The following discussion and analysis of the company's financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this annual report. 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 "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this annual report.

Overview

We are a blank check company formed under the laws of the State of Delaware on October 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 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.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities for the year ended December 31, 2022 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and the search for a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering. 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 net income of $6,960,758 which consists of by interest earned on investments held in the Trust Account of $2,885,369 and the change in fair value of warrant liabilities and forward purchase asset/liability of $7,909,486, partially offset by operating costs of $3,303,458 and income taxes of $530,639.


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For the year ended December 31, 2021, we had net income of $3,749,355, which consists of operating costs of $1,017,989 and costs associated with warrant liabilities of $591,948 offset by interest earned on investments held in the Trust Account of $40,937 and the change in fair value of warrant liabilities and forward purchase asset/liability of $5,318,355.

Liquidity and Capital Resources

There is no current commitment on the part of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately be available. As of December 31, 2022, the Company had a working capital deficit of approximately $2.2 million and cash of approximately $1.3 million. This condition raises substantial doubt about the Company's ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. There is no assurance that the Company's plans to raise additional capital (to the extent ultimately necessary) will be successful. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

On May 18, 2021, we consummated the Initial Public Offering of 23,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,600,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to our Sponsor, generating gross proceeds of $6,600,000.

Following the Initial Public Offering and the sale of the Private Placement Warrants, a total of $230,000,000 was placed in the Trust Account and as of December 31, 2022, we had $1,263,707 of cash held outside of the Trust Account, after payment of costs related to the Initial Public Offering, and available for working capital purposes. Of this $1,263,707 of cash held outside of the Trust Account as of December 31, 2022, $700,000 that had been withdrawn the pay estimated taxes will be returned to the Trust Account because actual taxes were lower than estimated. We incurred $13,707,892 in transaction costs, including $4,600,000 of underwriters' discount paid, $8,050,000 of deferred underwriting commissions and $1,067,892 of other fees.

On December 14, 2022, we held the Meeting, where our stockholders approved the Extension Amendment Proposal to extend the date by which the company must consummate its initial business combination from May 18, 2023 to May 18, 2024, or such earlier date as determined by the company's board of directors.

In connection with the vote to approve the Extension Amendment Proposal, stockholders holding 19,896,459 shares of the company's Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the company's trust account. As a result, $199,650,204 (approximately $10.03 per share) was removed from the company's trust account to pay such holders. 3,103,541 of the public shares issued in our IPO remain outstanding.

Following the Meeting, on December 14, 2022, the company's board of directors waived the condition to the Extension Amendment Proposal providing that no more than $75 million of redemptions occur.

For the year ended December 31, 2022, cash used in operating activities was $2,514,162. Interest earned on investments held in the Trust Account of $2,885,369, the change in fair value of warrant liabilities and forward purchase asset/liability of $7,909,486 and changes in operating assets and liabilities, which provided $1,319,935 of cash from operating activities, contributed to net income of $6,960,758.

As of December 31, 2022, we had cash held in the Trust Account of $31,685,865. 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 Business Combination. We may withdraw interest to pay franchise and income taxes. During the year ended December 31, 2022, we withdrew interest earned on the Trust Account of $1,638,019. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our 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, we had cash of $1,263,707 outside of the Trust Account. Of this $1,263,707 of cash held outside of the Trust Account as of December 31, 2022, $700,000 that had been withdrawn the pay estimated taxes will be returned to the Trust Account because actual taxes were lower than estimated. 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 a Business Combination.


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In order to fund working capital deficiencies or finance transaction costs in connection with a 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 $1.00 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 determined and no written agreements exist with respect to such loans. The loans would be repaid upon consummation of a Business Combination, without interest.

If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a 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 Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our 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 Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Financing 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.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the sponsor a monthly fee of $10,000 for office space and administrative support to the company. We began incurring these fees on May 13, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and the company's liquidation.

The underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will be waived by the underwriters in the event that we do not complete a Business Combination, subject to the terms of the underwriting agreement.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies and estimates:

Warrant Instruments

The Company accounts for the Public Warrants and the Private Placement Warrants issued in connection with the Initial Public Offering and the Private Placement in accordance with the guidance contained in FASB ASC 815, " Derivatives and Hedging" whereby under that provision the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the warrant instrument as a liability at fair value and adjust the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Public Warrants and the Private Placement Warrants are exercised or expire, and any change in fair value will be recognized in the Company's statement of operations. The fair value of the Public Warrants and the Private Placement Warrants are estimated primarily using


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market information. The Company's valuation model utilizes inputs and other assumptions and may not be reflective of the price at which they can be settled.

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