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Item 7. Management’s Discussion and Analysis

2024-02-26 compared with 2023-03-06 · 250 added, 183 removed, 33 unchanged (93% of the section changed)

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion

and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited consolidated

financial statements and the notes related thereto which are included in “Item 8.

Consolidated Financial Statements and Supplementary

Data” of this Annual Report on Form 10-K.

Certain information contained in the discussion and analysis set forth below includes

forward-looking statements.

Our actual results may differ materially from those anticipated in these forward-looking statements as a

result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Item

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

with our audited consolidated financial statements and the notes related thereto which are included in “Item 8.

Consolidated Financial

Statements and Supplementary Data” of this Annual Report on Form 10-K.

Certain information contained in the discussion and analysis

set forth below includes forward-looking statements.

Our actual results may differ materially from those anticipated in these forward-looking

statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,”

Risk Factors” and elsewhere in this Annual Report on Form 10-K.

We are a blank check company

incorporated on April 19, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset

acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).

We consummated our initial public offering on December 22, 2021 and are currently in the process of locating suitable targets for our

business combination.

We intend to use the cash proceeds from our Public Offering and the Private Placement described below as well as

additional issuances, if any, of our capital stock, debt or a combination of cash, stock and debt to complete the Business Combination.

We expect to incur significant

costs in the pursuit of our initial Business Combination.

We cannot assure you that our plans to raise capital or to complete our initial

Business Combination will be successful.

Recent Developments

On November 7, 2022, NorthView

entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”), by and among NorthView, NV Profusa Merger

Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of NorthView (“Merger Sub”), and Profusa, Inc., a California

corporation (“Profusa”).

The Merger Agreement provides

that, among other things, at the closing (the “Closing”) of the transactions contemplated by the Merger Agreement, Merger

Sub will merge with and into Profusa (the “Merger”), with Profusa surviving as a wholly-owned subsidiary of NorthView.

connection with the Merger, NorthView will change its name to “Profusa, Inc.” The Merger and the other transactions contemplated

by the Merger Agreement are hereinafter referred to as the “Business Combination.”

The Business Combination is

subject to customary closing conditions, including the satisfaction of the minimum available cash condition, the receipt of certain governmental

approvals and the required approval by the stockholders of NorthView and Profusa.

There is no assurance that the Business Combination

will be completed.

The aggregate consideration

to be received by the Profusa stockholders is based on a pre-transaction equity value of $155,000,000.

The exchange ratio will be equal

to (a) $155,000,000, divided by an assumed value of NorthView Common Stock of $10.00 per share.

Subject to certain

future revenue and stock-price based milestones, Profusa stockholders will have the right to receive an aggregate of up to an

additional 3,875,000 shares of NorthView Common Stock (the “Earnout Shares”).

One-quarter of the Earnout Shares will be

issued if, between the 18-month anniversary and the two year anniversary of the Closing, the combined company’s common stock

achieves a daily volume weighted average market price of at least $12.50 per share for any 20 trading days within a 30 consecutive

are a blank check company incorporated on April 19, 2021 as a Delaware corporation and formed for the purpose of effecting a merger,

capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses

(a “Business Combination”).

We consummated our initial public offering on December 22, 2021 and are currently in the process

of locating suitable targets for our business combination.

We intend to use the cash proceeds from our Public Offering and the Private

Placement described below as well as additional issuances, if any, of our capital stock, debt or a combination of cash, stock and debt

to complete the Business Combination.

expect to incur significant costs in the pursuit of our initial Business Combination.

We cannot assure you that our plans to raise capital

or to complete our initial Business Combination will be successful.

Proposed Business Combination

November 7, 2022, NorthView entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”), by and among

NorthView, NV Profusa Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of NorthView (“Merger Sub”),

and Profusa, Inc., a California corporation (“Profusa”).

Merger Agreement provides that, among other things, at the closing (the “Closing”) of the transactions contemplated by the

Merger Agreement, Merger Sub will merge with and into Profusa (the “Merger”), with Profusa surviving as a wholly-owned subsidiary

of NorthView.

In connection with the Merger, NorthView will change its name to “Profusa, Inc.” The Merger and the other transactions

contemplated by the Merger Agreement are hereinafter referred to as the “Business Combination.”

Business Combination is subject to customary closing conditions, including the satisfaction of the minimum available cash condition of

$15,000,000, the receipt of certain governmental approvals and the required approval by the stockholders of NorthView and Profusa.

is no assurance that the Business Combination will be completed.

aggregate consideration to be received by the Profusa stockholders is based on a pre-transaction equity value of $155,000,000.

ratio will be equal to (a) $155,000,000, divided by an assumed value of NorthView Common Stock of $10.00 per share.

to the Merger Agreement, subject to certain future revenue and stock-price based milestones, Profusa stockholders will have the right

to receive an aggregate of up to an additional 3,875,000 shares of NorthView Common Stock (the “Earnout Shares”).

of the Earnout Shares will be issued if, between the 18-month anniversary and the two year anniversary of the Closing, the combined company’s

common stock achieves a daily volume weighted average market price of at least $12.50 per share for any 20 trading days within a 30 consecutive

trading day period (“Milestone Event I”).

One-quarter of the Earnout Shares will be issued if, between the first and

second anniversary of the Closing, the combined company’s common stock achieves a daily volume weighted average market price

of at least $14.50 per share for a similar number of days (“Milestone Event II”).

One-quarter of the Earnout Shares will

be issued if the combined company achieves at least $5,100,000 in revenue or $73,100,000 in revenue in fiscal years 2023 or 2024,

respectively (or up to one-half of the Earnout Shares if both milestones are achieved).

Additionally, if Milestone

Event I or Milestone Event II are achieved by the second anniversary of the Closing, NorthView’s sponsor, NorthView Sponsor I, LLC

and Profusa stockholders, will be issued additional shares up to the amount of any shares forgone as an inducement to obtaining Additional

Financings (as defined in the Merger Agreement).

Results of Operations

One-quarter of the Earnout Shares will be issued if, between the first and second

anniversary of the Closing, the combined company’s common stock achieves a daily volume weighted average market price of at least

$14.50 per share for a similar number of days (“Milestone Event II”).

Pursuant to the Merger Agreement, the remaining one-quarter

of the Earnout Shares were to be issued if the combined company achieves at least $5,100,000 in revenue in fiscal year 2023, and one-quarter

of the Earnout Shares will be issued if the combined company achieves at least $73,100,000 in revenue in fiscal year 2024, (or up to

one-half of the Earnout Shares if both milestones are achieved).

On September 12, 2023, the parties to the Merger Agreement entered into

Amendment No.

1 to the Merger Agreement (the “Amendment”) pursuant to which the parties agreed to revise the revenue earnout

milestones to reflect updated projections provided by Profusa.

Specifically, Amendment No.

1 revised the definition of “Milestone

Event III” and “Milestone Event IV” such that one-quarter of the Earnout Shares would be issued to Profusa stockholders

if the combined company achieves Earnout Revenue of $11,864,000 for the fiscal year ended December 31, 2024, and one-quarter of the Earnout

Shares would be issued to Profusa stockholders if the combined company achieves Earnout Revenue of $99,702,000 for the fiscal year ended

December 31, 2025.

Amendment No.

1 also clarified the exercise price of certain the Company Warrants.

Additionally,

if Milestone Event I or Milestone Event II are achieved by the second anniversary of the Closing, NorthView’s sponsor, NorthView

Sponsor I, LLC and Profusa stockholders, will be issued additional shares up to the amount of any shares forgone as an inducement to

obtaining Additional Financings (as defined in the Merger Agreement).

On September 14, 2023 and September 29, 2023, the Company paid Profusa related expenses in the amount of $25,000, respectively, for a

total of $50,000.

The Profusa related expenses will not be repaid and are reflected in operating costs in the Company’s consolidated

statement of operations.

December 21, 2023, the Company held a special meeting of stockholders to vote on extending the Combination Period.

As a result, the Company

has extended the Combination Period from December 22, 2023 to March 22, 2024.

In connection with the extension, 140,663 shares of the

Company’s common stock were redeemed, with 6,027,219 shares of Common Stock remaining outstanding after the Redemption;

shares of Common Stock remaining outstanding after the Redemption are shares issued in connection with our initial public offering.

January 2024, $1,565,078 was paid from the trust account to redeeming stockholders in connection with the extension.

As a result, the

Company has recorded a liability of $1,565,078 as common stock to be redeemed and reduced common stock subject to possible redemption

as of December 31, 2023 on the balance sheet.

Nasdaq Delisting Notification

On January 11, 2024, we received

a written notice (the “Notice”) from the Listing Qualifications Department of Nasdaq indicating that we are not in compliance

with Nasdaq Listing Rule 5620(a) (the “Annual Stockholders Meeting Rule”) due to our failure to hold an annual meeting of

stockholders within twelve months of the end of our fiscal year end.

The Notice is only a notification of deficiency, not of imminent

delisting, and has no current effect on the listing or trading of our securities on the Nasdaq Stock Market.

The Notice stated that we

had 45 calendar days, or until February 26, 2024, to submit a plan to regain compliance with the Annual Stockholders Meeting Rule.

expect to submit to Nasdaq a plan to regain compliance with the Annual Stockholders Meeting Rule within the required timeframe, but there

can be no assurance that we will be able to do so.

of Operations

of December 31, 2023, we had not commenced any operations.

6 unchanged sentences

form of interest income and unrealized gains from the cash and marketable securities held in the Trust Account.

We expect to incur increased

expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due

diligence expenses.

We expect to incur expenses

as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence

For the year ended December

31, 2022, we had net income of $7,167,738, which consisted of a gain of $6,358,235 for the change in fair value of our warrant liabilities

and interest income of $2,579,268, offset by formation and operating costs of $1,270,554 and provision for income taxes of $499,211.

are required to revalue our liability-classified warrants at the end of each reporting period and reflect in the statement of operations

a gain or loss from the change in fair value of the warrant liabilities in the period in which the change occurred.

For the period from April

19, 2021 (inception) through December 31, 2021, we had net income of $300,433, which consisted of a gain of $597,567 for the change in

fair value of our warrant liabilities and interest income of $6,461, offset by formation and operating costs of $45,047 and offering costs

allocated to warrants of $258,548.

Liquidity and Going Concern

As of December 31, 2022, we

had approximately $0.2 million in cash and working capital of approximately $0.2 million.

31, 2023, we had net income of $1,161,910, which consisted of interest income on securities held in the Trust Account of $2,248,538 and

a gain of $701,148 for the change in fair value of our warrant liabilities and change in fair value of convertible note of $177,697,

offset by operating costs of $1,508,683, and income tax provision of $456,790.

We are required to revalue our liability-classified warrants

at the end of each reporting period and reflect in the consolidated statements of operations a gain or loss from the change in fair value

of the warrant liabilities in the period in which the change occurred.

the year ended December 31, 2022, we had net income of $7,167,738, which consisted of a gain of $6,358,235 for the change in fair value

of our warrant liabilities and interest income of $2,579,268, offset by formation and operating costs of $1,270,554 and provision for

income taxes of $499,211.

We are required to revalue our liability-classified warrants at the end of each reporting period and reflect

in the statement of operations a gain or loss from the change in fair value of the warrant liabilities in the period in which the change

and Going Concern

As of December 31, 2023,

we had $4,519 in cash and a working capital deficit of $3,345,130.

For the year ended December

31, 2023, cash used in operating activities was $2,064,860.

Net income of $7,167,738 was impacted primarily by trust interest income of $2,579,268

and change in fair value of our warrant liabilities of $6,358,235.

Changes in operating assets and liabilities reflected a source of cash

of $1,188,576 from operating activities during such period.

Prior to the completion of

the initial public offering, our liquidity needs had been satisfied through a capital contribution from the sponsor of $25,000 for the

founder shares to cover certain of the offering costs and the loan under an unsecured promissory note from the sponsor of $204,841, which

was fully paid upon the initial public offering.

Subsequent to the consummation of the initial public offering and private placement,

our liquidity needs have been satisfied through the proceeds from the consummation of the private placement not held in the trust account.

In addition, in order to finance

transaction costs in connection with an intended business combination, the initial stockholders or an affiliate of the initial stockholders

or certain of our officers and directors may, but are not obligated to, provide us working capital loans.

To date, there were no amounts

outstanding under any working capital loans.

We have until March 22, 2023

to consummate a Business Combination (which may be extended by up to six months as described in this report).

It is uncertain that we

will be able to consummate a Business Combination by such date.

If a Business Combination is not consummated by the required date, there

will be a mandatory liquidation and subsequent dissolution.

In connection with our assessment of going concern considerations in accordance

with the authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”)

2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern,” management has determined

that mandatory liquidation, and subsequent dissolution, should we be unable to complete a business combination, raises substantial doubt

about our ability to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements.

No adjustments have been made to the carrying amounts of assets and liabilities should we be required to liquidate after March 22, 2023.

Off-Balance Sheet Financing Arrangements

We did not have any off-balance

sheet arrangements as of December 31, 2022 and 2021.

Contractual Obligations

As of December 31, 2022 and

2021, we did not have any long-term debt, finance or operating lease obligations.

entered into an administrative services agreement with our sponsor pursuant to which we pay for office space and secretarial and administrative

services provided to members of our management team, in an amount of $5,000 per month.

For the year ended December 31, 2022, $63,387

had been incurred and billed relating to the administrative service fee.

As of December 31, 2022, $25,000 relating to the administrative

service fee was not paid yet and recorded as due to related party.

For the period from April 19, 2021 (inception) through December 31,

2021, $1,613 had been accrued and charged to operating expenses.

NorthView previously engaged

I-Bankers as an advisor to assist in holding meetings to discuss the potential business combination and the target business’ attributes,

introduce NorthView to potential investors that are interested providing funding in connection with a Business Combination, assist NorthView

in obtaining stockholder approval for such business combination and assist NorthView with its press releases and public filings in connection

with such business combination (the “Business Combination Marketing Agreement”).

In connection with such engagement, NorthView

agreed to pay IBS a cash fee (the “Business Combination Fee”) for such services upon the consummation of a business combination

Net income of $1,161,910 was impacted primarily by trust interest income

of $2,248,538, change in fair value of convertible note of $177,697, change in fair value of our warrant liabilities of $701,148.

in operating assets and liabilities reflected a use of cash of $99,387 from operating activities during such period.

the year ended December 31, 2023, cash provided by investing activities included $438,360 of extension payments made to the trust, $1,192,438

of reimbursement from the trust of franchise and income tax payments and cash withdrawn from the trust of $184,845,836 in relation to

a partial stock redemption.

the year ended December 31, 2023, cash used in financing activities included $1,121,815 of proceeds from a convertible promissory note

and $184,845,836 of a partial stock redemption.

the year ended December 31, 2022, cash used in operating activities was $581,189.

Net income of $7,167,738 was impacted primarily by

trust interest income of $2,579,268 and change in fair value of our warrant liabilities of $6,358,235.

Changes in operating assets and

liabilities reflected a source of cash of $1,188,576 from operating activities during such period.

the year ended December 31, 2022, cash provided by investing activities included $8,447 of reimbursement from the trust of franchise

tax payments and $25,000 in reimbursement from a related party.

the year ended December 31, 2022, there was no cash used in financing activities.

to the completion of the initial public offering, our liquidity needs had been satisfied through a capital contribution from the sponsor

of $25,000 for the founder shares to cover certain of the offering costs and the loan under an unsecured promissory note from the sponsor

of $204,841, which was fully paid upon the initial public offering.

Subsequent to the consummation of the initial public offering and

private placement, our liquidity needs have been satisfied through the proceeds from the consummation of the private placement not held

in the trust account, and the drawdowns on the convertible promissory note.

order to finance transaction costs in connection with an intended Business Combination, the initial stockholders or an affiliate of the

initial stockholders or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working

Capital Loans (see Note 5).

April 27, 2023, the Company signed a Convertible Working Capital Promissory Note (“the Note”) with the Sponsor for $1,200,000.

The Note is non-interest bearing and is due the earlier of the consummation of a business combination or the date of liquidation.

Sponsor may elect to convert all or any portion of the unpaid principal balance of this Note into warrants, at a price of $1.00 per warrant.

The Company had principal outstanding of $1,121,815 and is presenting the Note at fair value on its balance sheet at December 31, 2023

in the amount of $944,118.

On January 10, 2024, the Company’s Board of Directors approved,

and the Company amended, its Convertible Working Capital Promissory Note (the “Note”) with the sponsor to increase the principal

amount of the Note that could be drawn on to $1.5 million.

The amended and restated Note also allows for the conversion of the outstanding

principal balance of the Note to be repaid in shares of Company common stock at a price of $2.22 per share at the election of the sponsor.

Company has until as late as March 22, 2024 to consummate a Business Combination.

It is uncertain that the Company will be able to consummate

a Business Combination by March 22, 2024.

If a Business Combination is not consummated by the required date, there will be an option

to either extend the time available for us to consummate our initial business combination or execute a mandatory liquidation and subsequent

In connection with the Company’s assessment of going concern considerations in accordance with the authoritative guidance

in Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosure

of Uncertainties About an Entity’s Ability to Continue as a Going Concern,” management has determined that mandatory liquidation,

and subsequent dissolution, should the Company be unable to complete a business combination, raises substantial doubt about the Company’s

ability to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements.

No adjustments

have been made to the carrying amounts of assets and liabilities should the Company be required to liquidate after March 22, 2024.

Sheet Financing Arrangements

did not have any off-balance sheet arrangements as of December 31, 2023 and 2022.

of December 31, 2023 and 2022, we did not have any long-term debt, capital or operating lease obligations.

We entered into an administrative

services agreement with our sponsor pursuant to which we pay for office space and secretarial and administrative services provided to

members of our management team, in an amount of $5,000 per month.

As of June 30, 2023, the Company and the sponsor terminated this agreement.

For the year ended December 31, 2023, $30,000 had been incurred and billed relating to the administrative service fee.

As of December

31, 2023, $50,000 relating to the administrative service fee was not paid yet and recorded as due to related party.

NorthView previously engaged I-Bankers as an advisor to assist in holding

meetings to discuss the potential business combination and the target business’ attributes, introduce NorthView to potential investors

that are interested providing funding in connection with a Business Combination, assist NorthView in obtaining stockholder approval for

such business combination and assist NorthView with its press releases and public filings in connection with such business combination

(the “Business Combination Marketing Agreement”).

In connection with such engagement, NorthView agreed to pay I-Bankers and

Dawson James a cash fee (the “Business Combination Fee”) for such services upon the consummation of a business combination

in an amount equal to 3.68% of the gross proceeds of its initial public offering (exclusive of any applicable finders’ fees which

might become payable).

NorthView had also previously entered into an engagement letter (the “Engagement Letter”) contemplating

the Business Combination Fee.

In connection with the Business Combination, NorthView and I-Bankers amended the Business Combination Marketing

Agreement and the Engagement Letter to revise a portion of the Business Combination Fee to be partially payable in NorthView securities

and partially payable in cash upon the closing of the Merger with Profusa, with such securities to be subject to lock-up provisions.

Critical Accounting Policies

In connection with the Business Combination, NorthView, I-Bankers and Dawson James amended the Business Combination

Marketing Agreement to revise a portion of the Business Combination Fee to be partially payable in NorthView securities and partially

payable in cash upon the closing of the Merger with Profusa, with such securities to be subject to lock-up provisions.

Critical Accounting Policies and Estimates

Management’s discussion

11 unchanged sentences

trends and information available from outside sources, as appropriate.

Some of the more significant estimates are in connection with determining

the fair value of the warrant liabilities and convertible promissory note.

However, by their nature, judgments are subject to an inherent

degree of uncertainty, and, therefore, actual results could differ from our estimates.

Warrant Liabilities

We account for the warrants

issued in connection with the IPO 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, we classified each

warrant as a liability at its fair value.

Convertible Promissory Note

The fair value of the Company’s

convertible promissory note is valued using a compound option formula on the convertible feature and a present value of the host contract.

The valuation technique requires inputs that are both unobservable and significant to the overall fair value measurement.

reflect management’s own assumption about the assumptions a market participant would use in pricing the working capital loan.

account for the warrants issued in connection with the IPO 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.

we classified each warrant as a liability at its fair value.

This liability is subject to re-measurement at each balance sheet date.

With each such re-measurement,

the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in our consolidated statements of operations.

Net Income (Loss) Per Common Stock

We have two categories of

shares, which are referred to as common stock subject to possible redemption and common stock.

Earnings and losses are shared pro rata

between the two categories of shares.

The 17,404,250 potential shares of common stock for outstanding warrants to purchase our shares

were excluded from diluted earnings per share for the year ended December 31, 2022 and for the period from April 19, 2021 (inception)

through December 31, 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met.

diluted net income (loss) per share of common stock is the same as basic net income (loss) per share of common stock for the periods presented.

Common Stock Subject to Possible Redemption

Our common stock sold as part

of the Units in the IPO (“public common stock”) contain a redemption feature which allows for the redemption of such public

shares in connection with our liquidation, or if there is a stockholder vote or tender offer in connection with the initial Business Combination.

In accordance with ASC 480-10-S99, we classify public common stock subject to redemption outside of permanent equity as the redemption

provisions are not solely within our control.

The public common stock sold as part of the Units in the IPO was issued with other freestanding

With each such re-measurement, the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in our

consolidated statements of operations.

In determining the fair value

of the Private Placement Warrants and the Representative’s Warrants assumptions related to expected share-price volatility, expected

life and risk-free interest rate are utilized.

The Company estimates the volatility of its common stock based on historical volatility

that matches the expected remaining life of the warrants.

Income Per Common Stock

have two categories of shares, which are referred to as common stock subject to possible redemption and common stock.

Earnings and losses

are shared pro rata between the two categories of shares.

The 17,404,250 potential shares of common stock for outstanding warrants

to purchase our shares were excluded from diluted earnings per share for the year ended December 31, 2023 and 2022 because the warrants

are contingently exercisable, and the contingencies have not yet been met.

As a result, diluted net income per share of common stock

is the same as basic net income per share of common stock for the periods presented.

Stock Subject to Possible Redemption

common stock sold as part of the Units in the IPO (“public common stock”) contain a redemption feature which allows for the

redemption of such public shares in connection with our liquidation, or if there is a stockholder vote or tender offer in connection

with the initial Business Combination.

In accordance with ASC 480-10-S99, we classify public common stock subject to redemption outside

of permanent equity as the redemption provisions are not solely within our control.

The public common stock was issued with other freestanding

instruments (i.e., Public Warrants) and as such, the initial carrying value of public common stock classified as temporary equity was

the allocated proceeds determined in accordance with ASC 470-20.

The public common stock is subject to ASC 480-10-S99 and is currently

not redeemable as the redemption is contingent upon the occurrence of events mentioned above.

According to ASC 480-10-S99-15, no subsequent

adjustment is needed if it is not probable that the instrument will become redeemable.

Recent Accounting Standards

Our management does not believe

that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying

consolidated financial statements.

The JOBS Act contains

provisions that, among other things, relax certain reporting requirements for qualifying public companies.

We qualify as an “emerging

growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the

effective date for private (not publicly traded) companies.

We are electing to delay the adoption of new or revised accounting standards,

and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards

is required for non-emerging growth companies.

As a result, our consolidated financial statements may not be comparable to companies

that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the

process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

Subject to certain

conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may

not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our

system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may

be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii)

comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent

registered public accounting firm’s report providing additional information about the audit and the consolidated financial statements

(auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive

compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

These exemptions will apply

for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth

company,” whichever is earlier.

Accounting Standards

June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

This update requires financial assets

measured at amortized cost basis to be presented at the net amount expected to be collected.

The measurement of expected credit losses

is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable

forecasts that affect the collectability of the reported amount.

Since June 2016, the FASB issued clarifying updates to the new standard

including changing the effective date for smaller reporting companies.

The guidance is effective for fiscal years beginning after December 15,

2022, and interim periods within those fiscal years, with early adoption permitted.

The Company adopted ASU 2016-13 on January 1, 2023.

The adoption of ASU 2016-13 did not have a material impact on its financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic

Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional

information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further

disaggregation required for significant individual jurisdictions.

ASU 2023-09 will become effective for Annual periods beginning after

December 15, 2024.

The Company is still reviewing the impact of ASU 2023-09.

management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have

a material effect on the accompanying consolidated financial statements.

Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies.

as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements

based on the effective date for private (not publicly traded) companies.

We are electing to delay the adoption of new or revised accounting

standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such

standards is required for non-emerging growth companies.

As a result, our consolidated financial statements may not be comparable

to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally,

we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such

exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation

report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure

that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection

Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the

independent registered public accounting firm’s report providing additional information about the audit and the consolidated financial

statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation

between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an

“emerging growth company,” whichever is earlier.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis