What changed in Abacus Global Management, Inc.'s 10-K — 2022 vs 2023

Item 1. Business. Overview We are an early stage blank check company incorporated on May 22, 2020 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, which we refer to throughout this report as our initial business combination.

We intend to capitalize on the ability of our management team to identify, acquire and operate a business in the energy industry in North America, though we reserve the right to pursue an acquisition opportunity in any business or industry.

Significant Activities Since Inception On July 27, 2020, the Company consummated its initial public offering (“initial public offering”) of 30,000,000 units (the “initial units”). On August 25, 2020, we consummated the full exercise of the underwriters’ 4,500,000 unit over-allotment option (the “over-allotment units”; collectively with the initial units, the “units”).

Each unit consists of one share of Class A common stock, $0.0001 par value per share (“Class A common stock”), and one-half of one warrant (“public warrant”), each whole warrant entitling the holder to purchase one share of Class A common stock at $11.50 per share.

The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $300,000,000.

Simultaneously with the consummation of the initial public offering and the sale of the units, the Company consummated the private placement (“private placement”) of an aggregate of 8,000,000 warrants (“private placement warrants”) to our Sponsor at a price of $1.00 per private placement warrant, generating total proceeds of $8,000,000.

Simultaneously with the consummation of the full exercise of the underwriters’ over-allotment option, the Company consummated a sale of an additional 900,000 private placement warrants to our Sponsor generating additional proceeds of $900,000.

A total of $345,000,000 of the net proceeds from our initial public offering (including the over-allotment) and the private placement with the Sponsor were deposited in a trust account established for the benefit of the Company’s public stockholders. Our units began trading on July 24, 2020 on NASDAQ under the symbol ERESU.

On September 14, 2020, the securities comprising the units began separate trading. The common stock and warrants trade on NASDAQ under the symbols “ERES” and “ERESW,” respectively.

On July 25, 2022, we convened a special meeting of stockholders at which a proposal to extend the date by which we have to complete an initial business combination from July 27, 2022 to January 27, 2023 (the “First Extension Amendment Proposal”) was approved.

In connection with the special meeting, our stockholders were provided an opportunity to redeem all or a portion of their Class A common stock, and stockholders holding 24,781,028 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the trust account.

Consequently, approximately $248,087,256 (approximately $10.01 per share) was removed from the trust account to pay such redeeming holders.

Additionally, in connection with the approval of the First Extension Amendment Proposal, we issued a promissory note (the “First Extension Note”) in the principal amount of up to $1,924,356 to our Sponsor, pursuant to which our Sponsor agreed to loan us up to $1,924,356.

The First Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the our initial business combination or (b) the date of our liquidation.

In order to further extend the period we have to complete our initial business combination beyond the 27th of a given month until January 27, 2023, our Sponsor deposited an additional $320,726 into the trust account commencing on July 27, 2022 and on the 27th of each subsequent month until December 27, 2022.

As of December 31, 2022, $1,924,356 had been deposited into trust account by our Sponsor.

On August 30, 2022, the Company, LMA Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“LMA Merger Sub”), Abacus Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Abacus Merger Sub”), Longevity Market Assets, LLC, a Florida limited liability company (“LMA”) and Abacus Settlements, LLC, a Florida limited liability company (“Abacus”) entered into an Agreement and Plan of Merger, as amended on October 14, 2022 (as it may be 4 further amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Merger Agreement, (i) LMA Merger Sub will merge with and into LMA, with LMA surviving such merger as a direct wholly owned subsidiary of the Company (the “LMA Merger”) and (ii) Abacus Merger Sub will merge with and into Abacus, with Abacus surviving such merger as a direct wholly owned subsidiary of the Company (the “Abacus Merger” and, together with the LMA Merger and the other transactions contemplated by the Merger Agreement, the “Business Combination”).

The Business Combination is expected to be consummated in the first half of 2023, subject to the fulfillment of certain conditions.

Subject to the terms of the Merger Agreement, the aggregate merger consideration with respect to the holders of issued and outstanding limited liability company interests in LMA and Abacus will consist of approximately $531.8 million, payable in a number of newly issued shares of Class A common stock at a deemed value of $10.00 per share, with a portion of the aggregate merger consideration payable in cash upon the satisfaction of certain conditions.

For additional information regarding the Merger Agreement, see the Company's Current Reports on Form 8-K filed on August 30, 2022 and October 14, 2022, and the Company’s preliminary proxy statement (as amended, the “Proxy Statement”), initially filed with the Securities and Exchange Commission (the “SEC”) on October 14, 2022.

On January 20, 2023, we convened a special meeting of stockholders at which a proposal to extend the date by which we have to complete a business combination from January 27, 2023 to July 27, 2023 (the “Second Extension Amendment Proposal”) was approved.

In connection with the special meeting, our stockholders were provided an opportunity to redeem all or a portion of their Class A common stock, and stockholders holding 6,862,925 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the trust account.

Consequently, approximately $70,070,464 (approximately $10.21 per share) was removed from the trust account to pay such redeeming holders.

Additionally, in connection with the approval of the Second Extension Amendment Proposal, we issued a promissory note (the “Second Extension Note” and, together with the First Extension Note, the “Extension Notes”) in the principal amount of up to $565,497 to our Sponsor, pursuant to which our Sponsor agreed to loan us up to $565,497.

The Second Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the our initial business combination or (b) the date of our liquidation.

In order to further extend the period we have to complete our initial business combination beyond the 27th of a given month until July 27, 2023, our Sponsor will deposit an additional $94,250 into the trust account commencing on January 27, 2023 and on the 27th of each subsequent month until July 27, 2023.

As of April 17, 2023, $282,750 had been deposited into trust account by our Sponsor.

Business Strategy Our acquisition and value creation strategy is to source, acquire and, after our initial business combination, grow a company in the energy industry in North America that complements the experience of our management team and Board and can benefit from their respective operational and financial expertise and experience through multiple industry cycles.

We believe the deep industry and investing experience of our directors, the extensive experience of our Chief Executive Officer, Terrence M.

Pegula, and the rest of our management team that has operated through numerous market cycles and our operating platform’s deep geological knowledge, uniquely positions us to identify, source, negotiate and execute a business combination with attractive risk-adjusted returns for our stockholders.

We believe that there is a unique and timely opportunity to achieve attractive returns by acquiring and exploiting oil and natural gas E&P assets in proven basins with extensive production history and limited geologic risk, though we reserve the right to pursue an acquisition opportunity in any business or industry. Our acquisition strategy will leverage Mr.

Pegula’s extensive experience and relationships built over more than 40 years of forming and operating oil and gas companies, and the financial and operational expertise of the rest of our team, to identify potential proprietary and public transaction opportunities that we believe could benefit from our knowledge and experience and that offer the potential for an attractive risk-adjusted return profile under our operatorship.

Mr. Pegula and other members of our management team have developed a broad network of contacts and corporate relationships over their careers that we believe will serve as a useful source of acquisition opportunities.

Our ability to evaluate public/private and brokered/non-brokered deals provides us exposure to an extraordinarily broad set of potential acquisition opportunities in the energy sector that is not broadly available to our potential competitors.

In addition to industry and lending community relationships, we plan to leverage relationships with management teams of public and private companies, family offices, private equity firms, value chain partners, investment bankers, restructuring advisers, attorneys and accountants, which we believe should 5 provide us with numerous business combination opportunities.

In connection with our search for a suitable business combination target, members of our management team and Board communicate with their networks of relationships to articulate the parameters for our search for a target business and a potential business combination and begin the process of pursuing and reviewing potentially interesting leads.

Our business strategy is focused on identifying and acquiring long-lived assets with relatively stable decline profiles and low fixed costs supported by existing production and cash flow, but that we believe are underperforming their potential.

Even fundamentally sound companies can underperform their full-potential due to numerous factors, including underinvestment, a temporary period of dislocation in the markets in which they operate, over-levered capital structures, excessive cost structures, incomplete management teams and/or inappropriate business strategies. Our management team has extensive experience in identifying and executing such full-potential acquisitions in the energy industry.

We plan to capitalize on the broad range of our team’s skill sets, backgrounds, experiences, and other intellectual capital to identify and realize unexploited value. Our management team and Board have successfully executed on this business strategy across multiple energy market cycles, identifying value that the broader market has not recognized and acquiring assets at attractive valuations.

Furthermore, we believe in taking a conservative approach to valuation. When implementing our business strategy, we place significant emphasis on cash-on-cash returns, which we plan to maximize by (i) employing a conservative capital allocation strategy based on full cycle economics and (ii) focusing on implementation of cost reductions and enhancement of existing asset efficiency.

In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to us and our business.

The risks include the following summary risk factors: • our ability to select an appropriate target business or businesses; • our ability to complete our initial business combination; • our expectations around the performance of a prospective target business or businesses; • our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; • our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; • our potential ability to obtain additional financing to complete our initial business combination; • our pool of prospective target businesses; • any adverse effects stemming from economic, business or competitive factors; • any volatility in the markets caused by geopolitical and economic factors; • our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-19 pandemic and economic uncertainty and volatility in the financial markets, including as a result of the military conflict in Ukraine; • the ability of our officers and directors to generate a number of potential investment opportunities; • our public securities’ potential liquidity and trading; • our ability to meet NASDAQ’s listing standards before and after the initial business combination; • the lack of a market for our securities; • the potential tax implications of redemptions of our Class A common stock; • the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; • the trust account potentially being subject to claims of third parties; • any litigation, complaints and/or adverse publicity; • any changes in applicable laws or regulations; or 20 • our financial performance.

The risk factors related to the proposed Business Combination are set forth in the Proxy Statement filed with the SEC, which will be distributed to our stockholders in advance of the special meeting held in connection with the proposed Business Combination.

We are an early stage company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. We are an early stage company with limited operating results.

Because we lack significant operating history, you have little basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We may be unable to complete our business combination. If we fail to complete our business combination, we will never generate any operating revenues.

Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons.

Except as required by law, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval.

Accordingly, we may complete our initial business combination even if holders of a majority of our public shares do not approve of the business combination we complete. Please see the section of this report entitled “Business—Stockholders May Not Have the Ability to Approve our Initial Business Combination” for additional information.

If we seek stockholder approval of our initial business combination, our Sponsor has agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our Sponsor agreed to vote its founder shares, as well as any public shares purchased during or after offering, in favor of our initial business combination.

As our Sponsor, officers and directors currently hold more than the majority of the outstanding shares of our common stock and our Sponsor, officers and directors have agreed to vote their shares in favor of a proposed business combination and not redeem any of their shares in connection with such stockholder vote, their vote is sufficient to have our initial business combination approved.

Accordingly, if we seek stockholder approval of our initial business combination, we will have the necessary stockholder approval, whereas that may not have been the case if our Sponsor had agreed to vote its founder shares in accordance with the majority of the votes cast by our public stockholders.

Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of the business combination. You may not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses.

Since our Board may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote.

Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination. 21 The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.

If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.

Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination.

Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination.

Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us. The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.

At the time we enter into an agreement for our initial business combination, we will not know how many public stockholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.

If our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing.

In addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.

Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.

The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination.

The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

If our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased.

If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account.

If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account.

In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination on terms that would produce value for our stockholders.

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by July 27, 2023.

Consequently, such target 22 business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above.

In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.

Holders On April 17, 2023, there was one holder of record of our units, one holder of record of our Class A common stock, two holders of record of our Class B common stock and three holders of record of our warrants. Securities Authorized for Issuance Under Equity Compensation Plans. None.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings. On July 27, 2020, we sold 8,000,000 private placement warrants to the Sponsor at $1.00 per warrant, generating gross proceeds of $8.0 million.

On August 25, 2020, we completed an additional private sale, in connection with the full exercise of the underwriters’ over-allotment option under the initial public offering, of 900,000 private placement warrants to the Sponsor at $1.00 per warrant, generating gross proceeds of $900,000.

Each private placement warrant is exercisable to purchase one share of Class A common stock at $11.50 per share. On July 27, 2020, we consummated our initial public offering of 30,000,000 units at $10.00 per unit, generating gross proceeds of $300 million.

On August 25, 2020, the underwriters fully exercised their over-allotment option to purchase 4,500,000 additional units to cover over-allotments at $10.00 per unit, which generated additional gross proceeds of $45.0 million. Wells Fargo Securities, LLC served as the sole book-running manager for the offering.

The securities sold in the initial public offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-239677) that became effective on July 23, 2020. We paid a total of $6,900,000 in underwriting discounts and commissions and $865,171 for other costs and expenses related to the initial public offering.

The underwriters agreed to defer an additional $12,075,000 in underwriting discounts and commissions, payable upon consummation of our initial business combination. Wells Fargo Securities, LLC, as the sole book running manager for our initial public offering, has agreed to waive the deferred underwriting fees.

After deducting the underwriting discounts and commissions (excluding the deferred portion of $12,075,000 in underwriting discounts and commissions, which will be released from the trust account upon consummation of initial business combination, if consummated) and incurred offering costs, the total net proceeds from our initial public offering and the sale of the private placement warrants was $346,000,000, of which $345,000,000 (or $10.00 per unit sold in the initial public offering) was placed in the trust account.

We reimbursed our Sponsor and certain officers and directors to cover expenses related to the initial public offering. Other than as described above, no payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates. 52

Overview We are a blank check company formed under the laws of the State of Delaware on May 22, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses.

We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

On August 30, 2022, the Company, LMA Merger Sub, Abacus Merger Sub, LMA and Abacus entered into the Merger Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Merger Agreement, (i) LMA Merger Sub will merge with and into LMA, with LMA surviving such merger as a direct wholly owned subsidiary of the Company and (ii) Abacus Merger Sub will merge with and into Abacus, with Abacus surviving such merger as a direct wholly owned subsidiary of the Company.

The proposed Business Combination is expected to be consummated in the first half of 2023, subject to the fulfillment of certain conditions.

Subject to the terms of the Merger Agreement, the aggregate merger consideration with respect to the holders of issued and outstanding limited liability company interests in LMA and Abacus will consist of approximately $531.8 million, payable in a number of newly issued shares of Class A common stock at a deemed value of $10.00 per share, with a portion of the aggregate merger consideration payable in cash upon the satisfaction of certain conditions.

For additional information regarding the Merger Agreement, see the Company's Current Reports on Form 8-K filed on August 30, 2022 and October 14, 2022, and the Company’s Proxy Statement as filed with the SEC.

Results of Operations We have neither engaged in any operations (other than searching for an initial business combination after our initial public offering) nor generated any revenues to date.

Our only activities from May 22, 2020 (inception) through December 31, 2022 were organizational activities, those necessary to prepare for the initial public offering, described below, and, subsequent to the initial public offering, identifying a target company for an initial business combination and completing such business combination.

We generate non-operating income in the form of change in fair value of warrant liability, change in fair value of forward purchase agreements (prior to the termination of the forward purchase agreement on December 2, 2022), interest income from banks, and, until June 2022 when all investments in the trust account were liquidated to thereafter be held in cash as further explained in Note 1 to the financial statements, we also generated interest income on marketable securities held in the trust account.

We do not expect to generate any operating revenues until after the completion of our initial business combination. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the year ended December 31, 2022, we had a net loss of $643,564, which consists of operating costs of $11,722,287 , offset by a change in fair value of warrant liability of $9,335,550, a change in fair value of the forward purchase agreement liability of $600,000, and interest earned from bank of $10,031 and interest earned on marketable securities held in the trust account of $672,439, and income tax expense of $52,485.

For the year ended December 31, 2021, we had a net income of $15,839,365, which consists of operating costs of $1,382,681, offset by a change in fair value of warrant liability of $15,899,200, a change in fair value of the forward purchase agreement liability of $1,300,000, interest earned from bank of $62 and interest earned on marketable securities held in the trust account of $22,784. 53 Liquidity and Capital Resources On July 27, 2020, we consummated the initial public offering of 30,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $300,000,000.

Simultaneously with the closing of the initial public offering, we consummated the sale of 8,000,000 private placement warrants at a price of $1.00 per private placement warrant in a private placement to our stockholders, generating gross proceeds of $8,000,000.

On August 25, 2020, the underwriters exercised their over-allotment option in full, resulting in an additional 4,500,000 Units issued for total gross proceeds of $45,000,000. In connection with the underwriters’ exercise of their over-allotment option, we also consummated the sale of an additional 900,000 private placement warrants at $1.00 per private placement warrant, generating total proceeds of $900,000.

A total of $45,000,000 was deposited into the trust account, bringing the aggregate proceeds held in the trust account to $345,000,000.

Following the initial public offering, the full exercise of the over-allotment option and the sale of the private placement warrants, a total of $345,000,000 was placed in the trust account and we had $912,561 of cash held outside of the trust account, after payment of costs related to the initial public offering, and available for working capital purposes.

We incurred $19,840,171 in transaction costs, including $6,900,000 in cash underwriting fees, $12,075,000 of deferred underwriting fees and $865,171 of other offering costs. For the period ended December 31, 2022, cash used in operating activities was $2,602,281.

Net loss of $643,564 was affected by non-cash charges for the change in fair value of warrant liability of $9,335,550, change in fair value of forward purchase agreement liability of $600,000, interest earned on marketable securities held in the trust account of $672,439, gain on deferred underwriting fee waiver of $513,188 and changes in operating assets and liabilities, which used $9,162,460 of cash in operating activities.

For the period ended December 31, 2021, cash used in operating activities was $1,236,555.

Net income of $15,839,365 was affected by non-cash charges for the change in fair value of warrant liability of $15,899,200, change in fair value of forward purchase agreement liability of $1,300,000, interest earned on marketable securities held in the trust account of $22,784 and changes in operating assets and liabilities, which used $90,353 of cash in operating activities.

As of December 31, 2022 and December 31, 2021, we had cash and marketable securities held in the trust account of $99,222,704 and $345,048,888, 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 to complete our initial business combination.

We may withdraw interest to pay franchise and income taxes. During the period ended December 31, 2022 we withdrew $335,723 of interest earned on the trust account. During the period ended December 31, 2021, we did not withdraw any interest earned on the trust account.

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.

As of December 31, 2022 and December 31, 2021, we had cash of $86,572 and $853,130 outside of the trust account, 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 an initial business combination.

In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, the Sponsor, an affiliate of the Sponsor, or our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we would repay such loaned amounts.

In the event that a business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment.

Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.

The terms of such loans by our officers and directors, if any, have not been 54 determined and no written agreements exist with respect to such loans. The loans would be repaid upon consummation of a business combination , without interest. In August 2021, the Sponsor committed to provide us an aggregate of $1,500,000 in loans for working capital purpose.

As of December 31, 2022 and December 31, 2021, there was a balance of $1,500,000 under this loan. Subsequent to the reporting period, on January 31, 2023, the Sponsor agreed to loan us up to an additional $1,500,000 under this loan.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.

However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination.

Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such initial business combination.

Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.

In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity conditions raise substantial doubt about the Company’s ability to continue as a going concern through approximately one year from the date of filing.

These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. Off-Balance Sheet Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2022.

We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Following the consummation of our initial public offering, and prior to June 2022, at which time the assets in the trust account were liquidated to thereafter be held in cash (as described previously in this report), the net proceeds of our initial public offering, including amounts in the trust account, were invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries.

Due to the short-term nature of these investments, there was no associated material exposure to interest rate risk. Item 8.Consolidated Financial Statements and Supplementary Data. This information appears following Item 15 of this Report and is included herein by reference. Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.