitled to one vote for each share . On February 25, 2021, the Sponsor transferred 15,000 shares to the Company’s Chief Executive Officer, 15,000 shares to the Company’s Chief Financial Officer and 5,000 shares to two of the Company’s independent directors. Following the determination of the Company’s third independent director, on March 23, 2021, the Sponsor transferred 5,000 shares to such independent director. On December 31, 2022, ARC Group Limited, the Company’s Financial Advisor, was granted 1,378,517 shares of Class B common stock with a par value of $ 0.0001 per share, up to 143,766 of which are subject to forfeiture if the Company’s public stockholders exercise redemption rights with respect to any of the Company’s remaining outstanding shares of Class A common stock. Accordingly, at September 30, 2023 and December 31, 2022, there were 4,253,517 shares of Class B Common Stock issued and outstanding. Holders of Class A Common Stock and Class B Common Stock will vote together as a single class on all other matters submitted to a vote of stockholders, except as required by law. The shares of Class B Common Stock will automatically convert into shares of Class A Common Stock at the time of the Business Combination on a one -for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like. In the case that additional shares of Class A Common Stock, or equity linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B Common Stock shall convert into shares of Class A Common Stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B Common Stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A Common Stock issuable upon conversion of all shares of Class B Common Stock will equal, in the aggregate, on an as converted basis, 20 % of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A Common Stock and equity linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity linked securities issued, or to be issued, to any seller in a Business Combination, and any private placement-equivalent units and its underlying securities issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company may issue additional common stock or preferred stock to complete its Business Combination or under an employee incentive plan after completion of its Business Combination. 23 NOTE 9. FAIR VALUE MEASUREMENTS The following table presents information about the Company’s assets and derivative warrant liabilities that are measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value: SCHEDULE OF FAIR VALUE HIERARCHY OF VALUATION TECHNIQUES Description (Level 1) (Level 2) (Level 3) September 30, 2023 Quoted Prices in Significant Other Significant Other Active Markets Observable Inputs Unobservable Inputs Description (Level 1) (Level 2) (Level 3) Asset: Investments held in Trust Account $ 19,308,261 $ — $ — Warrant Liabilities: Public Warrants $ 575,000 $ — $ — Private Placement Warrants $ — $ — $ 29,849 Description (Level 1) (Level 2) (Level 3) December 31, 2022 Quoted Prices in Significant Other Significant Other Active Markets Observable Inputs Unobservable Inputs Description (Level 1) (Level 2) (Level 3) Asset: Investments held in Trust Account $ 29,029,416 $ — $ — Warrant Liabilities: Public Warrants $ 345,000 $ — $ — Private Placement Warrants $ — $ — $ 17,558 The Warrants are measured at fair value on a recurring basis. The Public Warrants were valued initially and at each reporting period that the warrants were not actively traded, using a Monte Carlo simulation. As of September 30, 2023 and December 31, 2022, the Public Warrants were valued using the instrument’s publicly listed trading price, which is considered to be a Level 1 measurement due to the use of an observable market quote in an active market. Private Placement Warrants were valued using a Monte Carlo valuation model using level 3 inputs at initial valuation and as of September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, assets held in the Trust Account were invested solely in Morgan Stanley Bank cash, bank deposit program and money market fund and BlackRock US Treasury mutual fund of $ 19,308,261 and $ 29,029,416 , respectively. The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the consolidated statement of operations. The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Initial Public Offering. Accordingly, the Company classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation. This liability is subject to remeasurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. 24 NOTE 9. FAIR VALUE MEASUREMENTS (Continued) The Company utilized a Monte Carlo simulation to estimate the fair value of the Public warrants at each reporting period for its warrants that are not actively traded. Inherent in a Monte Carlo simulation are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero . On June 22, 2021, the Public Warrants surpassed the threshold waiting period to be publicly traded. Once publicly traded, the observable input qualifies the liability for treatment as a Level 1 liability. As such, as of September 30, 2023 and December 31, 2022, the Company classified the Public Warrants as Level 1. The estimated fair value of the Private Placement Warrants is determined using Level 3 inputs. Inherent in a Monte Carlo model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero . Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. For the three months ended September 30, 2023 and December 31, 2022, there were no transfers between levels. The following table provides quantitative information regarding Level 3 fair value measurements inputs as their measurement dates: SCHEDULE OF FAIR VALUE MEASUREMENTS INPUTS AS THEIR MEASUREMENT DATES September 30, 2023 December 31, 2022 (Private Warrants) (Private Warrants) Exercise price $ 11.50 $ 11.50 Share price $ 11.26 $ 10.44 Expected term (years) 5.61 5.12 Probability of Acquisition 2.10 % 2.75 % Volatility 7.9 % 4.2 % Risk-free rate 4.50 % 3.91 % Dividend yield (per share) $ 0.00 $ 0.00 The change in the fair value of the derivative warrant liabilities for the three months ended September 30, 2023 and 2022 is as follows: SCHEDULE OF CHANGES IN FAIR VALUE OF DERIVATIVE WARRANT LIABILITIES Private Warrants Public Warrants Total Warrant Liability Fair value as of December 31, 2022 $ 17,558 $ 345,000 $ 362,558 Change in valuation inputs or other assumptions (1) 12,291 230,000 242,291 Fair value as of September 30, 2023 $ 29,849 $ 575,000 $ 604,849 Private Warrants Public Warrants Total Warrant Liability Fair value as of December 31, 2021 $ 251,668 $ 4,600,000 $ 4,851,668 Fair value, beginning balance $ 251,668 $ 4,600,000 $ 4,851,668 Change in valuation inputs or other assumptions (1) ( 117,640 ) ( 2,645,000 ) ( 2,762,640 ) Fair value as of September 30, 2022 $ 134,028 $ 1,955,000 $ 2,089,028 Fair value, ending balance $ 134,028 $ 1,955,000 $ 2,089,028 (1) Changes in valuation inputs or other assumptions are recognized in the change in fair value of warrant liability in the consolidated statement of operations. 25 NOTE 10. SUBSEQUENT EVENTS In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identified any subsequent events that would have required adjustment or disclosure in the financial statements other than as described below. On October 12, 2023, the Company elected to exercise its eighth of third one-month extension to the Termination Date , which extended its deadline to complete its initial business combination to November 11, 2023, by depositing $ 75,000 into the Trust Account. On October 17, 2023, the Company held a special meeting of its stockholders (the “Stockholders”) in lieu of the 2023 annual meeting of stockholders (the “Special Meeting”) in connection with the transactions contemplated by that certain Agreement and Plan of Merger dated April 25, 2022 (the “Merger Agreement”), by and among the Company, Data Knights Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Data Knights, LLC, the Company’s sponsor, OneMedNet Solutions Corporation (formerly named OneMedNet Corporation), a Delaware corporation, (“OneMedNet”), and Paul J. Casey, as seller representative (such transactions, collectively, the “Business Combination”). At the Special Meeting, the Stockholders were asked to consider and vote on the proposals identified in the definitive proxy statement/prospectus that the Company filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 21, 2023 (the “Definitive Proxy”). Proposals 1 through 7 set forth below were approved: - Proposal 1 : To approve an amendment to the Second Amendment to the Second Amended and Restated Certificate of Incorporation (the “Charter”) effective prior to the consummation of the Business Combination, to remove from the Charter the redemption limitation contained under Section 9.2(a) preventing the Company from closing a business combination if it would have less than $5,000,0001 of net tangible assets (the “NTA Proposal”) . - Proposal 2 : To approve and adopt the Merger Agreement and approve the transactions contemplated thereby (the “Business Combination Proposal”). - Proposal 3 : To approve, for purposes of complying with Nasdaq Listing Rules 5635(a) and (b), the issuance of more than 20 % of the issued and outstanding Class A common stock and the resulting change in control in connection with the Business Combination (the “Nasdaq Proposal”). 26 NOTE 10. SUBSEQUENT EVENTS (Continued) - Proposal 4 : To approve the Third Amended and Restated Certificate of Incorporation, which shall become effective upon the closing of the Business Combination (the “Charter Amendment Proposal”), including (i) the addition of a supermajority voting requirement to amend the Surviving Corporation’s Bylaws, and (ii) the addition of a supermajority voting requirement to amend Articles V (Board of Directors), VI (Stockholders), VII (Liability and Indemnification; Corporate Opportunity), VIII (Business Combinations), IX (Exclusive Forum), and Article X (Amendments) to the Third Amended and Restated Certificate of Incorporation. - Proposal 4A : To approve the addition to Company’s Certificate of Incorporation of a super majority voting requirement to amend the Surviving Corporation’s Bylaws (the “Bylaw Amendment Requirement”), as contained in the Third Amended and Restated Certificate of Incorporation. - Proposal 4B: To approve the addition to the Company’s Certificate of Incorporation of a super majority voting requirement (the “Article Amendment Requirement”) to amend Articles V (Board of Directors), VI (Stockholders), VII (Liability and Indemnification; Corporate Opportunity), VIII (Business Combinations), IX (Exclusive Forum), and Article X (Amendments) of the Third Amended and Restated Certificate of Incorporation. - Proposal 5 : To elect eight directors to serve on the Company’s board of directors following the consummation of the Business Combination until the 2024 annual meeting of Stockholders, in the case of Class I directors, the 2025 annual meeting of Stockholders, in the case of Class II directors, and the 2026 annual meeting of Stockholders, in the case of Class III directors, and, in each case, until their respective successors are duly elected and qualified (the “Director Election Proposal”). - Proposal 6 : To approve the 2022 Equity Incentive Plan (the “Incentive Plan Proposal”). - Proposal 7 : To approve adjourning the Special Meeting to a later date or dates, if necessary to permit further solicitation and vote of proxies if it is determined by the Company that more time is necessary or appropriate to approve one or more Proposals at the Special Meeting (the “Adjournment Proposal”). In connection with the Special Meeting, certain Stockholders (the “Redeeming Stockholders”) holding 1,614,148 shares of Class A Common Stock (after giving effect to withdrawals of redemptions) exercised their right to redeem such shares for a pro rata portion of the funds held by Continental Stock Transfer & Trust Company, as trustee (“Continental”) in the trust account established in connection with the Company’s initial public offering (the “Trust Account”). As a result, approximately $ 17.9 million (approximately $ 11.12 per share) will be removed from the Trust Account to pay the Redeeming Stockholders, and approximately $ 1.1 million will remain in the Trust Account. On November 7, 2023, the Company consummated the Business Combination with OneMedNet pursuant to Merger Agreement, following the approval of the Business Combination at the Special Meeting. On November 7, 2023, at the closing of the Business Combination pursuant to the Merger Agreement, Merger Sub merged with and into OneMedNet with OneMedNet surviving the Merger, as a wholly-owned subsidiary of the Company, and the Company changed its name to “OneMedNet Corporation.” 27